PL-106-113 Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2000 US

This title may be cited as the ``Mississippi National Forest Improvement Act of 1999''.

In this title: (1) Agreement.--The term ``Agreement'' means the Agreement described in section 405(a). (2) Secretary.--The term ``Secretary'' means the Secretary of Agriculture. (3) State.--The term ``State'' means the State of Mississippi. (4) University.--The term ``University'' means the University of Mississippi. (5) University land.--The term ``University land'' means land described in section 404(a).

(a) In General.--The Secretary may, under such terms and conditions as the Secretary may prescribe, sell or exchange any or all right, title, and interest of the United States in and to the following tracts of land in the State: (1) Gulfport Laboratory Site, consisting of approximately 10 acres, as depicted on the map entitled ``Gulfport Laboratory Site, May 21, 1998''. (2) Raleigh Dwelling Site No. 1, consisting of approximately 0.44 acre, as depicted on the map entitled ``Raleigh Dwelling Site No. 1, May 21, 1998''. (3) Raleigh Dwelling Site No. 2, consisting of approximately 0.47 acre, as depicted on the map entitled ``Raleigh Dwelling Site No. 2, May 21, 1998''. (4) Rolling Fork Dwelling Site, consisting of approximately 0.303 acre, as depicted on the map entitled ``Rolling Fork Dwelling Site, May 21, 1998''. (5) Gloster Dwelling Site, consisting of approximately 0.55 acre, as depicted on the map entitled ``Gloster Dwelling Site, May 21, 1998''. (6) Gloster Office Site, consisting of approximately 1.00 acre, as depicted on the map entitled ``Gloster Office Site, May 21, 1998''. (7) Gloster Work Center Site, consisting of approximately 2.00 acres, as depicted on the map entitled ``Gloster Work Center Site, May 21, 1998''. (8) Holly Springs Dwelling Site, consisting of approximately 0.31 acre, as depicted on the map entitled ``Holly Springs Dwelling Site, May 21, 1998''. (9) Isolated parcels of National Forest land located in Township 5 South, Ranges 12 and 13 West, and in Township 3 North, Range 12 West, sections 23, 33, and 34, St. Stephens Meridian. (10) Isolated parcels of National Forest land acquired after the date of the enactment of this Act from the University of Mississippi located in George and Jackson Counties. (11) Approximately 20 acres of National Forest land and structures located in Township 6 North, Range 3 East, Section 30, Washington Meridian.

(b) Consideration.--Consideration for a sale or exchange of land under subsection (a) may include the acquisition of land, existing improvements, or improvements constructed to the specifications of the Secretary. (c) Applicable Law.--Except as otherwise provided in this section, any sale or exchange of land under subsection (a) shall be subject to the laws (including regulations) applicable to the conveyance and acquisition of land for the National Forest System. (d) Cash Equalization.--Notwithstanding any other provision of law, the Secretary may accept a cash equalization payment in excess of 25 percent of the value of land exchanged under subsection (a). (e) Solicitation of Offers.-- (1) In general.--The Secretary may solicit offers for the sale or exchange of land under this section on such terms and conditions as the Secretary may prescribe.

(2) Rejection of offers.--The Secretary may reject any offer made under this section if the Secretary determines that the offer is not adequate or not in the public interest.

(f ) Deposit of Proceeds.--The Secretary shall deposit the proceeds of a sale or exchange under subsection (a) in the fund established under Public Law 90-171 (16 U.S.C. 484a) (commonly known as the ``Sisk Act''). (g) Use of Proceeds.--Funds deposited under subsection (f ) shall be available until expended for-- (1) the construction of a research laboratory and office facility at the Forest Service administrative site located at the Mississippi State University at Starkville, Mississippi; (2) the acquisition, construction, or improvement of administrative facilities in connection with units of the National Forest System in the State; and (3) the acquisition of land and interests in land for units of the National Forest System in the State.

(a) Acquisition.--The Secretary may acquire for fair market value all right, title, and interest in land owned by the University of Mississippi within or near the boundaries of the De Soto National Forest in Stone, George, and Jackson Counties, Mississippi, comprising approximately 22,700 acres. (b) Boundaries.-- (1) In general.--The boundaries of the De Soto National Forest shall be modified as depicted on the map entitled ``De Soto National Forest Boundary Modification--April, 1999'' to include any acquisition of University land under this section. (2) Availability of map.--The map described in paragraph (1) shall be available for public inspection in the office of the Chief of the Forest Service in Washington, District of Columbia. (3) Allocation of moneys for federal purposes.--For the purpose of section 7 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-9), the boundaries of the De Soto National Forest, as modified by this subsection, shall be considered the boundaries of the De Soto National Forest as of January 1, 1965.

(c) Management.-- (1) In general.--The Secretary shall assume possession and all management responsibilities for University land acquired under this section on the date of acquisition. (2) Cooperative management agreement.--For the fiscal year containing the date of the enactment of this Act and each of the four fiscal years thereafter, the Secretary may enter into a cooperative agreement with the University that provides for Forest Service management of any University land acquired, or planned to be acquired, under this section. (3) Administration.--University land acquired under this section shall be-- (A) subject to the Act of March 1, 1911 (16 U.S.C. 480 et seq.) (commonly known as the ``Weeks Act'') and other laws (including regulations) pertaining to the National Forest System; and (B) managed in a manner that is consistent with the land and resource management plan applicable to the De

Soto National Forest on the date of the enactment of this Act, until the plan is revised in accordance with the regularly scheduled process for revision.

(a) In General.--The Agreement dated April 24, 1999, entered into between the Secretary, the State, and the Franklin County School Board that provides for the Federal acquisition of land owned by the State for the construction of the Franklin Lake Dam in Franklin County, Mississippi, is ratified and the parties to the Agreement are authorized to implement the terms of the Agreement. (b) Federal Grant.-- (1) In general.--Subject to reservations and exceptions contained in the Agreement, there is granted and quit claimed to the State all right, title, and interest of the United States in the federally-owned land described in Exhibit A to the Agreement. (2) Management.--The land granted to the State under the Agreement shall be managed as school land grants.

(c) Acquisition of State Land.-- (1) In general.--All right, title, and interest in and to the 655.94 acres of land described as Exhibit B to the Agreement is vested in the United States along with the right of immediate possession by the Secretary. (2) Compensation.--Compensation owed to the State and the Franklin County School Board for the land described in paragraph (1) shall be provided in accordance with the Agreement.

(d) Correction of Descriptions.--The Secretary and the Secretary of State of the State may, by joint modification of the Agreement, make minor corrections to the descriptions of the land described on Exhibits A and B to the Agreement. (e) Security Interest.-- (1) In general.--Any cash equalization indebtedness owed to the United States pursuant to the Agreement shall be secured only by the timber on the granted land described in Exhibit A of the Agreement. (2) Loss of security.--The United States shall have no recourse against the State or the Franklin County School Board as the result of the loss of the security described in paragraph (1) due to fire, insects, natural disaster, or other circumstance beyond the control of the State or Board. (3) Release of liens.--On payment of cash equalization as required by the Agreement, the Secretary (or the Supervisor of the National Forests in the State or other authorized representative of the Secretary) shall release any liens on the granted land described in Exhibit A of the Agreement.

(a) In General.--The Secretary shall deposit any funds received by the United States from land conveyances authorized under section 405 in the fund established under Public Law 90-171 (16 U.S.C. 484a) (commonly known as the ``Sisk Act''). (b) Use.--Funds deposited in the fund under subsection (a) shall be available until expended for the acquisition of land and interests in land for the National Forest System in the State.

(c) Partial Distribution.--Any funds received by the United States from land conveyances authorized under this Act shall not be subject to partial distribution to the State under-- (1) the Act entitled ``An Act making appropriations for the Department of Agriculture for the fiscal year ending June thirtieth, nineteen hundred and nine'', approved May 23, 1908 (35 Stat. 260, chapter 192; 16 U.S.C. 500); (2) section 13 of the Act of March 1, 1911 (36 Stat. 963, chapter 186; 16 U.S.C. 500); or (3) any other law.

Section 387 of the Act of February 16, 1938 (7 U.S.C. 1387) is amended in the first sentence-- (1) by striking ``such'' the first place it appears and inserting ``information such as geo-referenced data from all sources,''; (2) by striking ``(not less than estimated cost of furnishing such reproductions)''; and (3) by inserting after ``determine'' the following: ``(but not less than the estimated costs of data processing, updating, revising, reformatting, repackaging and furnishing the reproductions and information)''.

There are authorized to be appropriated such sums as are necessary to carry out this title.

(a) Local Contribution Rate.--For purposes of calculating a payment under section 8003(b) of the Elementary and Secondary Education Act of 1965 for fiscal year 1999 or 2000 with respect to any local educational agency described in subsection (b), the Secretary of Education shall not use a local contribution rate for the fiscal year that is less than the local contribution rate used for the local educational agency for fiscal year 1998. (b) Local Educational Agencies.--A local educational agency referred to in subsection (a) is any local educational agency that-- (1) is eligible to receive a payment under section 8003(b) of the Elementary and Secondary Education Act of 1965 for fiscal year 1999 or 2000, as the case may be; and (2) received a payment under such section for fiscal year 1998 that was calculated on the basis of a local contribution rate based on generally comparable school districts using the special additional factors method.

(c) Effective Date.--This section shall be effective for fiscal years 1999 and 2000.

Subparagraph (C) of section 487(a)(23) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)(23)) is amended to read as follows: ``(C) This paragraph shall apply to general and special elections for Federal office, as defined in section 301(3) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(3)), and to the elections for Governor or other chief executive within such State).''.

This title may be cited as the ``Department of Education Appropriations Act, 2000''.

WORK PROGRAM.

(a) In General.--Section 403(a)(5)(C)(ii) of the Social Security Act (42 U.S.C. 603(a)(5)(C)(ii)) is amended to read as follows:

``(ii) General eligibility.--An entity that operates a project with funds provided under this paragraph may expend funds provided to the project for the benefit of recipients of assistance under the program funded under this part of the State in which the entity is located who-- ``(I) has received assistance under the State program funded under this part (whether in effect before or after the amendments made by section 103 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 first apply to the State) for at least 30 months (whether or not consecutive); or ``(II) within 12 months, will become ineligible for assistance under the State program funded under this part by reason of a durational limit on such assistance, without regard to any exemption provided pursuant to section 408(a)(7)(C) that may apply to the individual.''.

(b) Noncustodial Parents.-- (1) In general.--Section 403(a)(5)(C) of such Act (42 U.S.C. 603(a)(5)(C)) is amended-- (A) by redesignating clauses (iii) through (viii) as clauses (iv) through (ix), respectively; and (B) by inserting after clause (ii) the following: ``(iii) Noncustodial parents.--An entity that operates a project with funds provided under this paragraph may use the funds to provide services in a form described in clause (i) to noncustodial parents with respect to whom the requirements of the following subclauses are met: ``(I) The noncustodial parent is unemployed, underemployed, or having difficulty in paying child support obligations. ``(II) At least 1 of the following applies to a minor child of the noncustodial parent (with preference in the determination of the noncustodial parents to be provided services under this paragraph to be provided by the entity to those noncustodial parents with minor children who meet, or who have custodial parents who meet, the requirements of item (aa)): ``(aa) The minor child or the custodial parent of the minor child meets the requirements of subclause (I) or (II) of clause (ii). ``(bb) The minor child is eligible for, or is receiving, benefits under the program funded under this part. ``(cc) The minor child received benefits under the program funded under this part in the 12-month period preceding the date of the determination but no longer receives such benefits. ``(dd) The minor child is eligible for, or is receiving, assistance under the Food Stamp Act of 1977, benefits under the supplemental security income program under title XVI of

this Act, medical assistance under title XIX of this Act, or child health assistance under title XXI of this Act. ``(III) In the case of a noncustodial parent who becomes enrolled in the project on or after the date of the enactment of this clause, the noncustodial parent is in compliance with the terms of an oral or written personal responsibility contract entered into among the noncustodial parent, the entity, and (unless the entity demonstrates to the Secretary that the entity is not capable of coordinating with such agency) the agency responsible for administering the State plan under part D, which was developed taking into account the employment and child support status of the noncustodial parent, which was entered into not later than 30 (or, at the option of the entity, not later than 90) days after the noncustodial parent was enrolled in the project, and which, at a minimum, includes the following: ``(aa) A commitment by the noncustodial parent to cooperate, at the earliest opportunity, in the establishment of the paternity of the minor child, through voluntary acknowledgement or other procedures, and in the establishment of a child support order. ``(bb) A commitment by the noncustodial parent to cooperate in the payment of child support for the minor child, which may include a modification of an existing support order to take into account the ability of the noncustodial parent to pay such support and the participation of such parent in the project. ``(cc) A commitment by the noncustodial parent to participate in employment or related activities that will enable the noncustodial parent to make regular child support payments, and if the noncustodial parent has not attained 20 years of age, such related activities may include completion of high school, a general equivalency degree, or other education directly related to employment. ``(dd) A description of the services to be provided under this paragraph, and a commitment by the noncustodial parent to participate in such services, that are designed to assist the noncustodial parent obtain and retain employment, increase earnings, and enhance the financial and emotional contributions to the well-being of the minor child. In order to protect custodial parents and children who may be at risk of domestic violence, the preceding provisions of this subclause shall not be construed to affect any other provision of law requiring a custodial parent to cooperate in establishing the paternity of a child or establishing or enforcing a support order with respect to a

child, or entitling a custodial parent to refuse, for good cause, to provide such cooperation as a condition of assistance or benefit under any program, shall not be construed to require such cooperation by the custodial parent as a condition of participation of either parent in the program authorized under this paragraph, and shall not be construed to require a custodial parent to cooperate with or participate in any activity under this clause. The entity operating a project under this clause with funds provided under this paragraph shall consult with domestic violence prevention and intervention organizations in the development of the project.''. (2) Conforming amendment.--Section 412(a)(3)(C)(ii) of such Act (42 U.S.C. 612(a)(3)(C)(ii)) is amended by striking ``(vii)'' and inserting ``(viii)''.

(c) Recipients With Characteristics of Long-Term Dependency; Children Aging Out of Foster Care.-- (1) In general.--Section 403(a)(5)(C)(iv) of such Act (42 U.S.C. 603(a)(5)(C)(iv)), as so redesignated by subsection (b)(1)(A) of this section, is amended-- (A) by striking ``or'' at the end of subclause (I); and (B) by striking subclause (II) and inserting the following: ``(II) to children-- ``(aa) who have attained 18 years of age but not 25 years of age; and ``(bb) who, before attaining 18 years of age, were recipients of foster care maintenance payments (as defined in section 475(4)) under part E or were in foster care under the responsibility of a State; ``(III) to recipients of assistance under the State program funded under this part, determined to have significant barriers to self- sufficiency, pursuant to criteria established by the local private industry council; or ``(IV) to custodial parents with incomes below 100 percent of the poverty line (as defined in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section, applicable to a family of the size involved).''. (2) Conforming amendments.--Section 403(a)(5)(C)(iv) of such Act (42 U.S.C. 603(a)(5)(C)(iv)), as so redesignated by subsection (b)(1)(A) of this section, is amended-- (A) in the heading by inserting ``hard to employ'' before ``individuals''; and (B) in the last sentence by striking ``clause (ii)'' and inserting ``clauses (ii) and (iii) and, as appropriate, clause (v)''.

(d) Conforming Amendment.--Section 404(k)(1)(C)(iii) of such Act (42 U.S.C. 604(k)(1)(C)(iii)) is amended by striking ``item (aa) or (bb) of section 403(a)(5)(C)(ii)(II)'' and inserting ``section 403(a)(5)(C)(iii)''. (e) Effective Date.--The amendments made by this section--

(1) shall be effective January 1, 2000, with respect to the determination of eligible individuals for purposes of section 403(a)(5)(B) of the Social Security Act (relating to competitive grants); (2) shall be effective July 1, 2000, except that expenditures from allotments to the States shall not be made before October 1, 2000-- (A) with respect to the determination of eligible individuals for purposes of section 403(a)(5)(A) of the Social Security Act (relating to formula grants) in the case of those individuals who may be determined to be so eligible, but would not have been eligible before July 1, 2000; or (B) for allowable activities described in section 403(a)(5)(C)(i)(VII) of the Social Security Act (as added by section 802 of this title) provided to any individuals determined to be eligible for purposes of section 403(a)(5)(A) of the Social Security Act (relating to formula grants).

(f) Regulations.--Interim final regulations shall be prescribed to implement the amendments made by this section not later than January 1, 2000. Final regulations shall be prescribed within 90 days after the date of the enactment of this Act to implement the amendments made by this Act to section 403(a)(5) of the Social Security Act, in the same manner as described in section 403(a)(5)(C)(ix) of the Social Security Act (as so redesignated by subsection (b)(1)(A) of this section).

ALLOWABLE ACTIVITIES UNDER THE TANF PROGRAM.

Section 403(a)(5)(C)(i) of the Social Security Act (42 U.S.C. 603(a)(5)(C)(i)) is amended by inserting after subclause (VI) the following: ``(VII) Not more than 6 months of vocational educational or job training.''.

DIRECTLY.

Section 403(a)(5)(C)(i)(IV) of the Social Security Act (42 U.S.C. 603(a)(5)(C)(i)(IV)) is amended by inserting ``, or if the entity is not a private industry council or workforce investment board, the direct provision of such services'' before the period.

(a) Elimination of Current Requirements.--Section 411(a)(1)(A) of the Social Security Act (42 U.S.C. 611(a)(1)(A)) is amended-- (1) in the matter preceding clause (i), by inserting ``(except for information relating to activities carried out under section 403(a)(5))'' after ``part''; and (2) by striking clause (xviii).

(b) Establishment of Reporting Requirement.--Section 403(a)(5)(C) of the Social Security Act (42 U.S.C. 603(a)(5)(C)), as amended by section 801(b)(1) of this title, is amended by adding at the end the following: ``(x) Reporting requirements.--The Secretary of Labor, in consultation with the Secretary of Health and Human Services, States, and organizations that

represent State or local governments, shall establish requirements for the collection and maintenance of financial and participant information and the reporting of such information by entities carrying out activities under this paragraph.''.

WORK GRANT FUNDS.

(a) Authority of State Agencies to Disclose to Private Industry Councils the Names, Addressess, and Telephone Numbers of Potential Welfare-to-Work Program Participants.-- (1) State iv-d agencies.--Section 454A(f) of the Social Security Act (42 U.S.C. 654a(f)) is amended by adding at the end the following: ``(5) Private industry councils receiving welfare-to-work grants.--Disclosing to a private industry council (as defined in section 403(a)(5)(D)(ii)) to which funds are provided under section 403(a)(5) the names, addresses, telephone numbers, and identifying case number information in the State program funded under part A, of noncustodial parents residing in the service delivery area of the private industry council, for the purpose of identifying and contacting noncustodial parents regarding participation in the program under section 403(a)(5).''. (2) State tanf agencies.--Section 403(a)(5) of such Act (42 U.S.C. 603(a)(5)) is amended by adding at the end the following: ``(K) Information disclosure.--If a State to which a grant is made under section 403 establishes safeguards against the use or disclosure of information about applicants or recipients of assistance under the State program funded under this part, the safeguards shall not prevent the State agency administering the program from furnishing to a private industry council the names, addresses, telephone numbers, and identifying case number information in the State program funded under this part, of noncustodial parents residing in the service delivery area of the private industry council, for the purpose of identifying and contacting noncustodial parents regarding participation in the program under this paragraph.''.

(b) Safeguarding of Information Disclosed to Private Industry Councils.--Section 403(a)(5)(A)(ii)(I) of such Act (42 U.S.C. 603(a)(5)(A)(ii)(I)) is amended-- (1) by striking ``and'' at the end of item (dd); (2) by striking the period at the end of item (ee) and inserting ``; and''; and (3) by adding at the end the following: ``(ff) describes how the State will ensure that a private industry council to which information is disclosed pursuant to section 403(a)(5)(K) or 454A(f)(5) has procedures for safeguarding the information and for ensuring that the information is used solely for the purpose described in that section.''.

SUCCESSFUL PERFORMANCE BONUS.

(a) In General.--Section 403(a)(5)(E) of the Social Security Act (42 U.S.C. 603(a)(5)(E)) is amended in each of clauses (iv) and (vi) by striking ``$100,000,000'' and inserting ``$50,000,000''. (b) Conforming Amendments.-- (1) Section 403(a)(5)(F) of such Act (42 U.S.C. 603(a)(5)(F)) is amended by inserting ``$1,500,000'' before ``of the amount so specified''. (2) Section 403(a)(5)(G) of such Act (42 U.S.C. 603(a)(5)(G)) is amended by inserting ``$900,000'' before ``of the amount so specified''. (3) Section 403(a)(5)(H) of such Act (42 U.S.C. 603(a)(5)(H)) is amended by inserting ``$300,000'' before ``of the amount so specified''. (4) Section 403(a)(5)(I)(i) of such Act (42 U.S.C. 603(a)(5)(I)(i)) is amended by striking ``$1,500,000,000'' and all that follows and inserting ``for grants under this paragraph-- ``(I) $1,500,000,000 for fiscal year 1998; and ``(II) $1,450,000,000 for fiscal year 1999.''.

(c) No Outlay Until FY2001.--Section 403(a)(5)(E)(i) of such Act (42 U.S.C. 603(a)(5)(E)(i)) is amended-- (1) by striking ``make'' and insert ``award''; and (2) by inserting ``, but shall not make any outlay to pay any such grant before October 1, 2000'' before the period.

UNITS.

(a) In General.--Section 455(a) of the Social Security Act (42 U.S.C. 655(a)) is amended by adding at the end the following: ``(5)(A)(i) If-- ``(I) the Secretary determines that a State plan under section 454 would (in the absence of this paragraph) be disapproved for the failure of the State to comply with subparagraphs (A) and (B)(i) of section 454(27), and that the State has made and is continuing to make a good faith effort to so comply; and ``(II) the State has submitted to the Secretary, not later than April 1, 2000, a corrective compliance plan that describes how, by when, and at what cost the State will achieve such compliance, which has been approved by the Secretary,

then the Secretary shall not disapprove the State plan under section 454, and the Secretary shall reduce the amount otherwise payable to the State under paragraph (1)(A) of this subsection for the fiscal year by the penalty amount. ``(ii) All failures of a State during a fiscal year to comply with any of the requirements of section 454B shall be considered a single failure of the State to comply with subparagraphs (A) and (B)(i) of section 454(27) during the fiscal year for purposes of this paragraph. ``(B) In this paragraph: ``(i) The term `penalty amount' means, with respect to a failure of a State to comply with subparagraphs (A) and (B)(i) of section 454(27)-- ``(I) 4 percent of the penalty base, in the case of the 1st fiscal year in which such a failure by the State occurs (regardless of whether a penalty is imposed in that fiscal

year under this paragraph with respect to the failure), except as provided in subparagraph (C)(ii) of this paragraph; ``(II) 8 percent of the penalty base, in the case of the 2nd such fiscal year; ``(III) 16 percent of the penalty base, in the case of the 3rd such fiscal year; ``(IV) 25 percent of the penalty base, in the case of the 4th such fiscal year; or ``(V) 30 percent of the penalty base, in the case of the 5th or any subsequent such fiscal year. ``(ii) The term `penalty base' means, with respect to a failure of a State to comply with subparagraphs (A) and (B)(i) of section 454(27) during a fiscal year, the amount otherwise payable to the State under paragraph (1)(A) of this subsection for the preceding fiscal year.

``(C)(i) The Secretary shall waive all penalties imposed against a State under this paragraph for any failure of the State to comply with subparagraphs (A) and (B)(i) of section 454(27) if the Secretary determines that, before April 1, 2000, the State has achieved such compliance. ``(ii) If a State with respect to which a reduction is required to be made under this paragraph with respect to a failure to comply with subparagraphs (A) and (B)(i) of section 454(27) achieves such compliance on or after April 1, 2000, and on or before September 30, 2000, then the penalty amount applicable to the State shall be 1 percent of the penalty base with respect to the failure involved. ``(D) The Secretary may not impose a penalty under this paragraph against a State for a fiscal year for which the amount otherwise payable to the State under paragraph (1)(A) of this subsection is reduced under paragraph (4) of this subsection for failure to comply with section 454(24)(A).''. (b) Inapplicability of Penalty Under TANF Program.--Section 409(a)(8)(A)(i)(III) of such Act (42 U.S.C. 609(a)(8)(A)(i)(III)) is amended by striking ``section 454(24)'' and inserting ``paragraph (24), or subparagraph (A) or (B)(i) of paragraph (27), of section 454''. (c) Effective Date.--The amendments made by this section shall take effect on October 1, 1999. This Act may be cited as the ``Departments of Labor, Health, and Human Services, and Education, and Related Agencies Appropriations Act, 2000''.

APPENDIX E--H.R. 3425

That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2000, and for other purposes, namely:

Section 1003 of title X of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 (112 Stat. 2681-711) is amended-- (1) by redesignating paragraphs (4) through (12) as paragraphs (5) through (13), respectively; and (2) by inserting after paragraph (3) the following: ``(4) Individual property purchaser.--The term `individual property purchaser', with respect to an individual cabin site described in section 1004(b), means a person (including CFRA or a lessee) that purchases that cabin site.

Section 1004 of title X of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, is amended-- (1) in subsection (c)(2) (112 Stat. 2681-713), by striking subparagraph (B) and inserting the following: ``(B) Appraisal.-- ``(i) In general.--The appraisal under subparagraph (A) shall be based on the Canyon Ferry Cabin Site appraisal with a completion date of March 29, 1999, and amended June 11, 1999, with an effective date of valuation of October 15, 1998, for the Bureau of Reclamation, on the conditions stated in this subparagraph. ``(ii) Modifications.--The contract appraisers that conducted the original appraisal having an effective date of valuation of October 15, 1998, for the Bureau of Reclamation shall make appropriate modifications to permit recalculation of the lot values established in the original appraisal into an updated appraisal, the function of which shall be to provide market values for the sale of each of the 265 Canyon Ferry Cabin site lots. ``(iii) Changes in property characteristics.-- If there are any changes in the characteristic of a property that form part of the basis of the updated appraisal (including a change in size, easement considerations, or updated analyses of the physical characteristics of a lot), the contract appraisers shall make an appropriate adjustment to the updated appraisal. ``(iv) Updating.--Subject to the approval of CFRA and the Secretary, the fair market values established by the appraisers under this paragraph may be further updated periodically by the contract appraisers through appropriate market analyses. ``(v) Reconsideration.--The Bureau of Reclamation and the 265 Canyon Ferry cabin owners have the right to seek reconsideration, before commencement of the updated appraisal, of the assumptions that the appraisers used in arriving at the fair market values derived in the original appraisal.

``(vi) Continuing validity.--Notwithstanding any other provision of law, the October 15, 1998, Canyon Ferry Cabin Site original appraisal, as provided for in this paragraph, shall remain valid for use by the Bureau of Reclamation in the sale process for a period of not less than 3 years from the date of completion of the updated appraisal.''; (2) in subsection (d) (112 Stat. 2681-713)-- (A) in paragraph (1)(D), by adding at the end the following: ``(iii) Remaining leases.-- ``(I) Continuation of leases.--The remaining lessees shall have a right to continue leasing through August 31, 2014. ``(II) Right to close.--The remaining leases shall have the right to close under the terms of the sale at any time before August 31, 2014. On termination of the lease either by expiration under the terms of the lease or by violation of the terms of the lease, all personal property and improvements will be removed, and the cabin site shall remain in Federal ownership.''; and (B) in paragraph (2)-- (i) in the matter preceding subparagraph (A), by inserting ``or if no one (including CFRA) bids,'' after ``bid''; and (ii) in subparagraph (D)-- (I) by striking ``12 months'' and inserting ``36 months''; and (II) by adding at the end the following: ``If the requirement of the preceding sentence is not met, CFRA may close on all remaining cabin sites or up to the 75 percent requirement. If CFRA does not exercise either such option, the Secretary shall conduct another sale for the remaining cabin sites to close immediately, with proceeds distributed in accordance with section 1008.''; (3) by striking subsection (e) (112 Stat. 2681-714) and inserting the following:

``(e) Administrative Costs.-- ``(1) Allocation of funding.--The Secretary shall allocate all funding necessary to conduct the sales process for the sale of property under this title. ``(2) Reimbursement.--Any reasonable administrative costs incurred by the Secretary (including the costs of survey and appraisals incident to the conveyance under subsection (a)) shall be proportionately reimbursed by the property owner a the time of closing.''; and (4) by striking subsection (f ) (112 Stat. 2681-714) and inserting the following:

``(f ) Timing.--The Secretary shall-- ``(1) immediately begin preparing for the sales process on enactment of this Act; and ``(2) not later than 1 year after the date of enactment of this Act, begin conveying the property described in subsection (b).''.

Section 1007(b) of title X of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 (112 Stat. 2681- 715), is amended-- (1) in subsection (c)-- (A) in paragraph (1), in the matter preceding subparagraph (A), by striking ``trust manager'' and inserting ``trust manager (referred to in this section as the `trust manager')''; (B) in paragraph (2)(A), in the matter preceding clause (i), by striking ``agency Board'' and inserting ``Agency Board (referred to in this section as the `Joint State-Federal Agency Board')''; and (C) in paragraph (3)(A), by striking ``Advisory Board'' and inserting ``Advisory Board (referred to in this section as the `Citizen Advisory Board')''; and (2) by adding at the end the following:

``(f ) Recreation Trust Agreement.-- ``(1) In general.--The Trust, acting through the trust manager, in consultation with the Joint State-Federal Agency Board and the Citizen Advisory Board, shall enter into a legally enforceable agreement with CFRA (referred to in this section as the `Recreation Trust Agreement'). ``(2) Contents.--The Recreation Trust Agreement shall provide that-- ``(A) on receipt of proceeds of the sale of a property under section 1004, the Trust shall loan up to $3,000,000 of the proceeds to CFRA; ``(B) CFRA shall deposit all funds borrowed under subparagraph (A) in the Canyon Ferry-Broadwater County Trust; ``(C) CFRA and the individual purchasers shall repay the principal of the loan to the Trust as soon as reasonably practicable in accordance with a repayment schedule specified in the loan agreement; and ``(D) until such time as the principal is repaid in full, CFRA and the individual purchasers shall make an annual interest payment on the outstanding principal of the loan to the Trust at an interest rate determined in accordance with paragraph (4)(C). ``(3) Treatment of interest payments.--All interest payments received by the Trust under paragraph (2)(D) shall be treated as earnings under subsection (d)(2). ``(4) Fiduciary responsibility.--In negotiating the Recreation Trust Agreement, the trust manager shall act in the best interests of the Trust to ensure-- ``(A) the security of the loan; ``(B) timely repayment of the principal; and ``(C) payment of a fair interest rate, of not less than 6 nor more than 8 percent per year, based on the length of the term of a loan that is comparable to the term of a traditional home mortgage.

``(g) Restriction on Disbursement.--Except as provided in subsection (f ), the trust manager shall not disburse any funds from the Trust until August 1, 2001, as provided for in the Recreation Trust Agreement, unless Broadwater County, at an earlier date, certifies that the Canyon Ferry-Broadwater County Trust has been fully funded in accordance with this title.

``(h) Condition to Sale.--No closing of property under section 1004 shall be made until the Recreation Trust Agreement is entered into under subsection (f )''.

Section 1008(b) of title X of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 (112 Stat. 2681- 718), is amended-- (1) by striking paragraph (1) and inserting the following: ``(1) Agreement.-- ``(A) Condition to sale.--No closing of property under section 1004 shall be made until CFRA and Broadwater County enter into a legally enforceable agreement (referred to in this paragraph as the ` Contributions Agreement') concerning contributions to the Trust. ``(B) Contents.--The Contributions Agreement shall require that on or before August 1, 2001, CFRA shall ensure that $3,000,000 in value is deposited in the Canyon Ferry-Broadwater County Trust from 1 or more of the following sources: ``(i) Direct contributions made by the purchasers on the sale of each cabin site. ``(ii) Annual contributions made by the purchasers. ``(iii) All other monetary contributions. ``(iv) In-kind contributions, subject to the approval of the County. ``(v) All funds borrowed by CFRA under section 1007(f ). ``(vi) Assessments made against the cabin sites made under a county park district or any similar form of local government under the laws of the State of Montana. ``(vii) Any other contribution, subject to the approval of the County.''; (2) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; (3) by inserting after paragraph (1) the following: ``(2) Alternative funding source.--If CFRA agrees to form a county park district under section 7-16-2401 et seq., of the Montana Code Annotated, or any other similar form of local government under the laws of the State of Montana, for the purpose of providing funding for the Trust pursuant to the Contributions Agreement, CFRA and Broadwater County may amend the Contributions Agreement as appropriate, so long as the monetary obligations of individual property purchases under the Contributions Agreement as amended are substantially similar to those specified in paragraph (1).''; and (4) in paragraph (4) (as redesignated by paragraph (2), by striking ``until the condition stated in paragraph (1) is met''.

Title X of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 is amended-- (1) in section 1001 (112 Stat. 2681-710), by striking ``section 4(b)'' and inserting ``section 1004(b)''; (2) in section 1003 (112 Stat. 2681-711)-- (A) in paragraph (1), by striking ``section 8'' and inserting ``section 1008'';

(B) in paragraph (6), by striking ``section 7'' and inserting ``section 1007''; (C) in paragraph (8)-- (i) in subparagraph (A), by striking ``section 4(b)'' and inserting ``1004(b)''; and (ii) in subparagraph (B), by striking ``section 4(b)(1)(B)'' and inserting ``section 1004(b)(1)(B)''; and (D) in paragraph (9), by striking ``section 4'' and inserting ``section 104''; and (3) in section 1004 (112 Stat. 2681-712)-- (A) in subsection (b)(3)(B)(ii)(II), by striking ``section 4(a)'' and inserting ``section 1004(a)''; and (B) in subsection (d)(2)(G), by striking ``section 6'' and inserting ``section 1006''.

(a) Cancellation of Debt.--Subject to the availability of amounts provided in advance in appropriations Acts, the President shall cancel all amounts owed to the United States (or any agency of the United States) by any country eligible for debt reduction under this section, as a result of loans made or credits extended prior to June 20, 1999, under any of the provisions of law specified in subsection (b). (b) Provisions of Law.--The provisions of law referred to in subsection (a) are the following: (1) Sections 221 and 222 of the Foreign Assistance Act. (2) The Arms Export Control Act (22 U.S.C. 2751 et seq.). (3) Section 5(f ) of the Commodity Credit Corporation Charter Act, section 201 of the Agricultural Trade Act of 1978 (7 U.S.C. 5621), or section 202 of such Act (7 U.S.C. 5622), or predecessor provisions under the Food for Peace Act of 1966. (4) Title I of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1701 et seq.).

(c) Other Debt Reduction Authorities.--The authority provided in this section is in addition to any other debt relief authority and does not in any way limit such authority. (d) Eligible Countries.--A country that is performing satisfactorily under an economic reform program shall be eligible for cancellation of debt under this section if-- (1) the country, as of December 31, 2000, is eligible to borrow from the International Development Association; (2) the country, as of December 31, 2000, is not eligible to borrow from the International Bank for Reconstruction and Development; and (3)(A) the country has outstanding public and publicly guaranteed debt, the net present value of which on December 31, 1996, was at least 150 percent of the average annual value of the exports of the country for the period 1994 through 1996; or (B)(i) the country has outstanding public and publicly guaranteed debt, the net present value of which, as of the date the President determines that the country is eligible for debt relief under this section, is at least 150 percent of the annual value of the exports of the country; or

(ii) the country has outstanding public and publicly guaranteed debt, the net present value of which, as of the date the President determines that the country is eligible for debt relief under this section, is at least 250 percent of the annual fiscal revenues of the country, and has minimum ratios of exports to Gross Domestic Product of 30 percent, and of fiscal revenues to Gross Domestic Product of 15 percent.

(e) Priority.--In carrying out subsection (a), the President should seek to leverage scarce foreign assistance and give priority to heavily indebted poor countries with demonstrated need and the capacity to use such relief effectively. (f ) Exceptions.--A country shall not be eligible for cancellation of debt under this section if the government of the country-- (1) has an excessive level of military expenditures; (2) has repeatedly provided support for acts of international terrorism, as determined by the Secretary of State under section 6( j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405( j)(1)) or section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)); (3) is failing to cooperate on international narcotics control matters; or (4) (including its military or other security forces), engages in a consistent pattern of gross violations of internationally recognized human rights.

(g) Additional Requirement.--A country which is otherwise eligible to receive cancellation of debt under this section may receive such cancellation only if the country has committed, in connection with a social and economic reform program-- (1) to enable, facilitate, or encourage the implementation of policy changes and institutional reforms under economic reform programs, in a manner that ensures that such policy changes and institutional reforms are designed and adopted through transparent and participatory processes; (2) to adopt an integrated development strategy of the type described in section 1624(a) of the International Financial Institutions Act, to support poverty reduction through economic growth, that includes monitorable poverty reduction goals; (3) to take steps so that the financial benefits of debt relief are applied to programs to combat poverty (in particular through concrete measures to improve economic infrastructure, basic services in education, nutrition, and health, particularly treatment and prevention of the leading causes of mortality) and to redress environmental degradation; (4) to take steps to strengthen and expand the private sector, encourage increased trade and investment, support the development of free markets, and promote broad-scale economic growth; (5) to implement transparent policy making and budget procedures, good governance, and effective anticorruption measures; (6) to broaden public participation and popular understanding of the principles and goals of poverty reduction, particularly through economic growth, and good governance; and (7) to promote the participation of citizens and nongovernmental organizations in the economic policy choices of the government.

(h) Certain Prohibitions Inapplicable.--Except as the President may otherwise determine for reasons of national security, a cancellation of debt under this section shall not be considered to be assistance for purposes of any provision of law limiting assistance to a country. The authority to provide for cancellation of debt under this section may be exercised notwithstanding section 620(r) of the Foreign Assistance Act of 1961, or any similar provision of law. (i) Authorization of Appropriations.--For the cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990) of the cancellation of any debt under this section, there are authorized to be appropriated to the President such sums as may be necessary for each of the fiscal years 2000 through 2004, which shall remain available until expended. ( j) Annual Reports to the Congress.--Not later than December 31 of each year, the President shall prepare and transmit to the Committees on Banking and Financial Services, Appropriations, and International Relations of the House of Representatives, and the Committees on Banking, Housing, and Urban Affairs, Foreign Relations, and Appropriations of the Senate a report, which shall be made available to the public, concerning the cancellation of debt under subsection (a), and a detailed description of debt relief provided by the United States as a member of the Paris Club of Official Creditors for the prior fiscal year.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p-262p-5) is amended by adding at the end the following:

``SEC. 1623. IMPROVEMENT OF THE HEAVILY INDEBTED POOR COUNTRIES INITIATIVE.

``(a) Improvement of the HIPC Initiative.--In order to accelerate multilateral debt relief and promote human and economic development and poverty alleviation in heavily indebted poor countries, the Congress urges the President to commence immediately efforts, with the Paris Club of Official Creditors, as well as the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (World Bank), and other appropriate multilateral development institutions to accomplish the following modifications to the Heavily Indebted Poor Countries Initiative: ``(1) Focus on poverty reduction, good governance, transparency, and participation of citizens.--A country which is otherwise eligible to receive cancellation of debt under the modified Heavily Indebted Poor Countries Initiative may receive such cancellation only if the country has committed, in connection with social and economic reform programs that are jointly developed, financed, and administered by the World Bank and the IMF-- ``(A) to enable, facilitate, or encourage the implementation of policy changes and institutional reforms under economic reform programs, in a manner that ensures that such policy changes and institutional reforms are designed and adopted through transparent and participatory processes;

``(B) to adopt an integrated development strategy to support poverty reduction through economic growth, that includes monitorable poverty reduction goals; ``(C) to take steps so that the financial benefits of debt relief are applied to programs to combat poverty (in particular through concrete measures to improve economic infrastructure, basic services in education, nutrition, and health, particularly treatment and prevention of the leading causes of mortality) and to redress environmental degradation; ``(D) to take steps to strengthen and expand the private sector, encourage increased trade and investment, support the development of free markets, and promote broad-scale economic growth; ``(E) to implement transparent policy making and budget procedures, good governance, and effective anticorruption measures; ``(F) to broaden public participation and popular understanding of the principles and goals of poverty reduction, particularly through economic growth, and good governance; and ``(G) to promote the participation of citizens and nongovernmental organizations in the economic policy choices of the government. ``(2) Faster debt relief.--The Secretary of the Treasury should urge the IMF and the World Bank to complete a debt sustainability analysis by December 31, 2000, and determine eligibility for debt relief, for as many of the countries under the modified Heavily Indebted Poor Countries Initiative as possible.

``(b) Heavily Indebted Poor Countries Review.--The Secretary of the Treasury, after consulting with the Committees on Banking and Financial Services and International Relations of the House of Representatives, and the Committees on Foreign Relations and Banking, Housing, and Urban Affairs of the Senate, shall make every effort (including instructing the United States Directors at the IMF and World Bank) to ensure that an external assessment of the modified Heavily Indebted Poor Countries Initiative, including the reformed Enhanced Structural Adjustment Facility program as it relates to that Initiative, takes place by December 31, 2001, incorporating the views of debtor governments and civil society, and that such assessment be made public. ``(c) Definition.--The term `modified Heavily Indebted Poor Countries Initiative' means the multilateral debt initiative presented in the Report of G-7 Finance Ministers on the Koln Debt Initiative to the Koln Economic Summit, Cologne, Germany, held from June 18-20, 1999.

``SEC. 1624. REFORM OF THE ENHANCED STRUCTURAL ADJUSTMENT FACILITY.

``The Secretary of the Treasury shall instruct the United States Executive Directors at the International Bank for Reconstruction and Development (World Bank) and the International Monetary Fund (IMF) to use the voice and vote of the United States to promote the establishment of poverty reduction strategy policies and procedures at the World Bank and the IMF that support

countries' efforts under programs developed and jointly administered by the World Bank and the IMF that have the following components: ``(1) The development of country-specific poverty reduction strategies (Poverty Reduction Strategies) under the leadership of such countries that-- ``(A) will be set out in poverty reduction strategy papers (PRSPs) that provide the basis for the lending operations of the International Development Association (IDA) and the reformed Enhanced Structural Adjustment Facility (ESAF); ``(B) will reflect the World Bank's role in poverty reduction and the IMF's role in macroeconomic issues; ``(C) will make the IMF's and the World Bank's advice and operations fully consistent with the objectives of poverty reduction through broad-based economic growth; and ``(D) should include-- ``(i) implementation of transparent budgetary procedures and mechanisms to help ensure that the financial benefits of debt relief under the modified Heavily Indebted Poor Countries Initiative (as defined in section 1623) are applied to programs that combat poverty; and ``(ii) monitorable indicators of progress in poverty reduction. ``(2) The adoption of procedures for periodic comprehensive reviews of reformed ESAF and IDA programs to help ensure progress toward longer-term poverty goals outlined in the Poverty Reduction Strategies and to allow adjustments in such programs. ``(3) The publication of the PRSPs prior to Executive Board review of related programs under IDA and the reformed ESAF. ``(4) The establishment of a standing evaluation unit at the IMF, similar to the Operations Evaluation Department of the World Bank, that would report directly to the Executive Board of the IMF and that would undertake periodic reviews of IMF operations, including the operations of the reformed ESAF, including-- ``(A) assessments of experience under the reformed ESAF programs in the areas of poverty reduction, economic growth, and access to basic social services; ``(B) assessments of the extent and quality of participation in program design by citizens; ``(C) verifications that reformed ESAF programs are designed in a manner consistent with the Poverty Reduction Strategies; and ``(D) prompt release to the public of all reviews by the standing evaluation unit. ``(5) The promotion of clearer conditionality in IDA and reformed ESAF programs that focuses on reforms most likely to support poverty reduction through broad-based economic growth. ``(6) The adoption by the IMF of policies aimed at reforming ESAF so that reformed ESAF programs are consistent with the Poverty Reduction Strategies. ``(7) The adoption by the World Bank of policies to help ensure that its lending operations in countries eligible for debt

relief under the modified Heavily Indebted Poor Countries Initiative are consistent with the Poverty Reduction Strategies. ``(8) Strengthening the linkage between borrower country performance and lending operations by IDA and the reformed ESAF on the basis of clear and monitorable indictors. ``(9) Full public disclosure of the proposed objectives and financial organization of the successor to the ESAF at least 90 days before any decision by the Executive Board of the IMF to consider its adoption.''.

(a) Contributions for Debt Reductions for the Poorest Countries.-- The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended by adding at the end the following:

``SEC. 62. APPROVAL OF CONTRIBUTIONS FOR DEBT REDUCTIONS FOR THE POOREST COUNTRIES.

``For the purpose of mobilizing the resources of the Fund in order to help reduce poverty and improve the lives of residents of poor countries and, in particular, to allow those poor countries with unsustainable debt burdens to receive deeper, broader, and faster debt relief, without allowing gold to reach the open market or otherwise adversely affecting the market price of gold, the Secretary of the Treasury is authorized to instruct the United States Executive Director of the Fund to vote-- ``(1) to approve an arrangement whereby the Fund-- ``(A) sells a quantity of its gold at prevailing market prices to a member or members in nonpublic transactions sufficient to generate 2.226 billion Special Drawing Rights in profits on such sales; ``(B) immediately after, and in conjunction with each such sale, accepts payment by such member or members of such gold to satisfy existing repurchase obligations of such member or members so that the Fund retains ownership of the gold at the conclusion of such payment; ``(C) uses the earnings on the investment of the profits of such sales through a separate subaccount, only for the purpose of providing debt relief from the Fund under the modified Heavily Indebted Poor Countries (HIPC) Initiative (as defined in section 1623 of the International Financial Institutions Act); and ``(D) shall not use more than \9/14\ of the earnings on the investment of the profits of such sales; and ``(2) to support a decision that shall terminate the Special Contingency Account 2 (SCA-2) of the Fund so that the funds in the SCA-2 shall be made available to the poorest countries. Any funds attributable to the United States participation in SCA-2 shall be used only for debt relief from the Fund under the modified HIPC Initiative.''.

(b) Certification.--Within 15 days after the United States Executive Director casts the votes necessary to carry out the instruction described in section 62 of the Bretton Woods Agreements Act, the Secretary of the Treasury shall certify to the Congress that neither the profits nor the earnings on the investment of profits from the gold sales made pursuant to the instruction or of the funds attributable to United States participation in SCA-2 will be used to augment the resources of any reserve account

of the International Monetary Fund for the purpose of making loans.

(a) Publication of IMF Operational Budgets.--The Secretary of the Treasury shall instruct the United States Executive Director at the International Monetary Fund to use the voice, vote, and influence of the United States to urge vigorously the International Monetary Fund to publish the operational budgets of the International Monetary Fund, on a quarterly basis, not later than one year after the end of the period covered by the budget. (b) Report to the Congress Showing Costs of United States Participation in the International Monetary Fund.--The Secretary of the Treasury shall prepare and transmit to the Committees on Banking and Financial Services, on Appropriations, and on International Relations of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs, on Foreign Relations, and on Appropriations of the Senate a quarterly report, which shall be made readily available to the public, on the costs or benefits of United States participation in the International Monetary Fund and which shall detail the costs and benefits to the United States, as well as valuation gains or losses on the United States reserve position in the International Monetary Fund. (c) Continuation of Forgoing of Reimbursement of IMF for Expenses of Administering ESAF.--The Secretary of the Treasury shall instruct the United States Executive Director at the International Monetary Fund to use the voice, vote, and influence of the United States to urge vigorously the International Monetary Fund to continue to forgo reimbursements of the expenses incurred by the International Monetary Fund in administering the Enhanced Structural Adjustment Facility, until the Heavily Indebted Poor Countries Initiative (as defined in section 1623 of the International Financial Institutions Act) is terminated. (d) No Gold Sales by International Monetary Fund Without Prior Authorization by the Congress.--(1) The first sentence of section 5 of the Bretton Woods Agreements Act (22 U.S.C. 286c) is amended in clause (g) by striking ``approve either the disposition of more than 25 million ounces of Fund gold for the benefit of the Trust Fund established by the Fund on May 6, 1976, or the establishment of any additional trust fund whereby resources of the International Monetary Fund would be used for the special benefit of a single member, or of a particular segment of the membership, of the Fund.'' and inserting ``approve any disposition of Fund gold, unless the Secretary certifies to the Congress that such disposition is necessary for the Fund to restitute gold to its members, or for the Fund to provide liquidity that will enable the Fund to meet member country claims on the Fund or to meet threats to the systemic stability of the international financial system.''. (2) Not less than 30 days prior to the entrance by the United States into international negotiations for the purpose of reaching agreement on the disposition of Fund gold whereby resources of the Fund would be used for the special benefit of a single member, or of a particular segment of the membership of the Fund, the Secretary of the Treasury shall consult with the Committees on

Banking and Financial Services, on Appropriations, and on International Relations of the House of Representatives and the Committees on Foreign Relations, on Appropriations, and on Banking, Housing and Urban Affairs of the Senate. (e) Annual Report by GAO on Consistency of IMF Practices With Statutory Policies.--The Comptroller General of the United States shall annually prepare and submit to the Congress of the United States a written report on the extent to which the practices of the International Monetary Fund are consistent with the policies of the United States, as expressly contained in Federal law applicable to the International Monetary Fund.

(a) Payment Authorization.--The Secretary of the Treasury shall pay, out of funds not otherwise appropriated, $100,000 to the survivor, or collectively the survivors, of each of the 14 members of the Armed Forces and the one United States civilian Federal employee who were killed on April 14, 1994, when United States F-15 fighter aircraft mistakenly shot down two UH-60 Black Hawk helicopters over Iraq. (b) Survivor Status.-- (1) Members of the armed forces insured by sgli.--In the case of a member of the Armed Forces described in subsection (a) who was insured by a Servicemembers' Group Life Insurance policy (issued under chapter 19 of title 38, United States Code), a survivor of such member for the purposes of subsection (a) shall be any person designated as a beneficiary on the individual's policy. (2) Individuals not insured by sgli.--In the case of a member of the Armed Forces described in subsection (a) who was not insured by a Servicemembers' Group Life Insurance policy (issued under chapter 19 of title 38, United States Code) or the civilian Federal employee described in subsection (a), a survivor of such member or employee for the purposes of subsection (a) shall be any person determined to be a survivor by the Secretary of the Treasury using the provisions of section 5582(b) of title 5, United States Code.

Not more than a total of $1,500,000 may be paid to survivors under section 1.

Notwithstanding any contract, no representative of a survivor may receive more than 10 percent of a payment made under section 1 for services rendered in connection with the survivor's claim for such payment. Any person who violates this section shall be guilty of an infraction and shall be subject to a fine in the amount provided in title 18, United States Code.

Not later than 6 months after the date of the enactment of this Act, the Secretary of the Treasury shall transmit to the Congress a report describing the payments made under section 1.

SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES TO BBA; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999''. (b) Amendments to Social Security Act.--Except as otherwise specifically provided, whenever in this Act an amendment 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 that section or other provision of the Social Security Act. (c) References to the Balanced Budget Act of 1997.--In this Act, the term ``BBA'' means the Balanced Budget Act of 1997 (Public Law 105-33). (d) Table of Contents.--The table of contents of this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; references to BBA; table of contents.

(a) Adjustment for Medically Complex Patients Until Establishment of Refined Case-Mix Adjustment.--For purposes of computing payments for covered skilled nursing facility services under paragraph (1) of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) for such services furnished on or after April 1, 2000, and before the date described in subsection (c), the Secretary of Health and Human Services shall increase by 20 percent the adjusted Federal per diem rate otherwise determined under paragraph (4) of such section (but for this section) for covered skilled nursing facility services for RUG-III groups described in subsection (b) furnished to an individual during the period in which such individual is classified in such a RUG-III category. (b) Groups Described.--The RUG-III groups for which the adjustment described in subsection (a) applies are SE3, SE2, SE1, SSC, SSB, SSA, CC2, CC1, CB2, CB1, CA2, CA1, RHC, RMC, and RMB as specified in Tables 3 and 4 of the final rule published in the Federal Register by the Health Care Financing Administration on July 30, 1999 (64 Fed. Reg. 41684). (c) Date Described.--For purposes of subsection (a), the date described in this subsection is the later of-- (1) October 1, 2000; or (2) the date on which the Secretary implements a refined case mix classification system under section 1888(e)(4)(G)(i)

of the Social Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) to better account for medically complex patients.

(d) Increase for Fiscal Years 2001 and 2002.-- (1) In general.--For purposes of computing payments for covered skilled nursing facility services under paragraph (1) of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) for covered skilled nursing facility services furnished during fiscal years 2001 and 2002, the Secretary of Health and Human Services shall increase by 4.0 percent for each such fiscal year the adjusted Federal per diem rate otherwise determined under paragraph (4) of such section (but for this section). (2) Additional payment not built into the base.--The Secretary of Health and Human Services shall not include any additional payment made under this subsection in updating the Federal per diem rate under section 1888(e)(4) of that Act (42 U.S.C. 1395yy(e)(4)).

FEDERAL RATE.

(a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)) is amended-- (1) in paragraph (1), in the matter preceding subparagraph (A), by striking ``paragraph (7)'' and inserting ``paragraphs (7) and (11)''; and (2) by adding at the end the following new paragraph: ``(11) Permitting facilities to waive 3-year transition.-- Notwithstanding paragraph (1)(A), a facility may elect to have the amount of the payment for all costs of covered skilled nursing facility services for each day of such services furnished in cost reporting periods beginning no earlier than 30 days before the date of such election determined pursuant to paragraph (1)(B).''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to elections made on or after December 15, 1999, except that no election shall be effective under such amendments for a cost reporting period beginning before January 1, 2000.

PROSTHESES, AND CHEMOTHERAPY DRUGS.

(a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)) is amended-- (1) in paragraph (2)(A)(i)(II), by striking ``services described in clause (ii)'' and inserting ``items and services described in clauses (ii) and (iii)''; (2) by adding at the end of paragraph (2)(A) the following new clause: ``(iii) Exclusion of certain additional items and services.--Items and services described in this clause are the following: ``(I) Ambulance services furnished to an individual in conjunction with renal dialysis services described in section 1861(s)(2)(F). ``(II) Chemotherapy items (identified as of July 1, 1999, by HCPCS codes J9000-J9020; J9040-J9151; J9170- J9185; J9200-J9201; J9206-J9208; J9211; J9230-J9245; and J9265-J9600 (and as subsequently modified by the Secretary)) and any

additional chemotherapy items identified by the Secretary. ``(III) Chemotherapy administration services (identified as of July 1, 1999, by HCPCS codes 36260-36262; 36489; 36530-36535; 36640; 36823; and 96405- 96542 (and as subsequently modified by the Secretary)) and any additional chemotherapy administration services identified by the Secretary. ``(IV) Radioisotope services (identified as of July 1, 1999, by HCPCS codes 79030-79440 (and as subsequently modified by the Secretary)) and any additional radioisotope services identified by the Secretary. ``(V) Customized prosthetic devices (commonly known as artificial limbs or components of artificial limbs) under the following HCPCS codes (as of July 1, 1999 (and as subsequently modified by the Secretary)), and any additional customized prosthetic devices identified by the Secretary, if delivered to an inpatient for use during the stay in the skilled nursing facility and intended to be used by the individual after discharge from the facility: L5050- L5340; L5500-L5611; L5613-L5986; L5988; L6050-L6370; L6400-L6880; L6920-L7274; and L7362-7366.''; and (3) by adding at the end of paragraph (9) the following: ``In the case of an item or service described in clause (iii) of paragraph (2)(A) that would be payable under part A but for the exclusion of such item or service under such clause, payment shall be made for the item or service, in an amount otherwise determined under part B of this title for such item or service, from the Federal Hospital Insurance Trust Fund under section 1817 (rather than from the Federal Supplementary Medical Insurance Trust Fund under section 1841).''.

(b) Conforming for Budget Neutrality Beginning With Fiscal Year 2001.-- (1) In general.--Section 1888(e)(4)(G) (42 U.S.C. 1395yy(e)(4)(G)) is amended by adding at the end the following new clause: ``(iii) Adjustment for exclusion of certain additional items and services.--The Secretary shall provide for an appropriate proportional reduction in payments so that beginning with fiscal year 2001, the aggregate amount of such reductions is equal to the aggregate increase in payments attributable to the exclusion effected under clause (iii) of paragraph (2)(A).''. (2) Conforming amendment.--Section 1888(e)(8)(A) (42 U.S.C. 1395yy(e)(8)(A)) is amended by striking ``and adjustments for variations in labor-related costs under paragraph (4)(G)(ii)'' and inserting ``adjustments for variations in labor-related costs under paragraph (4)(G)(ii), and adjustments under paragraph (4)(G)(iii)''.

(c) Effective Date.--The amendments made by subsection (a) shall apply to payments made for items and services furnished on or after April 1, 2000.

THE NHCMQ DEMONSTRATION PROJECT.

(a) In General.--Section 1888(e)(3) (42 U.S.C. 1395yy(e)(3)) is amended-- (1) in subparagraph (A)-- (A) in clause (i), by inserting ``or, in the case of a facility participating in the Nursing Home Case-Mix and Quality Demonstration (RUGS-III), the RUGS-III rate received by the facility during the cost reporting period beginning in 1997'' after ``to non-settled cost reports''; and (B) in clause (ii), by striking ``furnished during such period'' and inserting ``furnished during the applicable cost reporting period described in clause (i)''; and (2) by striking subparagraph (B) and inserting the following new subparagraph: ``(B) Update to first cost reporting period.--The Secretary shall update the amount determined under subparagraph (A), for each cost reporting period after the applicable cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase minus 1.0 percentage point.''.

(b) Effective Date.--The amendments made by subsection (a) shall be effective as if included in the enactment of section 4432(a) of BBA.

PATIENT POPULATIONS.

(a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)), as amended by section 102(a)(1), is further amended-- (1) in paragraph (1), by striking ``subject to paragraphs (7) and (11)'' and inserting ``subject to paragraphs (7), (11), and (12)''; and (2) by adding at the end the following new paragraph: ``(12) Payment rule for certain facilities.-- ``(A) In general.--In the case of a qualified acute skilled nursing facility described in subparagraph (B), the per diem amount of payment shall be determined by applying the non-Federal percentage and Federal percentage specified in paragraph (2)(C)(ii). ``(B) Facility described.--For purposes of subparagraph (A), a qualified acute skilled nursing facility is a facility that-- ``(i) was certified by the Secretary as a skilled nursing facility eligible to furnish services under this title before July 1, 1992; ``(ii) is a hospital-based facility; and ``(iii) for the cost reporting period beginning in fiscal year 1998, the facility had more than 60 percent of total patient days comprised of patients who are described in subparagraph (C). ``(C) Description of patients.--For purposes of subparagraph (B), a patient described in this subparagraph is an individual who-- ``(i) is entitled to benefits under part A; and

``(ii) is immuno-compromised secondary to an infectious disease, with specific diagnoses as specified by the Secretary.''.

(b) Effective Date.--The amendments made by subsection (a) shall apply for the period beginning on the date on which the first cost reporting period of the facility begins after the date of the enactment of this Act and ending on September 30, 2001, and applies to skilled nursing facilities furnishing covered skilled nursing facility services on the date of the enactment of this Act for which payment is made under title XVIII of the Social Security Act. (c) Report to Congress.--Not later than March 1, 2001, the Secretary of Health and Human Services shall assess the resource use of patients of skilled nursing facilities furnishing services under the medicare program who are immuno-compromised secondary to an infectious disease, with specific diagnoses as specified by the Secretary (under paragraph (12)(C), as added by subsection (a), of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e))) to determine whether any permanent adjustments are needed to the RUGs to take into account the resource uses and costs of these patients.

HAWAII AND ALASKA.

(a) In General.--The Medicare Payment Advisory Commission shall conduct a study of skilled nursing facilities furnishing covered skilled nursing facility services (as defined in section 1888(e)(2)(A) of the Social Security Act (42 U.S.C. 1395yy(e)(2)(A)) to determine the need for an additional payment amount under section 1888(e)(4)(G) of such Act (42 U.S.C. 1395yy(e)(4)(G)) to take into account the unique circumstances of skilled nursing facilities located in Alaska and Hawaii. (b) Report.--Not later than 18 months after the date of the enactment of this Act, the Medicare Payment Advisory Commission shall submit a report to Congress on the study conducted under subsection (a).

STANDARDS AND RESPIRATORY THERAPY COMPETENCY EXAMINATIONS.

(a) Study.--The Secretary of Health and Human Services shall conduct a study that-- (1) identifies variations in State licensure and certification standards for health care providers (including nursing and allied health professionals) and other individuals providing respiratory therapy in skilled nursing facilities; (2) examines State requirements relating to respiratory therapy competency examinations for such providers and individuals; and (3) determines whether regular respiratory therapy competency examinations or certifications should be required under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for such providers and individuals.

(b) Report.--Not later than 18 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report on the results of the study conducted under this section, together with any recommendations

for legislation that the Secretary determines to be appropriate as a result of such study.

Subtitle B--PPS Hospitals

(IME) PERCENTAGE ADJUSTMENT.

(a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 1395ww(d)(5)(B)(ii)) is amended-- (1) in subclause (IV), by striking ``and'' at the end; (2) by redesignating subclause (V) as subclause (VI); (3) by inserting after subclause (IV) the following new subclause: ``(V) during fiscal year 2001, `c' is equal to 1.54; and''; and (4) in subclause (VI), as so redesignated, by striking ``2000'' and inserting ``2001''.

(b) Special Payments To Maintain 6.5 Percent IME Payment for Fiscal Year 2000.-- (1) Additional payment.--In addition to payments made to each subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) under section 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B))) which receives payment for the direct costs of medical education for discharges occurring in fiscal year 2000, the Secretary of Health and Human Services shall make one or more payments to each such hospital in an amount which, as estimated by the Secretary, is equal in the aggregate to the difference between the amount of payments to the hospital under such section for such discharges and the amount of payments that would have been paid under such section for such discharges if ``c'' in clause (ii)(IV) of such section equalled 1.6 rather than 1.47. Additional payments made under this subsection shall be made applying the same structure as applies to payments made under section 1886(d)(5)(B) of such Act. (2) No effect on other payments or determinations.--In making such additional payments, the Secretary shall not change payments, determinations, or budget neutrality adjustments made for such period under section 1886(d) of such Act (42 U.S.C. 1395ww(d)).

(c) Conforming Amendment Relating to Determination of Standardized Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is amended by inserting ``or any additional payments under such paragraph resulting from the application of section 111 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999'' after ``Balanced Budget Act of 1997''.

DECREASE IN REDUCTIONS FOR DISPROPORTIONATE SHARE HOSPITALS; DATA COLLECTION REQUIREMENTS.

(a) In General.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 1395ww(d)(5)(F)(ix)) is amended-- (1) in subclause (III), by striking ``during fiscal year 2000'' and inserting ``during each of fiscal years 2000 and 2001''; (2) by striking subclause (IV);

(3) by redesignating subclauses (V) and (VI) as subclauses (IV) and (V), respectively; and (4) in subclause (IV), as so redesignated, by striking ``reduced by 5 percent'' and inserting ``reduced by 4 percent''.

(b) Data Collection.-- (1) In general.--The Secretary of Health and Human Services shall require any subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B))) to submit to the Secretary, in the cost reports submitted to the Secretary by such hospital for discharges occurring during a fiscal year, data on the costs incurred by the hospital for providing inpatient and outpatient hospital services for which the hospital is not compensated, including non-medicare bad debt, charity care, and charges for medicaid and indigent care. (2) Effective date.--The Secretary shall require the submission of the data described in paragraph (1) in cost reports for cost reporting periods beginning on or after October 1, 2001.

Subtitle C--PPS-Exempt Hospitals

(a) In General.--Section 1886(b)(3)(H) (42 U.S.C. 1395ww(b)(3)(H)) is amended-- (1) in clause (i), by inserting ``, as adjusted under clause (iii)'' before the period; (2) in clause (ii), by striking ``clause (i)'' and ``such clause'' and inserting ``subclause (I)'' and ``such subclause'' respectively; (3) by striking ``(H)(i)'' and inserting ``(ii)(I)''; (4) by redesignating clauses (ii) and (iii) as subclauses (II) and (III); (5) by inserting after clause (ii), as so redesignated, the following new clause:

``(iii) In applying clause (ii)(I) in the case of a hospital or unit, the Secretary shall provide for an appropriate adjustment to the labor-related portion of the amount determined under such subparagraph to take into account differences between average wage-related costs in the area of the hospital and the national average of such costs within the same class of hospital.''; and (6) by inserting before clause (ii), as so redesignated, the following new clause:

``(H)(i) In the case of a hospital or unit that is within a class of hospital described in clause (iv), for a cost reporting period beginning during fiscal years 1998 through 2002, the target amount for such a hospital or unit may not exceed the amount as updated up to or for such cost reporting period under clause (ii).''. (b) Effective Date.--The amendments made by subsection (a) apply to cost reporting periods beginning on or after October 1, 1999.

UNTIL DEVELOPMENT OF PROSPECTIVE PAYMENT SYSTEMS FOR THOSE HOSPITALS.

Section 1886(b)(2) (42 U.S.C. 1395ww(b)(2)) is amended-- (1) in subparagraph (A), by striking ``In addition to'' and inserting ``Except as provided in subparagraph (E), in addition to''; and (2) by adding at the end the following new subparagraph:

``(E)(i) In the case of an eligible hospital that is a hospital or unit that is within a class of hospital described in clause (ii) with a 12-month cost reporting period beginning before the enactment of this subparagraph, in determining the amount of the increase under subparagraph (A), the Secretary shall substitute for the percentage of the target amount applicable under subparagraph (A)(ii)-- ``(I) for a cost reporting period beginning on or after October 1, 2000, and before September 30, 2001, 1.5 percent; and ``(II) for a cost reporting period beginning on or after October 1, 2001, and before September 30, 2002, 2 percent.

``(ii) For purposes of clause (i), each of the following shall be treated as a separate class of hospital: ``(I) Hospitals described in clause (i) of subsection (d)(1)(B) and psychiatric units described in the matter following clause (v) of such subsection. ``(II) Hospitals described in clause (iv) of such subsection.''.

HOSPITALS.

(a) Development of System.-- (1) In general.--The Secretary of Health and Human Services shall develop a per discharge prospective payment system for payment for inpatient hospital services of long-term care hospitals described in section 1886(d)(1)(B)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)) under the medicare program. Such system shall include an adequate patient classification system that is based on diagnosis-related groups (DRGs) and that reflects the differences in patient resource use and costs, and shall maintain budget neutrality. (2) Collection of data and evaluation.--In developing the system described in paragraph (1), the Secretary may require such long-term care hospitals to submit such information to the Secretary as the Secretary may require to develop the system.

(b) Report.--Not later than October 1, 2001, the Secretary shall submit to the appropriate committees of Congress a report that includes a description of the system developed under subsection (a)(1). (c) Implementation of Prospective Payment System.--Notwithstanding section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 2002, for payments for inpatient hospital services furnished by long-term care hospitals under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) in accordance with the system described in subsection (a).

(a) Development of System.-- (1) In general.--The Secretary of Health and Human Services shall develop a per diem prospective payment system for payment for inpatient hospital services of psychiatric hospitals and units (as defined in paragraph (3)) under the medicare program. Such system shall include an adequate patient classification system that reflects the differences in patient resource use and costs among such hospitals and shall maintain budget neutrality. (2) Collection of data and evaluation.--In developing the system described in paragraph (1), the Secretary may require such psychiatric hospitals and units to submit such information to the Secretary as the Secretary may require to develop the system. (3) Definition.--In this section, the term ``psychiatric hospitals and units'' means a psychiatric hospital described in clause (i) of section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) and psychiatric units described in the matter following clause (v) of such section.

(b) Report.--Not later than October 1, 2001, the Secretary shall submit to the appropriate committees of Congress a report that includes a description of the system developed under subsection (a)(1). (c) Implementation of Prospective Payment System.--Notwithstanding section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 2002, for payments for inpatient hospital services furnished by psychiatric hospitals and units under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) in accordance with the prospective payment system established by the Secretary under this section in a budget neutral manner.

REHABILITATION SERVICES.

(a) Use of Discharge as Payment Unit.-- (1) In general.--Section 1886(j)(1)(D) (42 U.S.C. 1395ww(j)(1)(D)) is amended by striking ``, day of inpatient hospital services, or other unit of payment defined by the Secretary''. (2) Conforming amendment to classification.--Section 1886(j)(2)(A)(i) (42 U.S.C. 1395ww(j)(2)(A)(i)) is amended to read as follows: ``(i) classes of patient discharges of rehabilitation facilities by functional-related groups (each in this subsection referred to as a `case mix group'), based on impairment, age, comorbidities, and functional capability of the patient and such other factors as the Secretary deems appropriate to improve the explanatory power of functional independence measure-function related groups; and''. (3) Construction relating to transfer authority.--Section 1886(j)(1) (42 U.S.C. 1395ww(j)(1)) is amended by adding at the end the following new subparagraph: ``(E) Construction relating to transfer authority.-- Nothing in this subsection shall be construed

as preventing the Secretary from providing for an adjustment to payments to take into account the early transfer of a patient from a rehabilitation facility to another site of care.''.

(b) Study on Impact of Implementation of Prospective Payment System.-- (1) Study.--The Secretary of Health and Human Services shall conduct a study of the impact on utilization and beneficiary access to services of the implementation of the medicare prospective payment system for inpatient hospital services or rehabilitation facilities under section 1886(j) of the Social Security Act (42 U.S.C. 1395ww(j)). (2) Report.--Not later than 3 years after the date such system is first implemented, the Secretary shall submit to Congress a report on such study.

(c) Effective Date.--The amendments made by subsection (a) are effective as if included in the enactment of section 4421(a) of BBA.

Subtitle D--Hospice Care

(a) Increase for Fiscal Years 2001 and 2002.--For purposes of payments under section 1814(i)(1)(C) of the Social Security Act (42 U.S.C. 1395f(i)(1)(C)) for hospice care furnished during fiscal years 2001 and 2002, the Secretary of Health and Human Services shall increase the payment rate in effect (but for this section) for-- (1) fiscal year 2001, by 0.5 percent, and (2) fiscal year 2002, by 0.75 percent.

(b) Additional Payment Not Built Into the Base.--The Secretary of Health and Human Services shall not include any additional payment made under this subsection (a) in updating the payment rate, as increased by the applicable market basket percentage increase for the fiscal year involved under section 1814(i)(1)(C)(ii) of that Act (42 U.S.C. 1395f(i)(1)(C)(ii)).

PAYMENT RATES FOR HOSPICE CARE.

(a) Study.--The Comptroller General of the United States shall conduct a study to determine the feasibility and advisability of updating the payment rates and the cap amount determined with respect to a fiscal year under section 1814(i) of the Social Security Act (42 U.S.C. 1395f(i)) for routine home care and other services included in hospice care. Such study shall examine the cost factors used to determine such rates and such amount and shall evaluate whether such factors should be modified, eliminated, or supplemented with additional cost factors. (b) Report.--Not later than one year after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the study conducted under subsection (a), together with any recommendations for legislation that the Comptroller General determines to be appropriate as a result of such study.

Subtitle E--Other Provisions

PROFESSIONAL CLINICAL TRAINING IN HOSPITALS.

(a) In General.--The Medicare Payment Advisory Commission shall conduct a study of medicare payment policy with respect to professional clinical training of different classes of nonphysician health care professionals (such as nurses, nurse practitioners, allied health professionals, physician assistants, and psychologists) and the basis for any differences in treatment among such classes. (b) Report.--Not later than 18 months after the date of the enactment of this Act, the Commission shall submit a report to Congress on the study conducted under subsection (a).

Subtitle F--Transitional Provisions

Notwithstanding any other provision of law, for purposes of fiscal year 2000, the Northwest Mississippi Regional Medical Center located in Clarksdale, Mississippi shall be deemed to have satisfied the case mix index criteria under section 1886(d)(5)(C)(ii) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(C)(ii)) for classification as a rural referral center.

REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

(a) Fiscal Year 2000.--Notwithstanding any other provision of law, effective for discharges occurring during fiscal year 2000, for purposes of making payments under section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d))-- (1) to hospitals in Iredell County, North Carolina, such county is deemed to be located in the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina Metropolitan Statistical Area; (2) to hospitals in Orange County, New York, the large urban area of New York, New York is deemed to include such county; (3) to hospitals in Lake County, Indiana, and to hospitals in Lee County, Illinois, such counties are deemed to be located in the Chicago, Illinois Metropolitan Statistical Area; (4) to hospitals in Hamilton-Middletown, Ohio, Hamilton- Middletown, Ohio, is deemed to be located in the Cincinnati, Ohio-Kentucky-Indiana Metropolitan Statistical Area; (5) to hospitals in Brazoria County, Texas, such county is deemed to be located in the Houston, Texas Metropolitan Statistical Area; and (6) to hospitals in Chittenden County, Vermont, such county is deemed to be located in the Boston-Worcester-Lawrence-Lowell- Brockton, Massachusetts-New Hampshire Metropolitan Statistical Area.

(b) Fiscal Year 2001.--Notwithstanding any other provision of law, effective for discharges occurring during fiscal year 2001,

for purposes of making payments under section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d))-- (1) Iredell County, North Carolina is deemed to be located in the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina Metropolitan Statistical Area; (2) the large urban area of New York, New York is deemed to include Orange County, New York; (3) Lake County, Indiana, and Lee County, Illinois, are deemed to be located in the Chicago, Illinois Metropolitan Statistical Area; (4) Hamilton-Middletown, Ohio, is deemed to be located in the Cincinnati, Ohio-Kentucky-Indiana Metropolitan Statistical Area; (5) Brazoria County, Texas, is deemed to be located in the Houston, Texas Metropolitan Statistical Area; and (6) Chittenden County, Vermont is deemed to be located in the Boston-Worcester-Lawrence-Lowell-Brockton, Massachusetts-New Hampshire Metropolitan Statistical Area.

For purposes of that section, any reclassification under this subsection shall be treated as a decision of the Medicare Geographic Classification Review Board under paragraph (10) of that section.

Notwithstanding any other provision of section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)), the Secretary of Health and Human Services shall calculate and apply the Hattiesburg, Mississippi Metropolitan Statistical Area wage index under that section for discharges occurring during fiscal year 2000 using fiscal year 1996 wage and hour data for Wesley Medical Center for purposes of payment under that section for that fiscal year. Such recalculation shall not affect the wage index for any other area.

AREA.

(a) Fiscal Year 2000.--Notwithstanding any other provision of section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)), for discharges occurring during fiscal year 2000, the Secretary of Health and Human Services shall calculate and apply the wage index for the Allentown-Bethlehem-Easton Metropolitan Statistical Area under that section as if the Lehigh Valley Hospital were classified in such area for purposes of payment under that section for such fiscal year. Such recalculation shall not affect the wage index for any other area. (b) Fiscal Year 2001.--Notwithstanding any other provision of section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)), in calculating and applying the wage indices under that section for discharges occurring during fiscal year 2001, Lehigh Valley Hospital shall be treated as being classified in the Allentown-Bethlehem-Easton Metropolitan Statistical Area.

(a) In General.--Notwithstanding any provision of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)), for the cost reporting period beginning in fiscal year 2000 and for the cost reporting period beginning in fiscal year 2001, if a skilled nursing facility which meets the criteria described in subsection (b) elects to be paid in accordance with subsection (c), the Secretary of Health and Human Services shall establish a per diem payment

amount for such facility according to the methodology described in subsection (c) for such cost reporting periods in lieu of the payment amount that would otherwise be established for such facility under section 1888(e)(1) of such Act (42 U.S.C. 1395yy(e)(1)). (b) Facility Eligibility Criteria.--For purposes of this subsection, a skilled nursing facility is one-- (1) that began participation in the Medicare program under title XVIII of the Social Security Act before January 1, 1995; (2) for which at least 80 percent of the total inpatient days of the facility in the cost reporting period beginning in fiscal year 1998 were comprised of individuals entitled to benefits under such title; and (3) that is located in Baldwin or Mobile County, Alabama.

(c) Determination of Per Diem Amount.--For purposes of subsection (a), the per diem payment amount shall be equal to 100 percent of the amount determined under section 1888(e)(3) of the Social Security Act (42 U.S.C. 1395yy(e)(3)) except that, in determining such amount, the Secretary shall-- (1) substitute the allowable costs of the facility for the cost reporting period beginning in fiscal year 1998 for those allowable costs of the cost reporting period beginning in fiscal year 1995; and (2) exclude the update to the first cost reporting period (from fiscal year 1995 to fiscal year 1998) described in section 1888(e)(3)(B)(i) of such Act (42 U.S.C. 1395yy(e)(3)(B)(i)).

MEDICAL DEVICES, DRUGS, AND BIOLOGICALS.

(a) Outlier Adjustment.--Section 1833(t) (42 U.S.C. 1395l(t)) is amended-- (1) by redesignating paragraphs (5) through (9) as paragraphs (7) through (11), respectively; and (2) by inserting after paragraph (4) the following new paragraph: ``(5) Outlier adjustment.-- ``(A) In general.--Subject to subparagraph (D), the Secretary shall provide for an additional payment for each covered OPD service (or group of services) for which a hospital's charges, adjusted to cost, exceed-- ``(i) a fixed multiple of the sum of-- ``(I) the applicable medicare OPD fee schedule amount determined under paragraph (3)(D), as adjusted under paragraph (4)(A) (other than for adjustments under this paragraph or paragraph (6)); and ``(II) any transitional pass-through payment under paragraph (6); and ``(ii) at the option of the Secretary, such fixed dollar amount as the Secretary may establish.

``(B) Amount of adjustment.--The amount of the additional payment under subparagraph (A) shall be determined by the Secretary and shall approximate the marginal cost of care beyond the applicable cutoff point under such subparagraph. ``(C) Limit on aggregate outlier adjustments.-- ``(i) In general.--The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year. ``(ii) Applicable percentage.--For purposes of clause (i), the term `applicable percentage' means a percentage specified by the Secretary up to (but not to exceed)-- ``(I) for a year (or portion of a year) before 2004, 2.5 percent; and ``(II) for 2004 and thereafter, 3.0 percent. ``(D) Transitional authority.--In applying subparagraph (A) for covered OPD services furnished before January 1, 2002, the Secretary may-- ``(i) apply such subparagraph to a bill for such services related to an outpatient encounter (rather than for a specific service or group of services) using OPD fee schedule amounts and transitional pass-through payments covered under the bill; and ``(ii) use an appropriate cost-to-charge ratio for the hospital involved (as determined by the Secretary), rather than for specific departments within the hospital.''.

(b) Transitional Pass-Through for Additional Costs of Innovative Medical Devices, Drugs, and Biologicals.--Such section is further amended by inserting after paragraph (5) the following new paragraph: ``(6) Transitional pass-through for additional costs of innovative medical devices, drugs, and biologicals.-- ``(A) In general.--The Secretary shall provide for an additional payment under this paragraph for any of the following that are provided as part of a covered OPD service (or group of services): ``(i) Current orphan drugs.--A drug or biological that is used for a rare disease or condition with respect to which the drug or biological has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act if payment for the drug or biological as an outpatient hospital service under this part was being made on the first date that the system under this subsection is implemented. ``(ii) Current cancer therapy drugs and biologicals and brachytherapy.--A drug or biological that is used in cancer therapy, including (but not limited to) a chemotherapeutic agent, an

antiemetic, a hematopoietic growth factor, a colony stimulating factor, a biological response modifier, a bisphosphonate, and a device of brachytherapy, if payment for such drug, biological, or device as an outpatient hospital service under this part was being made on such first date. ``(iii) Current radiopharmaceutical drugs and biological products.--A radiopharmaceutical drug or biological product used in diagnostic, monitoring, and therapeutic nuclear medicine procedures if payment for the drug or biological as an outpatient hospital service under this part was being made on such first date. ``(iv) New medical devices, drugs, and biologicals.--A medical device, drug, or biological not described in clause (i), (ii), or (iii) if-- ``(I) payment for the device, drug, or biological as an outpatient hospital service under this part was not being made as of December 31, 1996; and ``(II) the cost of the device, drug, or biological is not insignificant in relation to the OPD fee schedule amount (as calculated under paragraph (3)(D)) payable for the service (or group of services) involved. ``(B) Limited period of payment.--The payment under this paragraph with respect to a medical device, drug, or biological shall only apply during a period of at least 2 years, but not more than 3 years, that begins-- ``(i) on the first date this subsection is implemented in the case of a drug, biological, or device described in clause (i), (ii), or (iii) of subparagraph (A) and in the case of a device, drug, or biological described in subparagraph (A)(iv) and for which payment under this part is made as an outpatient hospital service before such first date; or ``(ii) in the case of a device, drug, or biological described in subparagraph (A)(iv) not described in clause (i), on the first date on which payment is made under this part for the device, drug, or biological as an outpatient hospital service. ``(C) Amount of additional payment.--Subject to subparagraph (D)(iii), the amount of the payment under this paragraph with respect to a device, drug, or biological provided as part of a covered OPD service is-- ``(i) in the case of a drug or biological, the amount by which the amount determined under section 1842(o) for the drug or biological exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the drug or biological; or ``(ii) in the case of a medical device, the amount by which the hospital's charges for the device, adjusted to cost, exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the device. ``(D) Limit on aggregate annual adjustment.--

``(i) In general.--The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year. ``(ii) Applicable percentage.--For purposes of clause (i), the term `applicable percentage' means-- ``(I) for a year (or portion of a year) before 2004, 2.5 percent; and ``(II) for 2004 and thereafter, a percentage specified by the Secretary up to (but not to exceed) 2.0 percent. ``(iii) Uniform prospective reduction if aggregate limit projected to be exceeded.--If the Secretary estimates before the beginning of a year that the amount of the additional payments under this paragraph for the year (or portion thereof) as determined under clause (i) without regard to this clause will exceed the limit established under such clause, the Secretary shall reduce pro rata the amount of each of the additional payments under this paragraph for that year (or portion thereof) in order to ensure that the aggregate additional payments under this paragraph (as so estimated) do not exceed such limit.''.

(c) Application of New Adjustments on a Budget Neutral Basis.-- Section 1833(t)(2)(E) (42 U.S.C. 1395l(t)(2)(E)) is amended by striking ``other adjustments, in a budget neutral manner, as determined to be necessary to ensure equitable payments, such as outlier adjustments or'' and inserting ``, in a budget neutral manner, outlier adjustments under paragraph (5) and transitional pass-through payments under paragraph (6) and other adjustments as determined to be necessary to ensure equitable payments, such as''. (d) Limitation on Judicial Review for New Adjustments.--Section 1833(t)(11), as redesignated by subsection (a)(1), is amended-- (1) by striking ``and'' at the end of subparagraph (C); (2) by striking the period at the end of subparagraph (D) and inserting ``; and''; and (3) by adding at the end the following: ``(E) the determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under paragraph (5) or the determination of insignificance of cost, the duration of the additional payments (consistent with paragraph (6)(B)), the portion of the medicare OPD fee schedule amount associated with particular devices, drugs, or biologicals, and the application of any pro rata reduction under paragraph (6).''.

(e) Inclusion of Certain Implantable Items Under System.-- (1) In general.--Section 1833(t) (42 U.S.C. 1395l(t)) is amended--

(A) in paragraph (1)(B)(ii), by striking ``clause (iii)'' and inserting ``clause (iv)'' and by striking ``but''; (B) by redesignating clause (iii) of paragraph (1)(B) as clause (iv) and inserting after clause (ii) of such paragraph the following new clause: ``(iii) includes implantable items described in paragraph (3), (6), or (8) of section 1861(s); but''; and (C) in paragraph (2)(B), by inserting after ``resources'' the following: ``and so that an implantable item is classified to the group that includes the service to which the item relates''. (2) Conforming amendment.--(A) Section 1834(a)(13) (42 U.S.C. 1395m(a)(13)) is amended by striking ``1861(m)(5))'' and inserting ``1861(m)(5), but not including implantable items for which payment may be made under section 1833(t)''. (B) Section 1834(h)(4)(B) (42 U.S.C. 1395m(h)(4)(B)) is amended by inserting before the semicolon the following: ``and does not include an implantable item for which payment may be made under section 1833(t)''.

(f) Authorizing Payment Weights Based on Mean Hospital Costs.-- Section 1833(t)(2)(C) (42 U.S.C. 1395l(t)(2)(C)) is amended by inserting ``(or, at the election of the Secretary, mean)'' after ``median''. (g) Limiting Variation of Costs of Services Classified With a Group.--Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is amended by adding at the end the following new flush sentence: ``For purposes of subparagraph (B), items and services within a group shall not be treated as `comparable with respect to the use of resources' if the highest median cost (or mean cost, if elected by the Secretary under subparagraph (C)) for an item or service within the group is more than 2 times greater than the lowest median cost (or mean cost, if so elected) for an item or service within the group; except that the Secretary may make exceptions in unusual cases, such as low volume items and services, but may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act.''.

(h) Annual Review of OPD PPS Components.-- (1) In general.--Section 1833(t)(8)(A) (42 U.S.C. 1395l(t)(8)(A)), as redesignated by subsection (a), is amended-- (A) by striking ``may periodically review'' and inserting ``shall review not less often than annually''; and (B) by adding at the end the following: ``The Secretary shall consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the groups and weights. Such panel may use data collected or developed by entities and organizations (other than the Department of Health and Human Services) in conducting such review.''. (2) Effective dates.--The Secretary of Health and Human Services shall first conduct the annual review under the amendment made by paragraph (1)(A) in 2001 for application in 2002 and the amendment made by paragraph (1)(B) takes effect on the date of the enactment of this Act.

(i) No Impact on Copayment.--Section 1833(t)(7) (42 U.S.C. 1395l(t)(7)), as redesignated by subsection (a), is amended by adding at the end the following new subparagraph: ``(D) Computation ignoring outlier and pass-through adjustments.--The copayment amount shall be computed under subparagraph (A) as if the adjustments under paragraphs (5) and (6) (and any adjustment made under paragraph (2)(E) in relation to such adjustments) had not occurred.''.

(j) Technical Correction in Reference Relating to Hospital-Based Ambulance Services.--Section 1833(t)(9) (42 U.S.C. 1395l(t)(9)), as redesignated by subsection (a), is amended by striking ``the matter in subsection (a)(1) preceding subparagraph (A)'' and inserting ``section 1861(v)(1)(U)''. (k) Extension of Payment Provisions of Section 4522 of BBA Until Implementation of PPS.--Section 1861(v)(1)(S)(ii) (42 U.S.C. 1395x(v)(1)(S)(ii)) is amended in subclauses (I) and (II) by striking ``and during fiscal year 2000 before January 1, 2000'' and inserting ``and until the first date that the prospective payment system under section 1833(t) is implemented'' each place it appears. (l) Congressional Intention Regarding Base Amounts in Applying the HOPD PPS.--With respect to determining the amount of copayments described in paragraph (3)(A)(ii) of section 1833(t) of the Social Security Act, as added by section 4523(a) of BBA, Congress finds that such amount should be determined without regard to such section, in a budget neutral manner with respect to aggregate payments to hospitals, and that the Secretary of Health and Human Services has the authority to determine such amount without regard to such section. (m) Effective Date.--Except as provided in this section, the amendments made by this section shall be effective as if included in the enactment of BBA. (n) Study of Delivery of Intravenous Immune Globulin (IVIG) Outside Hospitals and Physicians' Offices.-- (1) Study.--The Secretary of Health and Human Services shall conduct a study of the extent to which intravenous immune globulin (IVIG) could be delivered and reimbursed under the medicare program outside of a hospital or physician's office. In conducting the study, the Secretary shall-- (A) consider the sites of service that other payors, including Medicare+Choice plans, use for these drugs and biologicals; (B) determine whether covering the delivery of these drugs and biologicals in a medicare patient's home raises any additional safety and health concerns for the patient; (C) determine whether covering the delivery of these drugs and biologicals in a patient's home can reduce overall spending under the medicare program; and (D) determine whether changing the site of setting for these services would affect beneficiary access to care. (2) Report.--The Secretary shall submit a report on such study to the Committees on Ways and Means and Commerce of the House of Representatives and the Committee on Finance of the Senate within 18 months after the date of the enactment of this Act. The Secretary shall include in the report recommendations regarding the appropriate manner and settings under which the medicare program should pay for these drugs

and biologicals delivered outside of a hospital or physician's office.

PPS.

(a) In General.--Section 1833(t) (42 U.S.C. 1395l(t)), as amended by section 201(a), is further amended-- (1) in paragraph (4), in the matter before subparagraph (A), by inserting ``, subject to paragraph (7),'' after ``is determined''; and (2) by redesignating paragraphs (7) through (11) as paragraphs (8) through (12), respectively; and (3) by inserting after paragraph (6), as inserted by section 201(b), the following new paragraph: ``(7) Transitional adjustment to limit decline in payment.-- ``(A) Before 2002.--Subject to subparagraph (D), for covered OPD services furnished before January 1, 2002, for which the PPS amount (as defined in subparagraph (E)) is-- ``(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in subparagraph (F)), the amount of payment under this subsection shall be increased by 80 percent of the amount of such difference; ``(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.71 and the pre-BBA amount, exceeds (II) the product of 0.70 and the PPS amount; ``(iii) at least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.63 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or ``(iv) less than 70 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 21 percent of the pre-BBA amount. ``(B) 2002.--Subject to subparagraph (D), for covered OPD services furnished during 2002, for which the PPS amount is-- ``(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 70 percent of the amount of such difference; ``(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.61 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or ``(iii) less than 80 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 13 percent of the pre-BBA amount.

``(C) 2003.--Subject to subparagraph (D), for covered OPD services furnished during 2003, for which the PPS amount is-- ``(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 60 percent of the amount of such difference; or ``(ii) less than 90 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 6 percent of the pre-BBA amount. ``(D) Hold harmless provisions.-- ``(i) Temporary treatment for small rural hospitals.--In the case of a hospital located in a rural area and that has not more than 100 beds, for covered OPD services furnished before January 1, 2004, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount of such difference. ``(ii) Permanent treatment for cancer hospitals.--In the case of a hospital described in section 1886(d)(1)(B)(v), for covered OPD services for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount of such difference. ``(E) PPS amount defined.--In this paragraph, the term `PPS amount' means, with respect to covered OPD services, the amount payable under this title for such services (determined without regard to this paragraph), including amounts payable as copayment under paragraph (8), coinsurance under section 1866(a)(2)(A)(ii), and the deductible under section 1833(b). ``(F) Pre-BBA amount defined.-- ``(i) In general.--In this paragraph, the `pre-BBA amount' means, with respect to covered OPD services furnished by a hospital in a year, an amount equal to the product of the reasonable cost of the hospital for such services for the portions of the hospital's cost reporting period (or periods) occurring in the year and the base OPD payment-to-cost ratio for the hospital (as defined in clause (ii)). ``(ii) Base payment-to-cost-ratio defined.-- For purposes of this subparagraph, the `base payment-to-cost ratio' for a hospital means the ratio of-- ``(I) the hospital's reimbursement under this part for covered OPD services furnished during the cost reporting period ending in 1996, including any reimbursement for such services through cost-sharing described in subparagraph (E), to ``(II) the reasonable cost of such services for such period. The Secretary shall determine such ratios as if the amendments made by section 4521 of the Balanced Budget Act of 1997 were in effect in 1996. ``(G) Interim payments.--The Secretary shall make payments under this paragraph to hospitals on an interim basis, subject to retrospective adjustments based on settled cost reports.

``(H) No effect on copayments.--Nothing in this paragraph shall be construed to affect the unadjusted copayment amount described in paragraph (3)(B) or the copayment amount under paragraph (8). ``(I) Application without regard to budget neutrality.--The additional payments made under this paragraph-- ``(i) shall not be considered an adjustment under paragraph (2)(E); and ``(ii) shall not be implemented in a budget neutral manner.''.

(b) Effective Date.--The amendments made by this section shall be effective as if included in the enactment of BBA.

OF RURAL AND CANCER HOSPITALS IN PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

(a) Study.-- (1) In general.--The Medicare Payment Advisory Commission (referred to in this section as ``MedPAC'') shall conduct a study to determine the appropriateness (and the appropriate method) of providing payments to hospitals described in paragraph (2) for covered OPD services (as defined in paragraph (1)(B) of section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t))) based on the prospective payment system established by the Secretary in accordance with such section. (2) Hospitals described.--The hospitals described in this paragraph are the following: (A) A medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)(iv))). (B) A sole community hospital (as defined in section 1886(d)(5)(D)(iii) of such Act (42 U.S.C. 1395ww(d)(5)(D)(iii))). (C) Rural health clinics (as defined in section 1861(aa)(2) of such Act (42 U.S.C. 1395x(aa)(2)). (D) Rural referral centers (as so classified under section 1886(d)(5)(C) of such Act (42 U.S.C. 1395ww(d)(5)(C)). (E) Any other rural hospital with not more than 100 beds. (F) Any other rural hospital that the Secretary determines appropriate. (G) A hospital described in section 1886(d)(1)(B)(v) of such Act (42 U.S.C. 1395ww(d)(1)(B)(v)).

(b) Report.--Not later than 2 years after the date of the enactment of this Act, MedPAC shall submit a report to the Secretary of Health and Human Services and Congress on the study conducted under subsection (a), together with any recommendations for legislation that MedPAC determines to be appropriate as a result of such study. (c) Comments.--Not later than 60 days after the date on which MedPAC submits the report under subsection (b) to the Secretary of Health and Human Services, the Secretary shall submit comments on such report to Congress.

THE HOSPITAL DEDUCTIBLE AMOUNT.

(a) In General.--Section 1833(t)(8) (42 U.S.C. 1395l(t)(8)), as redesignated by sections 201(a)(1) and 202(a)(2), is amended-- (1) in subparagraph (A), by striking ``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''; (2) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively; and (3) by inserting after subparagraph (B) the following new subparagraph: ``(C) Limiting copayment amount to inpatient hospital deductible amount.--In no case shall the copayment amount for a procedure performed in a year exceed the amount of the inpatient hospital deductible established under section 1813(b) for that year.''.

(b) Increase in Payment To Reflect Reduction in Copayment.--Section 1833(t)(4)(C) (42 U.S.C. 1395l(t)(4)(C)) is amended by inserting ``, plus the amount of any reduction in the copayment amount attributable to paragraph (8)(C)'' before the period at the end. (c) Effective Date.--The amendments made by this section apply as if included in the enactment of BBA and shall only apply to procedures performed for which payment is made on the basis of the prospective payment system under section 1833(t) of the Social Security Act.

Subtitle B--Physician Services

UPDATE OSCILLATIONS AND REQUIRE ESTIMATE REVISIONS.

(a) Update Adjustment Factor.-- (1) In general.--Section 1848(d) (42 U.S.C. 1395w-4(d)) is amended-- (A) in paragraph (3)-- (i) in the heading, by inserting ``for 1999 and 2000'' after ``Update''; (ii) in subparagraph (A), by striking ``a year beginning with 1999'' and inserting ``1999 and 2000''; and (iii) in subparagraph (C), by inserting ``and paragraph (4)'' after ``For purposes of this paragraph''; and (B) by adding at the end the following new paragraph: ``(4) Update for years beginning with 2001.-- ``(A) In general.--Unless otherwise provided by law, subject to the budget-neutrality factor determined by the Secretary under subsection (c)(2)(B)(ii) and subject to adjustment under subparagraph (F), the update to the single conversion factor established in paragraph (1)(C) for a year beginning with 2001 is equal to the product of-- ``(i) 1 plus the Secretary's estimate of the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year (divided by 100); and ``(ii) 1 plus the Secretary's estimate of the update adjustment factor under subparagraph (B) for the year.

``(B) Update adjustment factor.--For purposes of subparagraph (A)(ii), subject to subparagraph (D), the `update adjustment factor' for a year is equal (as estimated by the Secretary) to the sum of the following: ``(i) Prior year adjustment component.--An amount determined by-- ``(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services for the prior year (as determined under subparagraph (C)) and the amount of the actual expenditures for such services for that year; ``(II) dividing that difference by the amount of the actual expenditures for such services for that year; and ``(III) multiplying that quotient by 0.75. ``(ii) Cumulative adjustment component.--An amount determined by-- ``(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services (as determined under subparagraph (C)) from April 1, 1996, through the end of the prior year and the amount of the actual expenditures for such services during that period; ``(II) dividing that difference by actual expenditures for such services for the prior year as increased by the sustainable growth rate under subsection (f) for the year for which the update adjustment factor is to be determined; and ``(III) multiplying that quotient by 0.33. ``(C) Determination of allowed expenditures.--For purposes of this paragraph: ``(i) Period up to april 1, 1999.--The allowed expenditures for physicians' services for a period before April 1, 1999, shall be the amount of the allowed expenditures for such period as determined under paragraph (3)(C). ``(ii) Transition to calendar year allowed expenditures.--Subject to subparagraph (E), the allowed expenditures for-- ``(I) the 9-month period beginning April 1, 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such period; and ``(II) the year of 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such year. ``(iii) Years beginning with 2000.--The allowed expenditures for a year (beginning with 2000) is equal to the allowed expenditures for physicians' services for the previous year, increased by the sustainable growth rate under subsection (f) for the year involved.

``(D) Restriction on update adjustment factor.--The update adjustment factor determined under subparagraph (B) for a year may not be less than -0.07 or greater than 0.03. ``(E) Recalculation of allowed expenditures for updates beginning with 2001.--For purposes of determining the update adjustment factor for a year beginning with 2001, the Secretary shall recompute the allowed expenditures for previous periods beginning on or after April 1, 1999, consistent with subsection (f)(3). ``(F) Transitional adjustment designed to provide for budget neutrality.--Under this subparagraph the Secretary shall provide for an adjustment to the update under subparagraph (A)-- ``(i) for each of 2001, 2002, 2003, and 2004, of -0.2 percent; and ``(ii) for 2005 of +0.8 percent.''. (2) Publication change.-- (A) In general.--Section 1848(d)(1)(E) (42 U.S.C. 1395w-4(d)(1)(E)) is amended to read as follows: ``(E) Publication and dissemination of information.--The Secretary shall-- ``(i) cause to have published in the Federal Register not later than November 1 of each year (beginning with 2000) the conversion factor which will apply to physicians' services for the succeeding year, the update determined under paragraph (4) for such succeeding year, and the allowed expenditures under such paragraph for such succeeding year; and ``(ii) make available to the Medicare Payment Advisory Commission and the public by March 1 of each year (beginning with 2000) an estimate of the sustainable growth rate and of the conversion factor which will apply to physicians' services for the succeeding year and data used in making such estimate.''. (B) Medpac review of conversion factor estimates.-- Section 1805(b)(1)(D) (42 U.S.C. 1395b-6(b)(1)(D)) is amended by inserting ``and including a review of the estimate of the conversion factor submitted under section 1848(d)(1)(E)(ii)'' before the period at the end. (C) One-time publication of information on transition.--The Secretary of Health and Human Services shall cause to have published in the Federal Register, not later than 90 days after the date of the enactment of this section, the Secretary's determination, based upon the best available data, of-- (i) the allowed expenditures under subclauses (I) and (II) of subsection (d)(4)(C)(ii) of section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as added by subsection (a)(1)(B), for the 9-month period beginning on April 1, 1999, and for 1999; (ii) the estimated actual expenditures described in subsection (d) of such section for 1999; and (iii) the sustainable growth rate under subsection (f) of such section for 2000. (3) Conforming amendments.-- (A) Section 1848 (42 U.S.C. 1395w-4) is amended--

(i) in subsection (d)(1)(A), by inserting ``(for years before 2001) and, for years beginning with 2001, multiplied by the update (established under paragraph (4)) for the year involved'' after ``for the year involved''; and (ii) in subsection (f)(2)(D), by inserting ``or (d)(4)(B), as the case may be'' after ``(d)(3)(B)''. (B) Section 1833(l)(4)(A)(i)(VII) (42 U.S.C. 1395l(l)(4)(A)(i)(VII)) is amended by striking ``1848(d)(3)'' and inserting ``1848(d)''.

(b) Sustainable Growth Rates.--Section 1848(f) (42 U.S.C. 1395w- 4(f)) is amended-- (1) by amending paragraph (1) to read as follows: ``(1) Publication.--The Secretary shall cause to have published in the Federal Register not later than-- ``(A) November 1, 2000, the sustainable growth rate for 2000 and 2001; and ``(B) November 1 of each succeeding year the sustainable growth rate for such succeeding year and each of the preceding 2 years.''; (2) in paragraph (2)-- (A) in the matter before subparagraph (A), by striking ``fiscal year 1998)'' and inserting ``fiscal year 1998 and ending with fiscal year 2000) and a year beginning with 2000''; and (B) in subparagraphs (A) through (D), by striking ``fiscal year'' and inserting ``applicable period'' each place it appears; (3) in paragraph (3), by adding at the end the following new subparagraph: ``(C) Applicable period.--The term `applicable period' means-- ``(i) a fiscal year, in the case of fiscal year 1998, fiscal year 1999, and fiscal year 2000; or ``(ii) a calendar year with respect to a year beginning with 2000; as the case may be.''; (4) by redesignating paragraph (3) as paragraph (4); and (5) by inserting after paragraph (2) the following new paragraph: ``(3) Data to be used.--For purposes of determining the update adjustment factor under subsection (d)(4)(B) for a year beginning with 2001, the sustainable growth rates taken into consideration in the determination under paragraph (2) shall be determined as follows: ``(A) For 2001.--For purposes of such calculations for 2001, the sustainable growth rates for fiscal year 2000 and the years 2000 and 2001 shall be determined on the basis of the best data available to the Secretary as of September 1, 2000. ``(B) For 2002.--For purposes of such calculations for 2002, the sustainable growth rates for fiscal year 2000 and for years 2000, 2001, and 2002 shall be determined on the basis of the best data available to the Secretary as of September 1, 2001. ``(C) For 2003 and succeeding years.--For purposes of such calculations for a year after 2002--

``(i) the sustainable growth rates for that year and the preceding 2 years shall be determined on the basis of the best data available to the Secretary as of September 1 of the year preceding the year for which the calculation is made; and ``(ii) the sustainable growth rate for any year before a year described in clause (i) shall be the rate as most recently determined for that year under this subsection. Nothing in this paragraph shall be construed as affecting the sustainable growth rates established for fiscal year 1998 or fiscal year 1999.''.

(c) Study and Report Regarding the Utilization of Physicians' Services by Medicare Beneficiaries.-- (1) Study by secretary.--The Secretary of Health and Human Services, acting through the Administrator of the Agency for Health Care Policy and Research, shall conduct a study of the issues specified in paragraph (2). (2) Issues to be studied.--The issues specified in this paragraph are the following: (A) The various methods for accurately estimating the economic impact on expenditures for physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) resulting from-- (i) improvements in medical capabilities; (ii) advancements in scientific technology; (iii) demographic changes in the types of medicare beneficiaries that receive benefits under such program; and (iv) geographic changes in locations where medicare beneficiaries receive benefits under such program. (B) The rate of usage of physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) among beneficiaries between ages 65 and 74, 75 and 84, 85 and over, and disabled beneficiaries under age 65. (C) Other factors that may be reliable predictors of beneficiary utilization of physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). (3) Report to congress.--Not later than 3 years after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit a report to Congress setting forth the results of the study conducted pursuant to paragraph (1), together with any recommendations the Secretary determines are appropriate. (4) Medpac report to congress.--Not later than 180 days after the date of submission of the report under paragraph (3), the Medicare Payment Advisory Commission shall submit a report to Congress that includes-- (A) an analysis and evaluation of the report submitted under paragraph (3); and (B) such recommendations as it determines are appropriate.

(d) Effective Date.--The amendments made by this section shall be effective in determining the conversion factor under section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) for years beginning with 2001 and shall not apply to or affect any update (or any update adjustment factor) for any year before 2001.

DETERMINING PRACTICE EXPENSE RELATIVE VALUES.

(a) In General.--The Secretary of Health and Human Services shall establish by regulation (after notice and opportunity for public comment) a process (including data collection standards) under which the Secretary will accept for use and will use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations (other than the Department of Health and Human Services) to supplement the data normally collected by that Department in determining the practice expense component under section 1848(c)(2)(C)(ii) of the Social Security Act (42 U.S.C. 1395w- 4(c)(2)(C)(ii)) for purposes of determining relative values for payment for physicians' services under the fee schedule under section 1848 of such Act (42 U.S.C. 1395w-4). The Secretary shall first promulgate such regulation on an interim final basis in a manner that permits the submission and use of data in the computation of practice expense relative value units for payment rates for 2001. (b) Publication of Information.--The Secretary shall include, in the publication of the estimated and final updates under section 1848(c) of such Act (42 U.S.C. 1395w-4(c)) for payments for 2001 and for 2002, a description of the process established under subsection (a) for the use of external data in making adjustments in relative value units and the extent to which the Secretary has used such external data in making such adjustments for each such year, particularly in cases in which the data otherwise used are inadequate because such data are not based upon a large enough sample size to be statistically reliable.

OUTPATIENT CANCER THERAPY.

(a) Study.--The Comptroller General of the United States shall conduct a nationwide study to determine the physician and non-physician clinical resources necessary to provide safe outpatient cancer therapy services and the appropriate payment rates for such services under the medicare program. In making such determination, the Comptroller General shall-- (1) determine the adequacy of practice expense relative value units associated with the utilization of those clinical resources; (2) determine the adequacy of work units in the practice expense formula; and (3) assess various standards to assure the provision of safe outpatient cancer therapy services.

(b) Report to Congress.--The Comptroller General shall submit to Congress a report on the study conducted under subsection (a). The report shall include recommendations regarding practice expense adjustments to the payment methodology under part B of title XVIII of the Social Security Act, including the development and inclusion of adequate work units to assure the adequacy of payment amounts for safe outpatient cancer therapy

services. The study shall also include an estimate of the cost of implementing such recommendations.

Subtitle C--Other Services

(a) 2-Year Moratorium on Caps.-- (1) In general.--Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is amended-- (A) in paragraphs (1) and (3), by striking ``In the case'' each place it appears and inserting ``Subject to paragraph (4), in the case''; and (B) by adding at the end the following:

``(4) This subsection shall not apply to expenses incurred with respect to services furnished during 2000 and 2001.''. (2) Focused medical reviews of claims during moratorium period.--During years in which paragraph (4) of section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) applies (under the amendment made by paragraph (1)(B)), the Secretary of Health and Human Services shall conduct focused medical reviews of claims for reimbursement for services described in paragraph (1) or (3) of such section, with an emphasis on such claims for services that are provided to residents of skilled nursing facilities.

(b) Technical Amendment Relating To Being Under the Care of a Physician.-- (1) In general.--Section 1861 (42 U.S.C. 1395x) is amended-- (A) in subsection (p)(1), by striking ``or (3)'' and inserting ``, (3), or (4)''; and (B) in subsection (r)(4), by inserting ``for purposes of subsection (p)(1) and'' after ``but only''. (2) Effective date.--The amendments made by paragraph (1) apply to services furnished on or after January 1, 2000.

(c) Revision of Report.-- (1) In general.--Section 4541(d)(2) of BBA (42 U.S.C. 1395l note) is amended to read as follows: ``(2) Report.--Not later than January 1, 2001, the Secretary of Health and Human Services shall submit to Congress a report that includes recommendations on-- ``(A) the establishment of a mechanism for assuring appropriate utilization of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395); and ``(B) the establishment of an alternative payment policy for such services based on classification of individuals by diagnostic category, functional status, prior use of services (in both inpatient and outpatient settings), and such other criteria as the Secretary determines appropriate, in place of the uniform dollar limitations specified in section 1833(g) of such Act, as amended by paragraph (1). The recommendations shall include how such a mechanism or policy might be implemented in a budget-neutral manner.''.

(2) Effective date.--The amendment made by paragraph (1) shall take effect as if included in the enactment of section 4541 of BBA.

(d) Study and Report on Utilization.-- (1) Study.-- (A) In general.--The Secretary of Health and Human Services shall conduct a study which compares-- (i) utilization patterns (including nationwide patterns, and patterns by region, types of settings, and diagnosis or condition) of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395) and provided on or after January 1, 2000; with (ii) such patterns for such services that were provided in 1998 and 1999. (B) Review of claims.--In conducting the study under this subsection the Secretary of Health and Human Services shall review a statistically significant number of claims for reimbursement for the services described in subparagraph (A). (2) Report.--Not later than June 30, 2001, the Secretary of Health and Human Services shall submit a report to Congress on the study conducted under paragraph (1), together with any recommendations for legislation that the Secretary determines to be appropriate as a result of such study.

(a) In General.--Section 1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by adding at the end the following new flush sentence: ``The Secretary shall increase the amount of each composite rate payment for dialysis services furnished during 2000 by 1.2 percent above such composite rate payment amounts for such services furnished on December 31, 1999, and for such services furnished on or after January 1, 2001, by 1.2 percent above such composite rate payment amounts for such services furnished on December 31, 2000.''. (b) Conforming Amendment.--The second sentence of section 9335(a)(1) of the Omnibus Budget Reconciliation Act of 1986 (42 U.S.C. 1395rr note) is amended by inserting ``and before January 1, 2000,'' after ``on or after January 1, 1991,''. (c) Study on Payment Level for Home Hemodialysis.--The Medicare Payment Advisory Commission shall conduct a study on the appropriateness of the differential in payment under the medicare program for hemodialysis services furnished in a facility and such services furnished in a home. Not later than 18 months after the date of the enactment of this Act, the Commission shall submit to Congress a report on such study and shall include recommendations regarding changes in medicare payment policy in response to the study.

(a) Limitation on Use.--The Secretary of Health and Human Services may not use, or permit fiscal intermediaries or carriers to use, the inherent reasonableness authority provided under section

1842(b)(8) of the Social Security Act (42 U.S.C. 1395u(b)(8)) until after-- (1) the Comptroller General of the United States releases a report pursuant to the request for such a report made on March 1, 1999, regarding the impact of the Secretary's, fiscal intermediaries', and carriers' use of such authority; and (2) the Secretary has published a notice of final rulemaking in the Federal Register that relates to such authority and that responds to such report and to comments received in response to the Secretary's interim final regulation relating to such authority that was published in the Federal Register on January 7, 1998.

(b) Reevaluation of IR Criteria.--In promulgating the final regulation under subsection (a)(2), the Secretary shall-- (1) reevaluate the appropriateness of the criteria included in such interim final regulation for identifying payments which are excessive or deficient; and (2) take appropriate steps to ensure the use of valid and reliable data when exercising such authority.

(c) Technical Correction.--Section 1842(b)(8)(A)(i)(I) (42 U.S.C. 1395u(b)(8)(A)(i)(I)) is amended by striking ``the application of this part'' and inserting ``the application of this title to payment under this part''.

(a) Pap Smear Payment Increase.--Section 1833(h) (42 U.S.C. 1395l(h)) is amended by adding at the end the following new paragraph: ``(7) Notwithstanding paragraphs (1) and (4), the Secretary shall establish a national minimum payment amount under this subsection for a diagnostic or screening pap smear laboratory test (including all cervical cancer screening technologies that have been approved by the Food and Drug Administration as a primary screening method for detection of cervical cancer) equal to $14.60 for tests furnished in 2000. For such tests furnished in subsequent years, such national minimum payment amount shall be adjusted annually as provided in paragraph (2).''. (b) Sense of Congress.--It is the sense of the Congress that-- (1) the Health Care Financing Administration has been slow to incorporate or provide incentives for providers to use new screening diagnostic health care technologies in the area of cervical cancer; (2) some new technologies have been developed which optimize the effectiveness of pap smear screening; and (3) the Health Care Financing Administration should institute an appropriate increase in the payment rate for new cervical cancer screening technologies that have been approved by the Food and Drug Administration and that are significantly more effective than a conventional pap smear.

Effective as if included in the enactment of BBA, section 4532 of BBA (42 U.S.C. 1395m note) is amended-- (1) in subsection (a), by adding at the end the following: ``Not later than July 1, 2000, the Secretary shall publish a request for proposals for such projects.''; and

(2) by amending paragraph (2) of subsection (b) to read as follows: ``(2) Capitated payment rate defined.--In this subsection, the term `capitated payment rate' means, with respect to a demonstration project-- ``(A) in its first year, a rate established for the project by the Secretary, using the most current available data, in a manner that ensures that aggregate payments under the project will not exceed the aggregate payment that would have been made for ambulance services under part B of title XVIII of the Social Security Act in the local area of government's jurisdiction; and ``(B) in a subsequent year, the capitated payment rate established for the previous year increased by an appropriate inflation adjustment factor.''.

If the Secretary of Health and Human Services implements a revised prospective payment system for services of ambulatory surgical facilities under section 1833(i) of the Social Security Act (42 U.S.C. 1395l(i)), prior to incorporating data from the 1999 Medicare cost survey or a subsequent cost survey, such system shall be implemented in a manner so that-- (1) in the first year of its implementation, only a proportion (specified by the Secretary and not to exceed \1/3\) of the payment for such services shall be made in accordance with such system and the remainder shall be made in accordance with current regulations; and (2) in the following year a proportion (specified by the Secretary and not to exceed \2/3\) of the payment for such services shall be made under such system and the remainder shall be made in accordance with current regulations.

(a) In General.--Section 1861(s)(2)(J)(v) (42 U.S.C. 1395x(s)(2)(J)(v)) is amended by inserting before the semicolon at the end the following: ``plus such additional number of months (if any) provided under section 1832(b)''. (b) Specification of Number of Additional Months.--Section 1832 (42 U.S.C. 1395k) is amended-- (1) by redesignating subsection (b) as subsection (c); and (2) by inserting after subsection (a) the following new subsection:

``(b) Extension of Coverage of Immunosuppressive Drugs.-- ``(1) Extension.-- ``(A) In general.--The Secretary shall specify consistent with this subsection an additional number of months (which may be portions of months) of coverage of immunosuppressive drugs for each cohort (as defined in subparagraph (C)) in a year during the 5-year period beginning with 2000. The number of such months for the cohort-- ``(i) for 2000 shall be 8 months; and ``(ii) for 2001 shall, subject to paragraph (2)(A)(i), be 8 months. ``(B) Application of additional months in a year only to cohort in that year.--

``(i) In general.--The additional months specified under this subsection for a cohort in a year in such 5-year period shall apply under section 1861(s)(2)(J)(v) only to individuals within such cohort for such year. ``(ii) Construction.--Nothing in this subsection shall be construed as preventing additional months of coverage provided for a cohort for a year from extending coverage to drugs furnished in months in the succeeding year. ``(C) Cohort defined.--In this subsection, the term `cohort' means, with respect to a year, those individuals who would (but for this subsection) exhaust benefits under section 1861(s)(2)(J)(v) for prescription drugs used in immunosuppressive therapy furnished at any time during such year. ``(2) Timing of specification.--Consistent with paragraphs (3) and (4)-- ``(A) May 1, 2001.--Not later than May 1, 2001, the Secretary-- ``(i) may increase the number of months for the cohort for 2001 above the 8 months provided under paragraph (1)(A)(ii); and ``(ii) shall compute and specify the number of additional months of benefits that will be available for the cohort for 2002. ``(B) May 1, 2002 and 2003.--Not later than May 1 of 2002 and 2003, the Secretary shall compute and specify the number of additional months of benefits that will be available for the cohort for the following year under this subsection. Such number may be more or less than 8 months. ``(3) Basis for specification.--Using appropriate actuarial methods, the Secretary shall compute the number of additional months for the cohort for a year under this subsection in a manner so that the total expenditures under this part attributable to this subsection, as computed based upon the best available data at the time additional months are specified under this subsection, do not exceed $150,000,000. Subject to paragraph (4), the Secretary shall seek to compute such months in a manner that provides for a level number of months for each cohort in each year in the last 4 years of the 5-year period described in paragraph (1)(A). ``(4) Annual adjustment to maintain aggregate expenditures within limits.--In computing and specifying the number of additional months under paragraph (2), the Secretary shall adjust the number of additional months under this subsection for a cohort for a year from that provided in the previous year within such 5-year period to the extent necessary to take into account, based upon the best available data, differences between actual and estimated expenditures under this part attributable to this subsection for previous years and to comply with the limitation on total expenditures under paragraph (3).''.

(c) Transitional Pass-Through of Additional Costs Under Medicare+Choice Program for 2000.--The provisions of subparagraphs (A) and (B) of section 1852(a)(5) of the Social Security Act (42 U.S.C. 1395w-22(a)(5)) shall apply with respect to the

coverage of additional benefits for immunosuppressive drugs under the amendments made by this section for drugs furnished in 2000 in the same manner as if such amendments constituted a national coverage determination described in the matter in such section before subparagraph (A). (d) Report on Immunosuppressive Drug Benefit.-- (1) In general.--Not later than March 1, 2003, the Secretary of Health and Human Services shall submit to Congress a report on the operation of this section and the amendments made by this section. The report shall include-- (A) an analysis of the impact of this section; and (B) recommendations regarding an appropriate cost- effective method for providing coverage of immunosuppressive drugs under the medicare program on a permanent basis. (2) Considerations.--In making recommendations under paragraph (1)(B), the Secretary shall identify potential modifications to the immunosuppressive drug benefit that would best promote the objectives of-- (A) improving health outcomes (by decreasing transplant rejection rates that are attributable to failure to comply with immunosuppressive drug regimens); (B) achieving cost savings to the medicare program (by decreasing the need for secondary transplants and other care relating to post-transplant complications); and (C) meeting the needs of those medicare beneficiaries who, because of income or other factors, would be less likely to maintain an immunosuppressive drug regimen in the absence of such modifications.

EQUIPMENT AND OXYGEN.

(a) In General.--For purposes of payments under section 1834(a) of the Social Security Act (42 U.S.C. 1395m(a)) for covered items (as defined in paragraph (13) of that section) furnished during 2001 and 2002, the Secretary of Health and Human Services shall increase the payment amount in effect (but for this section) for such items for-- (1) 2001 by 0.3 percent, and (2) 2002 by 0.6 percent.

(b) Limiting Application to Specified Years.--The payment amount increase-- (1) under subsection (a)(1) shall not apply after 2001 and shall not be taken into account in calculating the payment amounts applicable for covered items furnished after such year; and (2) under subsection (a)(2) shall not apply after 2002 and shall not be taken into account in calculating the payment amounts applicable for covered items furnished after such year.

(a) MedPAC Study on Postsurgical Recovery Care Center Services.-- (1) In general.--The Medicare Payment Advisory Commission shall conduct a study on the cost-effectiveness and efficacy of covering under the medicare program under title XVIII of the Social Security Act services of a post-surgical recovery care center (that provides an intermediate level of recovery

care following surgery). In conducting such study, the Commission shall consider data on these centers gathered in demonstration projects. (2) Report.--Not later than 1 year after the date of the enactment of this Act, the Commission shall submit to Congress a report on such study and shall include in the report recommendations on the feasibility, costs, and savings of covering such services under the medicare program.

(b) AHCPR Study on Effect of Credentialing of Technologists and Sonographers on Quality of Ultrasound.-- (1) Study.--The Administrator for Health Care Policy and Research shall provide for a study that, with respect to the provision of ultrasound under the medicare and medicaid programs under titles XVIII and XIX of the Social Security Act, compares differences in quality between ultrasound furnished by individuals who are credentialed by private entities or organizations and ultrasound furnished by those who are not so credentialed. Such study shall examine and evaluate differences in error rates, resulting complications, and patient outcomes as a result of the differences in credentialing. In designing the study, the Administrator shall consult with organizations nationally recognized for their expertise in ultrasound. (2) Report.--Not later than two years after the date of the enactment of this Act, the Administrator shall submit a report to Congress on the study conducted under paragraph (1).

(c) MedPAC Study on the Complexity of the Medicare Program and the Levels of Burdens Placed on Providers Through Federal Regulations.-- (1) Study.--The Medicare Payment Advisory Commission shall undertake a comprehensive study to review the regulatory burdens placed on all classes of health care providers under parts A and B of the medicare program under title XVIII of the Social Security Act and to determine the costs these burdens impose on the nation's health care system. The study shall also examine the complexity of the current regulatory system and its impact on providers. (2) Report.--Not later than December 31, 2001, the Commission shall submit to Congress one or more reports on the study conducted under paragraph (1). The report shall include recommendations regarding-- (A) how the Health Care Financing Administration can reduce the regulatory burdens placed on patients and providers; and (B) legislation that may be appropriate to reduce the complexity of the medicare program, including improvement of the rules regarding billing, compliance, and fraud and abuse.

(d) GAO Continued Monitoring of Department of Justice Application of Guidelines on Use of False Claims Act in Civil Health Care Matters.--The Comptroller General of the United States shall-- (1) continue the monitoring, begun under section 118 of the Department of Justice Appropriations Act, 1999 (included in Public Law 105-277) of the compliance of the Department of Justice and all United States Attorneys with the ``Guidance

on the Use of the False Claims Act in Civil Health Care Matters'' issued by the Department of Justice on June 3, 1998, including any revisions to that guidance; and (2) not later than April 1, 2000, and of each of the two succeeding years, submit a report on such compliance to the appropriate Committees of Congress.

INTERIM PAYMENT SYSTEM; GAO REPORT ON COSTS OF COMPLIANCE WITH OASIS DATA COLLECTION REQUIREMENTS.

(a) Adjustment To Reflect Administrative Costs.-- (1) In general.--In the case of a home health agency that furnishes home health services to a medicare beneficiary, for each such beneficiary to whom the agency furnished such services during the agency's cost reporting period beginning in fiscal year 2000, the Secretary of Health and Human Services shall pay the agency, in addition to any amount of payment made under section 1861(v)(1)(L) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) for the beneficiary and only for such cost reporting period, an aggregate amount of $10 to defray costs incurred by the agency attributable to data collection and reporting requirements under the Outcome and Assessment Information Set (OASIS) required by reason of section 4602(e) of BBA (42 U.S.C. 1395fff note). (2) Payment schedule.-- (A) Midyear payment.--Not later than April 1, 2000, the Secretary shall pay to a home health agency an amount that the Secretary estimates to be 50 percent of the aggregate amount payable to the agency by reason of this subsection. (B) Upon settled cost report.--The Secretary shall pay the balance of amounts payable to an agency under this subsection on the date that the cost report submitted by the agency for the cost reporting period beginning in fiscal year 2000 is settled. (3) Payment from trust funds.--Payments under this subsection shall be made, in appropriate part as specified by the Secretary, from the Federal Hospital Insurance Trust Fund and from the Federal Supplementary Medical Insurance Trust Fund. (4) Definitions.--In this subsection: (A) Home health agency.--The term ``home health agency'' has the meaning given that term under section 1861(o) of the Social Security Act (42 U.S.C. 1395x(o)). (B) Home health services.--The term ``home health services'' has the meaning given that term under section 1861(m) of such Act (42 U.S.C. 1395x(m)). (C) Medicare beneficiary.--The term ``medicare beneficiary'' means a beneficiary described in section

1861(v)(1)(L)(vi)(II) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)(II)).

(b) GAO Report on Costs of Compliance With OASIS Data Collection Requirements.-- (1) Report to congress.-- (A) In general.--Not later than 180 days after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the matters described in subparagraph (B) with respect to the data collection requirement of patients of such agencies under the Outcome and Assessment Information Set (OASIS) standard as part of the comprehensive assessment of patients. (B) Matters studied.--For purposes of subparagraph (A), the matters described in this subparagraph include the following: (i) An assessment of the costs incurred by medicare home health agencies in complying with such data collection requirement. (ii) An analysis of the effect of such data collection requirement on the privacy interests of patients from whom data is collected. (C) Audit.--The Comptroller General shall conduct an independent audit of the costs described in subparagraph (B)(i). Not later than 180 days after receipt of the report under subparagraph (A), the Comptroller General shall submit to Congress a report describing the Comptroller General's findings with respect to such audit, and shall include comments on the report submitted to Congress by the Secretary of Health and Human Services under subparagraph (A). (2) Definitions.--In this subsection: (A) Comprehensive assessment of patients.--The term ``comprehensive assessment of patients'' means the rule published by the Health Care Financing Administration that requires, as a condition of participation in the medicare program, a home health agency to provide a patient-specific comprehensive assessment that accurately reflects the patient's current status and that incorporates the Outcome and Assessment Information Set (OASIS). (B) Outcome and assessment information set.--The term ``Outcome and Assessment Information Set'' means the standard provided under the rule relating to data items that must be used in conducting a comprehensive assessment of patients.

FOR HOME HEALTH SERVICES UNTIL ONE YEAR AFTER IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM.

(a) Contingency Reduction.--Section 4603 of BBA (42 U.S.C. 1395fff note) (as amended by section 5101(c)(3) of the Tax and Trade Relief Extension Act of 1998 (contained in division J of Public Law 105-277)) is amended by striking subsection (e). (b) Prospective Payment System.--Section 1895(b)(3)(A)(i) (42 U.S.C. 1395fff(b)(3)(A)(i)) (as amended by section 5101 of the Tax

and Trade Relief Extension Act of 1998 (contained in division J of Public Law 105-277)) is amended to read as follows: ``(i) In general.--Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts) as follows: ``(I) Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for the 12-month period beginning on the date the Secretary implements the system shall be equal to the total amount that would have been made if the system had not been in effect. ``(II) For periods beginning after the period described in subclause (I), such amount (or amounts) shall be equal to the amount (or amounts) that would have been determined under subclause (I) that would have been made for fiscal year 2001 if the system had not been in effect but if the reduction in limits described in clause (ii) had been in effect, updated under subparagraph (B). Each such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.''.

(c) Report.--Not later than the date that is six months after the date the Secretary of Health and Human Services implements the prospective payment system for home health services under section 1895 of the Social Security Act (42 U.S.C. 1395fff), the Secretary shall submit to Congress a report analyzing the need for the 15 percent reduction under subsection (b)(3)(A)(ii) of such section, or for any reduction, in the computation of the base payment amounts under the prospective payment system for home health services established under such section.

(a) Increase in Per Beneficiary Limits.--Section 1861(v)(1)(L) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)), as amended by section 5101 of the Tax and Trade Relief Extension Act of 1998 (contained in Division J of Public Law 105-277), is amended-- (1) by redesignating clause (ix) as clause (x); and (2) by inserting after clause (viii) the following new clause:

``(ix) Notwithstanding the per beneficiary limit under clause (viii), if the limit imposed under clause (v) (determined without regard to this clause) for a cost reporting period beginning during or after fiscal year 2000 is less than the median described in clause (vi)(I) (but determined as if any reference in clause (v) to `98 percent' were a reference to `100 percent'), the limit otherwise

imposed under clause (v) for such provider and period shall be increased by 2 percent.''. (b) Increase Not Included in PPS Base.--The second sentence of section 1895(b)(3)(A)(i) (42 U.S.C. 1395fff(b)(3)(A)(i)), as amended by section 302(b), is further amended-- (1) in subclause (I), by inserting ``and if section 1861(v)(1)(L)(ix) had not been enacted'' before the semicolon; and (2) in subclause (II), by inserting ``and if section 1861(v)(1)(L)(ix) had not been enacted'' after ``if the system had not been in effect''.

(c) Effective Date.--The amendments made by this section shall apply to services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1999.

(a) Home Health Agencies.--Section 1861(o)(7) (42 U.S.C. 1395x(o)(7)) is amended to read as follows: ``(7) provides the Secretary with a surety bond-- ``(A) effective for a period of 4 years (as specified by the Secretary) or in the case of a change in the ownership or control of the agency (as determined by the Secretary) during or after such 4-year period, an additional period of time that the Secretary determines appropriate, such additional period not to exceed 4 years from the date of such change in ownership or control; ``(B) in a form specified by the Secretary; and ``(C) for a year in the period described in subparagraph (A) in an amount that is equal to the lesser of $50,000 or 10 percent of the aggregate amount of payments to the agency under this title and title XIX for that year, as estimated by the Secretary; and''.

(b) Coordination of Surety Bonds.--Part A of title XI of the Social Security Act is amended by inserting after section 1128E the following new section:

``coordination of medicare and medicaid surety bond provisions

``Sec. 1128F. In the case of a home health agency that is subject to a surety bond requirement under title XVIII and title XIX, the surety bond provided to satisfy the requirement under one such title shall satisfy the requirement under the other such title so long as the bond applies to guarantee return of overpayments under both such titles.''. (c) Effective Date.--The amendments made by this section take effect on the date of the enactment of this Act, and in applying section 1861(o)(7) of the Social Security Act (42 U.S.C. 1395x(o)(7)), as amended by subsection (a), the Secretary of Health and Human Services may take into account the previous period for which a home health agency had a surety bond in effect under such section before such date.

(a) In General.--Section 1842(b)(6)(F) (42 U.S.C. 1395u(b)(6)(F)) is amended by inserting ``(including medical supplies described in section 1861(m)(5), but excluding durable medical

equipment to the extent provided for in such section)'' after ``home health services''. (b) Conforming Amendment.--Section 1862(a)(21) (42 U.S.C. 1395y(a)(21)) is amended by inserting ``(including medical supplies described in section 1861(m)(5), but excluding durable medical equipment to the extent provided for in such section)'' after ``home health services''. (c) Effective Date.--The amendments made by this section shall apply to payments for services provided on or after the date of enactment of this Act.

INCREASE FOR PPS.

Section 1895(b)(3)(B)(ii)(I) (42 U.S.C. 1395fff(b)(3)(B)(ii)(I)) is amended by striking ``fiscal year 2002 or 2003'' and inserting ``each of fiscal years 2002 and 2003''.

AGENCIES AND POPULATIONS FROM INCLUSION IN THE HOME HEALTH PROSPECTIVE PAYMENT SYSTEM.

(a) Study.--The Medicare Payment Advisory Commission (referred to in this section as ``MedPAC'') shall conduct a study to determine the feasibility and advisability of exempting home health services provided by a home health agency (or by others under arrangements with such agency) located in a rural area, or to an individual residing in a rural area, from payment under the prospective payment system for such services established by the Secretary of Health and Human Services in accordance with section 1895 of the Social Security Act (42 U.S.C. 1395fff). (b) Report.--Not later than 2 years after the date of the enactment of this Act, MedPAC shall submit a report to Congress on the study conducted under subsection (a), together with any recommendations for legislation that MedPAC determines to be appropriate as a result of such study.

Subtitle B--Direct Graduate Medical Education

DIRECT GRADUATE MEDICAL EDUCATION (DGME) PAYMENTS.

(a) In General.--Section 1886(h)(2) (42 U.S.C. 1395ww(h)(2)) is amended-- (1) in subparagraph (D)(i), by striking ``clause (ii)'' and inserting ``a subsequent clause''; (2) by adding at the end of subparagraph (D) the following new clauses: ``(iii) Floor in fiscal year 2001 at 70 percent of locality adjusted national average per resident amount.--The approved FTE resident amount for a hospital for the cost reporting period beginning during fiscal year 2001 shall not be less than 70 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for the hospital and period.

``(iv) Adjustment in rate of increase for hospitals with fte approved amount above 140 percent of locality adjusted national average per resident amount.-- ``(I) Freeze for fiscal years 2001 and 2002.--For a cost reporting period beginning during fiscal year 2001 or fiscal year 2002, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and period, subject to subclause (III), the approved FTE resident amount for the period involved shall be the same as the approved FTE resident amount for the hospital for such preceding cost reporting period. ``(II) 2 percent decrease in update for fiscal years 2003, 2004, and 2005.-- For a cost reporting period beginning during fiscal year 2003, fiscal year 2004, or fiscal year 2005, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and preceding period, the approved FTE resident amount for the period involved shall be updated in the manner described in subparagraph (D)(i) except that, subject to subclause (III), the consumer price index applied for a 12-month period shall be reduced (but not below zero) by 2 percentage points. ``(III) No adjustment below 140 percent.--In no case shall subclause (I) or (II) reduce an approved FTE resident amount for a hospital for a cost reporting period below 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for such hospital and period.''; (3) by redesignating subparagraph (E) as subparagraph (F); and (4) by inserting after subparagraph (D) the following new subparagraph: ``(E) Determination of locality adjusted national average per resident amount.--The Secretary shall determine a locality adjusted national average per resident amount with respect to a cost reporting period of a hospital beginning during a fiscal year as follows: ``(i) Determining hospital single per resident amount.--The Secretary shall compute for each hospital operating an approved graduate medical education program a single per resident amount equal to the average (weighted by number of full- time equivalent residents, as determined under paragraph (4)) of the primary care per resident amount and the non-primary care per resident amount computed under paragraph (2) for cost reporting periods ending during fiscal year 1997.

``(ii) Standardizing per resident amounts.-- The Secretary shall compute a standardized per resident amount for each such hospital by dividing the single per resident amount computed under clause (i) by an average of the 3 geographic index values (weighted by the national average weight for each of the work, practice expense, and malpractice components) as applied under section 1848(e) for 1999 for the fee schedule area in which the hospital is located. ``(iii) Computing of weighted average.--The Secretary shall compute the average of the standardized per resident amounts computed under clause (ii) for such hospitals, with the amount for each hospital weighted by the average number of full-time equivalent residents at such hospital (as determined under paragraph (4)). ``(iv) Computing national average per resident amount.--The Secretary shall compute the national average per resident amount, for a hospital's cost reporting period that begins during fiscal year 2001, equal to the weighted average computed under clause (iii) increased by the estimated percentage increase in the consumer price index for all urban consumers during the period beginning with the month that represents the midpoint of the cost reporting periods described in clause (i) and ending with the midpoint of the hospital's cost reporting period that begins during fiscal year 2001. ``(v) Adjusting for locality.--The Secretary shall compute the product of-- ``(I) the national average per resident amount computed under clause (iv) for the hospital, and ``(II) the geographic index value average (described and applied under clause (ii)) for the fee schedule area in which the hospital is located. ``(vi) Computing locality adjusted amount.-- The locality adjusted national per resident amount for a hospital for-- ``(I) the cost reporting period beginning during fiscal year 2001 is the product computed under clause (v); or ``(II) each subsequent cost reporting period is equal to the locality adjusted national per resident amount for the hospital for the previous cost reporting period (as determined under this clause) updated, through the midpoint of the period, by projecting the estimated percentage change in the consumer price index for all urban consumers during the 12-month period ending at that midpoint.''.

(b) Conforming Amendments.--Section 1886(h)(2)(D) (42 U.S.C. 1395ww(h)(2)(D)) is further amended-- (1) in clause (i)-- (A) by striking ``periods.--(i)'' and inserting the following (and conforming the indentation of the succeeding matter accordingly): ``periods.-- ``(i) In general.--''; and

(B) by striking ``the amount determined'' and inserting ``the approved FTE resident amount determined''; and (2) in clause (ii)-- (A) by indenting the clause 2 ems to the right; and (B) by inserting ``Freeze in update for fiscal years 1994 and 1995.--'' after ``(ii)''.

TRAINING PROGRAMS.

(a) In General.--Section 1886(h)(5) (42 U.S.C. 1395ww(h)(5)) is amended-- (1) in the last sentence of subparagraph (F), by striking ``The initial residency period'' and inserting ``Subject to subparagraph (G)(v), the initial residency period''; and (2) in subparagraph (G)-- (A) in clause (i) by striking ``and (iv)'' and inserting ``(iv), and (v)''; and (B) by adding at the end the following new clause: ``(v) Child neurology training programs.--In the case of a resident enrolled in a child neurology residency training program, the period of board eligibility and the initial residency period shall be the period of board eligibility for pediatrics plus 2 years.''.

(b) Effective Date.--The amendments made by subsection (a) apply on and after July 1, 2000, to residency programs that began before, on, or after the date of the enactment of this Act. (c) MedPAC Report.--The Medicare Payment Advisory Commission shall include in its report submitted to Congress in March of 2001 recommendations regarding the appropriateness of the initial residency period used under section 1886(h)(5)(F) of the Social Security Act (42 U.S.C. 1395ww(h)(5)(F)) for other residency training programs in a specialty that require preliminary years of study in another specialty.

Subtitle C--Technical Corrections

(a) Section 4201.--Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i- 4(c)(2)(B)(i)) is amended by striking ``and is located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D)) that'' and inserting ``that is located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D)), and that''. (b) Section 4204.--(1) Section 1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)) is amended-- (A) in clause (i), by striking ``or beginning on or after October 1, 1997, and before October 1, 2001,'' and inserting ``or discharges occurring on or after October 1, 1997, and before October 1, 2001,''; and (B) in clause (ii)(II), by striking ``or beginning on or after October 1, 1997, and before October 1, 2001,'' and inserting ``or discharges occurring on or after October 1, 1997, and before October 1, 2001,''.

(2) Section 1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)) is amended in the matter preceding clause (i) by striking ``and for cost reporting periods beginning on or after October 1, 1997, and

before October 1, 2001,'' and inserting ``and for discharges beginning on or after October 1, 1997, and before October 1, 2001,''. (c) Section 4319.--Section 1847(b)(2) (42 U.S.C. 1395w-3(b)(2)) is amended by inserting ``and'' after ``specified by the Secretary''. (d) Section 4401.--Section 4401(b)(1)(B) of BBA (42 U.S.C. 1395ww note) is amended by striking ``section 1886(b)(3)(B)(i)(XIII) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XIII)))'' and inserting ``section 1886(b)(3)(B)(i)(XIV) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XIV)))''. (e) Section 4402.--The last sentence of section 1886(g)(1)(A) (42 U.S.C. 1395ww(g)(1)(A)) is amended by striking ``September 30, 2002,'' and inserting ``October 1, 2002,''. (f) Section 4419.--The first sentence of section 1886(b)(4)(A)(i) (42 U.S.C. 1395ww(b)(4)(A)(i)) is amended by striking ``or unit''. (g) Section 4432.--(1) Section 1888(e)(8)(B) (42 U.S.C. 1395yy(e)(8)(B)) is amended by striking ``January 1, 1999,'' and inserting ``July 1, 1999''. (2) Section 1833(h)(5)(A)(iii) (42 U.S.C. 1395l(h)(5)(A)(iii)) is amended-- (A) by striking ``or critical access hospital,'' and inserting ``, critical access hospital, or skilled nursing facility,''; and (B) by inserting ``or skilled nursing facility'' before the period.

(h) Section 4416.--Section 1886(b)(7)(A)(i)(II) (42 U.S.C. 1395ww(b)(7)(A)(i)(II)) is amended by inserting ``(as estimated by the Secretary)'' after ``median''. (i) Section 4442.--Section 4442(b) of BBA (42 U.S.C. 1395f note) is amended by striking ``applies to cost reporting periods beginning'' and inserting ``applies to items and services furnished''. (j) HIPAA Section 201.-- (1) In general.--Section 1817(k)(2)(C)(i) (42 U.S.C. 1395i(k)(2)(C)(i)) is amended by striking ``section 982(a)(6)(B)'' and inserting ``section 24(a)''. (2) Effective date.--The amendment made by this subsection shall take effect as if included in the amendment made by section 201 of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191; 110 Stat. 1992).

(k) Other Technical Amendments.-- (1) Section 4611.--Section 1812(b) (42 U.S.C. 1395d(b)) is amended in the matter following paragraph (3) by inserting ``during'' after ``100 visits''. (2) Section 4511.--Section 1833(a)(1)(O) (42 U.S.C. 1395l(a)(1)(O)) is amended by striking the semicolon and inserting a comma. (3) Section 4551.--Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended-- (A) in clause (i), by striking the comma at the end and inserting a semicolon; and (B) in clause (v), by striking ``, and'' and inserting ``; and''. (4) Section 4315.-- Section 1842(s)(2)(E) (42 U.S.C. 1395u(s)(2)(E)) is amended by inserting a period at the end. (5) Sections 4103, 4104, and 4106.-- (A) Section 4103.--Section 1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is amended by striking ``1861(oo)(2),'' and inserting ``1861(oo)(2))''.

(B) Section 4104.--Such section is further amended by striking ``(B),'' and inserting ``(B),''. (C) Section 4106.--Such section is further amended by striking ``and (15)'' and inserting ``, and (15)''. (6) Section 4001.--(A) Section 1851(i)(2) (42 U.S.C. 1395w- 21(i)(2)) is amended by striking ``and'' after ``1857(f)(2),''. (B) Section 1852 (42 U.S.C. 1395w-22) is amended-- (i) in subsection (a)(3)(A)-- (I) by striking the comma after ``MSA plan''; and (II) by inserting a comma after ``the coverage)''; (ii) in subsection (g)-- (I) in paragraph (1)(B), by inserting ``or'' after ``in whole''; and (II) in paragraph (3)(B)(ii), by inserting a period at the end; (iii) in subsection (h)(2), by striking the comma and inserting a semicolon; and (iv) in subsection (k)(2)(C)(ii), by striking ``balancing'' and inserting ``balance''. (C) Section 1854(a) (42 U.S.C. 1395w-24(a)) is amended-- (i) in paragraph (2)-- (I) in subparagraph (A), in the matter preceding clause (i), by inserting ``section'' before ``1852(a)(1)(A)''; and (II) in subparagraph (B), in the matter preceding clause (i), by inserting ``section'' after ``described in''; (ii) in paragraph (3)-- (I) in subparagraph (A), by inserting ``section'' after ``described in''; and (II) in subparagraph (B), by inserting ``section'' after ``described in''; and (iii) in paragraph (4)-- (I) in the matter preceding subparagraph (A), by inserting ``section'' after ``described in''; (II) in subparagraph (A), in the matter preceding clause (i), by inserting ``section'' after ``described in''; and (III) in subparagraph (B), by inserting ``section'' after ``described in''. (7) Section 4557.--Section 1861(s)(2)(T)(ii) (42 U.S.C. 1395x(s)(2)(T)(ii)) is amended by striking the period and inserting a semicolon. (8) Section 4205.--Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended-- (A) in subparagraph (I), by striking the comma at the end and inserting a semicolon; and (B) by realigning subparagraph (I) so as to align the left margin of such subparagraph with the left margin of subparagraph (H); and (9) Section 4454.--Section 1861(ss)(1)(G)(i) (42 U.S.C. 1395x(ss)(1)(G)(i)) is amended-- (A) by striking ``owed'' and inserting ``owned''; and (B) by striking ``of'' and inserting ``or''. (10) Section 4103.--Section 1862(a)(7) (42 U.S.C. 1395y(a)(7)) is amended by striking ``subparagraphs'' and inserting ``subparagraph''.

(11) Section 4002.--Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended-- (A) in subparagraph (I)(iii), by striking the semicolon and inserting a comma; (B) in subparagraph (N)(iv), by striking ``and'' at the end; and (C) in subparagraph (O), by striking the semicolon at the end and inserting a comma. (12) Section 4321.--Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended-- (A) in subparagraph (Q), by striking the semicolon at the end and inserting a comma; and (B) in subparagraph (R), by inserting ``, and'' at the end. (13) Section 4003.--Section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended by striking ``or'' after ``does not include''. (14) Section 4031.--Section 1882(s)(2)(D) (42 U.S.C. 1395ss(s)(2)(D)), is amended in the matter preceding clause (i), by inserting ``section'' after ``as defined in''. (15) Section 4421.--Section 1886(b) (42 U.S.C. 1395ww(b)) is amended-- (A) in paragraph (1), in the matter following subparagraph (C), by inserting a comma after ``paragraph (2)''; and (B) in paragraph (3)(B)(ii)-- (i) in subclause (VI), by striking the semicolon and inserting a comma; and (ii) in subclause (VII), by striking the semicolon and inserting a comma. (16) Section 4403.--Section 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is amended by inserting a comma after ``1986''. (17) Section 4406.--Section 1886(d)(9)(A)(ii) (42 U.S.C. 1395ww(d)(9)(A)(ii)) is amended by inserting a comma after ``1987''. (18) Section 4432.--Section 1888(e)(4)(E) (42 U.S.C. 1395yy(e)(4)(E)) is amended-- (A) in clause (i), by striking ``federal'' and inserting ``Federal''; and (B) in clause (ii), in the matter preceding subclause (I), by striking ``federal'' each place it appears and inserting ``Federal''. (19) Section 4603.--Section 1895(b)(1) (42 U.S.C. 1395fff(b)(1)) is amended by striking ``the this section'' and inserting ``this section''.

(l) Section 1135 of the Social Security Act.--Effective on the date of the enactment of this Act, section 1135 (42 U.S.C. 1320b-5) is repealed. (m) Effective Date.--Except as otherwise provided, the amendments made by this section shall take effect as if included in the enactment of BBA.

RURAL HOSPITALS.

(a) In General.--Section 1886(d)(8) (42 U.S.C. 1395ww(d)(8)) is amended by adding at the end the following new subparagraph: ``(E)(i) For purposes of this subsection, not later than 60 days after the receipt of an application (in a form and manner determined by the Secretary) from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in paragraph (2)(D)) of the State in which the hospital is located. ``(ii) For purposes of clause (i), a subsection (d) hospital described in this clause is a subsection (d) hospital that is located in an urban area (as defined in paragraph (2)(D)) and satisfies any of the following criteria: ``(I) The hospital is located in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)). ``(II) The hospital is located in an area designated by any law or regulation of such State as a rural area (or is designated by such State as a rural hospital). ``(III) The hospital would qualify as a rural, regional, or national referral center under paragraph (5)(C) or as a sole community hospital under paragraph (5)(D) if the hospital were located in a rural area. ``(IV) The hospital meets such other criteria as the Secretary may specify.''.

(b) Conforming Changes.--(1) Section 1833(t) (42 U.S.C. 1395l(t)), as amended by sections 201 and 202, is further amended by adding at the end the following new paragraph: ``(13) Miscellaneous provisions.-- ``(A) Application of reclassification of certain hospitals.--If a hospital is being treated as being located in a rural area under section 1886(d)(8)(E), that hospital shall be treated under this subsection as being located in that rural area.''.

(2) Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i-4(c)(2)(B)(i)) is amended, in the matter preceding subclause (I), by inserting ``or is treated as being located in a rural area pursuant to section 1886(d)(8)(E)'' after ``section 1886(d)(2)(D))''. (c) Effective Date.--The amendments made by this section shall become effective on January 1, 2000.

FOR CERTAIN HOSPITALS.

(a) In General.--Section 1886(d)(8)(B) (42 U.S.C. 1395ww(d)(8)(B)) is amended-- (1) by inserting ``(i)'' after ``(B)'';

(2) by striking ``published in the Federal Register on January 3, 1980'' and inserting ``described in clause (ii)''; and (3) by adding at the end the following new clause:

``(ii) The standards described in this clause for cost reporting periods beginning in a fiscal year-- ``(I) before fiscal year 2003, are the standards published in the Federal Register on January 3, 1980, or, at the election of the hospital with respect to fiscal years 2001 and 2002, standards so published on March 30, 1990; and ``(II) after fiscal year 2002, are the standards published in the Federal Register by the Director of the Office of Management and Budget based on the most recent available decennial population data.

Subparagraphs (C) and (D) shall not apply with respect to the application of subclause (I).''. (b) Effective Date.--The amendments made by subsection (a) apply with respect to discharges occurring during cost reporting periods beginning on or after October 1, 1999.

(a) Applying 96-Hour Limit on an Annual, Average Basis.-- (1) In general.--Section 1820(c)(2)(B)(iii) (42 U.S.C. 1395i-4(c)(2)(B)(iii)) is amended by striking ``for a period not to exceed 96 hours'' and all that follows and inserting ``for a period that does not exceed, as determined on an annual, average basis, 96 hours per patient;''. (2) Effective date.--The amendment made by paragraph (1) takes effect on the date of the enactment of this Act.

(b) Permitting For-Profit Hospitals To Qualify for Designation as a Critical Access Hospital.--Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i- 4(c)(2)(B)(i)) is amended in the matter preceding subclause (I), by striking ``nonprofit or public hospital'' and inserting ``hospital''. (c) Allowing Closed or Downsized Hospitals To Convert to Critical Access Hospitals.--Section 1820(c)(2) (42 U.S.C. 1395i-4(c)(2)) is amended-- (1) in subparagraph (A), by striking ``subparagraph (B)'' and inserting ``subparagraphs (B), (C), and (D)''; and (2) by adding at the end the following new subparagraphs: ``(C) Recently closed facilities.--A State may designate a facility as a critical access hospital if the facility-- ``(i) was a hospital that ceased operations on or after the date that is 10 years before the date of the enactment of this subparagraph; and ``(ii) as of the effective date of such designation, meets the criteria for designation under subparagraph (B). ``(D) Downsized facilities.--A State may designate a health clinic or a health center (as defined by the State) as a critical access hospital if such clinic or center-- ``(i) is licensed by the State as a health clinic or a health center; ``(ii) was a hospital that was downsized to a health clinic or health center; and

``(iii) as of the effective date of such designation, meets the criteria for designation under subparagraph (B).''.

(d) Election of Cost-Based Payment Option for Outpatient Critical Access Hospital Services.-- (1) In general.--Section 1834(g) (42 U.S.C. 1395m(g)) is amended to read as follows:

``(g) Payment for Outpatient Critical Access Hospital Services.-- ``(1) In general.--The amount of payment for outpatient critical access hospital services of a critical access hospital is the reasonable costs of the hospital in providing such services, unless the hospital makes the election under paragraph (2). ``(2) Election of cost-based hospital outpatient service payment plus fee schedule for professional services.--A critical access hospital may elect to be paid for outpatient critical access hospital services amounts equal to the sum of the following, less the amount that such hospital may charge as described in section 1866(a)(2)(A): ``(A) Facility fee.--With respect to facility services, not including any services for which payment may be made under subparagraph (B), the reasonable costs of the critical access hospital in providing such services. ``(B) Fee schedule for professional services.--With respect to professional services otherwise included within outpatient critical access hospital services, such amounts as would otherwise be paid under this part if such services were not included in outpatient critical access hospital services. ``(3) Disregarding charges.--The payment amounts under this subsection shall be determined without regard to the amount of the customary or other charge.''. (2) Effective date.--The amendment made by subsection (a) shall apply for cost reporting periods beginning on or after October 1, 2000.

(e) Elimination of Coinsurance for Clinical Diagnostic Laboratory Tests Furnished by a Critical Access Hospital on an Outpatient Basis.-- (1) In general.--Paragraphs (1)(D)(i) and (2)(D)(i) of section 1833(a) (42 U.S.C. 1395l(a)) are each amended by inserting ``or which are furnished on an outpatient basis by a critical access hospital'' after ``on an assignment-related basis''. (2) Effective date.--The amendments made by paragraph (1) shall apply to services furnished on or after the date of the enactment of this Act.

(f) Participation in Swing Bed Program.--Section 1883 (42 U.S.C. 1395tt) is amended-- (1) in subsection (a)(1), by striking ``(other than a hospital which has in effect a waiver under subparagraph (A) of the last sentence of section 1861(e))''; and (2) in subsection (c), by striking ``, or during which there is in effect for the hospital a waiver under subparagraph (A) of the last sentence of section 1861(e)''.

(a) Extension of Payment Methodology.--Section 1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)) is amended-- (1) in clause (i), by striking ``and before October 1, 2001,'' and inserting ``and before October 1, 2006,''; and (2) in clause (ii)(II), by striking ``and before October 1, 2001,'' and inserting ``and before October 1, 2006,''.

(b) Conforming Amendments.-- (1) Extension of target amount.--Section 1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)) is amended-- (A) in the matter preceding clause (i), by striking ``and before October 1, 2001,'' and inserting ``and before October 1, 2006,''; and (B) in clause (iv), by striking ``during fiscal year 1998 through fiscal year 2000'' and inserting ``during fiscal year 1998 through fiscal year 2005''. (2) Permitting hospitals to decline reclassification.-- Section 13501(e)(2) of Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. 1395ww note), as amended by section 4204(a)(3) of BBA, is amended by striking ``or fiscal year 2000'' and inserting ``or fiscal year 2000 through fiscal year 2005''.

Section 1886(b)(3) (42 U.S.C. 1395ww(b)(3)) is amended-- (1) in subparagraph (C), by inserting ``subject to subparagraph (I),'' before ``the term `target amount' means''; and (2) by adding at the end the following new subparagraph:

``(I)(i) For cost reporting periods beginning on or after October 1, 2000, in the case of a sole community hospital that for its cost reporting period beginning during 1999 is paid on the basis of the target amount applicable to the hospital under subparagraph (C) and that elects (in a form and manner determined by the Secretary) this subparagraph to apply to the hospital, there shall be substituted for such target amount-- ``(I) with respect to discharges occurring in fiscal year 2001, 75 percent of the target amount otherwise applicable to the hospital under subparagraph (C) (referred to in this clause as the `subparagraph (C) target amount') and 25 percent of the rebased target amount (as defined in clause (ii)); ``(II) with respect to discharges occurring in fiscal year 2002, 50 percent of the subparagraph (C) target amount and 50 percent of the rebased target amount; ``(III) with respect to discharges occurring in fiscal year 2003, 25 percent of the subparagraph (C) target amount and 75 percent of the rebased target amount; and ``(IV) with respect to discharges occurring after fiscal year 2003, 100 percent of the rebased target amount.

``(ii) For purposes of this subparagraph, the `rebased target amount' has the meaning given the term `target amount' in subparagraph (C) except that-- ``(I) there shall be substituted for the base cost reporting period the 12-month cost reporting period beginning during fiscal year 1996; ``(II) any reference in subparagraph (C)(i) to the `first cost reporting period' described in such subparagraph is deemed

a reference to the first cost reporting period beginning on or after October 1, 2000; and ``(III) applicable increase percentage shall only be applied under subparagraph (C)(iv) for discharges occurring in fiscal years beginning with fiscal year 2002.''.

Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i)) is amended-- (1) by redesignating subclause (XVII) as subclause (XVIII); (2) by striking subclause (XVI); and (3) by inserting after subclause (XV) the following new subclauses: ``(XVI) for fiscal year 2001, the market basket percentage increase minus 1.1 percentage points for hospitals (other than sole community hospitals) in all areas, and the market basket percentage increase for sole community hospitals, ``(XVII) for fiscal year 2002, the market basket percentage increase minus 1.1 percentage points for hospitals in all areas, and''.

IN RURAL AND OTHER AREAS.

(a) Counting Primary Care Residents on Certain Approved Leaves of Absence in Base Year FTE Count.-- (1) Payment for direct graduate medical education.--Section 1886(h)(4)(F) (42 U.S.C. 1395ww(h)(4)(F)) is amended-- (A) by redesignating the first sentence as clause (i) with the heading ``In general.--'' and appropriate indentation; and (B) by adding at the end the following new clause: ``(ii) Counting primary care residents on certain approved leaves of absence in base year fte count.-- ``(I) In general.--In determining the number of such full-time equivalent residents for a hospital's most recent cost reporting period ending on or before December 31, 1996, for purposes of clause (i), the Secretary shall count an individual to the extent that the individual would have been counted as a primary care resident for such period but for the fact that the individual, as determined by the Secretary, was on maternity or disability leave or a similar approved leave of absence. ``(II) Limitation to 3 fte residents for any hospital.--The total number of individuals counted under subclause (I) for a hospital may not exceed 3 full- time equivalent residents.''. (2) Payment for indirect medical education.--Section 1886(d)(5)(B)(v) (42 U.S.C. 1395ww(d)(5)(B)(v)) is amended by adding at the end the following: ``Rules similar to the rules of subsection (h)(4)(F)(ii) shall apply for purposes of this clause.''. (3) Effective date.-- (A) DGME.--The amendments made by paragraph (1) apply to cost reporting periods that begin on or after the date of the enactment of this Act.

(B) IME.--The amendment made by paragraph (2) applies to discharges occurring in cost reporting periods that begin on or after such date of enactment.

(b) Permitting 30 Percent Expansion in Current GME Training Programs for Hospitals Located in Rural Areas.-- (1) Payment for direct graduate medical education.--Section 1886(h)(4)(F)(i) (42 U.S.C. 1395ww(h)(4)(F)(i)), as amended by subsection (a)(1), is amended by inserting ``(or, 130 percent of such number in the case of a hospital located in a rural area)'' after ``may not exceed the number''. (2) Payment for indirect medical education.--Section 1886(d)(5)(B)(v) (42 U.S.C. 1395ww(d)(5)(B)(v)) is amended by inserting ``(or, 130 percent of such number in the case of a hospital located in a rural area)'' after ``may not exceed the number''. (3) Effective dates.-- (A) DGME.--The amendment made by paragraph (1) applies to cost reporting periods beginning on or after April 1, 2000. (B) IME.--The amendment made by paragraph (2) applies to discharges occurring on or after April 1, 2000.

(c) Special Rule for Nonrural Facilities Serving Rural Areas.-- (1) In general.--Section 1886(h)(4)(H) (42 U.S.C. 1395ww(h)(4)(H)) is amended by adding at the end the following new clause: ``(iv) Nonrural hospitals operating training programs in rural areas.--In the case of a hospital that is not located in a rural area but establishes separately accredited approved medical residency training programs (or rural tracks) in an rural area or has an accredited training program with an integrated rural track, the Secretary shall adjust the limitation under subparagraph (F) in an appropriate manner insofar as it applies to such programs in such rural areas in order to encourage the training of physicians in rural areas.''. (2) Effective date.--The amendment made by paragraph (1) applies with respect to-- (A) payments to hospitals under section 1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) for cost reporting periods beginning on or after April 1, 2000; and (B) payments to hospitals under section 1886(d)(5)(B)(v) of such Act (42 U.S.C. 1395ww(d)(5)(B)(v)) for discharges occurring on or after April 1, 2000.

(d) Not Counting Against Numerical Limitation Certain Interns and Residents Transferred from a VA Residency Program That Loses Accreditation.-- (1) In general.--Any applicable resident described in paragraph (2) shall not be taken into account in applying any limitation regarding the number of residents or interns for which payment may be made under section 1886 of the Social Security Act (42 U.S.C. 1395ww). (2) Applicable resident described.--An applicable resident described in this paragraph is a resident or intern who-- (A) participated in graduate medical education at a facility of the Department of Veterans Affairs;

(B) was subsequently transferred on or after January 1, 1997, and before July 31, 1998, to a hospital that was not a Department of Veterans Affairs facility; and (C) was transferred because the approved medical residency program in which the resident or intern participated would lose accreditation by the Accreditation Council on Graduate Medical Education if such program continued to train residents at the Department of Veterans Affairs facility. (3) Effective date.-- (A) In general.--Paragraph (1) applies as if included in the enactment of BBA. (B) Retroactive payments.--If the Secretary of Health and Human Services determines that a hospital operating an approved medical residency program is owed payments as a result of enactment of this subsection, the Secretary shall make such payments not later than 60 days after the date of the enactment of this Act.

SWING BED PROGRAM.

(a) Elimination of Requirement for State Certificate of Need.-- Section 1883(b) (42 U.S.C. 1395tt(b)) is amended to read as follows: ``(b) The Secretary may not enter into an agreement under this section with any hospital unless, except as provided under subsection (g), the hospital is located in a rural area and has less than 100 beds.''. (b) Elimination of Swing Bed Restrictions on Certain Hospitals With More Than 49 Beds.--Section 1883(d) (42 U.S.C. 1395tt(d)) is amended-- (1) by striking paragraphs (2) and (3); and (2) by striking ``(d)(1)'' and inserting ``(d)''.

(c) Effective Date.--The amendments made by this section take effect on the date that is the first day after the expiration of the transition period under section 1888(e)(2)(E) of the Social Security Act (42 U.S.C. 1395yy(e)(2)(E)) for payments for covered skilled nursing facility services under the medicare program.

PAYMENT.

Section 1820(g) (42 U.S.C. 1395i-4(g)) is amended by adding at the end the following new paragraph: ``(3) Upgrading data systems.-- ``(A) Grants to hospitals.--The Secretary may award grants to hospitals that have submitted applications in accordance with subparagraph (C) to assist eligible small rural hospitals in meeting the costs of implementing data systems required to meet requirements established under the medicare program pursuant to amendments made by the Balanced Budget Act of 1997. ``(B) Eligible small rural hospital defined.--For purposes of this paragraph, the term `eligible small rural hospital' means a non-Federal, short-term general acute care hospital that-- ``(i) is located in a rural area (as defined for purposes of section 1886(d)); and ``(ii) has less than 50 beds.

``(C) Application.--A hospital seeking a grant under this paragraph shall submit an application to the Secretary on or before such date and in such form and manner as the Secretary specifies. ``(D) Amount of grant.--A grant to a hospital under this paragraph may not exceed $50,000. ``(E) Use of funds.--A hospital receiving a grant under this paragraph may use the funds for the purchase of computer software and hardware, the education and training of hospital staff on computer information systems, and to offset costs related to the implementation of prospective payment systems. ``(F) Reports.-- ``(i) Information.--A hospital receiving a grant under this section shall furnish the Secretary with such information as the Secretary may require to evaluate the project for which the grant is made and to ensure that the grant is expended for the purposes for which it is made. ``(ii) Timing of submission.-- ``(I) Interim reports.--The Secretary shall report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate at least annually on the grant program established under this section, including in such report information on the number of grants made, the nature of the projects involved, the geographic distribution of grant recipients, and such other matters as the Secretary deems appropriate. ``(II) Final report.--The Secretary shall submit a final report to such committees not later than 180 days after the completion of all of the projects for which a grant is made under this section.''.

(a) In General.--The Comptroller General of the United States shall conduct a study of the current laws and regulations for geographic reclassification of hospitals to determine whether such reclassification is appropriate for purposes of applying wage indices under the medicare program and whether such reclassification results in more accurate payments for all hospitals. Such study shall examine data on the number of hospitals that are reclassified and their reclassified status in determining payments under the medicare program. The study shall evaluate-- (1) the magnitude of the effect of geographic reclassification on rural hospitals that are not reclassified; (2) whether the current thresholds used in geographic reclassification reclassify hospitals to the appropriate labor markets; (3) the effect of eliminating geographic reclassification through use of the occupational mix data; (4) the group reclassification policy; (5) changes in the number of reclassifications and the compositions of the groups;

(6) the effect of State-specific budget neutrality compared to national budget neutrality; and (7) whether there are sufficient controls over the intermediary evaluation of the wage data reported by hospitals.

(b) Report.--Not later than 18 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the study conducted under subsection (a).

Subtitle B--Other Rural Provisions

(a) Study.--The Medicare Payment Advisory Commission shall conduct a study of rural providers furnishing items and services for which payment is made under title XVIII of the Social Security Act. Such study shall examine and evaluate the adequacy and appropriateness of the categories of special payments (and payment methodologies) established for rural hospitals under the medicare program, and the impact of such categories on beneficiary access and quality of health care services. (b) Report.--Not later than 18 months after the date of the enactment of this Act, the Medicare Payment Advisory Commission shall submit to Congress a report on the study conducted under subsection (a).

AREAS.

(a) Expansion of Payment Areas.--Section 4531(c) of BBA (42 U.S.C. 1395x note) is amended by adding at the end the following flush sentence: ``For purposes of this subsection, an area shall be treated as a rural area if it is designated as a rural area by any law or regulation of the State or if it is located in a rural census tract of a metropolitan statistical area (as determined under the most recent Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)).''. (b) Effective Date.--The amendment made by subsection (a) takes effect on January 1, 2000, and applies to ALS intercept services furnished on or after such date.

AND EDUCATION DEMONSTRATION PROJECT.

Section 4207 of BBA (42 U.S.C. 1395b-1 note) is amended-- (1) in subsection (a)(1), by adding at the end the following: ``The Secretary shall make an award for such project not later than 3 months after the date of the enactment of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999. The Secretary shall accept the proposal adjudged to be the best technical proposal as of such date of enactment without the need for additional review or resubmission of proposals.''; (2) in subsection (a)(2)(A), by inserting before the period at the end the following: ``that qualify as Federally designated medically underserved areas or health professional shortage areas at the time of enrollment of beneficiaries under the project'';

(3) in subsection (c)(2), by striking ``and the source and amount of non-Federal funds used in the project''; (4) in subsection (d)(2)(A), by striking ``at a rate of 50 percent of the costs that are reasonable and'' and inserting ``for the costs that are''; (5) in subsection (d)(2)(B)(i), by striking ``(but only in the case of patients located in medically underserved areas)'' and inserting ``or at sites providing health care to patients located in medically underserved areas''; (6) in subsection (d)(2)(C)(i), by striking ``to deliver medical informatics services under'' and inserting ``for activities related to''; and (7) by amending paragraph (4) of subsection (d) to read as follows: ``(4) Cost-sharing.--The project may not impose cost-sharing on a medicare beneficiary for the receipt of services under the project. Project costs will cover all costs to medicare beneficiaries and providers related to participation in the project.''.

CHANGES IN MEDICARE+CHOICE ENROLLMENT RULES.

(a) Permitting Enrollment in Alternative Medicare+Choice Plans and Medigap Coverage in Case of Involuntary Termination of Medicare+Choice Enrollment.-- (1) In general.--Section 1851(e)(4) (42 U.S.C. 1395w- 21(e)(4)) is amended by striking subparagraph (A) and inserting the following: ``(A)(i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or ``(ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;''. (2) Conforming medigap amendment.--Section 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended-- (A) in subparagraph (A) in the matter following clause (iii), by inserting ``, subject to subparagraph (E),'' after ``in the case of an individual described in subparagraph (B) who''; and (B) by adding at the end the following new subparagraph:

``(E)(i) An individual described in subparagraph (B)(ii) may elect to apply subparagraph (A) by substituting, for the date of

termination of enrollment, the date on which the individual was notified by the Medicare+Choice organization of the impending termination or discontinuance of the Medicare+Choice plan it offers in the area in which the individual resides, but only if the individual disenrolls from the plan as a result of such notification. ``(ii) In the case of an individual making such an election, the issuer involved shall accept the application of the individual submitted before the date of termination of enrollment, but the coverage under subparagraph (A) shall only become effective upon termination of coverage under the Medicare+Choice plan involved.''. (b) Continuous Open Enrollment for Institutionalized Individuals.-- Section 1851(e)(2) (42 U.S.C. 1395w-21(e)(2)) is amended-- (1) in subparagraph (B)(i), by inserting ``and subparagraph (D)'' after ``clause (ii)''; (2) in subparagraph (C)(i), by inserting ``and subparagraph (D)'' after ``clause (ii)''; and (3) by adding at the end the following new subparagraph: ``(D) Continuous open enrollment for institutionalized individuals.--At any time after 2001 in the case of a Medicare+Choice eligible individual who is institutionalized (as defined by the Secretary), the individual may elect under subsection (a)(1)-- ``(i) to enroll in a Medicare+Choice plan; or ``(ii) to change the Medicare+Choice plan in which the individual is enrolled.''.

(c) Continuing Enrollment for Certain Enrollees.--Section 1851(b)(1) (42 U.S.C. 1395w-21(b)(1)) is amended-- (1) in subparagraph (A), by inserting ``and except as provided in subparagraph (C)'' after ``may otherwise provide''; and (2) by adding at the end the following new subparagraph: ``(C) Continuation of enrollment permitted where service changed.--Notwithstanding subparagraph (A) and in addition to subparagraph (B), if a Medicare+Choice organization eliminates from its service area a Medicare+Choice payment area that was previously within its service area, the organization may elect to offer individuals residing in all or portions of the affected area who would otherwise be ineligible to continue enrollment the option to continue enrollment in a Medicare+Choice plan it offers so long as-- ``(i) the enrollee agrees to receive the full range of basic benefits (excluding emergency and urgently needed care) exclusively at facilities designated by the organization within the plan service area; and ``(ii) there is no other Medicare+Choice plan offered in the area in which the enrollee resides at the time of the organization's election.''.

(d) Effective Dates.-- (1) The amendments made by subsection (a) apply to notices of impending terminations or discontinuances made on or after the date of the enactment of this Act. (2) The amendments made by subsection (c) apply to elections made on or after the date of the enactment of this Act with respect to eliminations of Medicare+Choice payment areas from a service area that occur before, on, or after the date of the enactment of this Act.

OF MEDICARE+CHOICE PLANS.

(a) Open Enrollment.--Section 1851(f)(2) (42 U.S.C. 1395w-21(f)(2)) is amended-- (1) by inserting ``or change'' before ``is made''; and (2) by inserting ``, except that if such election or change is made after the 10th day of any calendar month, then the election or change shall not take effect until the first day of the second calendar month following the date on which the election or change is made'' before the period.

(b) Effective Date.--The amendments made by this section apply to elections and changes of coverage made on or after January 1, 2000.

Section 1876(h)(5)(B) (42 U.S.C. 1395mm(h)(5)(B)) is amended by striking ``2002'' and inserting ``2004''.

Subtitle B--Provisions To Facilitate Implementation of the Medicare+Choice Program

PHASE-IN OF NEW RISK ADJUSTMENT METHODOLOGY; STUDIES AND REPORTS ON RISK ADJUSTMENT.

(a) Phase-In.--Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is amended-- (1) by redesignating the first sentence as clause (i) with the heading ``In general.--'' and appropriate indentation; and (2) by adding at the end the following new clause: ``(ii) Phase-in.--Such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation rates for health status applies to-- ``(I) 10 percent of \1/12\ of the annual Medicare+Choice capitation rate in 2000 and 2001; and ``(II) not more than 20 percent of such capitation rate in 2002.''.

(b) MedPAC Study and Report.-- (1) Study.--The Medicare Payment Advisory Commission shall conduct a study that evaluates the methodology used by the Secretary of Health and Human Services in developing the risk factors used in adjusting the Medicare+Choice capitation rate paid to Medicare+Choice organizations under section 1853 of the Social Security Act (42 U.S.C. 1395w-23) and includes the issues described in paragraph (2). (2) Issues to be studied.--The issues described in this paragraph are the following: (A) The ability of the average risk adjustment factor applied to a Medicare+Choice plan to explain variations in plans' average per capita medicare costs, as reported by Medicare+Choice plans in the plans' adjusted community rate filings. (B) The year-to-year stability of the risk factors applied to each Medicare+Choice plan and the potential for

substantial changes in payment for small Medicare+Choice plans. (C) For medicare beneficiaries newly enrolled in Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from medicare fee-for-service data for those individuals from the period prior to their enrollment in a Medicare+Choice plan and the average risk factor calculated for such individuals during their initial year of enrollment in a Medicare+Choice plan. (D) For medicare beneficiaries disenrolling from or switching among Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from data pertaining to the period prior to their disenrollment from a Medicare+Choice plan and the average risk factor calculated from data pertaining to the period after disenrollment. (E) An evaluation of the exclusion of ``discretionary'' hospitalizations from consideration in the risk adjustment methodology. (F) Suggestions for changes or improvements in the risk adjustment methodology. (3) Report.--Not later than December 1, 2000, the Commission shall submit a report to Congress on the study conducted under paragraph (1), together with any recommendations for legislation that the Commission determines to be appropriate as a result of such study.

(c) Study and Report Regarding Reporting of Encounter Data.-- (1) Study.--The Secretary of Health and Human Services shall conduct a study on how to reduce the costs and burdens on Medicare+Choice organizations of their complying with reporting requirements for encounter data imposed by the Secretary in establishing and implementing a risk adjustment methodology used in making payments to such organizations under section 1853 of the Social Security Act (42 U.S.C. 1395w-23). The Secretary shall consult with representatives of Medicare+Choice organizations in conducting the study. The study shall address the following issues: (A) Limiting the number and types of sites of services (that are in addition to inpatient sites) for which encounter data must be reported. (B) Establishing alternative risk adjustment methods that would require submission of less data. (C) The potential for Medicare+Choice organizations to misreport, overreport, or underreport prevalence of diagnoses in outpatient sites of care, the potential for increases in payments to Medicare+Choice organizations from changes in Medicare+Choice plan coding practices (commonly known as ``coding creep'') and proposed methods for detecting and adjusting for such variations in diagnosis coding as part of the risk adjustment methodology using encounter data from multiple sites of care. (D) The impact of such requirements on the willingness of insurers to offer Medicare+Choice MSA plans and options for modifying encounter data reporting requirements to accommodate such plans.

(E) Differences in the ability of Medicare+Choice organizations to report encounter data, and the potential for adverse competitive impacts on group and staff model health maintenance organizations or other integrated providers of care based on data reporting capabilities. (2) Report.--Not later than January 1, 2001, the Secretary shall submit a report to Congress on the study conducted under this subsection, together with any recommendations for legislation that the Secretary determines to be appropriate as a result of such study.

ENCOURAGING OFFERING OF MEDICARE+CHOICE PLANS IN AREAS WITHOUT PLANS.

Section 1853 (42 U.S.C. 1395w-23) is amended-- (1) in subsection (a)(1), by striking ``subsections (e) and (f)'' and inserting ``subsections (e), (g), and (i)''; (2) in subsection (c)(5), by inserting ``(other than those attributable to subsection (i))'' after ``payments under this part''; and (3) by adding at the end the following new subsection:

``(i) New Entry Bonus.-- ``(1) In general.--Subject to paragraphs (2) and (3), in the case of Medicare+Choice payment area in which a Medicare+Choice plan has not been offered since 1997 (or in which all organizations that offered a plan since such date have filed notice with the Secretary, as of October 13, 1999, that they will not be offering such a plan as of January 1, 2000), the amount of the monthly payment otherwise made under this section shall be increased-- ``(A) only for the first 12 months in which any Medicare+Choice plan is offered in the area, by 5 percent of the total monthly payment otherwise computed for such payment area; and ``(B) only for the subsequent 12 months, by 3 percent of the total monthly payment otherwise computed for such payment area. ``(2) Period of application.--Paragraph (1) shall only apply to payment for Medicare+Choice plans which are first offered in a Medicare+Choice payment area during the 2-year period beginning on January 1, 2000. ``(3) Limitation to organization offering first plan in an area.--Paragraph (1) shall only apply to payment to the first Medicare+Choice organization that offers a Medicare+Choice plan in each Medicare+Choice payment area, except that if more than one such organization first offers such a plan in an area on the same date, paragraph (1) shall apply to payment for such organizations. ``(4) Construction.--Nothing in paragraph (1) shall be construed as affecting the calculation of the annual Medicare+Choice capitation rate under subsection (c) for any payment area or as applying to payment for any period not described in such paragraph and paragraph (2). ``(5) Offered defined.--In this subsection, the term `offered' means, with respect to a Medicare+Choice plan as of a date, that a Medicare+Choice eligible individual may enroll with the plan on that date, regardless of when the enrollment

takes effect or when the individual obtains benefits under the plan.''.

TERMINATIONS.

(a) Reduction of General Exclusion Period to 2 Years.--Section 1857(c)(4) (42 U.S.C. 1395w-27(c)(4)) is amended by striking ``5-year period'' and inserting ``2-year period''. (b) Specific Exception Where Change in Payment Policy.-- (1) In general.--Section 1857(c)(4) (42 U.S.C. 1395w- 27(c)(4)) is amended-- (A) by striking ``except in circumstances'' and inserting ``except as provided in subparagraph (B) and except in such other circumstances''; (B) by redesignating the sentence following ``(4)'' as a subparagraph (A) with an appropriate indentation and the heading ``In general.--''; and (C) by adding at the end the following new subparagraph: ``(B) Earlier re-entry permitted where change in payment policy.--Subparagraph (A) shall not apply with respect to the offering by a Medicare+Choice organization of a Medicare+Choice plan in a Medicare+Choice payment area if during the 6-month period beginning on the date the organization notified the Secretary of the intention to terminate the most recent previous contract, there was a legislative change enacted (or a regulatory change adopted) that has the effect of increasing payment amounts under section 1853 for that Medicare+Choice payment area.''. (2) Construction relating to additional exceptions.--Nothing in the amendment made by paragraph (1)(C) shall be construed to affect the authority of the Secretary of Health and Human Services to provide for exceptions in addition to the exception provided in such amendment, including exceptions provided under Operational Policy Letter #103 (OPL99.103).

(c) Effective Date.--The amendments made by this section apply to contract terminations occurring before, on, or after the date of the enactment of this Act.

FEE-FOR-SERVICE EXPENDITURES ON A COUNTY-SPECIFIC BASIS.

(a) In General.--Section 1853(b) (42 U.S.C. 1395w-23(b)) is amended by adding at the end the following new paragraph: ``(4) Continued computation and publication of county- specific per capita fee-for-service expenditure information.-- The Secretary, through the Chief Actuary of the Health Care Financing Administration, shall provide for the computation and publication, on an annual basis beginning with 2001 at the time of publication of the annual Medicare+Choice capitation rates under paragraph (1), of the following information for the original medicare fee-for-service program under parts A and B (exclusive of individuals eligible for coverage under section 226A) for each Medicare+Choice payment area for the second calendar year ending before the date of publication:

``(A) Total expenditures per capita per month, computed separately for part A and for part B. ``(B) The expenditures described in subparagraph (A) reduced by the best estimate of the expenditures (such as graduate medical education and disproportionate share hospital payments) not related to the payment of claims. ``(C) The average risk factor for the covered population based on diagnoses reported for medicare inpatient services, using the same methodology as is expected to be applied in making payments under subsection (a). ``(D) Such average risk factor based on diagnoses for inpatient and other sites of service, using the same methodology as is expected to be applied in making payments under subsection (a).''.

(b) Special Rule for 2001.--In providing for the publication of information under section 1853(b)(4) of the Social Security Act (42 U.S.C. 1395w-23(b)(4)), as added by subsection (a), in 2001, the Secretary of Health and Human Services shall also include the information described in such section for 1998, as well as for 1999.

FLEXIBILITY TO TAILOR BENEFITS UNDER MEDICARE+CHOICE PLANS.

(a) In General.--Section 1854 (42 U.S.C. 1395w-24) is amended-- (1) in subsection (a)(1), by inserting ``(or segment of such an area if permitted under subsection (h))'' after ``service area'' in the matter preceding subparagraph (A); and (2) by adding at the end the following:

``(h) Permitting Use of Segments of Service Areas.--The Secretary shall permit a Medicare+Choice organization to elect to apply the provisions of this section uniformly to separate segments of a service area (rather than uniformly to an entire service area) as long as such segments are composed of one or more Medicare+Choice payment areas.''. (b) Effective Date.--The amendments made by this section apply to contract years beginning on or after January 1, 2001.

(a) Delay in Deadline for Submission of Adjusted Community Rates.-- Section 1854(a)(1) (42 U.S.C. 1395w-24(a)(1)) is amended by striking ``May 1'' and inserting ``July 1'' in the matter preceding subparagraph (A). (b) Effective Date.--The amendment made by subsection (a) applies to information submitted by Medicare+Choice organizations for years beginning with 1999.

REDUCTION IN ADJUSTMENT IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE FOR 2002.

Section 1853(c)(6)(B)(v) (42 U.S.C. 1395w-23(c)(6)(B)(v)) is amended by striking ``0.5 percentage points'' and inserting ``0.3 percentage points''.

DEEMING OF MEDICARE+CHOICE ORGANIZATION TO MEET REQUIREMENTS.

Section 1852(e)(4) (42 U.S.C. 1395w-22(e)(4)) is amended to read as follows:

``(4) Treatment of accreditation.-- ``(A) In general.--The Secretary shall provide that a Medicare+Choice organization is deemed to meet all the requirements described in any specific clause of subparagraph (B) if the organization is accredited (and periodically reaccredited) by a private accrediting organization under a process that the Secretary has determined assures that the accrediting organization applies and enforces standards that meet or exceed the standards established under section 1856 to carry out the requirements in such clause. ``(B) Requirements described.--The provisions described in this subparagraph are the following: ``(i) Paragraphs (1) and (2) of this subsection (relating to quality assurance programs). ``(ii) Subsection (b) (relating to antidiscrimination). ``(iii) Subsection (d) (relating to access to services). ``(iv) Subsection (h) (relating to confidentiality and accuracy of enrollee records). ``(v) Subsection (i) (relating to information on advance directives). ``(vi) Subsection (j) (relating to provider participation rules). ``(C) Timely action on applications.--The Secretary shall determine, within 210 days after the date the Secretary receives an application by a private accrediting organization and using the criteria specified in section 1865(b)(2), whether the process of the private accrediting organization meets the requirements with respect to any specific clause in subparagraph (B) with respect to which the application is made. The Secretary may not deny such an application on the basis that it seeks to meet the requirements with respect to only one, or more than one, such specific clause. ``(D) Construction.--Nothing in this paragraph shall be construed as limiting the authority of the Secretary under section 1857, including the authority to terminate contracts with Medicare+Choice organizations under subsection (c)(2) of such section.''.

TIMING OF MEDICARE+CHOICE HEALTH INFORMATION FAIRS.

(a) In General.--Section 1851(e)(3)(C) (42 U.S.C. 1395w-21(e)(3)(C)) is amended by striking ``In the month of November'' and inserting ``During the fall season''. (b) Effective Date.--The amendment made by subsection (a) first applies to campaigns conducted beginning in 2000.

ORGANIZATION PLANS.

(a) In General.--Section 1852(e)(2) (42 U.S.C. 1395w-22(e)(2)) is amended-- (1) in subparagraph (A), by striking ``or a non-network MSA plan'' and inserting ``, a non-network MSA plan, or a preferred provider organization plan'; (2) in subparagraph (B)-- (A) in the heading, by striking ``and non-network msa plans'' and inserting ``, non-network msa plans, and preferred provider organization plans''; and

(B) by striking ``or a non-network MSA plan'' and inserting ``, a non-network MSA plan, or a preferred provider organization plan''; (3) by adding at the end the following: ``(D) Definition of preferred provider organization plan.--In this paragraph, the term `preferred provider organization plan' means a Medicare+Choice plan that-- ``(i) has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan; ``(ii) provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and ``(iii) is offered by an organization that is not licensed or organized under State law as a health maintenance organization.''.

(b) Effective Date.--The amendments made by subsection (a) apply to contract years beginning on or after January 1, 2000. (c) Quality Improvement Standards.-- (1) Study.--The Medicare Payment Advisory Commission shall conduct a study on the appropriate quality improvement standards that should apply to-- (A) each type of Medicare+Choice plan described in section 1851(a)(2) of the Social Security Act (42 U.S.C. 1395w-21(a)(2)), including each type of Medicare+Choice plan that is a coordinated care plan (as described in subparagraph (A) of such section); and (B) the original medicare fee-for-service program under parts A and B title XVIII of such Act (42 U.S.C. 1395 et seq.). (2) Considerations.--Such study shall specifically examine the effects, costs, and feasibility of requiring entities, physicians, and other health care providers that provide items and services under the original medicare fee-for-service program to comply with quality standards and related reporting requirements that are comparable to the quality standards and related reporting requirements that are applicable to Medicare+Choice organizations. (3) Report.--Not later than 2 years after the date of the enactment of this Act, such Commission shall submit a report to Congress on the study conducted under this subsection, together with any recommendations for legislation that it determines to be appropriate as a result of such study.

DISCHARGE PLANNING PROCESS TO MEDICARE+CHOICE PLANS.

Section 1861(ee) (42 U.S.C. 1395x(ee)(2)(H)) is amended by adding at the end the following: ``(3) With respect to a discharge plan for an individual who is enrolled with a Medicare+Choice organization under a Medicare+Choice plan and is furnished inpatient hospital services by a hospital under a contract with the organization-- ``(A) the discharge planning evaluation under paragraph (2)(D) is not required to include information on the availability of home health services through individuals and entities which do not have a contract with the organization; and

``(B) notwithstanding subparagraph (H)(i), the plan may specify or limit the provider (or providers) of post-hospital home health services or other post-hospital services under the plan.''.

USER FEE FOR MEDICARE+CHOICE ORGANIZATIONS BASED ON NUMBER OF ENROLLED BENEFICIARIES.

(a) In General.--Section 1857(e)(2) (42 U.S.C. 1395w-27(e)(2)) is amended-- (1) in subparagraph (B), by striking ``Any amounts collected are authorized to be appropriated only for'' and inserting ``Any amounts collected shall be available without further appropriation to the Secretary for''; (2) by amending subparagraph (C) to read as follows: ``(C) Authorization of appropriations.--There are authorized to be appropriated for the purposes described in subparagraph (B) for each fiscal year beginning with fiscal year 2001 an amount equal to $100,000,000, reduced by the amount of fees authorized to be collected under this paragraph for the fiscal year.''; (3) in subparagraph (D)(ii)-- (A) in subclause (II), by striking ``and''; (B) in subclause (III), by striking `` and each subsequent fiscal year.'' and inserting ``; and''; and (C) by adding at the end the following: ``(IV) the Medicare+Choice portion (as defined in subparagraph (E)) of $100,000,000 in fiscal year 2001 and each succeeding fiscal year.''; and (4) by adding at the end the following: ``(E) Medicare+choice portion defined.--In this paragraph, the term `Medicare+Choice portion' means, for a fiscal year, the ratio, as estimated by the Secretary, of-- ``(i) the average number of individuals enrolled in Medicare+Choice plans during the fiscal year, to ``(ii) the average number of individuals entitled to benefits under part A, and enrolled under part B, during the fiscal year.''.

(b) Effective Date.--The amendments made by subsection (a) apply to fees charged on or after January 1, 2001. The Secretary of Health and Human Services may not increase the fees charged under section 1857(e)(2) of the Social Security Act (42 U.S.C. 1395w-27(e)(2)) for the 3-month period beginning with October 2000 above the level in effect during the previous 9-month period.

BENEFIT SOCIETY TO OPERATE ANY MEDICARE+CHOICE PLAN.

Section 1859(e)(2) (42 U.S.C. 1395w-29(e)(2)) is amended in the matter preceding subparagraph (A) by striking ``section 1851(a)(2)(A)'' and inserting ``section 1851(a)(2)''.

RULES REGARDING PHYSICIAN REFERRALS FOR MEDICARE+CHOICE PROGRAM.

(a) In General.--Section 1877(b)(3) (42 U.S.C. 1395nn(b)(3)) is amended-- (1) in subparagraph (C), by striking ``or'' at the end; (3) by adding at the end the following:

(2) in subparagraph (D), by striking the period at the end and inserting ``, or''; and ``(E) that is a Medicare+Choice organization under part C that is offering a coordinated care plan described in section 1851(a)(2)(A) to an individual enrolled with the organization.''.

(b) Effective Date.--The amendment made by this section shall apply to services furnished on or after the date of the enactment of this Act.

Subtitle C--Demonstration Projects and Special Medicare Populations

DEMONSTRATION (SHMO) PROJECT AUTHORITY.

(a) Extension.--Section 4018(b) of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203) is amended-- (1) in paragraph (1), by striking ``December 31, 2000'' and inserting ``the date that is 18 months after the date that the Secretary submits to Congress the report described in section 4014(c) of the Balanced Budget Act of 1997''; (2) in paragraph (4), by striking ``March 31, 2001'' and inserting ``the date that is 21 months after the date on which Secretary submits to Congress the report described in section 4014(c) of the Balanced Budget Act of 1997''; and (3) by adding at the end of paragraph (4) the following: ``Not later than 6 months after the date the Secretary submits such final report, the Medicare Payment Advisory Commission shall submit to Congress a report containing recommendations regarding such project.''.

(b) Substitution of Aggregate Cap.--Section 13567(c) of the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66) is amended to read as follows: ``(c) Aggregate Limit on Number of Members.--The Secretary of Health and Human Services may not impose a limit on the number of individuals that may participate in a project conducted under section 2355 of the Deficit Reduction Act of 1984, other than an aggregate limit of not less than 324,000 for all sites.''.

DEMONSTRATION PROJECT.

(a) Extension.--Notwithstanding any other provision of law, any demonstration project conducted under section 4079 of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-123; 42 U.S.C. 1395mm note) and conducted for the additional period of 2 years as provided for under section 4019 of BBA, shall be conducted for an additional period of 2 years. The Secretary of Health and Human Services shall provide for such reduction in payments under such project in the extension period provided under the previous sentence as the Secretary determines is necessary to ensure that total Federal expenditures during the extension period under the project do not exceed the total Federal expenditures that would have been made under title XVIII of the Social Security Act if such project had not been so extended.

(b) Report.--Not later than July 1, 2001, the Secretary of Health and Human Services shall submit to Congress a report describing the results of any demonstration project conducted under section 4079 of the Omnibus Budget Reconciliation Act of 1987, and describing the data collected by the Secretary relevant to the analysis of the results of such project, including the most recently available data through the end of 2000.

MEDICARE+CHOICE COMPETITIVE BIDDING DEMONSTRATION PROJECT.

Section 4011 of BBA (42 U.S.C. 1395w-23 note) is amended-- (1) in subsection (a)-- (A) by striking ``The Secretary'' and inserting the following (and conforming the indentation for the remainder of the subsection accordingly): ``(1) In general.--Subject to the succeeding provisions of this subsection, the Secretary''; and (B) by adding at the end the following: ``(2) Delay in implementation.--The Secretary shall not implement the project until January 1, 2002, or, if later, 6 months after the date the Competitive Pricing Advisory Committee has submitted to Congress a report on each of the following topics: ``(A) Incorporation of original medicare fee-for- service program into project.--What changes would be required in the project to feasibly incorporate the original medicare fee-for-service program into the project in the areas in which the project is operational. ``(B) Quality activities.--The nature and extent of the quality reporting and monitoring activities that should be required of plans participating in the project, the estimated costs that plans will incur as a result of these requirements, and the current ability of the Health Care Financing Administration to collect and report comparable data, sufficient to support comparable quality reporting and monitoring activities with respect to beneficiaries enrolled in the original medicare fee- for-service program generally. ``(C) Rural project.--The current viability of initiating a project site in a rural area, given the site specific budget neutrality requirements of the project under subsection (g), and insofar as the Committee decides that the addition of such a site is not viable, recommendations on how the project might best be changed so that such a site is viable. ``(D) Benefit structure.--The nature and extent of the benefit structure that should be required of plans participating in the project, the rationale for such benefit structure, the potential implications that any benefit standardization requirement may have on the number of plan choices available to a beneficiary in an area designated under the project, the potential implications of requiring participating plans to offer variations on any standardized benefit package the committee might recommend, such that a beneficiary could elect to pay a higher percentage of out-of-pocket costs in exchange for a lower premium (or premium rebate as the case may be), and the potential

implications of expanding the project (in conjunction with the potential inclusion of the original medicare fee-for-service program) to require medicare supplemental insurance plans operating in an area designated under the project to offer a coordinated and comparable standardized benefit package. ``(3) Conforming deadlines.--Any dates specified in the succeeding provisions of this section shall be delayed (as specified by the Secretary) in a manner consistent with the delay effected under paragraph (2).''; and (2) in subsection (c)(1)(A)-- (A) by striking ``and'' at the end of clause (i); and (B) by adding at the end the following new clause: ``(iii) establish beneficiary premiums for plans offered in such area in a manner such that a beneficiary who enrolls in an offered plan the per capita bid for which is less than the standard per capita government contribution (as established by the competitive pricing methodology established for such area) may, at the plan's election, be offered a rebate of some or all of the medicare part B premium that such individual must otherwise pay in order to participate in a Medicare+Choice plan under the Medicare+Choice program; and''.

PROJECTS.

Section 9215(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended by section 6135 of the Omnibus Budget Reconciliation Act of 1989, section 13557 of the Omnibus Budget Reconciliation Act of 1993, and section 4017 of BBA, is amended by striking ``December 31, 2000'' and inserting ``December 31, 2002''.

Section 4016(e)(1)(A)(ii) of BBA (42 U.S.C. 1395b-1 note) is amended to read as follows: ``(ii) Cancer hospital.--In the case of the project described in subsection (b)(2)(C), the Secretary shall provide for the transfer from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Insurance Trust Fund under title XVIII of the Social Security Act (42 U.S.C. 1395i, 1395t), in such proportions as the Secretary determines to be appropriate, of such funds as are necessary to cover costs of the project, including costs for information infrastructure and recurring costs of case management services, flexible benefits, and program management.''.

(a) In General.--Section 1882(s)(3)(B) (42 U.S.C. 1395ss(s)(3)(B)) is amended-- (1) in clause (ii), by inserting ``or the individual is 65 years of age or older and is enrolled with a PACE provider under section 1894, and there are circumstances that would permit the discontinuance of the individual's enrollment with such provider under circumstances that are similar to the circumstances that would permit discontinuance of the individual's

election under the first sentence of such section if such individual were enrolled in a Medicare+Choice plan'' before the period; (2) in clause (v)(II), by inserting ``any PACE provider under section 1894,'' after ``demonstration project authority,''; and (3) in clause (vi)-- (A) by inserting ``or in a PACE program under section 1894'' after ``part C''; and (B) by striking ``such plan'' and inserting ``such plan or such program''.

(b) Effective Date.--The amendments made by this section shall apply to terminations or discontinuances made on or after the date of the enactment of this Act.

Subtitle D--Medicare+Choice Nursing and Allied Health Professional Education Payments

MEDICARE+CHOICE NURSING AND ALLIED HEALTH PROFESSIONAL EDUCATION PAYMENTS.

(a) Additional Payments for Nursing and Allied Health Education.-- Section 1886 (42 U.S.C. 1395ww) is amended by adding at the end the following new subsection: ``(l) Payment for Nursing and Allied Health Education for Managed Care Enrollees.-- ``(1) In general.--For portions of cost reporting periods occurring in a year (beginning with 2000), the Secretary shall provide for an additional payment amount for any hospital that receives payments for the costs of approved educational activities for nurse and allied health professional training under section 1861(v)(1). ``(2) Payment amount.--The additional payment amount under this subsection for each hospital for portions of cost reporting periods occurring in a year shall be an amount specified by the Secretary in a manner consistent with the following: ``(A) Determination of managed care enrollee payment ratio for graduate medical education payments.--The Secretary shall estimate the ratio of payments for all hospitals for portions of cost reporting periods occurring in the year under subsection (h)(3)(D) to total direct graduate medical education payments estimated for such portions of periods under subsection (h)(3). ``(B) Application to fee-for-service nursing and allied health education payments.--Such ratio shall be applied to the Secretary's estimate of total payments for nursing and allied health education determined under section 1861(v) for portions of cost reporting periods occurring in the year to determine a total amount of additional payments for nursing and allied health education to be distributed to hospitals under this subsection for portions of cost reporting periods occurring in the year; except that in no case shall such total amount exceed $60,000,000 in any year. ``(C) Application to hospital.--The amount of payment under this subsection to a hospital for portions of

cost reporting periods occurring in a year is equal to the total amount of payments determined under subparagraph (B) for the year multiplied by the Secretary's estimate of the ratio of the amount of payments made under section 1861(v) to the hospital for nursing and allied health education activities for the hospital's cost reporting period ending in the second preceding fiscal year to the total of such amounts for all hospitals for such cost reporting periods.''.

(b) Adjustments in Payments for Direct Graduate Medical Education.-- Section 1886(h)(3)(D) (42 U.S.C. 1395ww(h)(3)(D)) is amended-- (1) in clause (i), by inserting ``, subject to clause (iii),'' after ``shall equal''; (2) by redesignating clause (iii) as clause (iv); and (3) by inserting after clause (ii) the following new clause: ``(iii) Proportional reduction for nursing and allied health education.--The Secretary shall estimate a proportional adjustment in payments to all hospitals determined under clauses (i) and (ii) for portions of cost reporting periods beginning in a year (beginning with 2000) such that the proportional adjustment reduces payments in an amount for such year equal to the total additional payment amounts for nursing and allied health education determined under subsection (l) for portions of cost reporting periods occurring in that year.''.

Subtitle E--Studies and Reports

BENEFICIARIES.

Not later April 1, 2001, the Secretary of Health and Human Services, jointly with the Secretaries of Defense and of Veterans Affairs, shall submit to Congress a report on the estimated use of health care services furnished by the Departments of Defense and of Veterans Affairs to medicare beneficiaries, including both beneficiaries under the original medicare fee-for-service program and under the Medicare+Choice program. The report shall include an analysis of how best to properly account for expenditures for such services in the computation of Medicare+Choice capitation rates.

(a) Development of Special Payment Rules Under the Medicare+Choice Program for Frail Elderly Enrolled in Specialized Programs.-- (1) Study.--The Medicare Payment Advisory Commission shall conduct a study on the development of a payment methodology under the Medicare+Choice program for frail elderly Medicare+Choice beneficiaries enrolled in a Medicare+Choice plan under a specialized program for the frail elderly that-- (A) accounts for the prevalence, mix, and severity of chronic conditions among such frail elderly Medicare+Choice beneficiaries;

(B) includes medical diagnostic factors from all provider settings (including hospital and nursing facility settings); and (C) includes functional indicators of health status and such other factors as may be necessary to achieve appropriate payments for plans serving such beneficiaries. (2) Report.--Not later than 1 year after the date of the enactment of this Act, the Commission shall submit a report to Congress on the study conducted under paragraph (1), together with any recommendations for legislation that the Commission determines to be appropriate as a result of such study.

(b) Report on Medicare MSA (Medical Savings Account) Plans.--Not later than 1 year after the date of the enactment of this Act, the Medicare Payment Assessment Commission shall submit to Congress a report on specific legislative changes that should be made to make MSA plans (as defined in section 1859(b)(3) of the Social Security Act, 42 U.S.C. 1395w-29(b)(3)) a viable option under the Medicare+Choice program.

(a) Study of Medigap Policies.-- (1) In general.--The Comptroller General of the United States (in this section referred to as the ``Comptroller General'') shall conduct a study of the issues described in paragraph (2) regarding medicare supplemental policies described in section 1882(g)(1) of the Social Security Act (42 U.S.C. 1395ss(g)(1)). (2) Issues to be studied.--The issues described in this paragraph are the following: (A) The level of coverage provided by each type of medicare supplemental policy. (B) The current enrollment levels in each type of medicare supplemental policy. (C) The availability of each type of medicare supplemental policy to medicare beneficiaries over age 65\1/2\. (D) The number and type of medicare supplemental policies offered in each State. (E) The average out-of-pocket costs (including premiums) per beneficiary under each type of medicare supplemental policy. (2) Report.--Not later than July 31, 2001, the Comptroller General shall submit a report to Congress on the results of the study conducted under this subsection, together with any recommendations for legislation that the Comptroller General determines to be appropriate as a result of such study.

(b) GAO Audit and Reports on the Provision of Medicare+Choice Health Information to Beneficiaries.-- (1) In general.--Beginning in 2000, the Comptroller General shall conduct an annual audit of the expenditures by the Secretary of Health and Human Services during the preceding year in providing information regarding the Medicare+Choice program under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.) to eligible medicare beneficiaries. (3) Reports.--Not later than March 31 of 2001, 2004, 2007, and 2010, the Comptroller General shall submit a report

to Congress on the results of the audit of the expenditures of the preceding 3 years conducted pursuant to subsection (a), together with an evaluation of the effectiveness of the means used by the Secretary of Health and Human Services in providing information regarding the Medicare+Choice program under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.) to eligible medicare beneficiaries.

OF COLUMBIA.

(a) In General.--The table in section 1923(f)(2) (42 U.S.C. 1396r- 4(f)(2)) is amended under each of the columns for FY 00, FY 01, and FY 02-- (1) in the entry for the District of Columbia, by striking ``23'' and inserting ``32''; (2) in the entry for Minnesota, by striking ``16'' and inserting ``33''; (3) in the entry for New Mexico, by striking ``5'' and inserting ``9''; and (4) in the entry for Wyoming, by striking ``0'' and inserting ``0.1''.

(b) Effective Date.--The amendments made by subsection (a) take effect on October 1, 1999, and applies to expenditures made on or after such date.

ADMINISTRATIVE COSTS ASSISTANCE.

(a) In General.--Section 1931(h) (42 U.S.C. 1396u-1(h)) is amended-- (1) in paragraph (3), by striking ``and ending with fiscal year 2000''; and (2) by striking paragraph (4).

(b) Effective Date.--The amendments made by this section shall take effect as if included in the enactment of section 114 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 2177).

QUALIFIED HEALTH CENTER SERVICES AND RURAL HEALTH CLINIC SERVICES BASED ON REASONABLE COSTS.

(a) Modification of Phase-Out.-- (1) In general.--Section 1902(a)(13)(C)(i) (42 U.S.C. 1396a(a)(13)(C)(i)) is amended by striking ``90 percent for services furnished during fiscal year 2001, 85 percent for services furnished during fiscal year 2002, or 70 percent for services furnished during fiscal year 2003'' and inserting ``fiscal year 2001, or fiscal year 2002, 90 percent for services furnished during fiscal year 2003, or 85 percent for services furnished during fiscal year 2004''. (2) Conforming amendment to end of transitional payment rules.--Section 4712(c) of BBA (111 Stat. 509) is amended by striking ``2003'' and inserting ``2004''.

(3) Effective date.--The amendments made by this subsection shall take effect as if included in the enactment of section 4712 of BBA (111 Stat. 508).

(b) GAO Study and Report.--Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to Congress that evaluates the effect on Federally-qualified health centers and rural health clinics and on the populations served by such centers and clinics of the phase-out and elimination of the reasonable cost basis for payment for Federally- qualified health center services and rural health clinic services provided under section 1902(a)(13)(C)(i) of the Social Security Act (42 U.S.C. 1396a(a)(13)(C)(i)), as amended by section 4712 of BBA (111 Stat. 508) and subsection (a) of this section. Such report shall include an analysis of the amount, method, and impact of payments made by States that have provided for payment under title XIX of such Act for such services on a basis other than payment of costs which are reasonable and related to the cost of furnishing such services, together with any recommendations for legislation, including whether a new payment system is needed, that the Comptroller General determines to be appropriate as a result of the study.

CONTROL SERVICES; ELIMINATION OF DUPLICATIVE REQUIREMENTS FOR EXTERNAL QUALITY REVIEW OF MEDICAID MANAGED CARE ORGANIZATIONS.

(a) Parity in Reimbursement for Certain Utilization and Quality Control Services.-- (1) Interim amendment to remove references to quality review.--Section 1902(d) (42 U.S.C. 1396a(d)) is amended by striking ``for the performance of the quality review functions described in subsection (a)(30)(C),''. (2) Final amendments to remove references to quality review.-- (A) Section 1902.--Section 1902(d) (42 U.S.C. 1396a(d)) is amended by striking ``(including quality review functions described in subsection (a)(30)(C))''. (B) Section 1903.--Section 1903(a)(3)(C)(i) (42 U.S.C. 1396b(a)(3)(C)(i)) is amended by striking ``or quality review''.

(b) Elimination of Duplicative Requirements for External Quality Review of Medicaid Managed Care Organizations.-- (1) In general.--Section 1902(a)(30) (42 U.S.C. 1396a(a)(30)) is amended-- (A) in subparagraph (A), by adding ``and'' at the end; (B) in subparagraph (B)(ii), by striking ``and'' at the end; and (C) by striking subparagraph (C). (2) Conforming amendment.--Section 1903(m)(6)(B) (42 U.S.C. 1396b(m)(6)(B)) is amended-- (A) in clause (ii), by adding ``and'' at the end; (B) in clause (iii), by striking ``; and'' and inserting a period; and (C) by striking clause (iv).

(c) Effective Dates.--

(1) The amendment made by subsection (a)(1) applies to expenditures made on and after the date of the enactment of this Act. (2) The amendments made by subsections (a)(2) and (b) apply as of such date as the Secretary of Health and Human Services certifies to Congress that the Secretary is fully implementing section 1932(c)(2) of the Social Security Act (42 U.S.C. 1396u- 2(c)(2)).

HEALTH INSURANCE PROGRAM TO MEDICAID DSH PAYMENTS.

(a) In General.--The last sentence of section 1905(b) (42 U.S.C. 1396d(b)) is amended by inserting ``(other than expenditures under section 1923)'' after ``with respect to expenditures''. (b) Effective Date.--The amendment made by subsection (a) takes effect on October 1, 1999, and applies to expenditures made on or after such date.

AGREEMENTS.

(a) In General.--Section 1927(a)(1) (42 U.S.C. 1396r-8(a)(1)) is amended by striking ``shall not be effective until'' and inserting ``shall become effective as of the date on which the agreement is entered into or, at State option, on any date thereafter on or before''. (b) Effective Date.--The amendment made by subsection (a) applies to agreements entered into on or after the date of enactment of this Act.

(a) In General.--Section 4721(e) of BBA (42 U.S.C. 1396r-4 note) is amended-- (1) in the matter before paragraph (1), by striking ``1923(g)(2)(A)'' and ``1396r-4(g)(2)(A)'' and inserting ``1923(g)(2)'' and ``1396r-4(g)(2)'', respectively; (2) in paragraphs (1) and (2)-- (A) by striking ``, and before July 1, 1999''; and (B) by striking ``in such section'' and inserting ``in subparagraph (A) of such section''; and (3) by striking ``and'' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting ``; and'', and by adding at the end the following new paragraph: ``(3) effective for State fiscal years that begin on or after July 1, 1999, `or (b)(1)(B)' were inserted in section 1923(g)(2)(B)(ii)(I) after `(b)(1)(A)'.''.

(b) Effective Date.--The amendments made by subsection (a) shall take effect as if included in the enactment of section 4721(e) of BBA.

(a) Section 1902(a)(64) (42 U.S.C. 1396a(a)(64)) is amended by adding ``and'' at the end. (b) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking ``of of'' and inserting ``of''. (c) Section 1902(l) (42 U.S.C. 1396a(l)) is amended-- (1) in paragraph (1)(C), by striking ``children children'' and inserting ``children'';

(2) in paragraph (3), in the matter preceding subparagraph (A), by striking the first comma after ``(a)(10)(A)(i)(VII)''; and (3) in paragraph (4)(B), by inserting a comma after ``(a)(10)(A)(i)(IV)''.

(d) Section 1902(v) (42 U.S.C. 1396a(v)) is amended by striking ``(1)''. (e) Section 1903(b)(4) (42 U.S.C. 1396b(b)(4)) is amended, in the matter preceding subparagraph (A), by inserting ``of'' after ``for the use''. (f) The left margins of clauses (i) and (ii) of section 1903(d)(3)(B) (42 U.S.C. 1396b(d)(3)(B)) are each realigned so as to align with the left margin of section 1903(d)(3)(A). (g) Section 1903(f)(2) (42 U.S.C. 1396b(f)(2)) is amended by striking the extra period at the end. (h) Section 1903(i)(14) (1396b(i)(14)) is amended by adding ``or'' after the semicolon. (i) Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended-- (1) in clause (vi), by striking the semicolon the first place it appears; and (2) by redesignating the clause (xi) added by section 4701(c)(3) of BBA (111 Stat. 493) as clause (xii).

(j) Section 1903(o) (42 U.S.C. 1396b(o)) is amended by striking ``1974))'' and inserting ``1974)''. (k) Section 1903(w) (42 U.S.C. 1396b(w)) is amended-- (1) in paragraph (1)(B), by striking ``puroses'' and inserting ``purposes''; (2) in paragraph (3)(B), by inserting a comma after ``(D)''; and (3) by realigning the left margin of clause (viii) in paragraph (7)(A) so as to align with the left margin of clause (vii) of that paragraph.

(l) Section 1905(b)(1) (42 U.S.C. 1396d(b)(1)) is amended by striking ``per centum,,'' and inserting ``per centum,''. (m) Section 1905(l)(2)(B) (42 U.S.C. 1936d(l)(2)(B)) is amended by striking ``a entity'' and inserting ``an entity''. (n) The heading for section 1910 (42 U.S.C. 1396i) is amended by striking ``of'' the first place it appears. (o) Section 1915 (42 U.S.C. 1396n) is amended-- (1) in subsection (b), by striking ``1902(a)(13)(E)'' and inserting ``1902(a)(13)(C)''; (2) in the last sentence of subsection (d)(5)(B)(iii), by striking ``75'' and inserting ``65''; and (3) in subsection (h), by striking ``90 day'' and inserting ``90 days''.

(p) Section 1919 (42 U.S.C. 1396r) is amended-- (1) in subsection (b)(3)(C)(i)(I), by striking ``not later than'' the first place it appears; and (2) in subsection (d)(4)(A), by striking ``1124'' and inserting ``1124)''.

(q) Section 1920(b)(2)(D)(i)(I) (42 U.S.C. 1396r-1(b)(2)(D)(i)(I)) is amended by striking ``329, 330, or 340'' and inserting ``330 or 330A''. (r) Section 1920A(d)(1)(B) (42 U.S.C. 1396r-1a(d)(1)(B)) is amended by striking ``a entity'' and inserting ``an entity''. (s) Section 1923(c)(3)(B) (42 U.S.C. 1396r-4(c)(3)(B)) is amended by striking ``patients.'' and inserting ``patients,''.

(t) Section 1925 (42 U.S.C. 1396r-6) is amended-- (1) in subsection (a)(3)(C), by striking ``(i)(VI) (i)(VII),,'' and inserting ``(i)(VI), (i)(VII),''; and (2) in subsection (b)(3)(C)(i), by striking ``(i)(IV) (i)(VI) (i)(VII),,'' and inserting ``(i)(IV), (i)(VI), (i)(VII),''.

(u) Section 1927 (42 U.S.C. 1396r-8) is amended-- (1) in subsection (g)(2)(A)(ii)(II)(cc), by striking ``individuals'' and inserting ``individual's''; (2) in subsection (i)(1), by striking ``the the'' and inserting ``the''; and (3) in subsection (k)(7)-- (A) in subparagraph (A)(iv), by striking ``distributers'' and inserting ``distributors''; and (B) in subparagraph (C)(i), by striking ``pharmaceuutically'' and inserting ``pharmaceutically''.

(v) Section 1929 (42 U.S.C. 1396t) is amended-- (1) in subsection (c)(2), by realigning the left margins of clauses (i) and (ii) of subparagraph (E) so as to align with the left margins of clauses (i) and (ii) of subparagraph (F) of that subsection; (2) in subsection (k)(1)(A)(i), by striking ``settings,'' and inserting ``settings),''; and (3) in subsection (l), by striking ``State wideness'' and inserting ``Statewideness''.

(w) Section 1932 (42 U.S.C. 1396u-2) is amended-- (1) in subsection (c)(2)(C), by inserting ``part'' before ``C of title XVIII''; and (2) in subsection (d)-- (A) in paragraph (1)(C)(ii), by striking ``Act'' and inserting ``Regulation''; and (B) in paragraph (2)(B), by striking ``1903(t)(3)'' and inserting ``1905(t)(3)''.

(x) Section 1933(b)(4) (42 U.S.C. 1396u-3(b)(4)) is amended by inserting ``a'' after ``for a month in''. (y)(1) The section 1908 (42 U.S.C. 1396g-1) that relates to required laws relating to medical child support is redesignated as section 1908A. (2) Section 1902(a)(60) (42 U.S.C. 1396b(a)(60)) is amended by striking ``1908'' and inserting ``1908A''. (z) Effective October 1, 2004, section 1915(b) (42 U.S.C. 1396n(b)) is amended, in the matter preceding paragraph (1), by striking ``sections 1902(a)(13)(C) and'' and inserting ``section''. (aa) Effective as if included in the enactment of BBA-- (1) section 1902(a)(10)(A)(ii)(XIV) (42 U.S.C. 1396a(a)(10)(A)(ii)(XIV)) is amended by striking ``1905(u)(2)(C)'' and inserting ``1905(u)(2)(B)''; (2) section 1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended, in the matter preceding subparagraph (A), by striking ``1905(p)(1), or 1905(u)'' and inserting ``1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV), or 1905(p)(1)''; and (3) section 1905(a)(15) (42 U.S.C. 1396d(a)(15)) is amended by striking ``1902(a)(31)(A)'' and inserting ``1902(a)(31)''.

(bb) Except as otherwise provided, the amendments made by this section shall take effect on the date of enactment of this Act.

ALLOTMENT FORMULA.

(a) In General.--Section 2104(b) (42 U.S.C. 1397dd(b)) is amended-- (1) in paragraph (2)(A)-- (A) in clause (i), by striking ``through 2000'' and inserting ``and 1999''; and (B) in clause (ii), by striking ``2001'' and inserting ``2000''; (2) by amending paragraph (4) to read as follows: ``(4) Floors and ceilings in state allotments.-- ``(A) In general.--The proportion of the allotment under this subsection for a subsection (b) State (as defined in subparagraph (D)) for fiscal year 2000 and each fiscal year thereafter shall be subject to the following floors and ceilings: ``(i) Floor of $2,000,000.--A floor equal to $2,000,000 divided by the total of the amount available under this subsection for all such allotments for the fiscal year. ``(ii) Annual floor of 10 percent below preceding fiscal year's proportion.--A floor of 90 percent of the proportion for the State for the preceding fiscal year. ``(iii) Cumulative floor of 30 percent below the fy 1999 proportion.--A floor of 70 percent of the proportion for the State for fiscal year 1999. ``(iv) Cumulative ceiling of 45 percent above fy 1999 proportion.--A ceiling of 145 percent of the proportion for the State for fiscal year 1999. ``(B) Reconciliation.-- ``(i) Elimination of any deficit by establishing a percentage increase ceiling for states with highest annual percentage increases.-- To the extent that the application of subparagraph (A) would result in the sum of the proportions of the allotments for all subsection (b) States exceeding 1.0, the Secretary shall establish a maximum percentage increase in such proportions for all subsection (b) States for the fiscal year in a manner so that such sum equals 1.0. ``(ii) Allocation of surplus through pro rata increase.--To the extent that the application of subparagraph (A) would result in the sum of the proportions of the allotments for all subsection (b) States being less than 1.0, the proportions of such allotments (as computed before the application of floors under clauses (i), (ii), and (iii) of subparagraph (A)) for all subsection (b) States shall be increased in a pro rata manner (but not to exceed the ceiling established under subparagraph (A)(iv)) so that (after the application of such floors and ceiling) such sum equals 1.0.

``(C) Construction.--This paragraph shall not be construed as applying to (or taking into account) amounts of allotments redistributed under subsection (f). ``(D) Definitions.--In this paragraph: ``(i) Proportion of allotment.--The term `proportion' means, with respect to the allotment of a subsection (b) State for a fiscal year, the amount of the allotment of such State under this subsection for the fiscal year divided by the total of the amount available under this subsection for all such allotments for the fiscal year. ``(ii) Subsection (b) state.--The term `subsection (b) State' means one of the 50 States or the District of Columbia.''; (3) in paragraph (2)(B), by striking ``the fiscal year'' and inserting ``the calendar year in which such fiscal year begins''; and (4) in paragraph (3)(B), by striking ``the fiscal year involved'' and inserting ``the calendar year in which such fiscal year begins''.

(b) Effective Date.--The amendments made by this section apply to allotments determined under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.) for fiscal year 2000 and each fiscal year thereafter.

CHILDREN'S HEALTH INSURANCE PROGRAM.

Section 2104(c)(4)(B) (42 U.S.C. 1397dd(c)(4)(B)) is amended by inserting ``, $34,200,000 for each of fiscal years 2000 and 2001, $25,200,000 for each of fiscal years 2002 through 2004, $32,400,000 for each of fiscal years 2005 and 2006, and $40,000,000 for fiscal year 2007'' before the period.

CHILDREN'S HEALTH INSURANCE PROGRAM.

(a) Funding for Reliable Annual State-by-State Estimates on the Number of Children Who Do Not Have Health Insurance Coverage.--Section 2109 (42 U.S.C. 1397ii) is amended by adding at the end the following: ``(b) Adjustment to Current Population Survey To Include State-by- State Data Relating to Children Without Health Insurance Coverage.-- ``(1) In general.--The Secretary of Commerce shall make appropriate adjustments to the annual Current Population Survey conducted by the Bureau of the Census in order to produce statistically reliable annual State data on the number of low- income children who do not have health insurance coverage, so that real changes in the uninsurance rates of children can reasonably be detected. The Current Population Survey should produce data under this subsection that categorizes such children by family income, age, and race or ethnicity. The adjustments made to produce such data shall include, where appropriate, expanding the sample size used in the State sampling units, expanding the number of sampling units in a State, and an appropriate verification element. ``(2) Appropriation.--Out of any money in the Treasury of the United States not otherwise appropriated, there are

appropriated $10,000,000 for fiscal year 2000 and each fiscal year thereafter for the purpose of carrying out this subsection.''.

(b) Federal Evaluation of State Children's Health Insurance Programs.--Section 2108 (42 U.S.C. 1397hh) is amended by adding at the end the following: ``(c) Federal Evaluation.-- ``(1) In general.--The Secretary, directly or through contracts or interagency agreements, shall conduct an independent evaluation of 10 States with approved child health plans. ``(2) Selection of states.--In selecting States for the evaluation conducted under this subsection, the Secretary shall choose 10 States that utilize diverse approaches to providing child health assistance, represent various geographic areas (including a mix of rural and urban areas), and contain a significant portion of uncovered children. ``(3) Matters included.--In addition to the elements described in subsection (b)(1), the evaluation conducted under this subsection shall include each of the following: ``(A) Surveys of the target population (enrollees, disenrollees, and individuals eligible for but not enrolled in the program under this title). ``(B) Evaluation of effective and ineffective outreach and enrollment practices with respect to children (for both the program under this title and the medicaid program under title XIX), and identification of enrollment barriers and key elements of effective outreach and enrollment practices, including practices that have successfully enrolled hard-to-reach populations such as children who are eligible for medical assistance under title XIX but have not been enrolled previously in the medicaid program under that title. ``(C) Evaluation of the extent to which State medicaid eligibility practices and procedures under the medicaid program under title XIX are a barrier to the enrollment of children under that program, and the extent to which coordination (or lack of coordination) between that program and the program under this title affects the enrollment of children under both programs. ``(D) An assessment of the effect of cost-sharing on utilization, enrollment, and coverage retention. ``(E) Evaluation of disenrollment or other retention issues, such as switching to private coverage, failure to pay premiums, or barriers in the recertification process. ``(4) Submission to congress.--Not later than December 31, 2001, the Secretary shall submit to Congress the results of the evaluation conducted under this subsection. ``(5) Funding.--Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $10,000,000 for fiscal year 2000 for the purpose of conducting the evaluation authorized under this subsection. Amounts appropriated under this paragraph shall remain available for expenditure through fiscal year 2002.''.

(c) Inspector General Audit and GAO Report on Enrollees Eligible for Medicaid.--Section 2108 (42 U.S.C. 1397hh), as amended by subsection (b), is amended by adding at the end the following: ``(d) Inspector General Audit and GAO Report.--

``(1) Audit.--Beginning with fiscal year 2000, and every third fiscal year thereafter, the Secretary, through the Inspector General of the Department of Health and Human Services, shall audit a sample from among the States described in paragraph (2) in order to-- ``(A) determine the number, if any, of enrollees under the plan under this title who are eligible for medical assistance under title XIX (other than as optional targeted low-income children under section 1902(a)(10)(A)(ii)(XIV)); and ``(B) assess the progress made in reducing the number of uncovered low-income children, including the progress made to achieve the strategic objectives and performance goals included in the State child health plan under section 2107(a). ``(2) State described.--A State described in this paragraph is a State with an approved State child health plan under this title that does not, as part of such plan, provide health benefits coverage under the State's medicaid program under title XIX. ``(3) Monitoring and report from gao.--The Comptroller General of the United States shall monitor the audits conducted under this subsection and, not later than March 1 of each fiscal year after a fiscal year in which an audit is conducted under this subsection, shall submit a report to Congress on the results of the audit conducted during the prior fiscal year.''.

(d) Coordination of Data Collection With Data Requirements Under the Maternal and Child Health Services Block Grant.-- (1) In general.--Paragraphs (2)(D)(ii) and (3)(D)(ii)(II) of section 506(a) (42 U.S.C. 706(a)) are each amended by inserting ``or the State plan under title XXI'' after ``title XIX''. (2) Effective date.--The amendments made by paragraph (1) apply to annual reports submitted under section 506 of the Social Security Act (42 U.S.C. 706) for years beginning after the date of the enactment of this Act.

(e) Coordination of Data Surveys and Reports.--The Secretary of Health and Human Services, through the Assistant Secretary for Planning and Evaluation, shall establish a clearinghouse for the consolidation and coordination of all Federal databases and reports regarding children's health.

PROGRAM.

The Secretary of Health and Human Services or any other Federal officer or employee, with respect to any reference to the program under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.) in any publication or other official communication, shall use-- (1) the term ``SCHIP'' instead of the term ``CHIP''; and (2) the term ``State children's health insurance program'' instead of the term ``children's health insurance program''.

(a) Section 2104(b)(3)(B) (42 U.S.C. 1397dd(b)(3)(B)) is amended by striking ``States.'' and inserting ``States,''. (b) Section 2105(d)(2)(B)(iii) (42 U.S.C. 1397ee(d)(2)(B)(iii)) is amended by inserting ``in'' after ``described''.

(c) Section 2109(a) (42 U.S.C.1397ii(a)) is amended-- (1) in paragraph (1), by striking ``title II'' and inserting ``title I''; and (2) in paragraph (2), by inserting ``)'' before the period.

APPENDIX G--H.R. 3427

This Act may be cited as the ``Admiral James W. Nance and Meg Donovan Foreign Relations Authorization Act, Fiscal Years 2000 and 2001''.

ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF CONTENTS.

(a) Act.--This Act is organized into two divisions as follows: (1) Division a.--Department of State Provisions. (2) Division b.--Arms Control, Nonproliferation, and Security Assistance Provisions.

(b) Table of Contents.--The table of contents for this Act is as follows:

Sec. 1. Short title. Sec. 2. Organization of act into divisions; table of contents. Sec. 3. Definitions.

DIVISION A--DEPARTMENT OF STATE PROVISIONS

In this Act: (1) Appropriate congressional committees.--Except as otherwise provided in section 902(1), the term ``appropriate

congressional committees'' means the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate. (2) Secretary.--The term ``Secretary'' means the Secretary of State.

DIVISION A--DEPARTMENT OF STATE PROVISIONS

The following amounts are authorized to be appropriated for the Department of State under ``Administration of Foreign Affairs'' to carry out the authorities, functions, duties, and responsibilities in the conduct of the foreign affairs of the United States and for other purposes authorized by law, including public diplomacy activities and the diplomatic security program: (1) Diplomatic and consular programs.-- (A) Authorization of appropriations.--For ``Diplomatic and Consular Programs'' of the Department of State, $2,837,772,000 for the fiscal year 2000 and $3,263,438,000 for the fiscal year 2001. (B) Limitations.-- (i) Worldwide security upgrades.--Of the amounts authorized to be appropriated by subparagraph (A), $254,000,000 for the fiscal year 2000 and $315,000,000 for the fiscal year 2001 is authorized to be appropriated only for worldwide security upgrades. (ii) Bureau of democracy, human rights, and labor.--Of the amounts authorized to be appropriated by subparagraph (A), $12,000,000 for the fiscal year 2000 and $12,000,000 for the fiscal year 2001 is authorized to be appropriated only for salaries and expenses of the Bureau of Democracy, Human Rights, and Labor. (iii) Recruitment of minority groups.--Of the amounts authorized to be appropriated by subparagraph (A), $2,000,000 for fiscal year 2000 and $2,000,000 for fiscal year 2001 is authorized to be appropriated only for the recruitment of members of minority groups for careers in the Foreign Service and international affairs. (2) Capital investment fund.--For ``Capital Investment Fund'' of the Department of State, $90,000,000 for the fiscal year 2000 and $150,000,000 for the fiscal year 2001. (3) Embassy security, construction and maintenance.--For ``Embassy Security, Construction and Maintenance'', $434,066,000 for the fiscal year 2000 and $445,000,000 for the fiscal year 2001.

(4) Representation allowances.--For ``Representation Allowances'', $5,850,000 for the fiscal year 2000 and $5,850,000 for the fiscal year 2001. (5) Emergencies in the diplomatic and consular service.--For ``Emergencies in the Diplomatic and Consular Service'', $17,000,000 for the fiscal year 2000 and $17,000,000 for the fiscal year 2001. (6) Office of the inspector general.--For ``Office of the Inspector General'', $30,054,000 for the fiscal year 2000 and $30,054,000 for the fiscal year 2001. (7) Payment to the american institute in taiwan.--For ``Payment to the American Institute in Taiwan'', $15,760,000 for the fiscal year 2000 and $15,918,000 for the fiscal year 2001. (8) Protection of foreign missions and officials.-- (A) Amounts authorized to be appropriated.--For ``Protection of Foreign Missions and Officials'', $9,490,000 for the fiscal year 2000 and $9,490,000 for the fiscal year 2001. (B) Availability of funds.--Each amount appropriated pursuant to this paragraph is authorized to remain available through September 30 of the fiscal year following the fiscal year for which the amount was appropriated. (9) Repatriation loans.--For ``Repatriation Loans'', $1,200,000 for the fiscal year 2000 and $1,200,000 for the fiscal year 2001, for administrative expenses.

The following amounts are authorized to be appropriated under ``International Commissions'' for the Department of State to carry out the authorities, functions, duties, and responsibilities in the conduct of the foreign affairs of the United States and for other purposes authorized by law: (1) International boundary and water commission, united states and mexico.--For ``International Boundary and Water Commission, United States and Mexico''-- (A) for ``Salaries and Expenses'', $20,413,000 for the fiscal year 2000 and $20,413,000 for the fiscal year 2001; and (B) for ``Construction'', $8,435,000 for the fiscal year 2000 and $8,435,000 for the fiscal year 2001. (2) International boundary commission, united states and canada.--For ``International Boundary Commission, United States and Canada'', $859,000 for the fiscal year 2000 and $859,000 for the fiscal year 2001. (3) International joint commission.--For ``International Joint Commission'', $3,819,000 for the fiscal year 2000 and $3,819,000 for the fiscal year 2001. (4) International fisheries commissions.--For ``International Fisheries Commissions'', $16,702,000 for the fiscal year 2000 and $16,702,000 for the fiscal year 2001.

(a) Migration and Refugee Assistance.-- (1) Authorization of appropriations.--There are authorized to be appropriated for ``Migration and Refugee Assistance'' for authorized activities, $750,000,000 for the fiscal year 2000 and $750,000,000 for the fiscal year 2001.

(2) Limitations.-- (A) Tibetan refugees in india and nepal.--Of the amounts authorized to be appropriated in paragraph (1), $2,000,000 for the fiscal year 2000 and $2,000,000 for the fiscal year 2001 is authorized to be available for humanitarian assistance, including food, medicine, clothing, and medical and vocational training, to Tibetan refugees in India and Nepal who have fled Chinese-occupied Tibet. (B) Refugees resettling in israel.--Of the amounts authorized to be appropriated in paragraph (1), $60,000,000 for the fiscal year 2000 and $60,000,000 for the fiscal year 2001 is authorized to be available only for assistance for refugees resettling in Israel from other countries. (C) Humanitarian assistance for displaced burmese.-- Of the amounts authorized to be appropriated in paragraph (1), $2,000,000 for the fiscal year 2000 and $2,000,000 for the fiscal year 2001 are authorized to be available for humanitarian assistance (including food, medicine, clothing, and medical and vocational training) to persons displaced as a result of civil conflict in Burma, including persons still within Burma. (D) Assistance for displaced sierra leoneans.--Of the amounts authorized to be appropriated in paragraph (1), $2,000,000 for the fiscal year 2000 and $2,000,000 for the fiscal year 2001 are authorized to be available for humanitarian assistance (including food, medicine, clothing, and medical and vocational training) and resettlement of persons who have been severely mutilated as a result of civil conflict in Sierra Leone, including persons still within Sierra Leone. (E) International rape counseling program.--Of the amounts authorized to be appropriated in paragraph (1), $1,000,000 for the fiscal year 2000 and $1,000,000 for the fiscal year 2001 are authorized to be appropriated for a program of counseling for female victims of rape and gender violence in times of conflict and war.

(b) Availability of Funds.--Funds appropriated pursuant to this section are authorized to remain available until expended.

PROGRAMS.

(a) In General.--The following amounts are authorized to be appropriated for the Department of State to carry out international information activities and educational and cultural exchange programs under the United States Information and Educational Exchange Act of 1948, the Mutual Educational and Cultural Exchange Act of 1961, Reorganization Plan Number 2 of 1977, the Dante B. Fascell North-South Center Act of 1991, and the National Endowment for Democracy Act, other such programs including the Claude and Mildred Pepper Scholarship Program of the Washington Workshops Foundation and the Mike Mansfield Fellowship Program, and to carry out other authorities in law consistent with such purposes: (1) Educational and cultural exchange programs.-- (A) Fulbright academic exchange programs.--For the ``Fulbright Academic Exchange Programs'' (other than programs described in subparagraph (B)), $112,000,000 for

the fiscal year 2000 and $120,000,000 for the fiscal year 2001. (B) Other educational and cultural exchange programs.-- (i) In general.--For other educational and cultural exchange programs authorized by law, including the Claude and Mildred Pepper Scholarship Program of the Washington Workshops Foundation and Mike Mansfield Fellowship Program, $98,329,000 for the fiscal year 2000 and $105,000,000 for the fiscal year 2001. (ii) South pacific exchanges.--Of the amounts authorized to be appropriated under clause (i), $750,000 for the fiscal year 2000 and $750,000 for the fiscal year 2001 is authorized to be available for ``South Pacific Exchanges''. (iii) East timorese scholarships.--Of the amounts authorized to be appropriated under clause (i), $500,000 for the fiscal year 2000 and $500,000 for the fiscal year 2001 is authorized to be available for ``East Timorese Scholarships''. (iv) Tibetan exchanges.--Of the amounts authorized to be appropriated under clause (i), $500,000 for the fiscal year 2000 and $500,000 for the fiscal year 2001 is authorized to be available for ``Ngawang Choephel Exchange Programs'' (formerly known as educational and cultural exchanges with Tibet) under section 103(a) of the Human Rights, Refugee, and Other Foreign Relations Provisions Act of 1996 (Public Law 104-319). (v) African exchanges.--Of the amounts authorized to be appropriated under clause (i), $500,000 for the fiscal year 2000 and $500,000 for the fiscal year 2001 is authorized to be available only for ``Educational and Cultural Exchanges with Sub-Saharan Africa''. (vi) Israel-arab peace partners program.--Of the amounts authorized to be appropriated under clause (i), $750,000 for the fiscal year 2000 and $750,000 for the fiscal year 2001 is authorized to be available only for people-to-people activities (with a focus on young people) to support the Middle East peace process involving participants from Israel, the Palestinian Authority, Arab countries, and the United States, to be known as the ``Israel-Arab Peace Partners Program''. Not later than 90 days after the date of the enactment of this Act, the Secretary of State shall submit a plan to the appropriate congressional committees for implementation of such program. The Secretary shall not implement the plan until 45 days after its submission to the appropriate congressional committees. (2) National endowment for democracy.-- (A) Authorization of appropriations.--For the ``National Endowment for Democracy'', $32,000,000 for the fiscal year 2000 and $32,000,000 for the fiscal year 2001. (B) Reagan-fascell democracy fellows.--Of the amount authorized to be appropriated by subparagraph

(A), $1,000,000 for fiscal year 2000 and $1,000,000 for the fiscal year 2001 is authorized to be appropriated only for a fellowship program, to be known as the ``Reagan-Fascell Democracy Fellows'', for democracy activists and scholars from around the world at the International Forum for Democratic Studies in Washington, D.C., to study, write, and exchange views with other activists and scholars and with Americans. (3) Dante b. fascell north-south center.--For ``Dante B. Fascell North-South Center'' $2,500,000 for the fiscal year 2000 and $2,500,000 for the fiscal year 2001. (4) Center for cultural and technical interchange between east and west.--For the ``Center for Cultural and Technical Interchange between East and West'', $12,500,000 for the fiscal year 2000 and $12,500,000 for the fiscal year 2001.

(b) Muskie Fellowships.-- (1) Exchanges with russia.--Of the amounts authorized to be appropriated by this or any other Act for the fiscal years 2000 and 2001 for exchange programs with the Russian Federation, $5,000,000 for fiscal year 2000 and $5,000,000 for fiscal year 2001 shall be available only to carry out the Edmund S. Muskie Program under section 227 of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102-138; 22 U.S.C. 2452 note). (2) Doctoral graduate studies for nationals of the independent states of the former soviet union.--Of the amounts authorized to be appropriated by this or any other Act for the fiscal years 2000 and 2001 for exchange programs, $1,500,000 for fiscal year 2000 and $1,500,000 for fiscal year 2001 shall be available only to provide scholarships for doctoral graduate study in economics to nationals of the independent states of the former Soviet Union under the Edmund S. Muskie Fellowship Program authorized by section 227 of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102- 138; 22 U.S.C. 2452 note).

(c) Vietnam Fulbright Academic Exchange Program.--Of the amounts authorized to be appropriated by subsection (a)(1)(A), $4,000,000 for the fiscal year 2000 and $4,000,000 for the fiscal year 2001 shall be available only to carry out the Vietnam scholarship program established by section 229 of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102-138; 22 U.S.C. 2452 note).

Section 404 of The Asia Foundation Act (title IV of Public Law 98- 164; 22 U.S.C. 4403) is amended to read as follows: ``Sec. 404. There are authorized to be appropriated to the Secretary of State $15,000,000 for each of the fiscal years 2000 and 2001 for grants to The Asia Foundation pursuant to this title.''.

(a) Authorization of Appropriations.-- (1) In general.--There are authorized to be appropriated under the heading ``Contributions to International Organizations'' $940,000,000 for the fiscal year 2000 and such sums as may be necessary for the fiscal year 2001 for the Department

of State to carry out the authorities, functions, duties, and responsibilities in the conduct of the foreign affairs of the United States with respect to international organizations and to carry out other authorities in law consistent with such purposes. (2) Availability of funds for civil budget of nato.--Of the amounts authorized in paragraph (1), $48,977,000 are authorized in fiscal year 2000 and such sums as may be necessary in fiscal year 2001 for the United States assessment for the civil budget of the North Atlantic Treaty Organization.

(b) No Growth Budget.--Of the funds made available under subsection (a), $80,000,000 may be made available during each calendar year only after the Secretary of State certifies that the United Nations has taken no action during the preceding calendar year to increase funding for any United Nations program without identifying an offsetting decrease during that calendar year elsewhere in the United Nations budget of $2,533,000,000, and cause the United Nations to exceed the initial 1998- 99 United Nations biennium budget adopted in December 1997. (c) Inspector General of the United Nations.-- (1) Withholding of funds.--Twenty percent of the funds made available in each fiscal year under subsection (a) for the assessed contribution of the United States to the United Nations shall be withheld from obligation and expenditure until a certification is made under paragraph (2). (2) Certification.--A certification under this paragraph is a certification by the Secretary of State in the fiscal year concerned that the following conditions are satisfied: (A) Action by the united nations.--The United Nations-- (i) has met the requirements of paragraphs (1) through (6) of section 401(b) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (22 U.S.C. 287e note), as amended by paragraph (3); (ii) has established procedures that require the Under Secretary General of the Office of Internal Oversight Services to report directly to the Secretary General on the adequacy of the Office's resources to enable the Office to fulfill its mandate; and (iii) has made available an adequate amount of funds to the Office for carrying out its functions. (B) Authority by oios.--The Office of Internal Oversight Services has authority to audit, inspect, or investigate each program, project, or activity funded by the United Nations, and each executive board created under the United Nations has been notified of that authority. (3) Amendment of the foreign relations authorization act, fiscal years 1994 and 1995.--Section 401(b) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 is amended-- (A) by amending paragraph (6) to read as follows: ``(6) the United Nations has procedures in place to ensure that all reports submitted by the Office of Internal Oversight Services are made available to the member states of the United Nations without modification except to the extent necessary to protect the privacy rights of individuals.''; and

(B) by striking ``Inspector General'' each place it appears and inserting ``Office of Internal Oversight Services''.

(d) Prohibition on Certain Global Conferences.--None of the funds made available under subsection (a) shall be available for any United States contribution to pay for any expense related to the holding of any United Nations global conference, except for any conference scheduled prior to October 1, 1998. (e) Prohibition on Funding Other Framework Treaty-Based Organizations.--None of the funds made available for the 1998-1999 biennium budget under subsection (a) for United States contributions to the regular budget of the United Nations shall be available for the United States proportionate share of any other framework treaty-based organization, including the Framework Convention on Global Climate Change, the International Seabed Authority, the Desertification Convention, and the International Criminal Court. (f) Foreign Currency Exchange Rates.-- (1) Authorization of appropriations.--In addition to amounts authorized to be appropriated by subsection (a), there are authorized to be appropriated such sums as may be necessary for each of fiscal years 2000 and 2001 to offset adverse fluctuations in foreign currency exchange rates. (2) Availability of funds.--Amounts appropriated under this subsection shall be available for obligation and expenditure only to the extent that the Director of the Office of Management and Budget determines and certifies to Congress that such amounts are necessary due to such fluctuations.

(g) Refund of Excess Contributions.--The United States shall continue to insist that the United Nations and its specialized and affiliated agencies shall credit or refund to each member of the agency concerned its proportionate share of the amount by which the total contributions to the agency exceed the expenditures of the regular assessed budgets of these agencies.

There are authorized to be appropriated under the heading ``Contributions for International Peacekeeping Activities'' $500,000,000 for the fiscal year 2000 and such sums as may be necessary for the fiscal year 2001 for the Department of State to carry out the authorities, functions, duties, and responsibilities in the conduct of the foreign affairs of the United States with respect to international peacekeeping activities and to carry out other authorities in law consistent with such purposes.

(a) Authorization of Appropriations.--There are authorized to be appropriated for ``Voluntary Contributions to International Organizations'', $293,000,000 for the fiscal year 2000 and such sums as may be necessary for the fiscal year 2001. (b) Limitations on Authorizations of Appropriations.-- (1) World food program.--Of the amounts authorized to be appropriated under subsection (a), $5,000,000 for the fiscal year 2000 and $5,000,000 for the fiscal year 2001 is authorized to be appropriated only for a United States contribution to the World Food Program.

(2) United nations voluntary fund for victims of torture.-- Of the amounts authorized to be appropriated under subsection (a), $5,000,000 for the fiscal year 2000 and $5,000,000 for the fiscal year 2001 is authorized to be appropriated only for a United States contribution to the United Nations Voluntary Fund for Victims of Torture. (3) Organization of american states.--Of the amounts authorized to be appropriated under subsection (a), $240,000 for the fiscal year 2000 and $240,000 for the fiscal year 2001 is authorized to be appropriated only for a United States contribution to the Organization of American States for the Office of the Special Rapporteur for Freedom of Expression in the Western Hemisphere to conduct investigations, including field visits, to establish a network of nongovernmental organizations, and to hold hemispheric conferences, of which $6,000 for each fiscal year is authorized to be appropriated only for the investigation and dissemination of information on violations of freedom of expression by the Government of Cuba, $6,000 for each fiscal year is authorized to be appropriated only for the investigation and dissemination of information on violations of freedom of expression by the Government of Peru, and $6,000 for each fiscal year is authorized to be appropriated only for the investigation and dissemination of information on violations of freedom of expression by the Government of Colombia. (4) UNICEF.--Of the amounts authorized to be appropriated under subsection (a), $110,000,000 for the fiscal year 2000 is authorized to be appropriated only for a United States contribution to UNICEF.

(c) Restrictions on United States Voluntary Contributions to United Nations Development Program.-- (1) Limitation.--Of the amounts made available under subsection (a) for each of the fiscal years 2000 and 2001 for United States voluntary contributions to the United Nations Development Program an amount equal to the amount the United Nations Development Program will spend in Burma during each fiscal year shall be withheld unless during such fiscal year the Secretary of State submits to the appropriate congressional committees the certification described in paragraph (2). (2) Certification.--The certification referred to in paragraph (1) is a certification by the Secretary of State that all programs and activities of the United Nations Development Program (including United Nations Development Program-- Administered Funds) in Burma-- (A) are focused on eliminating human suffering and addressing the needs of the poor; (B) are undertaken only through international or private voluntary organizations that have been deemed independent of the State Peace and Development Council (SPDC) (formerly known as the State Law and Order Restoration Council (SLORC)), after consultation with the leadership of the National League for Democracy and the leadership of the National Coalition Government of the Union of Burma; (C) provide no financial, political, or military benefit to the SPDC; and

(D) are carried out only after consultation with the leadership of the National League for Democracy and the leadership of the National Coalition Government of the Union of Burma.

(d) Contributions to the United Nations Fund for Population Activities.-- (1) Limitations on amount of contribution.--Of the amounts made available under subsection (a), not more than $25,000,000 for fiscal year 2000 and $25,000,000 for fiscal year 2001 shall be available for the United Nations Fund for Population Activities (hereinafter in this subsection referred to as the ``UNFPA''). (2) Prohibition on use of funds in china.--None of the funds made available under subsection (a) may be made available for the UNFPA for a country program in the People's Republic of China. (3) Conditions on availability of funds.--Amounts made available under subsection (a) for each of the fiscal years 2000 and 2001 for the UNFPA may not be made available to the UNFPA unless-- (A) the UNFPA maintains amounts made available to the UNFPA under this section in an account separate from other accounts of the UNFPA; (B) the UNFPA does not commingle amounts made available to the UNFPA under this section with other sums; and (C) the UNFPA does not fund abortions. (4) Report to congress and withholding of funds.-- (A) Not later than February 15, of each of the years 2000 and 2001, the Secretary of State shall submit a report to the appropriate congressional committees indicating the amount of funds that the United Nations Fund for Population Activities is budgeting for the year in which the report is submitted for a country program in the People's Republic of China. (B) If a report under subparagraph (A) indicates that the United Nations Population Fund plans to spend funds for a country program in the People's Republic of China in the year covered by the report, then the amount of such funds that the UNFPA plans to spend in the People's Republic of China shall be deducted from the funds made available to the UNFPA after March 1 for obligation for the remainder of the fiscal year in which the report is submitted.

(e) Availability of Funds.--Amounts authorized to be appropriated under subsection (a) are authorized to remain available until expended.

Subtitle B--United States International Broadcasting Activities

(a) In General.--The following amounts are authorized to be appropriated to carry out the United States International Broadcasting Act of 1994, the Radio Broadcasting to Cuba Act, and

the Television Broadcasting to Cuba Act, and to carry out other authorities in law consistent with such purposes: (1) International broadcasting activities.--For ``International Broadcasting Activities'', $385,900,000 for the fiscal year 2000, and $393,618,000 for the fiscal year 2001. (2) Broadcasting capital improvements.--For ``Broadcasting Capital Improvements'', $20,868,000 for the fiscal year 2000, and $20,868,000 for the fiscal year 2001. (3) Broadcasting to cuba.--For ``Broadcasting to Cuba'', $22,743,000 for the fiscal year 2000 and $22,743,000 for the fiscal year 2001. (4) Radio free asia.--For ``Radio Free Asia'', $24,000,000 for the fiscal year 2000, and $30,000,000 for the fiscal year 2001.

(a) Director Requirements.--The Secretary of State shall fill the position of Director of the Office of Children's Issues of the Department of State (in this section referred to as the ``Office'') with an individual of senior rank who can ensure long-term continuity in the management and policy matters of the Office and has a strong background in consular affairs. (b) Case Officer Staffing.--Effective April 1, 2000, there shall be assigned to the Office of Children's Issues of the Department of State a sufficient number of case officers to ensure that the average caseload for each officer does not exceed 75. (c) Embassy Contact.--The Secretary of State shall designate in each United States diplomatic mission an employee who shall serve as the point of contact for matters relating to international abductions of children by parents. The Director of the Office shall regularly inform the designated employee of children of United States citizens abducted by parents to that country. (d) Reports to Parents.-- (1) In general.--Except as provided in paragraph (2), beginning 6 months after the date of enactment of this Act, and at least once every 6 months thereafter, the Secretary of State shall report to each parent who has requested assistance regarding an abducted child overseas. Each such report shall include information on the current status of the abducted child's case and the efforts by the Department of State to resolve the case. (2) Exception.--The requirement in paragraph (1) shall not apply in a case of an abducted child if-- (A) the case has been closed and the Secretary of State has reported the reason the case was closed to the parent who requested assistance; or (B) the parent seeking assistance requests that such reports not be provided.

CIVIL ASPECTS OF INTERNATIONAL CHILD ABDUCTION.

Section 2803(a) of the Foreign Affairs Reform and Restructuring Act of 1998 (as contained in division G of Public Law 105-277) is amended-- (1) in the first sentence, by striking ``1999,'' and inserting ``2001,''; (2) in paragraph (1), by striking ``United States citizens'' and inserting ``applicants in the United States''; (3) in paragraph (2), by striking ``abducted.'' and inserting ``abducted, are being wrongfully retained in violation of United States court orders, or which have failed to comply with any of their obligations under such convention with respect to applications for the return of children, access to children, or both, submitted by applicants in the United States.''; (4) in paragraph (3)-- (A) by striking ``children'' and inserting ``children, access to children, or both,''; and (B) by striking ``United States citizens'' and inserting ``applicants in the United States''; (5) in paragraph (4), by inserting before the period at the end the following: ``, including the specific actions taken by the United States chief of mission in the country to which the child is alleged to have been abducted''; and (6) by inserting after paragraph (5) the following new paragraphs: ``(6) A list of the countries that are parties to the Convention in which, during the reporting period, parents who have been left-behind in the United States have not been able to secure prompt enforcement of a final return or access order under a Hague proceeding, of a United States custody, access, or visitation order, or of an access or visitation order by authorities in the country concerned, due to the absence of a prompt and effective method for enforcement of civil court orders, the absence of a doctrine of comity, or other factors. ``(7) A description of the efforts of the Secretary of State to encourage the parties to the Convention to facilitate the work of nongovernmental organizations within their countries that assist parents seeking the return of children under the Convention.''.

Not later than 30 days after the date of the enactment of this Act, and one year thereafter unless the investigation referred to in this section is completed, the Secretary of State, in consultation with the Attorney General, shall submit a report to the appropriate congressional committees, in classified and unclassified form, containing the most current information on the investigation into the March 30, 1997, grenade attack in Cambodia.

(a) Limitation.--Except as provided in subsection (b) and notwithstanding any other provision of law, the Department of State may not obligate or expend any funds appropriated to the Department of State for a United States pavilion or other major exhibit at any international exposition or world's fair registered by the

Bureau of International Expositions in excess of amounts expressly authorized and appropriated for such purpose. (b) Exceptions.-- (1) In general.--The Department of State is authorized to utilize its personnel and resources to carry out the responsibilities of the Department for the following: (A) Administrative services, including legal and other advice and contract administration, under section 102(a)(3) of the Mutual Educational and Cultural Exchange Act of 1961 (22 U.S.C. 2452(a)(3)) related to United States participation in international fairs and expositions abroad. Such administrative services may not include capital expenses, operating expenses, or travel or related expenses (other than such expenses as are associated with the provision of administrative services by employees of the Department of State). (B) Activities under section 105(f) of such Act with respect to encouraging foreign governments, international organizations, and private individuals, firms, associations, agencies and other groups to participate in international fairs and expositions and to make contributions to be utilized for United States participation in international fairs and expositions. (C) Encouraging private support of United States pavilions and exhibits at international fairs and expositions. (2) Statutory construction.--Nothing in this subsection authorizes the use of funds appropriated to the Department of State to make payments for-- (A) contracts, grants, or other agreements with any other party to carry out the activities described in this subsection; or (B) the satisfaction of any legal claim or judgment or the costs of litigation brought against the Department of State arising from activities described in this subsection.

(c) Notification.--No funds made available to the Department of State by any Federal agency to be used for a United States pavilion or other major exhibit at any international exposition or world's fair registered by the Bureau of International Expositions may be obligated or expended unless the appropriate congressional committees are notified not less than 15 days prior to such obligation or expenditure. (d) Reports.--The Commissioner General of a United States pavilion or other major exhibit at any international exposition or world's fair registered by the Bureau of International Expositions shall submit to the Secretary of State and the appropriate congressional committees a report concerning activities relating to such pavilion or exhibit every 180 days while serving as Commissioner General and shall submit a final report summarizing all such activities not later than 1 year after the closure of the pavilion or exhibit. (e) Repeal.--Section 230 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (22 U.S.C. 2452 note) is repealed.

AMERICAN FOUNDATION AND THE AFRICAN DEVELOPMENT FOUNDATION.

(a) Responsibilities.--Section 8A(a) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended-- (1) by striking ``and'' at the end of paragraph (1); (2) by striking the period at the end of paragraph (2) and inserting ``; and''; and (3) by adding at the end the following: ``(3) shall supervise, direct, and control audit and investigative activities relating to programs and operations within the Inter-American Foundation and the African Development Foundation.''.

(b) Conforming Amendment.--Section 8A(f) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by inserting before the period at the end the following: ``, an employee of the Inter-American Foundation, and an employee of the African Development Foundation''.

(a) In General.--Not later than 120 days after the date of enactment of this Act, the Secretary of State shall submit to the appropriate congressional committees an unclassified report (with a classified annex) on the extent of international drug trafficking through Cuba since 1990. The report shall include the following: (1) Information concerning the extent to which the Cuban Government or any official, employee, or entity of the Government of Cuba has engaged in, facilitated, or condoned such trafficking. (2) The extent to which agencies of the United States Government have investigated or prosecuted such activities.

(b) Limitation.--The report need not include information about isolated instances of conduct by low-level employees, except to the extent that such information may suggest improper conduct by more senior officials.

Section 3 of Public Law 102-1 is amended by striking ``60 days'' and inserting ``90 days''.

(a) Report on Language Proficiency.--Section 702 of the Foreign Service Act of 1980 (22 U.S.C. 4022) is amended by adding at the end the following new subsection: ``(c) Not later than March 31 of each year, the Director General of the Foreign Service shall submit a report to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives summarizing the number of positions in each overseas mission requiring foreign language competence that-- ``(1) became vacant during the previous calendar year; and ``(2) were filled by individuals having the required foreign language competence.''.

(b) Repeal.--Section 304(c) of the Foreign Service Act of 1980 (22 U.S.C. 3944(c)) is repealed.

(a) Reports on Claims by United States Firms Against the Government of Saudi Arabia.--Section 2801(b)(1) of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted by division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended by striking ``third'' and inserting ``seventh''. (b) Reports on Determinations Under Title IV of the Libertad Act.-- Section 2802(a) of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted by division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended by striking ``September 30, 1999,'' and inserting ``September 30, 2001,''. (c) Relations With Vietnam.--Section 2805 of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted by division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended by striking ``September 30, 1999,'' and inserting ``September 30, 2001,''. (d) Reports on Ballistic Missile Cooperation With Russia.--Section 2705(d) of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted by division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended by striking ``and January 1, 2000,'' and inserting ``January 1, 2000, and January 1, 2001,''. (e) Continuation of Reports Terminated by the Federal Reports Elimination and Sunset Act of 1995.--Section 3003(a)(1) of the Federal Reports Elimination and Sunset Act of 1995 (Public Law 104-66; 31 U.S.C. 1113 note) does not apply to any report required to be submitted under any of the following provisions of law: (1) Section 1205 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 22 U.S.C. 2346 note) (relating to annual reports on economic conditions in Egypt, Israel, Turkey, and Portugal). (2) Section 1307(f)(1)(A) of the International Financial Institutions Act (Public Law 95-118) (relating to an assessment of the environmental impact of proposed multilateral development bank actions). (3) Section 118(f) of the Foreign Assistance Act of 1961 (Public Law 87-195; 22 U.S.C. 2151p-1) (relating to the protection of tropical forests). (4) Section 586J(c)(4) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991 (Public Law 101-513) (relating to sanctions taken by other nations against Iraq). (5) Section 3 of the Authorization for Use of Military Force Against Iraq Resolution (Public Law 102-1; 105 Stat. 3) (relating to the status of efforts to obtain Iraqi compliance with United Nations Security Council resolutions). (6) Section 124 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989 (Public Law 100-204; 22 U.S.C. 2680 note) (relating to expenditures for emergencies in the diplomatic and consular service). (7) Section 620C(c) of the Foreign Assistance Act of 1961 (Public Law 87-195; 22 U.S.C. 2373(c)) (relating to progress made toward the conclusion of a negotiated solution to the Cyprus problem).

(8) Section 533(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 19991 (Public Law 101-513) (relating to international natural resource management initiatives). (9) Section 3602 of the Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418; 22 U.S.C. 5352) (relating to foreign treatment of United States financial institutions). (10) Section 1702 of the International Financial Institutions Act (Public Law 95-118; 22 U.S.C. 262r-1) (relating to operating summaries of the multilateral development banks). (11) Section 1303(c) of the International Financial Institutions Act (Public Law 95-118; 22 U.S.C. 262m-2(c)) (relating to international environmental assistance programs). (12) Section 1701(a) of the International Financial Institutions Act (Public Law 95-118; 22 U.S.C. 262r) (relating to United States participation in international financial institutions). (13) Section 163(a) of the Trade Act of 1974 (Public Law 93- 618; 19 U.S.C. 2213) (relating to the trade agreements program and national trade policy agenda). (14) Section 8 of the Export-Import Bank Act (Public Law 79- 173; 12 U.S.C. 635g) (relating to Export-Import Bank activities). (15) Section 407(f) of the Agricultural Trade Development and Assistance Act of 1954 (Public Law 83-480; 7 U.S.C. 1736a) (relating to Public Law 480 programs and activities). (16) Section 239(c) of the Foreign Assistance Act of 1961 (Public Law 87-195; 22 U.S.C. 2199(c)) (relating to OPIC audit report). (17) Section 504(i) of the National Endowment for Democracy Act (Public Law 98-164; 22 U.S.C. 4413(i)) (relating to the activities of the National Endowment for Democracy). (18) Section 5(b) of the Japan-United States Friendship Act (Public Law 94-118; 22 U.S.C. 2904(b)) (relating to Japan-United States Friendship Commission activities).

SCIENTIFIC, CULTURAL AND RELATED AREAS.

Amounts made available to the Department of State for participation in joint funds under agreements for cooperation in environmental, scientific, cultural and related areas prior to fiscal year 1996 which, pursuant to express terms of such international agreements, were deposited in interest-bearing accounts prior to disbursement may earn interest, and interest accrued to such accounts may be used and retained without return to the Treasury of the United States and without further appropriation by Congress. The Department of State shall take action to ensure the complete and timely disbursement of appropriations and associated interest within joint funds covered by this section and final disposition of such agreements.

(a) Report to Congress.--Not later than 180 days after the date of enactment of this Act, the Secretary of State shall review extradition treaties and other agreements containing extradition obligations to which the United States is a party (only with regard to those treaties where the United States has diplomatic relations

with the treaty partner) and submit a report to the appropriate congressional committees regarding United States extradition policy and practice. (b) Contents of Report.--The report under subsection (a) shall-- (1) discuss the factors that contribute to failure of foreign nations to comply fully with their obligations under bilateral extradition treaties with the United States; (2) discuss the factors that contribute to nations becoming ``safe havens'' for individuals fleeing the United States justice system; (3) identify those bilateral extradition treaties to which the United States is a party which do not require the extradition of nationals, and the reason such treaties contain such a provision; (4) discuss appropriate legislative and diplomatic solutions to existing gaps in United States extradition treaties and practice; and (5) discuss current priorities of the United States for negotiation of new extradition treaties and renegotiation of existing treaties, including resource factors relevant to such negotiations.

Subtitle B--Consular Authorities

Section 140(a) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (8 U.S.C. 1351 note) is amended-- (1) in paragraph (3) by amending the first sentence to read as follows: ``For each of the fiscal years 2000, 2001, and 2002, any amount collected under paragraph (1) that exceeds $316,715,000 for fiscal year 2000, $316,715,000 for fiscal year 2001, and $316,715,000 for fiscal year 2002 may be made available only if a notification is submitted to Congress in accordance with the procedures applicable to reprogramming notifications under section 34 of the State Department Basic Authorities Act of 1956.''; and (2) by striking paragraphs (4) and (5).

(a) Authority To Charge Fee.--The Secretary of State may charge and retain a fee or surcharge for services provided by the Department of State to any sponsor who provides an affidavit of support under section 213A of the Immigration and Nationality Act (8 U.S.C. 1183a) to ensure that such affidavit is properly completed before it is forwarded to a consular post for adjudication by a consular officer in connection with the adjudication of an immigrant visa. Such fee or surcharge shall be in addition to and separate from any fee imposed for immigrant visa application processing and issuance, and shall recover only the costs of such services not recovered by such fee. (b) Limitation.--Any fee established under subsection (a) shall be charged only once to a sponsor or joint sponsors who file essentially duplicative affidavits of support in connection with separate immigrant visa applications from the spouse and children of any

petitioner required by the Immigration and Nationality Act to petition separately for such persons. (c) Treatment of Fees.--Fees collected under the authority of subsection (a) shall be deposited as an offsetting collection to any Department of State appropriation to recover the cost of providing consular services. (d) Compliance With Budget Act.--Fees collected under the authority of subsection (a) shall be available only to such extent or in such amounts as are provided in advance in an appropriation Act.

(a) Applications.--Section 1 of the Passport Act of June 4, 1920 (22 U.S.C. 214), is amended-- (1) in the first sentence-- (A) by striking ``each passport issued'' and inserting ``the filing of each application for a passport (including the cost of passport issuance and use)''; and (B) by striking ``each application for a passport;'' and inserting ``each such application''; and (2) by adding after the first sentence the following new sentence: ``Such fees shall not be refundable, except as the Secretary may by regulation prescribe.''.

(b) Repeal of Outdated Provision on Passport Fees.--Section 4 of the Passport Act of June 4, 1920 (22 U.S.C. 216) is repealed. (c) Effective Date.--The amendments made by this section shall take effect on the date of issuance of final regulations under section 1 of the Passport Act of June 4, 1920, as amended by subsection (a).

(a) Repeal.--Section 1709 of the Revised Statutes (22 U.S.C. 4195) is repealed. (b) Amendment to State Department Basic Authorities Act.--The State Department Basic Authorities Act of 1956 is amended by inserting after section 43 (22 U.S.C. 2715) the following new sections:

``SEC. 43A. NOTIFICATION OF NEXT OF KIN; REPORTS OF DEATH.

``(a) In General.--Whenever a United States citizen or national dies abroad, a consular officer shall endeavor to notify, or assist the Secretary of State in notifying, the next of kin or legal guardian as soon as possible, except that, in the case of death of any Peace Corps volunteer (within the meaning of section 5(a) of the Peace Corps Act (22 U.S.C. 2504(a)), any member of the Armed Forces, any dependent of such a volunteer or member, or any Department of Defense employee, the consular officer shall assist the Peace Corps or the appropriate military authorities, as the case may be, in making such notifications. ``(b) Reports of Death or Presumptive Death.--The consular officer may, for any United States citizen who dies abroad-- ``(1) in the case of a finding of death by the appropriate local authorities, issue a report of death or of presumptive death; or ``(2) in the absence of a finding of death by the appropriate local authorities, issue a report of presumptive death.

``(c) Implementing Regulations.--The Secretary of State shall prescribe such regulations as may be necessary to carry out this section.

``SEC. 43B. CONSERVATION AND DISPOSITION OF ESTATES.

``(a) Conservation of Estates Abroad.-- ``(1) Authority to act as conservator.--Whenever a United States citizen or national dies abroad, a consular officer shall act as the provisional conservator of the portion of the decedent's estate located abroad and, subject to paragraphs (3), (4), and (5), shall-- ``(A) take possession of the personal effects of the decedent within his jurisdiction; ``(B) inventory and appraise the personal effects of the decedent, sign the inventory, and annex thereto a certificate as to the accuracy of the inventory and appraised value of each article; ``(C) when appropriate in the exercise of prudent administration, collect the debts due to the decedent in the officer's jurisdiction and pay from the estate the obligations owed by the decedent; ``(D) sell or dispose of, as appropriate, in the exercise of prudent administration, all perishable items of property; ``(E) sell, after reasonable public notice and notice to such next of kin as can be ascertained with reasonable diligence, such additional items of property as necessary to provide funds sufficient to pay the decedent's debts and property taxes in the country of death, funeral expenses, and other expenses incident to the disposition of the estate; ``(F) upon the expiration of the one-year period beginning on the date of death (or after such additional period as may be required for final settlement of the estate), if no claimant shall have appeared, after reasonable public notice and notice to such next of kin as can be ascertained with reasonable diligence, sell or dispose of the residue of the personal estate, except as provided in subparagraph (G), in the same manner as United States Government-owned foreign excess property; ``(G) transmit to the custody of the Secretary of State in Washington, D.C. the proceeds of any sales, together with all financial instruments (including bonds, shares of stock, and notes of indebtedness), jewelry, heirlooms, and other articles of obvious sentimental value, to be held in trust for the legal claimant; and ``(H) in the event that the decedent's estate includes an interest in real property located within the jurisdiction of the officer and such interest does not devolve by the applicable laws of intestate succession or otherwise, provide for title to the property to be conveyed to the Government of the United States unless the Secretary declines to accept such conveyance. ``(2) Authority to act as administrator.--Subject to paragraphs (3) and (4), a consular officer may act as administrator of an estate in exceptional circumstances if expressly authorized to do so by the Secretary of State.

``(3) Exceptions.--The responsibilities described in paragraphs (1) and (2) may not be performed to the extent that the decedent has left or there is otherwise appointed, in the country where the death occurred or where the decedent was domiciled, a legal representative, partner in trade, or trustee appointed to take care of his personal estate. If the decedent's legal representative shall appear at any time prior to transmission of the estate to the Secretary and demand the proceeds and effects being held by the consular officer, the officer shall deliver them to the representative after having collected any prescribed fee for the services performed under this section. ``(4) Additional requirement.--In addition to being subject to the limitations in paragraph (3), the responsibilities described in paragraphs (1) and (2) may not be performed unless-- ``(A) authorized by treaty provisions or permitted by the laws or authorities of the country wherein the death occurs, or the decedent is domiciled; or ``(B) permitted by established usage in that country. ``(5) Statutory construction.--Nothing in this section supersedes or otherwise affects the authority of any military commander under title 10 of the United States Code with respect to the person or property of any decedent who died while under a military command or jurisdiction or the authority of the Peace Corps with respect to a Peace Corps volunteer or the volunteer's property.

``(b) Disposition of Estates by the Secretary of State.-- ``(1) Personal estates.-- ``(A) In general.--After receipt of a personal estate pursuant to subsection (a), the Secretary may seek payment of all outstanding debts to the estate as they become due, may receive any balances due on such estate, may endorse all checks, bills of exchange, promissory notes, and other instruments of indebtedness payable to the estate for the benefit thereof, and may take such other action as is reasonably necessary for the conservation of the estate. ``(B) Disposition as surplus united states property.--If, upon the expiration of a period of 5 fiscal years beginning on October 1 after a consular officer takes possession of a personal estate under subsection (a), no legal claimant for such estate has appeared, title to the estate shall be conveyed to the United States, the property in the estate shall be under the custody of the Department of State, and the Secretary shall dispose of the estate in the same manner as surplus United States Government-owned property is disposed or by such means as may be appropriate in light of the nature and value of the property involved. The expenses of sales shall be paid from the estate, and any lawful claim received thereafter shall be payable to the extent of the value of the net proceeds of the estate as a refund from the appropriate Treasury appropriations account. ``(C) Transfer of proceeds.--The net cash estate after disposition as provided in subparagraph (B) shall be transferred to the miscellaneous receipts account of the Treasury of the United States. ``(2) Real property.--

``(A) Designation as excess property.--In the event that title to real property is conveyed to the Government of the United States pursuant to subsection (a)(1)(H) and is not required by the Department of State, such property shall be considered foreign excess property under title IV of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 511 et seq.). ``(B) Treatment as gift.--In the event that the Department requires such property, the Secretary of State shall treat such property as if it were an unconditional gift accepted on behalf of the Department of State under section 25 of this Act and section 9(a)(3) of the Foreign Service Buildings Act of 1926.

``(c) Losses in Connection With the Conservation of Estates.-- ``(1) Authority to compensate.--The Secretary is authorized to compensate the estate of any United States citizen who has died overseas for property-- ``(A) the conservation of which has been undertaken under section 43 or subsection (a) of this section; and ``(B) that has been lost, stolen, or destroyed while in the custody of officers or employees of the Department of State. ``(2) Liability.-- ``(A) Exclusion of personal liability after provision of compensation.--Any such compensation shall be in lieu of personal liability of officers or employees of the Department of State. ``(B) Liability to the department.--An officer or employee of the Department of State may be liable to the Department of State to the extent of any compensation provided under paragraph (1). ``(C) Determinations of liability.--The liability of any officer or employee of the Department of State to the Department for any payment made under subsection (a) shall be determined pursuant to the Department's procedures for determining accountability for United States Government property.

``(d) Regulations.--The Secretary of State may prescribe such regulations as may be necessary to carry out this section.''. (c) Effective Date.--The repeal and amendment made by this section shall take effect six months after the date of enactment of this Act.

INCIDENTS ABROAD AFFECTING UNITED STATES CITIZENS.

Section 43 of the State Department Basic Authorities Act of 1956 (22 U.S.C. 2715) is amended-- (1) by inserting ``(a) Authority.--'' before ``In''; (2) by striking ``disposition of personal effects.'' in the last sentence and inserting ``disposition of personal estates pursuant to section 43B of this Act.''; and (3) by adding at the end the following new subsection:

``(b) Definitions.--For purposes of this section and sections 43A and 43B, the term `consular officer' includes any United States citizen employee of the Department of State who is designated

by the Secretary of State to perform consular services pursuant to such regulations as the Secretary may prescribe.''.

(a) In General.-- (1) Regulations.--Not later than 1 year after the date of the enactment of this Act, the Secretary of State shall issue regulations providing that before a child under the age of 14 years is issued a passport the requirements under paragraph (2) shall apply under penalty of perjury. (2) Requirements.-- (A) Both parents, or the child's legal guardian, must execute the application and provide documentary evidence demonstrating that they are the parents or guardian; or (B) the person executing the application must provide documentary evidence that such person-- (i) has sole custody of the child; (ii) has the consent of the other parent to the issuance of the passport; or (iii) is in loco parentis and has the consent of both parents, of a parent with sole custody over the child, or of the child's legal guardian, to the issuance of the passport.

(b) Exceptions.--The regulations required by subsection (a) may provide for exceptions in exigent circumstances, such as those involving the health or welfare of the child, or when the Secretary determines that issuance of a passport is warranted by special family circumstances.

(a) Policy.--It shall be the policy of the Department of State to process immigrant visa applications of immediate relatives of United States citizens and nonimmigrant K-1 visa applications of fiances of United States citizens within 30 days of the receipt of all necessary documents from the applicant and the Immigration and Naturalization Service. In the case of an immigrant visa application where the sponsor of such applicant is a relative other than an immediate relative, it should be the policy of the Department of State to process such an application within 60 days of the receipt of all necessary documents from the applicant and the Immigration and Naturalization Service. (b) Reports.--Not later than 180 days after the date of enactment of this Act, and not later than 1 year thereafter, the Secretary of State shall submit to the appropriate congressional committees a report on the extent to which the Department of State is meeting the policy standards under subsection (a). Each report shall be based on a survey of the 22 consular posts which account for approximately 72 percent of immigrant visas issued and, in addition, the consular posts in Guatemala City, Nicosia, Caracas, Naples, and Jakarta. Each report should include data on the average time for processing each category of visa application under subsection (a), a list of the embassies and consular posts which do not meet the policy standards under subsection (a), the amount of funds collected worldwide for processing of visa applications during the most recent fiscal year, the estimated costs of processing such visa applications (based on the Department of State's most recent fee study), the steps being taken by the Department of State to achieve such policy standards, and results achieved by

the interagency working group charged with the goal of reducing the overall processing time for visa applications.

INDIVIDUALS IN ARREARS ON CHILD SUPPORT.

(a) Report to Congress.--Not later than 120 days after the date of the enactment of this Act, the Secretary of State, in consultation with the Secretary of Health and Human Services, shall submit a report to the appropriate congressional committees, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate on the feasibility of decreasing the amount of an individual's arrearages of child support that would require the Secretary of State to refuse to issue a passport to such individual, or otherwise act with respect to such an individual, as provided under section 452(k) of the Social Security Act (42 U.S.C. 652(k)). (b) Contents of Report.--The report under subsection (a) shall include the following: (1) The estimated cost to the Department of State of reducing the arrearage amount which would result in a refusal to issue a passport to $2,500 and, in addition, an amount between $5,000 and $2,500. (2) A projection of the estimated benefits of reducing the amount to $2,500 (or an amount between $5,000 and $2,500), which shall include an estimate of the additional numbers of individuals who would be subject to denial, an estimate of the additional child support arrearages that would be received through such a reduction, and an estimate of the amount of child support that would be paid earlier than under current law (together with an estimate of how much earlier such amounts would be paid). (3) Information regarding the number of individuals with child support arrearages over $2,500 and the average length of time it takes for individuals to reach $2,500 in arrearages. (4) The methodology for the cost estimates and benefit projections described in paragraphs (1) and (2).

Subtitle C--Refugees

REFUGEES.

(a) In General.--None of the funds made available by this Act or by section 2(c) of the Migration and Refugee Assistance Act of 1962 (22 U.S.C. 2601(c)) shall be available to effect the involuntary return by the United States of any person to a country in which the person has a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion, except on grounds recognized as precluding protection as a refugee under the United Nations Convention Relating to the Status of Refugees of July 28, 1951, and the Protocol Relating to the Status of Refugees of January 31, 1967, subject to the reservations contained in the United States Senate Resolution of Ratification. (b) Migration and Refugee Assistance.--None of the funds made available by this Act or by section 2(c) of the Migration and Refugee Assistance Act of 1962 (22 U.S.C. 2601(c)) shall be

available to effect the involuntary return of any person to any country unless the Secretary of State first notifies the appropriate congressional committees, except that in the case of an emergency involving a threat to human life the Secretary of State shall notify the appropriate congressional committees as soon as practicable. (c) Involuntary Return Defined.--As used in this section, the term ``to effect the involuntary return'' means to require, by means of physical force or circumstances amounting to a threat thereof, a person to return to a country against the person's will, regardless of whether the person is physically present in the United States and regardless of whether the United States acts directly or through an agent.

Section 502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2304(b)) is amended by inserting after the fourth sentence the following: ``Each report under this section shall describe the extent to which each country has extended protection to refugees, including the provision of first asylum and resettlement.''.

(a) Guidelines for Addressing Hostile Biases.--Section 602(c)(1) of the International Religious Freedom Act of 1998 (Public Law 105-292; 112 Stat. 2812) is amended by inserting ``and of the Department of State'' after ``Service''. (b) Guidelines for Overseas Refugee Processing.--Section 602(c) of such Act is further amended by adding at the end the following new paragraph: ``(3) Not later than 120 days after the date of the enactment of the Admiral James W. Nance and Meg Donovan Foreign Relations Authorization Act, Fiscal Years 2000 and 2001, the Secretary of State (after consultation with the Attorney General) shall issue guidelines to ensure that persons with potential biases against any refugee applicant, including persons employed by, or otherwise subject to influence by, governments known to be involved in persecution on account of religion, race, nationality, membership in a particular social group, or political opinion, shall not in any way be used in processing determinations of refugee status, including interpretation of conversations or examination of documents presented by such applicants.''.

(a) Establishment of Task Force.--The Secretary of State, in consultation with the Attorney General and other appropriate Federal agencies, shall establish a task force with the goal of determining eligibility guidelines for women seeking refugee status overseas due to gender-related persecution. (b) Report.--Not later than 1 year after the date of the enactment of this Act, the Secretary of State shall prepare and submit to the Congress a report outlining the guidelines determined by the task force under subsection (a).

(a) Eligibility for In-Country Refugee Processing in Vietnam.--For purposes of eligibility for in-country refugee processing for nationals of Vietnam during fiscal years 2000 and 2001, an alien described in subsection (b) or (d) shall be considered

to be a refugee of special humanitarian concern to the United States (within the meaning of section 207 of the Immigration and Nationality Act (8 USC 1157)) and shall be admitted to the United States for resettlement if the alien would be admissible as an immigrant under the Immigration and Nationality Act (except as provided in section 207(c)(3) of that Act). (b) Aliens Covered.--An alien described in this subsection is an alien who-- (1) is the son or daughter of a qualified national; (2) is 21 years of age or older; and (3) was unmarried as of the date of acceptance of the alien's parent for resettlement under the Orderly Departure Program or through the United States Consulate General in Ho Chi Minh City.

(c) Qualified National.--The term ``qualified national'' in subsection (b)(1) means a national of Vietnam who-- (1)(A) was formerly interned in a re-education camp in Vietnam by the Government of the Socialist Republic of Vietnam; or (B) is the widow or widower of an individual described in subparagraph (A); (2)(A) qualified for refugee processing under the Orderly Departure Program re-education subprogram; and (B) except as provided in subsection (d), on or after April 1, 1995, is or has been accepted under the Orderly Departure Program or through the United States Consulate General in Ho Chi Minh City-- (i) for resettlement as a refugee; or (ii) for admission to the United States as an immediate relative immigrant; and (3)(A) is presently maintaining a residence in the United States; or (B) was approved for refugee resettlement or immigrant visa processing and is awaiting departure formalities from Vietnam.

(d) Previous Denials Based on Lack of Co-Residency.--An alien who is otherwise qualified under subsection (b) is eligible for admission for resettlement regardless of the date of acceptance of the alien's parent if the alien previously was denied refugee resettlement based solely on the fact that the alien was not listed continuously on the parent's residence permit.

(a) Development of Assessment.--The Secretary of State shall assess the administrative and personnel requirements for the establishment of legislative liaison offices for the Department of State within the office buildings of the House of Representatives and the Senate. In undertaking the assessment, the Secretary

should examine existing liaison offices of other executive departments that are located in the congressional office buildings, including the liaison offices of the military services. (b) Assessment Considerations.--The assessment required by subsection (a) shall consider-- (1) space requirements; (2) cost implications; (3) personnel structure; and (4) the feasibility of modifying the Pearson Fellowship program in order to have members of the Foreign Service who serve in such fellowships serve a second year in a legislative liaison office.

(c) Transmittal of Assessment.--Not later than 6 months after the date of the enactment of this Act, the Secretary of State shall submit to the Committee on International Relations and the Committee on House Administration of the House of Representatives and the Committee on Foreign Relations and the Committee on Rules and Administration of the Senate the assessment developed under subsection (a).

The Secretary of State shall designate a senior-level official of the Department of State with responsibility for promoting regional cooperation in and coordinating United States policy toward Northeastern Europe.

(a) Designation.--The Secretary of State shall designate a senior- level official of the Department of State as the Science and Technology Adviser to the Secretary of State (in this section referred to as the ``Adviser''). The Adviser shall have substantial experience in the area of science and technology. The Adviser shall report to the Secretary of State through the appropriate Under Secretary of State. (b) Duties.--The Adviser shall-- (1) advise the Secretary of State, through the appropriate Under Secretary of State, on international science and technology matters affecting the foreign policy of the United States; and (2) perform such duties, exercise such powers, and have such rank and status as the Secretary of State shall prescribe.

Section 1333(c) of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted in division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended-- (1) after ``diplomacy programs'' by inserting ``, identified as public diplomacy funds in any Congressional Presentation Document described in subsection (e), or reprogrammed for public diplomacy purposes,''; (2) by striking ``Except'' and inserting ``(1) Except''; and (3) by adding at the end the following new paragraph:

``(2) Construction.--Nothing in paragraph (1) may be construed (A) to interfere with the integration of administrative

resources between public diplomacy and other functions of the Department of State or to prevent the occasional performance of functions other than public diplomacy by officials or employees of the Department of State who are primarily assigned to public diplomacy, provided there is no substantial resulting diminution in the amount of resources devoted to public diplomacy below the amounts described in paragraph (1), or (B) to supersede reprogramming procedures.''.

OFFICE.

(a) Additional Resources.--In addition to other amounts authorized to be appropriated for the purposes of the Diplomatic Telecommunications Service Program Office (DTS-PO), of the amounts made available to the Department of State under section 101(2), $18,000,000 shall be made available only to the DTS-PO for enhancement of Diplomatic Telecommunications Service capabilities. (b) Improvement of DTS-PO.--In order for the DTS-PO to better manage a fully integrated telecommunications network to service all agencies at diplomatic missions and consular posts, the DTS-PO shall-- (1) ensure that those enhancements of, and the provision of service for, telecommunication capabilities that involve the national security interests of the United States receive the highest prioritization; (2) not later than December 31, 1999, terminate all leases for satellite systems located at posts in criteria countries, unless all maintenance and servicing of the satellite system is undertaken by United States citizens who have received appropriate security clearances; (3) institute a system of charges for utilization of bandwidth by each agency beginning October 1, 2000, and institute a comprehensive chargeback system to recover all, or substantially all, of the other costs of telecommunications services provided through the Diplomatic Telecommunications Service to each agency beginning October 1, 2001; (4) ensure that all DTS-PO policies and procedures comply with applicable policies established by the Overseas Security Policy Board; and (5) maintain the allocation of the positions of Director and Deputy Director of DTS-PO as those positions were assigned as of June 1, 1999, which assignments shall pertain through fiscal year 2001, at which time such assignments shall be adjusted in the customary manner.

(c) Report on Improving Management.--Not later than March 31, 2000, the Director and Deputy Director of DTS-PO shall jointly submit to the Committee on International Relations and the Permanent Select Committee on Intelligence of the House of Representatives and the Committee on Foreign Relations and the Select Committee on Intelligence of the Senate the Director's plan for improving network architecture, engineering, operations monitoring and control, service metrics reporting, and service provisioning, so as to achieve highly secure, reliable, and robust communications capabilities that meet the needs of both national security agencies and other United States agencies with overseas personnel.

(d) Funding of DTS-PO.--Funds appropriated for allocation to DTS-PO shall be made available only for DTS-PO until a comprehensive chargeback system is in place. (e) Appropriate Committees of Congress Defined.--In this section, the term ``appropriate committees of Congress'' means the Committee on International Relations and the Permanent Select Committee on Intelligence of the House of Representatives and the Committee on Foreign Relations and the Select Committee on Intelligence of the Senate.

Subtitle B--Personnel of the Department of State

The State Department Basic Authorities Act of 1956 is amended by inserting after section 36 (22 U.S.C. 2708) the following new section:

``SEC. 36A. AWARD OF FOREIGN SERVICE STAR.

``(a) Authority to Award.--The President, upon the recommendation of the Secretary, may award a Foreign Service star to any member of the Foreign Service or any other civilian employee of the Government of the United States who, while employed at, or assigned permanently or temporarily to, an official mission overseas or while traveling abroad on official business, incurred a wound or other injury or an illness (whether or not the wound, other injury, or illness resulted in death)-- ``(1) as the person was performing official duties; ``(2) as the person was on the premises of a United States mission abroad; or ``(3) by reason of the person's status as a United States Government employee.

``(b) Selection Criteria.--The Secretary shall prescribe the procedures for identifying and considering persons eligible for award of a Foreign Service star and for selecting the persons to be recommended for the award. ``(c) Award in the Event of Death.--If a person selected for award of a Foreign Service star dies before being presented the award, the award may be made and the star presented to the person's family or to the person's representative, as designated by the President. ``(d) Form of Award.--The Secretary shall prescribe the design of the Foreign Service star. The award may not include a stipend or any other cash payment. ``(e) Funding.--Any expenses incurred in awarding a person a Foreign Service star may be paid out of appropriations available at the time of the award for personnel of the department or agency of the United States Government in which the person was employed when the person incurred the wound, injury, or illness upon which the award is based.''.

Section 408(a)(1) of the Foreign Service Act of 1980 (22 U.S.C. 3968(a)(1)) is amended in the last sentence-- (1) by striking ``(A)'' and all that follows through ``(B)''; and

(2) by striking ``this total compensation package'' and inserting ``the total compensation package''.

FOR PERFORMANCE PAY.

Section 405(b)(1) of the Foreign Service Act of 1980 (22 U.S.C. 3965(b)(1)) is amended by striking ``50'' and inserting ``33''.

The Director General of the Foreign Service shall submit a report on the first day of each fiscal quarter to the appropriate congressional committees containing the following: (1) The number of members of the Senior Foreign Service. (2) The number of vacant positions designated for members of the Senior Foreign Service. (3) The number of members of the Senior Foreign Service who are not assigned to positions.

Not later than April 1, 2000, the Department of State shall report to the appropriate congressional committees on the feasibility of modifying current training programs and curricula so that the Department can provide significant and comprehensive management training at all career grades for Foreign Service personnel.

AGENCIES.

Section 601(c) of the Foreign Service Act of 1980 (22 U.S.C. 4001(c)) is amended by striking paragraph (4) and inserting the following: ``(4) Not later than March 1, 2001, and every four years thereafter, the Secretary of State shall submit a report to the Speaker of the House of Representatives and to the Committee on Foreign Relations of the Senate which shall include the following: ``(A) A description of the steps taken and planned in furtherance of-- ``(i) maximum compatibility among agencies utilizing the Foreign Service personnel system, as provided for in section 203, and ``(ii) the development of uniform policies and procedures and consolidated personnel functions, as provided for in section 204. ``(B) A workforce plan for the subsequent five years, including projected personnel needs, by grade and by skill. Each such plan shall include for each category the needs for foreign language proficiency, geographic and functional expertise, and specialist technical skills. Each workforce plan shall specifically account for the training needs of Foreign Service personnel and shall delineate an intake program of generalist and specialist Foreign Service personnel to meet projected future requirements.

``(5) If there are substantial modifications to any workforce plan under paragraph (4)(B) during any year in which a report under paragraph (4) is not required, a supplemental annual notification shall be submitted in the same manner as reports are required to be submitted under paragraph (4).''.

(a) In General.--Section 604 of the Foreign Service Act of 1980 (22 U.S.C. 4004) is amended-- (1) by striking ``Confidentiality of Records.--'' and inserting ``Records.--(a)''; and (2) by adding at the end the following new subsection:

``(b) Notwithstanding subsection (a), any record of disciplinary action that includes a suspension of more than five days taken against a member of the Service, including any correction of that record under section 1107(b)(1), shall remain a part of the personnel records until the member is tenured as a career member of the Service or next promoted.''. (b) Effective Date.--The amendments made by this section apply to all disciplinary actions initiated on or after the date of enactment of this Act.

SERVICE RECOMMENDED FOR SEPARATION FOR CAUSE.

Section 610(a) of the Foreign Service Act (22 U.S.C. 4010(a)) is amended by adding at the end the following new paragraph: ``(6) Notwithstanding the hearing required by paragraph (2), at the time the Secretary recommends that a member of the Service be separated for cause, that member shall be placed on leave without pay pending final resolution of the underlying matter, subject to reinstatement with back pay if cause for separation is not established in a hearing before the Board.''.

Section 1103(d)(1) of the Foreign Service Act of 1980 (22 U.S.C. 4133(d)(1)) is amended by adding the following new sentence at the end: ``Nothing in this subsection shall prevent a grievant from placing a rebuttal to accompany a record of disciplinary action in such grievant's personnel records nor prevent the Department from including a response to such rebuttal, including documenting those cases in which the Board has reviewed and upheld the discipline.''.

(a) In General.--Section 1104(a) of the Foreign Service Act of 1980 (22 U.S.C. 4134(a)) is amended in the first sentence by striking ``within a period of 3 years'' and all that follows through the period and inserting ``not later than two years after the occurrence giving rise to the grievance or, in the case of a grievance with respect to the grievant's rater or reviewer, one year after the date on which the grievant ceased to be subject to rating or review by that person, but in no case less than two years after the occurrence giving rise to the grievance.''. (b) Grievances Alleging Discrimination.--Section 1104 of that Act (22 U.S.C. 4134) is amended in subsection (c) by striking ``3 years'' and inserting ``2 years''. (c) Effective Date.--The amendments made by this section shall take effect 180 days after the date of enactment of this Act and shall apply to grievances which arise on or after such effective date.

Section 1105 of the Foreign Service Act of 1980 (22 U.S.C. 4135) is amended by adding at the end the following new subsection: ``(f)(1) Not later than March 1 of each year, the Chairman of the Foreign Service Grievance Board shall prepare a report summarizing the activities of the Board during the previous calendar year. The report shall include-- ``(A) the number of cases filed; ``(B) the types of cases filed; ``(C) the number of cases on which a final decision was reached, as well as data on the outcome of cases, whether affirmed, reversed, settled, withdrawn, or dismissed; ``(D) the number of oral hearings conducted and the length of each such hearing; ``(E) the number of instances in which interim relief was granted by the Board; and ``(F) data on the average time for consideration of a grievance, from the time of filing to a decision of the Board.

``(2) The report required under paragraph (1) shall be submitted to the Director General of the Foreign Service and the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives.''.

Section 202(a) of the Foreign Service Act of 1980 (22 U.S.C. 3922(a)) is amended by adding at the end the following new paragraph: ``(4)(A) Whenever (and to the extent) the Secretary of State considers it in the best interests of the United States Government, the Secretary of State may authorize the head of any agency or other Government establishment (including any establishment in the legislative or judicial branch) to appoint under section 303 individuals described in subparagraph (B) as members of the Service and to utilize the Foreign Service personnel system with respect to such individuals under such regulations as the Secretary of State may prescribe. ``(B) The individuals referred to in subparagraph (A) are individuals eligible for employment abroad under section 311(a).''.

(a) In General.--Chapter 4 of title I of the Foreign Service Act of 1980 (22 U.S.C. 3961 et seq.) is amended by adding at the end the following new section:

``SEC. 414. BORDER EQUALIZATION PAY ADJUSTMENT.

``(a) In General.--An employee who regularly commutes from the employee's place of residence in the continental United States to an official duty station in Canada or Mexico shall receive a border equalization pay adjustment equal to the amount of comparability payments under section 5304 of title 5, United States Code, that the employee would receive if the employee were assigned to an official duty station within the United States locality pay area closest to the employee's official duty station. ``(b) Employee Defined.--For purposes of this section, the term `employee' means a person who--

``(1) is an `employee' as defined under section 2105 of title 5, United States Code; and ``(2) is employed by the Department of State, the United States Agency for International Development, or the International Joint Commission of the United States and Canada (established under Article VII of the treaty signed January 11, 1909) (36 Stat. 2448), except that the term shall not include members of the Service (as specified in section 103).

``(c) Treatment as Basic Pay.--An equalization pay adjustment paid under this section shall be considered to be part of basic pay for the same purposes for which comparability payments are considered to be part of basic pay under section 5304 of title 5, United States Code. ``(d) Regulations.--The heads of the agencies referred to in subsection (b)(2) may prescribe regulations to carry out this section.''. (b) Conforming Amendment.--The table of contents for the Foreign Service Act of 1980 is amended by inserting after the item relating to section 413 the following new item:

``Sec. 414. Border equalization pay adjustment.''.

INTERNATIONAL ORGANIZATIONS.

(a) In General.--Title 5 of the United States Code is amended by inserting after section 8432b the following new section:

``Sec. 8432c. Contributions of certain persons reemployed after service with international organizations

``(a) In this section, the term `covered person' means any person who-- ``(1) transfers from a position of employment covered by chapter 83 or 84 or subchapter I or II of chapter 8 of the Foreign Service Act of 1980 to a position of employment with an international organization pursuant to section 3582; ``(2) pursuant to section 3582 elects to retain coverage, rights, and benefits under any system established by law for the retirement of persons during the period of employment with the international organization and currently deposits the necessary deductions in payment for such coverage, rights, and benefits in the system's fund; and ``(3) is reemployed pursuant to section 3582(b) to a position covered by chapter 83 or 84 or subchapter I or II of chapter 8 of the Foreign Service Act of 1980 after separation from the international organization.

``(b)(1) Each covered person may contribute to the Thrift Savings Fund, in accordance with this subsection, an amount not to exceed the amount described in paragraph (2). ``(2) The maximum amount which a covered person may contribute under paragraph (1) is equal to-- ``(A) the total amount of all contributions under section 8351(b)(2) or 8432(a), as applicable, which the person would have made over the period beginning on the date of transfer of the person (as described in subsection (a)(1)) and ending on the day before the date of reemployment of the person (as described in subsection (a)(3)), minus

``(B) the total amount of all contributions, if any, under section 8351(b)(2) or 8432(a), as applicable, actually made by the person over the period described in subparagraph (A).

``(3) Contributions under paragraph (1)-- ``(A) shall be made at the same time and in the same manner as would any contributions under section 8351(b)(2) or 8432(a), as applicable; ``(B) shall be made over the period of time specified by the person under paragraph (4)(B); and ``(C) shall be in addition to any contributions actually being made by the person during that period under section 8351(b)(2) or 8432(a), as applicable.

``(4) The Executive Director shall prescribe the time, form, and manner in which a covered person may specify-- ``(A) the total amount the person wishes to contribute with respect to any period described in paragraph (2)(A); and ``(B) the period of time over which the covered person wishes to make contributions under this subsection.

``(c) If a covered person who makes contributions under section 8432(a) makes contributions under subsection (b), the agency employing the person shall make those contributions to the Thrift Savings Fund on the person's behalf in the same manner as contributions are made for an employee described in section 8432b(a) under sections 8432b(c), 8432b(d), and 8432b(f). Amounts paid under this subsection shall be paid in the same manner as amounts are paid under section 8432b(g). ``(d) For purposes of any computation under this section, a covered person shall, with respect to the period described in subsection (b)(2)(A), be considered to have been paid at the rate which would have been payable over such period had the person remained continuously employed in the position that the person last held before transferring to the international organization. ``(e) For purposes of section 8432(g), a covered person shall be credited with a period of civilian service equal to the period beginning on the date of transfer of the person (as described in subsection (a)(1)) and ending on the day before the date of reemployment of the person (as described in subsection (a)(3)). ``(f) The Executive Director shall prescribe regulations to carry out this section.''. (b) Conforming Amendment.--The table of sections for chapter 84 of title 5, United States Code, is amended by inserting after the item relating to section 8432b the following:

``8432c. Contributions of certain persons reemployed after service with international organizations.''.

(c) Effective Date.--The amendment made by subsection (a) shall apply to persons reemployed on or after the date of enactment of this Act.

PERSONNEL.

Section 5922 of title 5, United States Code, is amended by adding at the end the following: ``(f)(1) If an employee dies at post in a foreign area, a transfer allowance under section 5924(2)(B) may be granted to the spouse or dependents of such employee (or both) for the purpose of providing for their return to the United States.

``(2) A transfer allowance under this subsection may not be granted with respect to the spouse or a dependent of the employee unless, at the time of death, such spouse or dependent was residing-- ``(A) at the employee's post of assignment; or ``(B) at a place, outside the United States, for which a separate maintenance allowance was being furnished under section 5924(3).

``(3) The President may prescribe any regulations necessary to carry out this subsection.''.

Section 5924(4) of title 5, United States Code, is amended-- (1) in subparagraph (A), by striking ``between that post and the nearest locality where adequate schools are available,'' and inserting ``between that post and the school chosen by the employee, not to exceed the total cost to the Government of the dependent attending an adequate school in the nearest locality where an adequate school is available,''; and (2) by adding at the end the following new subparagraph: ``(C) In those cases in which an adequate school is available at the post of the employee, if the employee chooses to educate the dependent at a school away from post, the education allowance which includes board and room, and periodic travel between the post and the school chosen, shall not exceed the total cost to the Government of the dependent attending an adequate school at the post of the employee.''.

Section 5927 of title 5, United States Code, is amended to read as follows:

``Sec. 5927. Advances of pay

``(a) Up to three months' pay may be paid in advance-- ``(1) to an employee upon the assignment of the employee to a post in a foreign area; ``(2) to an employee, other than an employee appointed under section 303 of the Foreign Service Act of 1980 (and employed under section 311 of such Act), who-- ``(A) is a citizen of the United States; ``(B) is officially stationed or located outside the United States pursuant to Government authorization; and ``(C) requires (or has a family member who requires) medical treatment outside the United States, in circumstances specified by the President in regulations; and ``(3) to a foreign national employee appointed under section 303 of the Foreign Service Act of 1980, or a nonfamily member United States citizen appointed under such section 303 (and employed under section 311 of such Act) for service at such nonfamily member's post of residence, who-- ``(A) is located outside the country of employment of such foreign national employee or nonfamily member (as the case may be) pursuant to Government authorization; and

``(B) requires medical treatment outside the country of employment of such foreign national employee or nonfamily member (as the case may be), in circumstances specified by the President in regulations.

``(b) For the purpose of this section, the term `country of employment', as used with respect to an individual under subsection (a)(3), means the country (or other area) outside the United States where such individual is appointed (as described in subsection (a)(3)) by the Government.''.

AND TECHNICAL PERSONNEL.

(a) Findings.--Congress finds that administrative and technical personnel posted to United States missions abroad who do not have diplomatic status suffer financial disadvantages from their lack of such status. (b) Report.--Not later than 1 year after the date of the enactment of this Act, the Secretary of State should submit a report to the appropriate congressional committees concerning the extent to which administrative and technical personnel posted to United States missions abroad who do not have diplomatic status suffer financial disadvantages from their lack of such status, including proposals to alleviate such disadvantages.

INVESTIGATIONS.

(a) Amendment of the Foreign Service Act of 1980.--Section 209(c) of the Foreign Service Act of 1980 (22 U.S.C. 3929(c)) is amended by adding at the end the following: ``(5) Investigations.-- ``(A) Conduct of investigations.--In conducting investigations of potential violations of Federal criminal law or Federal regulations, the Inspector General shall-- ``(i) abide by professional standards applicable to Federal law enforcement agencies; and ``(ii) make every reasonable effort to permit each subject of an investigation an opportunity to provide exculpatory information. ``(B) Final reports of investigations.--In order to ensure that final reports of investigations are thorough and accurate, the Inspector General shall-- ``(i) make every reasonable effort to ensure that any person named in a final report of investigation has been afforded an opportunity to refute any allegation of wrongdoing or assertion with respect to a material fact made regarding that person's actions; ``(ii) include in every final report of investigation any exculpatory information, as well as any inculpatory information, that has been discovered in the course of the investigation.''.

(b) Annual Report.--Section 209(d)(2) of the Foreign Service Act of 1980 (22 U.S.C. 3929(d)(2)) is amended-- (1) by striking ``and'' at the end of subparagraph (D); (2) by striking the period at the end of subparagraph (E) and inserting ``; and''; and (3) by inserting after subparagraph (E) the following new subparagraph:

``(F) a notification, which may be included, if necessary, in the classified portion of the report, of any instance in a case that was closed during the period covered by the report when the Inspector General decided not to afford an individual the opportunity described in subsection (c)(5)(B)(i) to refute any allegation and the rationale for denying such individual that opportunity.''.

(c) Statutory Construction.--Nothing in the amendments made by this section may be construed to modify-- (1) section 209(d)(4) of the Foreign Service Act of 1980 (22 U.S.C. 3929(d)(4)); (2) section 7(b) of the Inspector General Act of 1978 (5 U.S.C. app.); (3) the Privacy Act of 1974 (5 U.S.C. 552a); (4) the provisions of section 2302(b)(8) of title 5 (relating to whistleblower protection); (5) rule 6(e) of the Federal Rules of Criminal Procedure (relating to the protection of grand jury information); or (6) any statute or executive order pertaining to the protection of classified information.

(d) No Grievance or Right of Action.--A failure to comply with the amendments made by this section shall not give rise to any private right of action in any court or to an administrative complaint or grievance under any law. (e) Effective Date.--The amendments made by this section shall apply to cases opened on or after the date of the enactment of this Act.

OVERSEAS.

Not later than 180 days after the date of enactment of this Act, the President shall submit a report to the appropriate congressional committees on the benefits and compensation paid to the survivors and personal representatives of the United States Government employees (including those in the uniformed services and Foreign Service National employees) killed in the performance of duty abroad as result of terrorist acts. All appropriate United States Government agencies shall contribute to the preparation of the report. The report shall include a comparison of benefits available to military and civilian employees and should include any recommendations for additional or other types of benefits or compensation.

Section 1613(c) of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted by division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended by inserting after the first sentence the following: ``In carrying out the reorganization under this Act, the Secretary shall ensure that the advances made in increasing the number and status of women and minorities within the foreign affairs agencies of the Federal Government, in terms of representation within the agencies as well as relative rank, are not undermined by discrimination within the newly reorganized Department of State.''.

TIBETANS AND BURMESE.

(a) Designation of Ngawang Choephel Exchange Programs.--Section 103(a) of the Human Rights, Refugee, and Other Foreign Relations Provisions Act of 1996 (Public Law 104-319) is amended by inserting after the first sentence the following: ``Exchange programs under this subsection shall be known as the `Ngawang Choephel Exchange Programs'.''. (b) Scholarships for Tibetans and Burmese.--Section 103(b)(1) of the Human Rights, Refugee, and Other Foreign Relations Provisions Act of 1996 (Public Law 104-319; 22 U.S.C. 2151 note) is amended by striking ``for the fiscal year 1999'' and inserting ``for the fiscal year 2000''. (c) Scholarships for Preservation of Tibet's culture, language, and religion.--Section 103(b)(1) of the Human Rights, Refugee, and Other Foreign Relations Provisions Act of 1996 (Public Law 104-319; 22 U.S.C. 2151 note) is further amended by striking ``Tibet,'' and inserting ``Tibet (whenever practical giving consideration to individuals who are active in the preservation of Tibet's culture, language, and religion),''.

Section 102 of the Human Rights, Refugee, and Other Foreign Relations Provisions Act of 1996 (Public Law 104-319; 22 U.S.C. 2452 note) is amended to read as follows:

``SEC. 102. CONDUCT OF CERTAIN EDUCATIONAL AND CULTURAL EXCHANGE PROGRAMS.

``(a) In General.--In carrying out programs of educational and cultural exchange in countries whose people do not fully enjoy freedom and democracy, the Secretary of State, with the assistance of the Under Secretary of State for Public Diplomacy, shall provide, where appropriate, opportunities for significant participation in such programs to nationals of such countries who are-- ``(1) human rights or democracy leaders of such countries; or ``(2) committed to advancing human rights and democratic values in such countries.

``(b) Grantee Organizations.--To the extent practicable, grantee organizations selected to operate programs described in subsection (a) shall be selected through an open competitive process. Among the factors that should be considered in the selection of such a grantee are the willingness and ability of the organization to-- ``(1) recruit a broad range of participants, including those described in paragraphs (1) and (2) of subsection (a); and

``(2) ensure that the governments of the countries described in subsection (a) do not have inappropriate influence in the selection process.''.

The United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1431 et seq.) is amended by adding after section 1011 the following new section:

``SEC. 1012. NATIONAL SECURITY MEASURES.

``(a) Restriction.--In coordination with other appropriate executive branch officials, the Secretary of State shall take all appropriate steps to-- ``(1) prevent any agent of a foreign power from participating in educational and cultural exchange programs under this Act; ``(2) ensure that no person who is involved in the research, development, design, testing, evaluation, or production of missiles or weapons of mass destruction is a participant in any program of educational or cultural exchange under this Act if such person is employed by, or attached to, an entity within a country that has been identified by any element of the United States intelligence community (as defined by section 3(4) of the National Security Act of 1947) within the previous 5 years as having been involved in the proliferation of missiles or weapons of mass destruction; and ``(3) ensure that no person who is involved in the research, development, design, testing, evaluation, or production of chemical or biological weapons for offensive purposes is a participant in any program of educational or cultural exchange under this Act.

``(b) Definitions.-- ``(1) The term `appropriate executive branch officials' means officials from the elements of the United States Government listed pursuant to section 101 of the Intelligence Authorization Act for Fiscal Year 1999 (Public Law 105-272). ``(2) The term `agent of a foreign power' has the same meaning as set forth in section 101(b)(1)(B) and (b)(2) of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801), and does not include any person who acts in the capacity defined under section 101(b)(1)(A) of such Act.

DIPLOMACY.

(a) Restoration of Advisory Commission.--Section 1334 of the Foreign Affairs Reform and Restructuring Act of 1998 (as enacted in division G of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277) is amended to read as follows:

``SEC. 1334. SUNSET OF UNITED STATES ADVISORY COMMISSION ON PUBLIC DIPLOMACY.

``The United States Advisory Commission on Public Diplomacy, established under section 604 of the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1469) and section 8 of Reorganization Plan Numbered 2 of 1977, shall continue to exist and operate under such provisions of law until October 1, 2001.''.

(b) Retroactivity of Effective Date.--The amendment made by subsection (a) shall take effect as if included in the enactment of the Foreign Affairs Reform and Restructuring Act of 1998. (c) Reenactment and Repeal of Certain Provisions of Law.-- (1) Reenactment.--The provisions of law repealed by section 1334 of the Foreign Affairs Reform and Restructuring Act of 1998, as in effect before the date of the enactment of this Act, are hereby reenacted into law. (2) Repeal.--Effective September 30, 2001, section 604 of the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1469) and section 8 of the Reorganization Plan Numbered 2 of 1977 are repealed.

(d) Continuity of Advisory Commission.--Notwithstanding any other provision of law, any period of discontinuity of the United States Advisory Commission on Public Diplomacy shall not affect the appointment or terms of service of members of the commission. (e) Reduction in Staff and Budget.--Notwithstanding section 604(b) of the United States Information and Educational Exchange Act of 1948, effective on the date of the enactment of this Act, the United States Advisory Commission on Public Diplomacy shall have not more than 2 individuals who are compensated staff, and not more than 50 percent of the resources allocated in fiscal year 1999.

(a) Training for the Royal Ulster Constabulary.--No funds authorized to be appropriated by this or any other Act may be used to support any training or exchange program conducted by the Federal Bureau of Investigation or any other Federal law enforcement agency for the Royal Ulster Constabulary (in this section referred to as the ``RUC'') or RUC members until the President submits to the appropriate congressional committees the report required by subsection (b) and the certification described in subsection (c)(1). (b) Report on Past Training Programs.--The President shall report on training or exchange programs conducted by the Federal Bureau of Investigation or other Federal law enforcement agencies for the RUC or RUC members during fiscal years 1994 through 1999. Such report shall include-- (1) the number of training or exchange programs conducted during the period of the report; (2) the number and rank of the RUC members who participated in such training or exchange programs in each fiscal year; (3) the duration and location of such training or exchange programs; and (4) a detailed description of the curriculum of the training or exchange programs.

(c) Certification Regarding Future Training Activities.-- (1) In general.--The certification described in this subsection is a certification by the President that-- (A) training or exchange programs conducted by the Federal Bureau of Investigation or other Federal law enforcement agencies for the RUC or RUC members are necessary to--

(i) improve the professionalism of policing in Northern Ireland; and (ii) advance the peace process in Northern Ireland; (B) such programs will include in the curriculum a significant human rights component; (C) vetting procedures have been established in the Departments of State and Justice, and any other appropriate Federal agency, to ensure that training or exchange programs do not include RUC members who there are substantial grounds for believing have committed or condoned violations of internationally recognized human rights, including any role in the murder of Patrick Finucane or Rosemary Nelson or other violence or serious threat of violence against defense attorneys in Northern Ireland; and (D) the governments of the United Kingdom and the Republic of Ireland are committed to assisting in the full implementation of the recommendations contained in the Patten Commission report issued September 9, 1999. (2) Fiscal year 2001 application.--The President shall make an additional certification under paragraph (1) before any Federal law enforcement agency conducts training for the RUC or RUC members in fiscal year 2001. (3) Application to successor organizations.--The provisions of this subsection shall apply to any successor organization of the RUC.

Subtitle B--Russian and Ukrainian Business Management Education

The purpose of this subtitle is to establish a training program in Russia and Ukraine for nationals of those countries to obtain skills in business administration, accounting, and marketing, with special emphasis on instruction in business ethics and in the basic terminology, techniques, and practices of those disciplines, to achieve international standards of quality, transparency, and competitiveness.

In this subtitle: (1) Distance learning.--The term ``distance learning'' means training through computers, interactive videos, teleconferencing, and videoconferencing between and among students and teachers. (2) Eligible enterprise.--The term ``eligible enterprise'' means-- (A) in the case of Russia-- (i) a business concern operating in Russia that employs Russian nationals in Russia; or (ii) a private enterprise that is being formed or operated by former officers of the Russian armed forces in Russia; and (B) in the case of Ukraine-- (i) a business concern operating in Ukraine that employs Ukrainian nationals in Ukraine; or

(ii) a private enterprise that is being formed or operated by former officers of the Ukrainian armed forces in Ukraine. (3) Eligible national.--The term ``eligible national'' means the employee of an eligible enterprise who is employed in the program country. (4) Program.--The term ``program'' means the program of technical assistance established under section 423. (5) Program country.--The term ``program country'' means-- (A) Russia in the case of any eligible enterprise operating in Russia that receives technical assistance under the program; or (B) Ukraine in the case of any eligible enterprise operating in Ukraine that receives technical assistance under the program.

(a) Training Program.-- (1) In general.--The President is authorized to establish a program of technical assistance to provide the training described in section 421 to eligible enterprises. (2) Implementation.--Training shall be carried out by United States nationals having expertise in business administration, accounting, and marketing or by eligible nationals who have been trained under the program. Such training may be carried out-- (A) in the offices of eligible enterprises, at business schools or institutes, or at other locations in the program country, including facilities of the armed forces of the program country, educational institutions, or in the offices of trade or industry associations, with special consideration given to locations where similar training opportunities are limited or nonexistent; or (B) by ``distance learning'' programs originating in the United States or in European branches of United States institutions.

(b) Internships With United States Domestic Business Concerns.-- Authorized program costs may include the travel expenses and appropriate in-country business English language training, if needed, of eligible nationals who have completed training under the program to undertake short-term internships with business concerns in the United States.

(a) Procedures.-- (1) In general.--Each eligible enterprise that desires to receive training for its employees and managers under this subtitle shall submit an application to the clearinghouse under subsection (c), at such time, in such manner, and accompanied by such additional information as may reasonably be required. (2) Joint applications.--A consortium of eligible enterprises may file a joint application under the provisions of paragraph (1).

(b) Contents.--An application under subsection (a) may be approved only if the application--

(1) is for an individual or individuals employed in an eligible enterprise or enterprises applying under the program; (2) describes the level of training for which assistance under this subtitle is sought; (3) provides evidence that the eligible enterprise meets the general policies adopted for the administration of this subtitle; (4) provides assurances that the eligible enterprise will pay a share of the costs of the training, which share may include in-kind contributions; and (5) provides such additional assurances as are determined to be essential to ensure compliance with the requirements of this subtitle.

(c) Clearinghouse.--A clearinghouse shall be established or designated in each program country to manage and execute the program in that country. The clearinghouse shall screen applications, provide information regarding training and teachers, monitor performance of the program, and coordinate appropriate post-program follow-on activities.

Prohibitions on the use of foreign assistance funds for assistance for the Russian Federation or for Ukraine shall not apply with respect to the funds made available to carry out this subtitle.

(a) In General.--There is authorized to be appropriated $10,000,000 for the fiscal year 2000 and $10,000,000 for the fiscal year 2001 to carry out this subtitle. (b) Availability of Funds.--Amounts appropriated under subsection (a) are authorized to remain available until expended.

Section 309 of the United States International Broadcasting Act of 1994 (22 U.S.C. 6208) is amended-- (1) by striking subsection (c); (2) by redesignating subsections (d), (e), (f), (g), (h), and (i) as subsections (c), (d), (e), (f), (g), and (h), respectively; (3) in subsection (c) (as redesignated by paragraph (2))-- (A) in paragraph (1)-- (i) by striking ``(A)''; and (ii) by striking subparagraph (B); (B) in paragraph (2), by striking ``September 30, 1999'' and inserting ``September 30, 2009''; (C) in paragraph (4), by striking ``$22,000,000 in any fiscal year'' and inserting ``$30,000,000 in each of the fiscal years 2000 and 2001''; (D) by striking paragraph (5); and (E) by redesignating paragraph (6) as paragraph (5); and

(4) by amending subsection (f) (as redesignated by paragraph (2)) to read as follows:

``(f) Sunset Provision.--The Board may not make any grant for the purpose of operating Radio Free Asia after September 30, 2009.''.

BOARD OF GOVERNORS.

Section 304(b)(2) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (22 U.S.C. 6203 (b)(2)), is amended-- (1) by striking ``designate'' and inserting ``appoint''; and (2) by adding at the end the following: ``, subject to the advice and consent of the Senate''.

PRESERVATION OF RFE/RL (RADIO FREE EUROPE/RADIO LIBERTY).

Section 312 of the United States International Broadcasting Act of 1994 (22 U.S.C. 6211) is amended to read as follows:

``SEC. 312. THE CONTINUING MISSION OF RADIO FREE EUROPE AND RADIO LIBERTY BROADCASTS.

``It is the sense of Congress that Radio Free Europe and Radio Liberty should continue to broadcast to the peoples of Central Europe, Eurasia, and the Persian Gulf until such time as-- ``(1) a particular nation has clearly demonstrated the successful establishment and consolidation of democratic rule; and ``(2) its domestic media which provide balanced, accurate, and comprehensive news and information, is firmly established and widely accessible to the national audience, thus making redundant broadcasts by Radio Free Europe or Radio Liberty.

``At such time as a particular nation meets both of these conditions, RFE/RL should phase out broadcasting to that nation.''.

GOVERNORS.

Section 304 of the United States International Broadcasting Act of 1994 (22 U.S.C. 6203) is amended by adding at the end the following subsection: ``(g) Immunity From Civil Liability.--Notwithstanding any other provision of law, any and all limitations on liability that apply to the members of the Broadcasting Board of Governors also shall apply to such members when acting in their capacities as members of the boards of directors of RFE/RL, Incorporated and Radio Free Asia.''.

This title may be cited as the ``Secure Embassy Construction and Counterterrorism Act of 1999''.

Congress makes the following findings: (1) On August 7, 1998, the United States embassies in Nairobi, Kenya, and in Dar es Salaam, Tanzania, were

destroyed by simultaneously exploding bombs. The resulting explosions killed 220 persons and injured more than 4,000 others. Twelve Americans and 40 Kenyan and Tanzanian employees of the United States Foreign Service were killed in the attack. (2) The United States personnel in both Dar es Salaam and Nairobi showed leadership and personal courage in their response to the attacks. Despite the havoc wreaked upon the embassies, staff in both embassies provided rapid response in locating and rescuing victims, providing emergency assistance, and quickly restoring embassy operations during a crisis. (3) The bombs are believed to have been set by individuals associated with Osama bin Laden, leader of a known transnational terrorist organization. In February 1998, bin Laden issued a directive to his followers that called for attacks against United States interests anywhere in the world. (4) Threats continue to be made against United States diplomatic facilities. (5) Accountability Review Boards were convened following the bombings, as required by Public Law 99-399, chaired by Admiral William J. Crowe, United States Navy (Ret.) (in this section referred to as the ``Crowe panels''). (6) The conclusions of the Crowe panels were strikingly similar to those stated by the Commission chaired by Admiral Bobby Ray Inman, which issued an extensive embassy security report in 1985. (7) The Crowe panels issued a report setting out many problems with security at United States diplomatic facilities, in particular the following: (A) The United States Government has devoted inadequate resources to security against terrorist attacks. (B) The United States Government places too low a priority on security concerns. (8) The result has been a failure to take adequate steps to prevent tragedies such as the bombings in Kenya and Tanzania. (9) The Crowe panels found that there was an institutional failure on the part of the Department of State to recognize threats posed by transnational terrorism and vehicular bombs. (10) Responsibility for ensuring adequate resources for security programs is widely shared throughout the United States Government, including Congress. Unless the vulnerabilities identified by the Crowe panels are addressed in a sustained and financially realistic manner, the lives and safety of United States employees in diplomatic facilities will continue to be at risk from further terrorist attacks. (11) Although service in the Foreign Service or other United States Government positions abroad can never be completely without risk, the United States Government must take all reasonable steps to minimize security risks.

In this title, the terms `United States diplomatic facility' and `diplomatic facility' mean any chancery, consulate, or other office notified to the host government as diplomatic or consular premises in accordance with the Vienna Conventions on Diplomatic and Consular Relations, or otherwise subject to a publicly available

bilateral agreement with the host government (contained in the records of the United States Department of State) that recognizes the official status of the United States Government personnel present at the facility.

(a) Authorization of Appropriations.--In addition to amounts otherwise authorized to be appropriated by this or any other Act, there are authorized to be appropriated for ``Embassy Security, Construction and Maintenance''-- (1) for fiscal year 2000, $900,000,000; (2) for fiscal year 2001, $900,000,000; (3) for fiscal year 2002, $900,000,000; (4) for fiscal year 2003, $900,000,000; and (5) for fiscal year 2004, $900,000,000.

(b) Purposes.--Funds made available under the ``Embassy Security, Construction, and Maintenance'' account may be used only for the purposes of-- (1) the acquisition of United States diplomatic facilities and, if necessary, any residences or other structures located in close physical proximity to such facilities, or (2) the provision of major security enhancements to United States diplomatic facilities,

to the extent necessary to bring the United States Government into compliance with all requirements applicable to the security of United States diplomatic facilities, including the relevant requirements set forth in section 606. (c) Availability of Authorizations.--Authorizations of appropriations under subsection (a) shall remain available until the appropriations are made. (d) Availability of Funds.--Amounts appropriated pursuant to subsection (a) are authorized to remain available until expended.

(a) Report and Priority of Obligations.-- (1) Report.--Not later than February 1 of the year 2000 and each of the four subsequent years, the Secretary of State shall submit a classified report to the appropriate congressional committees identifying each diplomatic facility or each diplomatic or consular post composed of such facilities that is a priority for replacement or for any major security enhancement because of its vulnerability to terrorist attack (by reason of the terrorist threat and the current condition of the facility). The report shall list such facilities in groups of 20. The groups shall be ranked in order from most vulnerable to least vulnerable to such an attack. (2) Priority on use of funds.-- (A) In general.--Except as provided in subparagraph (B), funds authorized to be appropriated by section 604 for a particular project may be used only for those facilities which are listed in the first four groups described in paragraph (1). (B) Exception.--Funds authorized to be made available by section 604 may only be used for facilities which are not in the first 4 groups described in paragraph (1), if the Congress authorizes or appropriates funds for such a diplomatic facility or the Secretary of State notifies the appropriate congressional committees that such funds will

be used for a facility in accordance with the procedures applicable to a reprogramming of funds under section 34(a) of the State Department Basic Authorities Act of 1956 (22 U.S.C. 2706(a)).

(b) Prohibition on Transfer of Funds.--None of the funds authorized to be appropriated by section 604 may be transferred to any other account. (c) Semiannual Reports on Acquisition and Major Security Upgrades.-- On June 1 and December 1 of each year, the Secretary of State shall submit a report to the appropriate congressional committees on the embassy construction and security program authorized under this title. The report shall include-- (1) obligations and expenditures-- (A) during the previous two fiscal quarters; and (B) since the enactment of this Act; (2) projected obligations and expenditures for the fiscal year in which the report is submitted and how these obligations and expenditures will improve security conditions of specific diplomatic facilities; and (3) the status of ongoing acquisition and major security enhancement projects, including any significant changes in-- (A) the budgetary requirements for such projects; (B) the schedule of such projects; and (C) the scope of the projects.

(a) In General.--The following security requirements shall apply with respect to United States diplomatic facilities and specified personnel: (1) Threat assessment.-- (A) Emergency action plan.--The Emergency Action Plan (EAP) of each United States mission shall address the threat of large explosive attacks from vehicles and the safety of employees during such an explosive attack. Such plan shall be reviewed and updated annually. (B) Security environment threat list.--The Security Environment Threat List shall contain a section that addresses potential acts of international terrorism against United States diplomatic facilities based on threat identification criteria that emphasize the threat of transnational terrorism and include the local security environment, host government support, and other relevant factors such as cultural realities. Such plan shall be reviewed and updated every six months. (2) Site selection.-- (A) In general.--In selecting a site for any new United States diplomatic facility abroad, the Secretary shall ensure that all United States Government personnel at the post (except those under the command of an area military commander) will be located on the site. (B) Waiver authority.-- (i) In general.--Subject to clause (ii), the Secretary of State may waive subparagraph (A) if the Secretary, together with the head of each agency employing personnel that would not be located at the

site, determine that security considerations permit and it is in the national interest of the United States. (ii) Chancery or consulate building.-- (I) Authority not delegable.--The Secretary may not delegate the waiver authority under clause (i) with respect to a chancery or consulate building. (II) Congressional notification.-- Not less than 15 days prior to implementing the waiver authority under clause (i) with respect to a chancery or consulate building, the Secretary shall notify the appropriate congressional committees in writing of the waiver and the reasons for the determination. (iii) Report to congress.--The Secretary shall submit to the appropriate congressional committees an annual report of all waivers under this subparagraph. (3) Perimeter distance.-- (A) Requirement.--Each newly acquired United States diplomatic facility shall be sited not less than 100 feet from the perimeter of the property on which the facility is to be situated. (B) Waiver authority.-- (i) In general.--Subject to clause (ii), the Secretary of State may waive subparagraph (A) if the Secretary determines that security considerations permit and it is in the national interest of the United States. (ii) Chancery or consulate building.-- (I) Authority not delegable.--The Secretary may not delegate the waiver authority under clause (i) with respect to a chancery or consulate building. (II) Congressional notification.-- Not less than 15 days prior to implementing the waiver authority under subparagraph (A) with respect to a chancery or consulate building, the Secretary shall notify the appropriate congressional committees in writing of the waiver and the reasons for the determination. (iii) Report to congress.--The Secretary shall submit to the appropriate congressional committees an annual report of all waivers under this subparagraph. (4) Crisis management training.-- (A) Training of headquarters staff.--The appropriate personnel of the Department of State headquarters staff shall undertake crisis management training for mass casualty and mass destruction incidents relating to diplomatic facilities for the purpose of bringing about a rapid response to such incidents from Department of State headquarters in Washington, D.C. (B) Training of personnel abroad.--A program of appropriate instruction in crisis management shall be provided to personnel at United States diplomatic facilities abroad at least on an annual basis.

(5) Diplomatic security training.--Not later than six months after the date of the enactment of this Act, the Secretary of State shall-- (A) develop annual physical fitness standards for all diplomatic security agents to ensure that the agents are prepared to carry out all of their official responsibilities; and (B) provide for an independent evaluation by an outside entity of the overall adequacy of current new agent, in-service, and management training programs to prepare agents to carry out the full scope of diplomatic security responsibilities, including preventing attacks on United States personnel and facilities. (6) State department support.-- (A) Foreign emergency support team.--The Foreign Emergency Support Team (FEST) of the Department of State shall receive sufficient support from the Department, including-- (i) conducting routine training exercises of the FEST; (ii) providing personnel identified to serve on the FEST as a collateral duty; (iii) providing personnel to assist in activities such as security, medical relief, public affairs, engineering, and building safety; and (iv) providing such additional support as may be necessary to enable the FEST to provide support in a post-crisis environment involving mass casualties and physical damage. (B) Fest aircraft.-- (i) Replacement aircraft.--The President shall develop a plan to replace on a priority basis the current FEST aircraft funded by the Department of Defense with a dedicated, capable, and reliable replacement aircraft and backup aircraft to be operated and maintained by the Department of Defense. (ii) Report.--Not later than 60 days after the date of enactment of this Act, the President shall submit a report to the appropriate congressional committees describing the aircraft selected pursuant to clause (i) and the arrangements for the funding, operation, and maintenance of such aircraft. (iii) Authority to lease aircraft to respond to a terrorist attack abroad.--Subject to the availability of appropriations, when the Attorney General of the Department of Justice exercises the Attorney General's authority to lease commercial aircraft to transport equipment and personnel in response to a terrorist attack abroad if there have been reasonable efforts to obtain appropriate Department of Defense aircraft and such aircraft are unavailable, the Attorney General shall have the authority to obtain indemnification insurance or guarantees if necessary and appropriate. (7) Rapid response procedures.--The Secretary of State shall enter into a memorandum of understanding with the Secretary of Defense setting out rapid response procedures

for mobilization of personnel and equipment of their respective departments to provide more effective assistance in times of emergency with respect to United States diplomatic facilities. (8) Storage of emergency equipment and records.--All United States diplomatic facilities shall have emergency equipment and records required in case of an emergency situation stored at an off-site facility.

(b) Statutory Construction.--Nothing in this section alters or amends existing security requirements not addressed by this section.

(a) Review.--The Secretary of State shall review the findings of the Overseas Presence Advisory Panel of the Department of State. (b) Report.-- (1) In general.--Not later than 120 days after submission of the Overseas Presence Advisory Panel Report, the Secretary of State shall submit a report to the appropriate congressional committees setting forth the results of the review conducted under subsection (a). (2) Elements of the report.--To the extent not addressed by the review described in subsection (a), the report shall also-- (A) specify whether any United States diplomatic facility should be closed because-- (i) the facility is highly vulnerable and subject to threat of terrorist attack; and (ii) adequate security enhancements cannot be provided to the facility; (B) in the event that closure of a diplomatic facility is required, identify plans to provide secure premises for permanent use by the United States diplomatic mission, whether in country or in a regional United States diplomatic facility, or for temporary occupancy by the mission in a facility pending acquisition of new buildings; (C) outline the potential for reduction or transfer of personnel or closure of missions if technology is adequately exploited for maximum efficiencies; (D) examine the possibility of creating regional missions in certain parts of the world; (E) in the case of diplomatic facilities that are part of the Special Embassy Program, report on the foreign policy objectives served by retaining such missions, balancing the importance of these objectives against the well-being of United States personnel; and (F) examine the feasibility of opening new regional outreach centers, modeled on the system used by the United States Embassy in Paris, France, with each center designed to operate-- (i) at no additional cost to the United States Government; (ii) with staff consisting of one or two Foreign Service officers currently assigned to the United States diplomatic mission in the country in which the center is located; and

(iii) in a region of the country with high gross domestic product (GDP), a high density population, and a media market that not only includes but extends beyond the region.

Section 301 of the Omnibus Diplomatic Security and Antiterrorism Act of 1986 (22 U.S.C. 4831) is amended to read as follows:

``SEC. 301. ACCOUNTABILITY REVIEW BOARDS.

``(a) In General.-- ``(1) Convening a board.--Except as provided in paragraph (2), in any case of serious injury, loss of life, or significant destruction of property at, or related to, a United States Government mission abroad, and in any case of a serious breach of security involving intelligence activities of a foreign government directed at a United States Government mission abroad, which is covered by the provisions of titles I through IV (other than a facility or installation subject to the control of a United States area military commander), the Secretary of State shall convene an Accountability Review Board (in this title referred to as the `Board'). The Secretary shall not convene a Board where the Secretary determines that a case clearly involves only causes unrelated to security. ``(2) Department of defense facilities and personnel.--The Secretary of State is not required to convene a Board in the case of an incident described in paragraph (1) that involves any facility, installation, or personnel of the Department of Defense with respect to which the Secretary has delegated operational control of overseas security functions to the Secretary of Defense pursuant to section 106 of this Act. In any such case, the Secretary of Defense shall conduct an appropriate inquiry. The Secretary of Defense shall report the findings and recommendations of such inquiry, and the action taken with respect to such recommendations, to the Secretary of State and Congress.

``(b) Deadlines for convening boards.-- ``(1) In general.--Except as provided in paragraph (2), the Secretary of State shall convene a Board not later than 60 days after the occurrence of an incident described in subsection (a)(1), except that such 60-day period may be extended for one additional 60-day period if the Secretary determines that the additional period is necessary for the convening of the Board. ``(2) Delay in cases involving intelligence activities.-- With respect to breaches of security involving intelligence activities, the Secretary of State may delay the establishment of a Board if, after consultation with the chairman of the Select Committee on Intelligence of the Senate and the chairman of the Permanent Select Committee on Intelligence of the House of Representatives, the Secretary determines that the establishment of a Board would compromise intelligence sources or methods. The Secretary shall promptly advise the chairmen of such committees of each determination pursuant to this paragraph to delay the establishment of a Board.

``(c) Notification to Congress.--Whenever the Secretary of State convenes a Board, the Secretary shall promptly inform the

chairman of the Committee on Foreign Relations of the Senate and the Speaker of the House of Representatives-- ``(1) that a Board has been convened; ``(2) of the membership of the Board; and ``(3) of other appropriate information about the Board.''.

Not later than six months after the date of the enactment of this Act, the Secretary of State, in consultation with the Secretary of the Treasury and the Attorney General, shall submit a report to the appropriate congressional committees on a proposed operational plan and site selection to expeditiously establish an International Law Enforcement Academy (ILEA) on the continent of Africa in order to increase training and cooperation on the continent in anti-terrorism and transnational crime fighting.

INTERPARLIAMENTARY GROUPS.

(a) Transatlantic Legislators' Dialogue.--Section 109(c) of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (22 U.S.C. 276 note) is amended by striking ``United States-European Community Interparliamentary Group'' and inserting ``Transatlantic Legislators' Dialogue (United States-European Union Interparliamentary Group)''. (b) NATO Parliamentary Assembly-- (1) In general.--The joint resolution entitled ``Joint Resolution to authorize participation by the United States in parliamentary conferences of the North Atlantic Treaty Organization'', approved July 11, 1956 (22 U.S.C. 1928a et seq.), is amended in sections 2, 3, and 4 (22 U.S.C. 1928b, 1928c, and 1928d, respectively) by striking ``North Atlantic Assembly'' each place it appears and inserting ``NATO Parliamentary Assembly''. (2) Conforming amendment.--Section 105(b) of the Legislative Branch Appropriation Act, 1961 (22 U.S.C. 276c-1) is amended by striking ``North Atlantic Assembly'' and inserting ``NATO Parliamentary Assembly''. (3) References.--In the case of any provision of law having application on or after May 31, 1999 (other than a provision of law specified in subparagraphs (A) or (B)), any reference contained in that provision to the North Atlantic Assembly shall, on and after that date, be considered to be a reference to the NATO Parliamentary Assembly.

TO ASSIST STATE AND LOCAL GOVERNMENTS.

(a) Authority.--The Commissioner of the United States section of the International Boundary and Water Commission may provide

technical tests, evaluations, information, surveys, or others similar services to State or local governments upon the request of such State or local government on a reimbursable basis. (b) Reimbursements.--Reimbursements shall be paid in advance of the goods or services ordered and shall be for the estimated or actual cost as determined by the United States section of the International Boundary and Water Commission. Proper adjustment of amounts paid in advance shall be made as determined by the United States section of the International Boundary and Water Commission on the basis of the actual cost of goods or services provided. Reimbursements received by the United States section of the International Boundary and Water Commission for providing services under this section shall be credited to the appropriation from which the cost of providing the services is charged.

Section 2(b) of the American-Mexican Chamizal Convention Act of 1964 (Public Law 88-300; 22 U.S.C. 277d-18(b)) is amended by inserting ``operations, maintenance, and'' after ``cost of''.

PARTICIPATION OF TAIWAN IN INTERNATIONAL ORGANIZATIONS.

(a) Reports Required.--Not later than 60 days after the date of enactment of this Act, and every 6 months thereafter for fiscal years 2000 and 2001, the Secretary of State shall submit to Congress a report in a classified and unclassified manner on the status of efforts by the United States Government to support-- (1) the membership of Taiwan in international organizations that do not require statehood as a prerequisite to such membership; and (2) the appropriate level of participation by Taiwan in international organizations that may require statehood as a prerequisite to full membership.

(b) Report Elements.--Each report under subsection (a) shall-- (1) set forth a comprehensive list of the international organizations in which the United States Government supports the membership or participation of Taiwan; (2) describe in detail the efforts of the United States Government to achieve the membership or participation of Taiwan in each organization listed; and (3) identify the obstacles to the membership or participation of Taiwan in each organization listed, including a list of any governments that do not support the membership or participation of Taiwan in each such organization.

INTERNATIONAL CRIMINAL COURT.

(a) Prohibition.--The United States shall not become a party to the International Criminal Court except pursuant to a treaty made under Article II, section 2, clause 2 of the Constitution of the United States on or after the date of enactment of this Act. (b) Prohibition.--None of the funds authorized to be appropriated by this or any other Act may be obligated for use by, or for support of, the International Criminal Court unless the United States has become a party to the Court pursuant to a treaty made under Article II, section 2, clause 2 of the Constitution

of the United States on or after the date of enactment of this Act. (c) International Criminal Court Defined.--In this section, the term ``International Criminal Court'' means the court established by the Rome Statute of the International Criminal Court, adopted by the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court on July 17, 1998.

CITIZENS TO THE INTERNATIONAL CRIMINAL COURT.

(a) Prohibition on Extradition.--None of the funds authorized to be appropriated or otherwise made available by this or any other Act may be used to extradite a United States citizen to a foreign country that is under an obligation to surrender persons to the International Criminal Court unless that foreign country confirms to the United States that applicable prohibitions on reextradition apply to such surrender or gives other satisfactory assurances to the United States that the country will not extradite or otherwise transfer that citizen to the International Criminal Court. (b) Prohibition on Consent to Extradition by Third Countries.--None of the funds authorized to be appropriated or otherwise made available by this or any other Act may be used to provide consent to the extradition or transfer of a United States citizen by a foreign country to a third country that is under an obligation to surrender persons to the International Criminal Court, unless the third country confirms to the United States that applicable prohibitions on reextradition apply to such surrender or gives other satisfactory assurances to the United States that the third country will not extradite or otherwise transfer that citizen to the International Criminal Court. (c) Definition.--In this section, the term ``International Criminal Court'' has the meaning given the term in section 705(c) of this Act.

Section 2505 of the Foreign Affairs Reform and Restructuring Act of 1998 (as contained in division G of Public Law 105-277) is amended-- (1) in subsection (a), by striking ``by this division for fiscal year 1999'' and inserting ``for the Department of State for fiscal year 2000 or 2001''; and (2) in subsection (d), by striking ``not later than April 1, 1999,'' and inserting ``on January 31 of the years 2000 and 2001 and July 31 of the years 2000 and 2001,''.

ENERGY AGENCY.

(a) Amendment to the United Nations Participation Act of 1945.-- Section 2(h) of the United Nations Participation Act of 1945 (22 U.S.C. 287(h)) is amended by adding at the end the following new sentence: ``The representative of the United States to the Vienna office of the United Nations shall also serve as representative of the United States to the International Atomic Energy Agency.''.

(b) Amendment to the IAEA Participation Act of 1957.--Section 2(a) of the International Atomic Energy Agency Participation Act of 1957 (22 U.S.C. 2021(a)) is amended by adding at the end the following new sentence: ``The Representative of the United States to the Vienna office of the United Nations shall also serve as representative of the United States to the Agency.''. (c) Effective Date.--The amendments made by subsections (a) and (b) shall apply to individuals appointed on or after the date of enactment of this Act.

Subtitle B--United Nations Activities

(a) Congressional Statement.--It shall be the policy of the United States to promote an end to the persistent inequity experienced by Israel in the United Nations whereby Israel is the only longstanding member of the organization to be denied acceptance into any of the United Nations regional blocs. (b) Policy on Abolition of Certain United Nations Groups.--It shall be the policy of the United States to seek the abolition of certain United Nations groups the existence of which is inimical to the ongoing Middle East peace process, those groups being the Special Committee to Investigate Israeli Practices Affecting the Human Rights of the Palestinian People and other Arabs of the Occupied Territories; the Committee on the Exercise of the Inalienable Rights of the Palestinian People; the Division for the Palestinian Rights; and the Division on Public Information on the Question of Palestine. (c) Annual Reports.--On January 15 of each year, the Secretary of State shall submit a report to the appropriate congressional committees (in classified or unclassified form as appropriate) on-- (1) actions taken by representatives of the United States to encourage the nations of the Western Europe and Others Group (WEOG) to accept Israel into their regional bloc; (2) other measures being undertaken, and which will be undertaken, to ensure and promote Israel's full and equal participation in the United Nations; and (3) steps taken by the United States under subsection (b) to secure abolition by the United Nations of groups described in that subsection.

(d) Annual Consultation.--At the time of the submission of each annual report under subsection (c), the Secretary of State shall consult with the appropriate congressional committees on specific responses received by the Secretary of State from each of the nations of the Western Europe and Others Group (WEOG) on their position concerning Israel's acceptance into their organization.

PEACEKEEPING OPERATIONS.

Chapter 6 of part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2348 et seq.) is amended by adding at the end the following:

``SEC. 554. DATA ON COSTS INCURRED IN SUPPORT OF UNITED NATIONS PEACEKEEPING OPERATIONS.

``(a) United States Costs.--The President shall annually provide to the Secretary General of the United Nations data regarding all costs incurred by the United States Department of Defense during the preceding year in support of all United Nations Security Council resolutions as reported to the Congress pursuant to section 8079 of the Department of Defense Appropriations Act, 1998. ``(b) United Nations Member Costs.--The President shall request that the United Nations compile and publish information concerning costs incurred by United Nations members in support of such resolutions.''.

STATES TO THE UNITED NATIONS.

The United Nations Participation Act of 1945 (22 U.S.C. 287 et seq.) is amended by adding at the end the following new section:

``SEC. 10. REIMBURSEMENT FOR GOODS AND SERVICES PROVIDED BY THE UNITED STATES TO THE UNITED NATIONS.

``(a) Requirement To Obtain Reimbursement.-- ``(1) In general.--Except as provided in paragraph (2), the President shall seek and obtain in a timely fashion a commitment from the United Nations to provide reimbursement to the United States from the United Nations whenever the United States Government furnishes assistance pursuant to the provisions of law described in subsection (c)-- ``(A) to the United Nations when the assistance is designed to facilitate or assist in carrying out an assessed peacekeeping operation; ``(B) for any United Nations peacekeeping operation that is authorized by the United Nations Security Council under Chapter VI or Chapter VII of the United Nations Charter and paid for by peacekeeping or regular budget assessment of the United Nations members; or ``(C) to any country participating in any operation authorized by the United Nations Security Council under Chapter VI or Chapter VII of the United Nations Charter and paid for by peacekeeping assessments of United Nations members when the assistance is designed to facilitate or assist the participation of that country in the operation. ``(2) Exceptions.-- ``(A) In general.--The requirement in paragraph (1) shall not apply to-- ``(i) goods and services provided to the United States Armed Forces; ``(ii) assistance having a value of less than $3,000,000 per fiscal year per operation; ``(iii) assistance furnished before the date of enactment of this section; ``(iv) salaries and expenses of civilian police and other civilian and military monitors where United Nations policy is to require payment by contributing members for similar assistance to United Nations peacekeeping operations; or

``(v) any assistance commitment made before the date of enactment of this section. ``(B) Deployments of united states military forces.-- The requirements of subsection (d)(1)(B) shall not apply to the deployment of United States military forces when the President determines that such deployment is important to the security interests of the United States. The cost of such deployment shall be included in the data provided under section 554 of the Foreign Assistance Act of 1961. ``(3) Form and amount.-- ``(A) Amount.--The amount of any reimbursement under this subsection shall be determined at the usual rate established by the United Nations. ``(B) Form.--Reimbursement under this subsection may include credits against the United States assessed contributions for United Nations peacekeeping operations, if the expenses incurred by any United States department or agency providing the assistance have first been reimbursed.

``(b) Treatment of Reimbursements.-- ``(1) Credit.--The amount of any reimbursement paid the United States under subsection (a) shall be credited to the current applicable appropriation, fund, or account of the United States department or agency providing the assistance for which the reimbursement is paid. ``(2) Availability.--Amounts credited under paragraph (1) shall be merged with the appropriations, or with appropriations in the fund or account, to which credited and shall be available for the same purposes, and subject to the same conditions and limitations, as the appropriations with which merged.

``(c) Covered Assistance.--Subsection (a) applies to assistance provided under the following provisions of law: ``(1) Sections 6 and 7 of this Act. ``(2) Sections 451, 506(a)(1), 516, 552(c), and 607 of the Foreign Assistance Act of 1961. ``(3) Any other provisions of law pursuant to which assistance is provided by the United States to carry out the mandate of an assessed United Nations peacekeeping operation.

``(d) Waiver.-- ``(1) Authority.-- ``(A) In general.--The President may authorize the furnishing of assistance covered by this section without regard to subsection (a) if the President determines, and so notifies in writing the Committee on Foreign Relations of the Senate and the Speaker of the House of Representatives, that to do so is important to the security interests of the United States. ``(B) Congressional notification.--When exercising the authorities of subparagraph (A), the President shall notify the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives in accordance with the procedures applicable to reprogramming notifications under section 634A of the Foreign Assistance Act of 1961. ``(2) Congressional review.--Notwithstanding a notice under paragraph (1) with respect to assistance covered by this

section, subsection (a) shall apply to the furnishing of the assistance if, not later than 15 calendar days after receipt of a notification under that paragraph, the Congress enacts a joint resolution disapproving the determination of the President contained in the notification. ``(3) Senate procedures.--Any joint resolution described in paragraph (2) shall be considered in the Senate in accordance with the provisions of section 601(b) of the International Security Assistance and Arms Export Control Act of 1976.

``(e) Relationship to Other Reimbursement Authority.--Nothing in this section shall preclude the President from seeking reimbursement for assistance covered by this section that is in addition to the reimbursement sought for the assistance under subsection (a). ``(f) Definition.--In this section, the term `assistance' includes personnel, services, supplies, equipment, facilities, and other assistance if such assistance is provided by the Department of Defense or any other United States Government agency.''.

PEACEKEEPING OPERATIONS.

(a) Codification.--Section 4 of the United Nations Participation Act of 1945 (22 U.S.C. 287b) is amended-- (1) in subsection (a), by striking the second sentence; and (2) by striking subsection (e) and inserting the following:

``(e) Consultations and Reports on United Nations Peacekeeping Operations.-- ``(1) Consultations.--Each month the President shall consult with Congress on the status of United Nations peacekeeping operations. ``(2) Information to be provided.--In connection with such consultations, the following information shall be provided each month to the designated congressional committees: ``(A) With respect to ongoing United Nations peacekeeping operations, the following: ``(i) A list of all resolutions of the United Nations Security Council anticipated to be voted on during such month that would extend or change the mandate of any United Nations peacekeeping operation. ``(ii) For each such operation, any changes in the duration, mandate, and command and control arrangements that are anticipated as a result of the adoption of the resolution. ``(iii) An estimate of the total cost to the United Nations of each such operation for the period covered by the resolution, and an estimate of the amount of that cost that will be assessed to the United States. ``(iv) Any anticipated significant changes in United States participation in or support for each such operation during the period covered by the resolution (including the provision of facilities, training, transportation, communication, and logistical support, but not including intelligence activities reportable under title V of the National Security Act of 1947 (50 U.S.C. 413 et seq.)), and the estimated costs to the United States of such changes.

``(B) With respect to each new United Nations peacekeeping operation that is anticipated to be authorized by a Security Council resolution during such month, the following information for the period covered by the resolution: ``(i) The anticipated duration, mandate, and command and control arrangements of such operation, the planned exit strategy, and the vital national interest to be served. ``(ii) An estimate of the total cost to the United Nations of the operation, and an estimate of the amount of that cost that will be assessed to the United States. ``(iii) A description of the functions that would be performed by any United States Armed Forces participating in or otherwise operating in support of the operation, an estimate of the number of members of the Armed Forces that will participate in or otherwise operate in support of the operation, and an estimate of the cost to the United States of such participation or support. ``(iv) A description of any other United States assistance to or support for the operation (including the provision of facilities, training, transportation, communication, and logistical support, but not including intelligence activities reportable under title V of the National Security Act of 1947 (50 U.S.C. 413 et seq.)), and an estimate of the cost to the United States of such assistance or support. ``(v) A reprogramming of funds pursuant to section 34 of the State Department Basic Authorities Act of 1956, submitted in accordance with the procedures set forth in such section, describing the source of funds that will be used to pay for the cost of the new United Nations peacekeeping operation, provided that such notification shall also be submitted to the Committee on Appropriations of the House of Representatives and the Committee on Appropriations of the Senate. ``(3) Form and timing of information.-- ``(A) Form.--The President shall submit information under clauses (i) and (iii) of paragraph (2)(A) in writing. ``(B) Timing.-- ``(i) Ongoing operations.--The information required under paragraph (2)(A) for a month shall be submitted not later than the 10th day of the month. ``(ii) New operations.--The information required under paragraph (2)(B) shall be submitted in writing with respect to each new United Nations peacekeeping operation not less than 15 days before the anticipated date of the vote on the resolution concerned unless the President determines that exceptional circumstances prevent compliance with the requirement to report 15 days in advance. If the President makes such a determination, the information required under paragraph (2)(B) shall be submitted as far in advance of the vote as is practicable. ``(4) New united nations peacekeeping operation defined.--As used in paragraph (2), the term `new United

Nations peacekeeping operation' includes any existing or otherwise ongoing United Nations peacekeeping operation-- ``(A) where the authorized force strength is to be expanded; ``(B) that is to be authorized to operate in a country in which it was not previously authorized to operate; or ``(C) the mandate of which is to be changed so that the operation would be engaged in significant additional or significantly different functions. ``(5) Notification and quarterly reports regarding united states assistance.-- ``(A) Notification of certain assistance.-- ``(i) In general.--The President shall notify the designated congressional committees at least 15 days before the United States provides any assistance to the United Nations to support peacekeeping operations. ``(ii) Exception.--This subparagraph does not apply to-- ``(I) assistance having a value of less than $3,000,000 in the case of nonreimbursable assistance or less than $14,000,000 in the case of reimbursable assistance; or ``(II) assistance provided under the emergency drawdown authority of sections 506(a)(1) and 552(c)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2318(a)(1) and 2348a(c)(2)). ``(B) Quarterly reports.-- ``(i) In general.--The President shall submit quarterly reports to the designated congressional committees on all assistance provided by the United States during the preceding calendar quarter to the United Nations to support peacekeeping operations. ``(ii) Matters included.--Each report under this subparagraph shall describe the assistance provided for each such operation, listed by category of assistance. ``(iii) Fourth quarter report.--The report under this subparagraph for the fourth calendar quarter of each year shall be submitted as part of the annual report required by subsection (d) and shall include cumulative information for the preceding calendar year.

``(f) Designated Congressional Committees.--In this section, the term `designated congressional committees' means the Committee on Foreign Relations and the Committee on Appropriations of the Senate and the Committee on International Relations and the Committee on Appropriations of the House of Representatives.''. (2) Conforming repeal.--Subsection (a) of section 407 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (Public Law 103-236; 22 U.S.C. 287b note; 108 Stat. 448) is repealed.

(b) Relationship to Other Notice Requirements.--Section 4 of the United Nations Participation Act of 1945, as amended by subsection (a), is further amended by adding at the end the following:

``(g) Relationship to Other Notification Requirements.--Nothing in this section is intended to alter or supersede any notification requirement with respect to peacekeeping operations that is established under any other provision of law.''.

ENGAGED IN ESTABLISHMENT OR ENFORCEMENT OF FORCED ABORTION OR STERILIZATION POLICY.

(a) Denial of Entry.--Notwithstanding any other provision of law, the Secretary of State may not issue any visa to, and the Attorney General may not admit to the United States, any foreign national whom the Secretary finds, based on credible and specific information, to have been directly involved in the establishment or enforcement of population control policies forcing a woman to undergo an abortion against her free choice or forcing a man or woman to undergo sterilization against his or her free choice, unless the Secretary has substantial grounds for believing that the foreign national has discontinued his or her involvement with, and support for, such policies. (b) Exceptions.--The prohibitions in subsection (a) shall not apply in the case of a foreign national who is a head of state, head of government, or cabinet level minister. (c) Waiver.--The Secretary of State may waive the prohibitions in subsection (a) with respect to a foreign national if the Secretary-- (1) determines that it is important to the national interest of the United States to do so; and (2) provides written notification to the appropriate congressional committees containing a justification for the waiver.

(a) Section 1422(b)(3)(B) of the Foreign Affairs Reform and Restructuring Act (as contained in division G of Public Law 105-277; 112 Stat. 2681-792) is amended by striking ``divisionAct'' and inserting ``division''. (b) Section 1002(a) of the Foreign Affairs Reform and Restructuring Act (as contained in division G of Public Law 105-277; 112 Stat. 2681- 762) is amended by striking paragraph (3). (c) The table of contents of division G of Public Law 105-277 (112 Stat. 2681-762) is amended by striking ``division__'' and inserting ``division g''. (d) Section 305 of Public Law 97-446 (19 U.S.C 2604) is amended in the first sentence by striking ``Secretary'' the first place it appears and inserting ``Secretary, in consultation with the Secretary of State,''.

(a) Reports Required.-- (1) In general.--Not later than each of the dates specified in paragraph (2), the Secretary of State shall submit a report to the appropriate congressional committees describing specific

steps being taken by the Government of Morocco and by the Popular Front for the Liberation of Saguia el-Hamra and Rio de Oro (POLISARIO) to ensure that a free, fair, and transparent referendum in which the people of the Western Sahara will choose between independence and integration with Morocco will be held by July 2000. (2) Deadlines for submission of reports.--The dates referred to in paragraph (1) are January 1, 2000, and June 1, 2000.

(b) Report Elements.--The report shall include-- (1) a description of preparations for the referendum, including the extent to which free access to the territory for independent international organizations, including election observers and international media, will be guaranteed; (2) a description of current efforts by the Department of State to ensure that a referendum will be held by July 2000; (3) an assessment of the likelihood that the July 2000 date will be met; (4) a description of obstacles, if any, to the voter registration process and other preparations for the referendum, and efforts being made by the parties and the United States Government to overcome those obstacles; and (5) an assessment of progress being made in the repatriation process.

1989.

The PLO Commitments Compliance Act of 1989 is amended -- (1) in section 804(b), by striking ``In conjunction with each written policy justification required under section 604(b)(1) of the Middle East Peace Facilitation Act of 1995 or every'' and inserting ``Every''; (2) in section 804(b)-- (A) by striking ``and'' at the end of paragraph (9); (B) by striking the period at the end of paragraph (10); and (C) by adding at the end the following new paragraphs: ``(11) a statement on the effectiveness of end-use monitoring of international or United States aid being provided to the Palestinian Authority, Palestinian Liberation Organization, or the Palestinian Legislative Council, or to any other agent or instrumentality of the Palestinian Authority, on Palestinian efforts to comply with international accounting standards and on enforcement of anti-corruption measures; and ``(12) a statement on compliance by the Palestinian Authority with the democratic reforms, with specific details regarding the separation of powers called for between the executive and Legislative Council, the status of legislation passed by the Legislative Council and sent to the executive, the support of the executive for local and municipal elections, the status of freedom of the press, and of the ability of the press to broadcast debate from within the Legislative Council and about the activities of the Legislative Council.''.

WERE KILLED AND RELATED MATTERS.

(a) In General.--Not later than 6 months after the date of enactment of this Act and every 6 months thereafter until October 1, 2001, the Secretary of State shall prepare and submit a report, with a classified annex as necessary, to the appropriate congressional committees regarding terrorist attacks in Israel, in territory administered by Israel, and in territory administered by the Palestinian Authority. The report shall contain the following information: (1) A list of formal commitments the Palestinian Authority has made to combat terrorism. (2) A list of terrorist attacks, occurring between September 13, 1993 and the date of the report, against United States citizens in Israel, in territory administered by Israel, or in territory administered by the Palestinian Authority, including-- (A) a list of all citizens of the United States killed or injured in such attacks; (B) the date of each attack and the total number of people killed or injured in each attack; (C) the person or group claiming responsibility for the attack and where such person or group has found refuge or support; (D) a list of suspects implicated in each attack and the nationality of each suspect, including information on-- (i) which suspects are in the custody of the Palestinian Authority and which suspects are in the custody of Israel; (ii) which suspects are still at large in areas controlled by the Palestinian Authority or Israel; and (iii) the whereabouts (or suspected whereabouts) of suspects implicated in each attack. (3) Of the suspects implicated in the attacks described in paragraph (2) and detained by Palestinian or Israeli authorities, information on-- (A) the date each suspect was incarcerated; (B) whether any suspects have been released, the date of such release, and whether any released suspect was implicated in subsequent acts of terrorism; and (C) the status of each case pending against a suspect, including information on whether the suspect has been indicted, prosecuted, or convicted by the Palestinian Authority or Israel. (4) The policy of the Department of State with respect to offering rewards for information on terrorist suspects, including any information on whether a reward has been posted for suspects involved in terrorist attacks listed in the report. (5) A list of each request by the United States for assistance in investigating terrorist attacks listed in the report, a list of each request by the United States for the transfer of terrorist suspects from the Palestinian Authority and Israel since September 13, 1993, and the response to each request from the Palestinian Authority and Israel. (6) A description of efforts made by United States officials since September 13, 1993 to bring to justice perpetrators of terrorist acts against United States citizens as listed in the report.

(7) A list of any terrorist suspects in these cases who are members of Palestinian police or security forces, the Palestine Liberation Organization, or any Palestinian governing body. (8) A list of all United States citizens killed or injured in terrorist attacks in Israel or in territory administered by Israel between 1950 and September 13, 1993, to include in each case, where such information is reasonably available, any stated claim of responsibility and the resolution or disposition of each case, except that this list shall be submitted only once with the initial report required under this section unless additional relevant information on these cases becomes available.

(b) Consultation with Other Departments.--The Secretary of State shall, in preparing the report required by this section, consult and coordinate with all other Government officials who have information necessary to complete the report. Nothing contained in this section shall require the disclosure, on a classified or unclassified basis, of information that would jeopardize sensitive sources and methods or other vital national security interests or jeopardize ongoing criminal investigations or proceedings. (c) Initial Report.--Except as provided in subsection (a)(8), the initial report filed under this section shall cover the period between September 13, 1993 and the date of the report.

GENOCIDE.

(a) Section 116 of Foreign Assistance Act of 1961.--Section 116(d) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151n(d)) is amended-- (1) in paragraph (6), by striking ``and'' at the end; (2) in paragraph (7), by striking the period at the end and inserting ``and''; and (3) by adding at the end the following: ``(8) wherever applicable, consolidated information regarding the commission of war crimes, crimes against humanity, and evidence of acts that may constitute genocide (as defined in article 2 of the Convention on the Prevention and Punishment of the Crime of Genocide and modified by the United States instrument of ratification to that convention and section 2(a) of the Genocide Convention Implementation Act of 1987).''.

(b) Section 502B of the Foreign Assistance Act of 1961.--Section 502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2304(b)) is amended by inserting after the first sentence the following: ``Wherever applicable, such report shall include consolidated information regarding the commission of war crimes, crimes against humanity, and evidence of acts that may constitute genocide (as defined in article 2 of the Convention on the Prevention and Punishment of the Crime of Genocide and modified by the United States instrument of ratification to that convention and section 2(a) of the Genocide Convention Implementation Act of 1987).''.

Subtitle B--North Korea Threat Reduction

This subtitle may be cited as the ``North Korea Threat Reduction Act of 1999''.

(a) In General.--Notwithstanding any other provision of law or any international agreement, no agreement for cooperation (as defined in sec. 11 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2014 b.)) between the United States and North Korea may become effective, no license may be issued for export directly or indirectly to North Korea of any nuclear material, facilities, components, or other goods, services, or technology that would be subject to such agreement, and no approval may be given for the transfer or retransfer directly or indirectly to North Korea of any nuclear material, facilities, components, or other goods, services, or technology that would be subject to such agreement, until the President determines and reports to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate that-- (1) North Korea has come into full compliance with its safeguards agreement with the IAEA (INFCIRC/403), and has taken all steps that have been deemed necessary by the IAEA in this regard; (2) North Korea has permitted the IAEA full access to all additional sites and all information (including historical records) deemed necessary by the IAEA to verify the accuracy and completeness of North Korea's initial report of May 4, 1992, to the IAEA on all nuclear sites and material in North Korea; (3) North Korea is in full compliance with its obligations under the Agreed Framework; (4) North Korea has consistently taken steps to implement the Joint Declaration on Denuclearization, and is in full compliance with its obligations under numbered paragraphs 1, 2, and 3 of the Joint Declaration on Denuclearization (excluding in the case of numbered paragraph 3 facilities frozen pursuant to the Agreed Framework); (5) North Korea does not have uranium enrichment or nuclear reprocessing facilities (excluding facilities frozen pursuant to the Agreed Framework), and is making no significant progress toward acquiring or developing such facilities; (6) North Korea does not have nuclear weapons and is making no significant effort to acquire, develop, test, produce, or deploy such weapons; and (7) the transfer to North Korea of key nuclear components, under the proposed agreement for cooperation with North Korea and in accordance with the Agreed Framework, is in the national interest of the United States.

(b) Construction.--The restrictions contained in subsection (a) shall apply in addition to all other applicable procedures, requirements, and restrictions contained in the Atomic Energy Act of 1954 and other laws.

In this subtitle: (1) Agreed framework.--The term ``Agreed Framework'' means the ``Agreed Framework Between the United States of America and the Democratic People's Republic of Korea'', signed in Geneva on October 21, 1994, and the Confidential Minute to that Agreement. (2) IAEA.--The term ``IAEA'' means the International Atomic Energy Agency. (3) North korea.--The term ``North Korea'' means the Democratic People's Republic of Korea. (4) Joint declaration on denuclearization.--The term ``Joint Declaration on Denuclearization'' means the Joint Declaration on the Denuclearization of the Korean Peninsula, issued by the Republic of Korea and the Democratic People's Republic of Korea on January 1, 1992.

Subtitle C--People's Republic of China

Congress makes the following findings: (1) Congress concurs in the conclusions of the Department of State, as set forth in the Country Reports on Human Rights Practices for 1998, on human rights in the People's Republic of China in 1998 as follows: (A) ``The People's Republic of China (PRC) is an authoritarian state in which the Chinese Communist Party (CCP) is the paramount source of power.... Citizens lack both the freedom peacefully to express opposition to the party-led political system and the right to change their national leaders or form of government.''. (B) ``The Government continued to commit widespread and well-documented human rights abuses, in violation of internationally accepted norms. These abuses stemmed from the authorities' very limited tolerance of public dissent aimed at the Government, fear of unrest, and the limited scope or inadequate implementation of laws protecting basic freedoms.''. (C) ``Abuses included instances of extrajudicial killings, torture and mistreatment of prisoners, forced confessions, arbitrary arrest and detention, lengthy incommunicado detention, and denial of due process.''. (D) ``Prison conditions at most facilities remained harsh.... The Government infringed on citizens' privacy rights. The Government continued restrictions on freedom of speech and of the press, and tightened these toward the end of the year. The Government severely restricted freedom of assembly, and continued to restrict freedom of association, religion, and movement.''. (E) ``Discrimination against women, minorities, and the disabled; violence against women, including coercive family planning practices--which sometimes include forced abortion and forced sterilization; prostitution, trafficking in women and children, and the abuse of children all are problems.''.

(F) ``The Government continued to restrict tightly worker rights, and forced labor remains a problem.''. (G) ``Serious human rights abuses persisted in minority areas, including Tibet and Xinjiang, where restrictions on religion and other fundamental freedoms intensified.''. (H) ``Unapproved religious groups, including Protestant and Catholic groups, continued to experience varying degrees of official interference and repression.''. (I) ``Although the Government denies that it holds political or religious prisoners, and argues that all those in prison are legitimately serving sentences for crimes under the law, an unknown number of persons, estimated at several thousand, are detained in violation of international human rights instruments for peacefully expressing their political, religious, or social views.''. (2) In addition to the State Department, credible press reports and human rights organizations have documented an intense crackdown on political activists by the Government of the People's Republic of China, involving the harassment, detainment, arrest, and imprisonment of dozens of activists. (3) The People's Republic of China, as a member of the United Nations, is expected to abide by the provisions of the Universal Declaration of Human Rights. (4) The People's Republic of China is a party to numerous international human rights conventions, including the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, and is a signatory to the International Covenant on Civil and Political Rights and the Covenant on Economic, Social, and Cultural Rights.

ON POLITICAL, ECONOMIC, AND HUMAN RIGHTS MATTERS IN THE PEOPLE'S REPUBLIC OF CHINA.

Of the amounts authorized to be appropriated for the Department of State by this Act, $2,200,000 for fiscal year 2000 and $2,200,000 for fiscal year 2001 shall be made available only to support additional personnel in the United States Embassies in Beijing and Kathmandu, as well as the American consulates in Guangzhou, Shanghai, Shenyang, Chengdu, and Hong Kong, in order to monitor political and social conditions, with particular emphasis on respect for, and violations of, internationally recognized human rights, in the People's Republic of China.

CHINA.

(a) Requirement.--The Secretary of State shall establish and maintain a registry which shall, to the extent practicable, provide information on all political prisoners, prisoners of conscience, and prisoners of faith in the People's Republic of China. The registry shall be known as the ``Prisoner Information Registry for the People's Republic of China''. (b) Information in Registry.--The registry required by subsection (a) shall include information on the charges, judicial processes, administrative actions, uses of forced labor, incidents of torture, lengths of imprisonment, physical and health conditions, and other matters associated with the incarceration of prisoners in the People's Republic of China referred to in that subsection.

(c) Availability of Funds.--The Secretary may make a grant to nongovernmental organizations currently engaged in monitoring activities regarding political prisoners in the People's Republic of China in order to assist in the establishment and maintenance of the registry required by subsection (a).

This title may be cited as the ``United Nations Reform Act of 1999''.

In this title: (1) Appropriate congressional committees.--The term ``appropriate congressional committees'' means the Committee on Foreign Relations and the Committee on Appropriations of the Senate and the Committee on International Relations and the Committee on Appropriations of the House of Representatives. (2) Designated specialized agency defined.--The term ``designated specialized agency'' means the International Labor Organization, the World Health Organization, and the Food and Agriculture Organization. (3) General assembly.--The term ``General Assembly'' means the General Assembly of the United Nations. (4) Secretary general.--The term ``Secretary General'' means the Secretary General of the United Nations. (5) Security council.--The term ``Security Council'' means the Security Council of the United Nations. (6) United nations member.--The term ``United Nations member'' means any country that is a member of the United Nations. (7) United nations peacekeeping operation.--The term ``United Nations peacekeeping operation'' means any United Nations-led operation to maintain or restore international peace or security that-- (A) is authorized by the Security Council; and (B) is paid for from assessed contributions of United Nations members that are made available for peacekeeping activities.

Subtitle B--Arrearages to the United Nations

CHAPTER 1--AUTHORIZATION OF APPROPRIATIONS; OBLIGATION AND EXPENDITURE OF FUNDS

(a) Authorization.-- (1) Fiscal year 1998.--

(A) Regular assessments.--Amounts appropriated by title IV of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1998 (Public Law 105-119), under the heading ``Contributions to International Organizations'', are hereby authorized to be appropriated and shall be available for obligation and expenditure subject to the provisions of this title. (B) Peacekeeping assessments.--Amounts appropriated by title IV of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1998 (Public Law 105-119), under the heading ``Contributions for International Peacekeeping Activities'', are hereby authorized to be appropriated and shall be available for obligation and expenditure subject to the provisions of this title. (2) Fiscal year 1999.--Amounts appropriated under the heading ``Arrearage Payments'' in title IV of the Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1999 (as contained in section 101(b) of division A of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999; Public Law 105-277), are hereby authorized to be appropriated and shall be available for obligation and expenditure subject to the provisions of this title. (3) Fiscal year 2000.--There are authorized to be appropriated to the Department of State for payment of arrearages owed by the United States described in subsection (b) as of September 30, 1997, $244,000,000 for fiscal year 2000. Amounts appropriated pursuant to this paragraph shall be available for obligation and expenditure subject to the provisions of this title.

(b) Limitation.--Amounts made available under subsection (a) are authorized to be available only-- (1) to pay the United States share of assessments for the regular budget of the United Nations; (2) to pay the United States share of United Nations peacekeeping operations; (3) to pay the United States share of United Nations specialized agencies; and (4) to pay the United States share of other international organizations.

(c) Availability of Funds.--Amounts appropriated pursuant to subsection (a) are authorized to remain available until expended. (d) Statutory Construction.--For purposes of payments made using funds made available under subsection (a), section 404(b)(2) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (Public Law 103-236) shall not apply to United Nations peacekeeping operation assessments received by the United States prior to October 1, 1995.

(a) In General.--Funds made available pursuant to section 911 may be obligated and expended only if the requirements of subsections (b) and (c) of this section are satisfied. (b) Obligation and Expenditure Upon Satisfaction of Certification Requirements.--Subject to subsections (e) and (f), funds made available pursuant to section 911 may be obligated and

expended only in the following allotments and upon the following certifications: (1) Amounts made available for fiscal year 1998, upon the certification described in section 921. (2) Amounts made available for fiscal year 1999, upon the certification described in section 931. (3) Amounts authorized to be appropriated for fiscal year 2000, upon the certification described in section 941.

(c) Advance Congressional Notification.--Funds made available pursuant to section 911 may be obligated and expended only if the appropriate certification has been submitted to the appropriate congressional committees 30 days prior to the payment of the funds. (d) Transmittal of Certifications.--Certifications made under this chapter shall be transmitted by the Secretary of State to the appropriate congressional committees. (e) Waiver Authority With Respect to Fiscal Year 1999 Funds.-- (1) In general.--Subject to paragraph (3) and notwithstanding subsection (b), funds made available under section 911 for fiscal year 1999 may be obligated or expended pursuant to subsection (b)(2) even if the Secretary of State cannot certify that the condition described in section 931(b)(1) has been satisfied. (2) Requirements.-- (A) In general.--The authority to waive the condition described in paragraph (1) of this subsection may be exercised only if the Secretary of State-- (i) determines that substantial progress towards satisfying the condition has been made and that the expenditure of funds pursuant to that paragraph is important to the interests of the United States; and (ii) has notified, and consulted with, the appropriate congressional committees prior to exercising the authority. (B) Effect on subsequent certification.--If the Secretary of State exercises the authority of paragraph (1), the condition described in that paragraph shall be deemed to have been satisfied for purposes of making any certification under section 941. (3) Additional requirement.--If the authority to waive a condition under paragraph (1)(A) is exercised, the Secretary of State shall notify the United Nations that the Congress does not consider the United States obligated to pay, and does not intend to pay, arrearages that have not been included in the contested arrearages account or other mechanism described in section 931(b)(1).

(f) Waiver Authority With Respect to Fiscal Year 2000 Funds.-- (1) In general.--Subject to paragraph (2) and notwithstanding subsection (b), funds made available under section 911 for fiscal year 2000 may be obligated or expended pursuant to subsection (b)(3) even if the Secretary of State cannot certify that the condition described in paragraph (1) of section 941(b) has been satisfied. (2) Requirements.--

(A) In general.--The authority to waive a condition under paragraph (1) may be exercised only if the Secretary of State has notified, and consulted with, the appropriate congressional committees prior to exercising the authority. (B) Effect on subsequent certification.--If the Secretary of State exercises the authority of paragraph (1) with respect to a condition, such condition shall be deemed to have been satisfied for purposes of making any certification under section 941.

UNITED STATES.

(a) Forgiveness of Indebtedness.--Subject to subsection (b), the President is authorized to forgive or reduce any amount owed by the United Nations to the United States as a reimbursement, including any reimbursement payable under the Foreign Assistance Act of 1961 or the United Nations Participation Act of 1945. (b) Limitations.-- (1) Total amount.--The total of amounts forgiven or reduced under subsection (a) may not exceed $107,000,000. (2) Relation to united states arrearages.--Amounts shall be forgiven or reduced under this section only to the same extent as the United Nations forgives or reduces amounts owed by the United States to the United Nations as of September 30, 1997.

(c) Requirements.--The authority in subsection (a) shall be available only to the extent and in the amounts provided in advance in appropriations Acts. (d) Congressional Notification.--Before exercising any authority in subsection (a), the President shall notify the appropriate congressional committees in accordance with the same procedures as are applicable to reprogramming notifications under section 634A of the Foreign Assistance Act of 1961 (22 U.S.C. 2394-1). (e) Effective Date.--This section shall take effect on the date a certification is transmitted to the appropriate congressional committees under section 931.

CHAPTER 2--UNITED STATES SOVEREIGNTY

(a) Contents of Certification.--A certification described in this section is a certification by the Secretary of State that the following conditions are satisfied: (1) Supremacy of the united states constitution.--No action has been taken by the United Nations or any of its specialized or affiliated agencies that requires the United States to violate the United States Constitution or any law of the United States. (2) No united nations sovereignty.--Neither the United Nations nor any of its specialized or affiliated agencies-- (A) has exercised sovereignty over the United States; or (B) has taken any steps that require the United States to cede sovereignty. (3) No united nations taxation.--

(A) No legal authority.--Except as provided in subparagraph (D), neither the United Nations nor any of its specialized or affiliated agencies has the authority under United States law to impose taxes or fees on United States nationals. (B) No taxes or fees.--Except as provided in subparagraph (D), a tax or fee has not been imposed on any United States national by the United Nations or any of its specialized or affiliated agencies. (C) No taxation proposals.--Except as provided in subparagraph (D), neither the United Nations nor any of its specialized or affiliated agencies has, on or after October 1, 1996, officially approved any formal effort to develop, advocate, or promote any proposal concerning the imposition of a tax or fee on any United States national in order to raise revenue for the United Nations or any such agency. (D) Exception.--This paragraph does not apply to-- (i) fees for publications or other kinds of fees that are not tantamount to a tax on United States citizens; (ii) the World Intellectual Property Organization; or (iii) the staff assessment costs of the United Nations and its specialized or affiliated agencies. (4) No standing army.--The United Nations has not, on or after October 1, 1996, budgeted any funds for, nor taken any official steps to develop, create, or establish any special agreement under Article 43 of the United Nations Charter to make available to the United Nations, on its call, the armed forces of any member of the United Nations. (5) No interest fees.--The United Nations has not, on or after October 1, 1996, levied interest penalties against the United States or any interest on arrearages on the annual assessment of the United States, and neither the United Nations nor its specialized agencies have, on or after October 1, 1996, amended their financial regulations or taken any other action that would permit interest penalties to be levied against the United States or otherwise charge the United States any interest on arrearages on its annual assessment. (6) United states real property rights.--Neither the United Nations nor any of its specialized or affiliated agencies has exercised authority or control over any United States national park, wildlife preserve, monument, or real property, nor has the United Nations nor any of its specialized or affiliated agencies implemented plans, regulations, programs, or agreements that exercise control or authority over the private real property of United States citizens located in the United States without the approval of the property owner. (7) Termination of borrowing authority.-- (A) Prohibition on authorization of external borrowing.--On or after the date of enactment of this Act, neither the United Nations nor any specialized agency of the United Nations has amended its financial regulations to permit external borrowing. (B) Prohibition of united states payment of interest costs.--The United States has not, on or after October 1, 1984, paid its share of any interest costs made

known to or identified by the United States Government for loans incurred, on or after October 1, 1984, by the United Nations or any specialized agency of the United Nations through external borrowing.

(b) Transmittal.--The Secretary of State may transmit a certification under subsection (a) at any time during fiscal year 1998 or thereafter if the requirements of the certification are satisfied.

CHAPTER 3--REFORM OF ASSESSMENTS AND UNITED NATIONS PEACEKEEPING OPERATIONS

(a) In General.--A certification described in this section is a certification by the Secretary of State that the conditions in subsection (b) are satisfied. Such certification shall not be made by the Secretary if the Secretary determines that any of the conditions set forth in section 921 are no longer satisfied. (b) Conditions.--The conditions under this subsection are the following: (1) Contested arrearages.--The United Nations has established an account or other appropriate mechanism with respect to all United States arrearages incurred before the date of enactment of this Act with respect to which payments are not authorized by this Act, and the failure to pay amounts specified in the account does not affect the application of Article 19 of the Charter of the United Nations. The account established under this paragraph may be referred to as the ``contested arrearages account''. (2) Limitation on assessed share of budget for united nations peacekeeping operations.--The assessed share of the budget for each assessed United Nations peacekeeping operation does not exceed 25 percent for any single United Nations member. (3) Limitation on assessed share of regular budget.--The share of the total of all assessed contributions for the regular budget of the United Nations does not exceed 22 percent for any single United Nations member.

CHAPTER 4--BUDGET AND PERSONNEL REFORM

(a) In General.-- (1) In general.--Except as provided in paragraph (2), a certification described in this section is a certification by the Secretary of State that the conditions in subsection (b) are satisfied. (2) Specified certification.--A certification described in this section is also a certification that, with respect to the United Nations or a particular designated specialized agency, the conditions in subsection (b)(4) applicable to that organization are satisfied, regardless of whether the conditions in subsection (b)(4) applicable to any other organization are satisfied, if the other conditions in subsection (b) are satisfied. (3) Effect of specified certification.--Funds made available under section 912(b)(3) upon a certification made under this section with respect to the United Nations or a particular designated specialized agency shall be limited to

that portion of the funds available under that section that is allocated for the organization with respect to which the certification is made and for any other organization to which none of the conditions in subsection (b) apply. (4) Limitation.--A certification described in this section shall not be made by the Secretary if the Secretary determines that any of the conditions set forth in sections 921 and 931 are no longer satisfied.

(b) Conditions.--The conditions under this subsection are the following: (1) Limitation on assessed share of regular budget.--The share of the total of all assessed contributions for the regular budget of the United Nations, or any designated specialized agency of the United Nations, does not exceed 20 percent for any single United Nations member. (2) Inspectors general for certain organizations.-- (A) Establishment of offices.--Each designated specialized agency has established an independent office of inspector general to conduct and supervise objective audits, inspections, and investigations relating to the programs and operations of the organization. (B) Appointment of inspectors general.--The Director General of each designated specialized agency has appointed an inspector general, with the approval of the member states, and that appointment was made principally on the basis of the appointee's integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. (C) Assigned functions.--Each inspector general appointed under subparagraph (A) is authorized to-- (i) make investigations and reports relating to the administration of the programs and operations of the agency concerned; (ii) have access to all records, documents, and other available materials relating to those programs and operations of the agency concerned; and (iii) have direct and prompt access to any official of the agency concerned. (D) Complaints.--Each designated specialized agency has procedures in place designed to protect the identity of, and to prevent reprisals against, any staff member making a complaint or disclosing information to, or cooperating in any investigation or inspection by, the inspector general of the agency. (E) Compliance with recommendations.--Each designated specialized agency has in place procedures designed to ensure compliance with the recommendations of the inspector general of the agency. (F) Availability of reports.--Each designated specialized agency has in place procedures to ensure that all annual and other relevant reports submitted by the inspector general to the agency are made available to the member states without modification except to the extent necessary to protect the privacy rights of individuals.

(3) New budget procedures for the united nations.--The United Nations has established and is implementing budget procedures that-- (A) require the maintenance of a budget not in excess of the level agreed to by the General Assembly at the beginning of each United Nations budgetary biennium, unless increases are agreed to by consensus; and (B) require the system-wide identification of expenditures by functional categories such as personnel, travel, and equipment. (4) Sunset policy for certain united nations programs.-- (A) Existing authority.--The Secretary General and the Director General of each designated specialized agency have used their existing authorities to require program managers within the United Nations Secretariat and the Secretariats of the designated specialized agencies to conduct evaluations of United Nations programs approved by the General Assembly, and of programs of the designated specialized agencies, in accordance with the standardized methodology referred to in subparagraph (B). (B) Development of evaluation criteria.-- (i) United nations.--The Office of Internal Oversight Services has developed a standardized methodology for the evaluation of United Nations programs approved by the General Assembly, including specific criteria for determining the continuing relevance and effectiveness of the programs. (ii) Designated specialized agencies.-- Patterned on the work of the Office of Internal Oversight Services of the United Nations, each designated specialized agency has developed a standardized methodology for the evaluation of the programs of the agency, including specific criteria for determining the continuing relevance and effectiveness of the programs. (C) Procedures.--Consistent with the July 16, 1997, recommendations of the Secretary General regarding a sunset policy and results-based budgeting for United Nations programs, the United Nations and each designated specialized agency has established and is implementing procedures-- (i) requiring the Secretary General or the Director General of the agency, as the case may be, to report on the results of evaluations referred to in this paragraph, including the identification of programs that have met criteria for continuing relevance and effectiveness and proposals to terminate or modify programs that have not met such criteria; and (ii) authorizing an appropriate body within the United Nations or the agency, as the case may be, to review each evaluation referred to in this paragraph and report to the General Assembly on means of improving the program concerned or on terminating the program. (D) United states policy.--It shall be the policy of the United States to seek adoption by the United Nations of a resolution requiring that each United Nations program

approved by the General Assembly, and to seek adoption by each designated specialized agency of a resolution requiring that each program of the agency, be subject to an evaluation referred to in this paragraph and have a specific termination date so that the program will not be renewed unless the evaluation demonstrates the continuing relevance and effectiveness of the program. (E) Definition.--For purposes of this paragraph, the term ``United Nations program approved by the General Assembly'' means a program approved by the General Assembly of the United Nations which is administered or funded by the United Nations. (5) United nations advisory committee on administrative and budgetary questions.-- (A) In general.--The United States has a seat on the United Nations Advisory Committee on Administrative and Budgetary Questions or the five largest member contributors each have a seat on the Advisory Committee. (B) Definition.--As used in this paragraph, the term ``5 largest member contributors'' means the 5 United Nations member states that, during a United Nations budgetary biennium, have more total assessed contributions than any other United Nations member state to the aggregate of the United Nations regular budget and the budget (or budgets) for United Nations peacekeeping operations. (6) Access by the general accounting office.--The United Nations has in effect procedures providing access by the United States General Accounting Office to United Nations financial data to assist the Office in performing nationally mandated reviews of United Nations operations. (7) Personnel.-- (A) Appointment and service of personnel.--The Secretary General-- (i) has established and is implementing procedures that ensure that staff employed by the United Nations is appointed on the basis of merit consistent with Article 101 of the United Nations Charter; and (ii) is enforcing those contractual obligations requiring worldwide availability of all professional staff of the United Nations to serve and be relocated based on the needs of the United Nations. (B) Code of conduct.--The General Assembly has adopted, and the Secretary General has the authority to enforce and is effectively enforcing, a code of conduct binding on all United Nations personnel, including the requirement of financial disclosure statements binding on senior United Nations personnel and the establishment of rules against nepotism that are binding on all United Nations personnel. (C) Personnel evaluation system.--The United Nations has adopted and is enforcing a personnel evaluation system. (D) Periodic assessments.--The United Nations has established and is implementing a mechanism to conduct periodic assessments of the United Nations payroll to determine total staffing, and the results of such assessments

are reported in an unabridged form to the General Assembly. (E) Review of united nations allowance system.--The United States has completed a thorough review of the United Nations personnel allowance system. The review shall include a comparison of that system with the United States civil service system, and shall make recommendations to reduce entitlements to allowances and allowance funding levels from the levels in effect on January 1, 1998. (8) Reduction in budget authorities.--The designated specialized agencies have achieved zero nominal growth in their biennium budgets for 2000-01 from the 1998-99 biennium budget levels of the respective agencies. (9) New budget procedures and financial regulations.--Each designated specialized agency has established procedures to-- (A) require the maintenance of a budget that does not exceed the level agreed to by the member states of the organization at the beginning of each budgetary biennium, unless increases are agreed to by consensus; (B) require the identification of expenditures by functional categories such as personnel, travel, and equipment; and (C) require approval by the member states of the agency's supplemental budget requests to the Secretariat in advance of expenditures under those requests. (10) Limitation on assessed share of regular budget for the designated specialized agencies.--The share of the total of all assessed contributions for any designated specialized agency does not exceed 22 percent for any single member of the agency.

Subtitle C--Miscellaneous Provisions

Except as otherwise specifically provided, nothing in this title may be construed to make available funds in violation of any provision of law containing a specific prohibition or restriction on the use of the funds, including section 114 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (Public Law 98-164; 22 U.S.C. 287e note), section 151 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987 (Public Law 99-93; 22 U.S.C. 287e note), and section 404 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (Public Law 103-236; 22 U.S.C. 287e note).

INTERNATIONAL ORGANIZATIONS FROM WHICH THE UNITED STATES HAS WITHDRAWN OR RESCINDED FUNDING.

None of the funds authorized to be appropriated by this title shall be used to pay any arrearage for-- (1) the United Nations Industrial Development Organization;

(2) any costs to merge that organization into the United Nations; (3) the costs associated with any other organization of the United Nations from which the United States has withdrawn including the costs of the merger of such organization into the United Nations; or (4) the World Tourism Organization, or any other international organization with respect to which Congress has rescinded funding.

DIVISION B--ARMS CONTROL, NONPROLIFERATION, AND SECURITY ASSISTANCE PROVISIONS

This division may be cited as the ``Arms Control, Nonproliferation, and Security Assistance Act of 1999''.

This title may be cited as the ``Arms Control and Nonproliferation Act of 1999''.

In this title: (1) Appropriate committees of congress.--The term ``appropriate committees of Congress'' means the Committee on International Relations and the Permanent Select Committee on Intelligence of the House of Representatives and the Committee on Foreign Relations and the Select Committee on Intelligence of the Senate. (2) Assistant secretary.--The term ``Assistant Secretary'' means the position of Assistant Secretary of State for Verification and Compliance designated under section 1112. (3) Executive agency.--The term ``Executive agency'' has the meaning given the term in section 105 of title 5, United States Code. (4) Intelligence community.--The term ``intelligence community'' has the meaning given the term in section 3(4) of the National Security Act of 1947 (50 U.S.C. 401a(4)). (5) START treaty or treaty.--The term ``START Treaty'' or ``Treaty'' means the Treaty With the Union of Soviet Socialist Republics on the Reduction and Limitation of Strategic Offensive Arms, including all agreed statements, annexes, protocols, and memoranda, signed at Moscow on July 31, 1991. (6) START ii treaty.--The term ``START II Treaty'' means the Treaty Between the United States of America and the Russian Federation on Further Reduction and Limitation of Strategic Offensive Arms, and related protocols and memorandum of understanding, signed at Moscow on January 3, 1993.

Subtitle A--Arms Control

CHAPTER 1--EFFECTIVE VERIFICATION OF COMPLIANCE WITH ARMS CONTROL AGREEMENTS

(a) In General.--The Secretary of State is authorized to transfer funds available to the Department of State under this section to the Department of Defense, the Department of Energy, or any agency, entity, or component of the intelligence community, as needed, for retaining, researching, developing, or acquiring technologies or programs relating to the verification of arms control, nonproliferation, and disarmament agreements or commitments. (b) Prohibition on Reprogramming.--Notwithstanding any other provision of law, funds made available to carry out this section may not be used for any purpose other than the purposes specified in subsection (a). (c) Funding.--Of the total amount of funds authorized to be appropriated to the Department of State by this Act for the fiscal years 2000 and 2001, $5,000,000 is authorized to be available for each such fiscal year to carry out subsection (a). (d) Designation of Fund.--Amounts made available under subsection (c) may be referred to as the ``Key Verification Assets Fund''.

(a) Designation of Position.--The Secretary of State shall designate one of the Assistant Secretaries of State authorized by section 1(c)(1) of the State Department Basic Authorities Act of 1956 (22 U.S.C. 2651a(c)(1)) as the Assistant Secretary of State for Verification and Compliance. The Assistant Secretary shall report to the Under Secretary of State for Arms Control and International Security. (b) Directive Governing the Assistant Secretary of State.-- (1) In general.--Not later than 30 days after the date of enactment of this Act, the Secretary of State shall issue a directive governing the position of the Assistant Secretary. (2) Elements of the directive.--The directive issued under paragraph (1) shall set forth, consistent with this section-- (A) the duties of the Assistant Secretary; (B) the relationships between the Assistant Secretary and other officials of the Department of State; (C) any delegation of authority from the Secretary of State to the Assistant Secretary; and (D) such matters as the Secretary considers appropriate.

(c) Duties.-- (1) In general.--The Assistant Secretary shall have as his principal responsibility the overall supervision (including oversight of policy and resources) within the Department of State of all matters relating to verification and compliance with international arms control, nonproliferation, and disarmament agreements or commitments. (2) Participation of the assistant secretary.--

(A) Primary role.--Except as provided in subparagraphs (B) and (C), the Assistant Secretary, or his designee, shall participate in all interagency groups or organizations within the executive branch of Government that assess, analyze, or review United States planned or ongoing policies, programs, or actions that have a direct bearing on verification or compliance matters, including interagency intelligence committees concerned with the development or exploitation of measurement or signals intelligence or other national technical means of verification. (B) Requirement for designation.--Subparagraph (A) shall not apply to groups or organizations on which the Secretary of State or the Undersecretary of State for Arms Control and International Security sits, unless such official designates the Assistant Secretary to attend in his stead. (C) National security limitation.-- (i) Waiver by president.--The President may waive the provisions of subparagraph (A) if inclusion of the Assistant Secretary would not be in the national security interests of the United States. (ii) Waiver by others.--With respect to an interagency group or organization, or meeting thereof, working with exceptionally sensitive information contained in compartments under the control of the Director of Central Intelligence, the Secretary of Defense, or the Secretary of Energy, such Director or Secretary, as the case may be, may waive the provision of subparagraph (A) if inclusion of the Assistant Secretary would not be in the national security interests of the United States. (iii) Transmission of waiver to congress.--Any waiver of participation under clause (i) or (ii) shall be transmitted in writing to the appropriate committees of Congress. (3) Relationship to the intelligence community.--The Assistant Secretary shall be the principal policy community representative to the intelligence community on verification and compliance matters. (4) Reporting responsibilities.--The Assistant Secretary shall have responsibility within the Department of State for-- (A) all reports required pursuant to section 306 of the Arms Control and Disarmament Act (22 U.S.C. 2577); (B) so much of the report required under paragraphs (4) through (6) of section 403(a) of the Arms Control and Disarmament Act (22 U.S.C. 2593a(a)(4) through (6)) as relates to verification or compliance matters; and (C) other reports being prepared by the Department of State as of the date of enactment of this Act relating to arms control, nonproliferation, or disarmament verification or compliance matters.

ENHANCED ANNUAL (``PELL'') REPORT.

(a) Annual Report.--Section 403(a) of the Arms Control and Disarmament Act (22 U.S.C. 2593a(a)) is amended-- (1) in paragraph (4)--

(A) by inserting ``or commitments, including the Missile Technology Control Regime,'' after ``agreements'' the first time it appears; (B) by inserting ``or commitments'' after ``agreements'' the second time it appears; (C) by inserting ``or commitment'' after ``agreement''; and (D) by striking ``and'' at the end; (2) by striking the period at the end of paragraph (5) and inserting ``; and''; and (3) by adding at the end the following: ``(6) a specific identification, to the maximum extent practicable in unclassified form, of each and every question that exists with respect to compliance by other countries with arms control, nonproliferation, and disarmament agreements with the United States.''.

(b) Additional Requirement.--Section 403 of the Arms Control and Disarmament Act (22 U.S.C. 2593a) is amended by adding at the end the following: ``(d) Each report required by this section shall include a discussion of each significant issue described in subsection (a)(6) that was contained in a previous report issued under this section during 1995, or after December 31, 1995, until the question or concern has been resolved and such resolution has been reported in detail to the appropriate committees of Congress (as defined in section 1102(1) of the Arms Control, Non-Proliferation, and Security Assistance Act of 1999).''.

(a) Report.--Not later than 180 days after the date of enactment of this Act, the Director of Central Intelligence shall submit to the appropriate committees of Congress a detailed report in classified form. Such report shall include the following: (1) A comprehensive identification of all monitoring activities associated with the START Treaty and the START II Treaty. (2) The specific intelligence community assets and capabilities, including analytical capabilities, that the Senate was informed, prior to the Senate giving its advice and consent to ratification of the treaties, would be necessary to accomplish those activities. (3) An identification of the extent to which those assets and capabilities have, or have not, been attained or retained, and the corresponding effect this has had upon United States monitoring confidence levels. (4) An assessment of any Russian activities relating to the START Treaty which have had an impact upon the ability of the United States to monitor Russian adherence to the Treaty.

(b) Compartmented Annex.--Exceptionally sensitive, compartmented information in the report required by this section may be provided in a compartmented annex submitted to the Select Committee on Intelligence of the Senate and the Permanent Select Committee on Intelligence of the House of Representatives.

(a) Verification of Compliance.--Section 306(a) of the Arms Control and Disarmament Act (22 U.S.C. 2577(a)) is amended in the matter preceding paragraph (1) by striking ``adequately''. (b) Assessments Upon Request.--Section 306 of the Arms Control and Disarmament Act (22 U.S.C. 2577) is amended-- (1) by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively; and (2) by inserting after subsection (a) the following:

``(b) Assessments Upon Request.--Upon the request of the chairman or ranking minority member of the Committee on Foreign Relations of the Senate or the Committee on International Relations of the House of Representatives, in case of an arms control, nonproliferation, or disarmament proposal presented to a foreign country by the United States or presented to the United States by a foreign country, the Secretary of State shall submit a report to the Committee on the degree to which elements of the proposal are capable of being verified.''.

The United States Government shall, to the maximum extent practicable, make available to the public in real time, or as quickly as possible, all raw seismological data provided to the United States Government by any international organization that is directly responsible for seismological monitoring.

(a) Reimbursement.--During the 2-year period beginning on the date of the enactment of this Act, the United States National Authority (as designated pursuant to section 101 of the Chemical Weapons Convention Implementation Act of 1998 (as contained in division I of Public Law 105-277)) shall, upon request of the Director of the Federal Bureau of Investigation, reimburse the Federal Bureau of Investigation for all costs incurred by the Bureau for such period in connection with implementation of section 303(b)(2)(A) of that Act, except that such reimbursement may not exceed $2,000,000 for such 2-year period. (b) Report.--Not later than 180 days prior to the expiration of the 2-year period described in subsection (a), the Director of the Federal Bureau of Investigation shall prepare and submit to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate a report on how activities under section 303(b)(2)(A) of the Chemical Weapons Convention Implementation Act of 1998 will be fully funded and implemented by the Federal Bureau of Investigation notwithstanding the expiration of the 2- year period described in subsection (a).

Whenever a United States delegation engaging in negotiations on arms control, nonproliferation, or disarmament submits to the Secretary of State a summary of the activities of the delegation or the status of those negotiations, a copy of each such summary shall be further transmitted by the Secretary of State to the Committee on Foreign Relations of the Senate and to the Committee on International Relations of the House of Representatives promptly.

CHAPTER 2--MATTERS RELATING TO THE CONTROL OF BIOLOGICAL WEAPONS

This chapter may be cited as the ``National Security and Corporate Fairness under the Biological Weapons Convention Act''.

In this chapter: (1) Biological weapons convention.--The term ``Biological Weapons Convention'' means the 1972 Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction. (2) Compliance protocol.--The term ``compliance protocol'' means that segment of a bilateral or multilateral agreement that enables investigation of questions of compliance entailing written data or visits to facilities to monitor compliance.

(3) Industry.--The term ``industry'' means any corporate or private sector entity engaged in the research, development, production, import, and export of peaceful pharmaceuticals and bio-technological and related products.

Congress makes the following findings: (1) The threat of biological weapons and their proliferation is one of the greatest national security threats facing the United States. (2) The threat of biological weapons and materials represents a serious and increasing danger to people around the world. (3) Biological weapons are relatively inexpensive to produce, can be made with readily available expertise and equipment, do not require much space to make and can therefore be readily concealed, do not require unusual raw materials or materials not readily available for legitimate purposes, do not require the maintenance of stockpiles, or can be delivered with low-technology mechanisms, and can effect widespread casualties even in small quantities. (4) Unlike other weapons of mass destruction, biological materials capable of use as weapons can occur naturally in the environment and are also used for medicinal or other beneficial purposes. (5) Biological weapons are morally reprehensible, prompting the United States Government to halt its offensive biological weapons program in 1969, subsequently destroy its entire biological weapons arsenal, and maintain henceforth only a robust defensive capacity. (6) The Senate gave its advice and consent to ratification of the Biological Weapons Convention in 1974. (7) The Director of the Arms Control and Disarmament Agency explained, at the time of the Senate's consideration of the Biological Weapons Convention, that the treaty contained no verification provisions because verification would be ``difficult''.

(8) A compliance protocol has now been proposed to strengthen the 1972 Biological Weapons Convention. (9) The resources needed to produce, stockpile, and store biological weapons are the same as those used in peaceful industry facilities to discover, develop, and produce medicines. (10) The raw materials of biological agents are difficult to use as an indicator of an offensive military program because the same materials occur in nature or can be used to produce a wide variety of products. (11) Some biological products are genetically manipulated to develop new commercial products, optimizing production and ensuring the integrity of the product, making it difficult to distinguish between legitimate commercial activities and offensive military activities. (12) Only a small culture of a biological agent and some growth medium are needed to produce a large amount of biological agents with the potential for offensive purposes. (13) The United States pharmaceutical and biotechnology industries are a national asset and resource that contribute to the health and well-being of the American public as well as citizens around the world. (14) One bacterium strain can represent a large proportion of a company's investment in a pharmaceutical product and thus its potential loss during an arms control monitoring activity could conceivably be worth billions of dollars. (15) Biological products contain proprietary genetic information. (16) The proposed compliance regime for the Biological Weapons Convention entails new data reporting and investigation requirements for industry. (17) A compliance regime which contributes to the control of biological weapons and materials must have a reasonable chance of success in reducing the risk of production, stockpiling, or use of biological weapons while protecting the reputations, intellectual property, and confidential business information of legitimate companies.

(a) National Security Trial Investigations and Trial Visits.--The President shall conduct a series of national security trial investigations and trial visits, both during and following negotiations to develop a compliance protocol to the Biological Weapons Convention, with the objective of ensuring that the compliance procedures of the protocol are effective and adequately protect the national security of the United States. These trial investigations and trial visits shall be conducted at such sites as United States Government facilities, installations, and national laboratories. (b) United States Industry Trial Investigations and Trial Visits.-- The President shall take all appropriate steps to conduct or sponsor a series of United States industry trial investigations and trial visits, both during and following negotiations to develop a compliance protocol to the Biological Weapons Convention, with the objective of ensuring that the compliance procedures of the protocol are effective and adequately protect the national security and the concerns of affected United States industries and research institutions. These trial investigations and trial visits shall be conducted at such sites as academic institutions, vaccine production

facilities, and pharmaceutical and biotechnology firms in the United States. (c) Participation by Defense Department and Other Appropriate Personnel.--The Secretary of Defense and, as appropriate, the Director of the Federal Bureau of Investigation shall make available specialized personnel to participate-- (1) in each trial investigation or trial visit conducted pursuant to subsection (a); and (2) in each trial investigation or trial visit conducted pursuant to subsection (b), except for any investigation or visit in which the host facility requests that such personnel not participate,

for the purpose of assessing the information security implications of such investigation or visit. The Secretary of Defense, in coordination with the Director of the Federal Bureau of Investigation, shall add to the report required by subsection (d)(2) a classified annex containing an assessment of the risk to proprietary and classified information posed by any investigation or visit procedures in the compliance protocol. (d) Study.-- (1) In general.--The President shall conduct a study on the need for investigations and visits under the compliance protocol to the Biological Weapons Convention, including-- (A) an assessment of risks to national security and United States industry and research institutions of such on-site activities; and (B) an assessment of the monitoring results that can be expected from such investigations and visits. (2) Report.--Not later than the date on which a compliance protocol to the Biological Weapons Convention is submitted to the Senate for its advice and consent to ratification, the President shall submit to the Committee on Foreign Relations of the Senate a report, in both unclassified and classified form, setting forth-- (A) the findings of the study conducted pursuant to paragraph (1); and (B) the results of trial investigations and trial visits conducted pursuant to subsections (a) and (b).

Subtitle B--Nuclear Nonproliferation, Safety, and Related Matters

Section 602(c) of the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 3282(c)) is amended to read as follows: ``(c)(1) The Department of State, the Department of Defense, the Department of Commerce, the Department of Energy, the Commission, and, with regard to subparagraph (B), the Director of Central Intelligence, shall keep the Committees on Foreign Relations and Governmental Affairs of the Senate and the Committee on International Relations of the House of Representatives fully and currently informed with respect to-- ``(A) their activities to carry out the purposes and policies of this Act and to otherwise prevent proliferation, including

the proliferation of nuclear, chemical, or biological weapons, or their means of delivery; and ``(B) the current activities of foreign nations which are of significance from the proliferation standpoint.

``(2) For the purposes of this subsection with respect to paragraph (1)(B), the phrase `fully and currently informed' means the transmittal of credible information not later than 60 days after becoming aware of the activity concerned.''.

(a) Prohibition.--Except as provided in subsection (b), no assistance may be provided by the United States Government to any person who is involved in the research, development, design, testing, or evaluation of chemical or biological weapons for offensive purposes. (b) Exception.--The prohibition contained in subsection (a) shall not apply to any activity conducted pursuant to title V of the National Security Act of 1947 (50 U.S.C. 413 et seq.).

(a) Report on Reduction of the Stockpile.--Not later than 120 days after signing an agreement between the United States and Russia for the disposition of excess weapons plutonium, the Secretary of Energy, with the concurrence of the Secretary of Defense, shall submit to the Committee on Foreign Relations and the Committee on Armed Services of the Senate and to the Committee on International Relations and the Committee on Armed Services of the House of Representatives a report-- (1) detailing plans for United States implementation of such agreement; (2) identifying, in classified form, the number of United States warhead ``pits'' of each type deemed ``excess'' for the purpose of dismantlement or disposition; and (3) describing any implications this may have for the Stockpile Stewardship and Management Program.

(b) Submission of the Fabrication Facility Agreement Pursuant To Law.--Whenever the President submits to Congress the agreement to establish a mixed oxide fuel fabrication or production facility in Russia pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153), it is the sense of the Congress that the Secretary of State should be prepared to certify to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House Representatives that-- (1) arrangements for the establishment of that facility will further United States nuclear nonproliferation objectives and will outweigh the proliferation risks inherent in the use of mixed oxide fuel elements; (2) a guaranty has been given by Russia that no fuel elements produced, fabricated, reprocessed, or assembled at such facility, and no sensitive nuclear technology related to such facility, will be exported or supplied by Russia to any country in the event that the United States objects to such export or supply; and (3) a guaranty has been given by Russia that the facility and all nuclear materials and equipment therein, and any fuel elements or special nuclear material produced, fabricated,

reprocessed, or assembled at that facility, including fuel elements exported or supplied by Russia to a third party, will be subject to international monitoring and transparency sufficient to ensure that special nuclear material is not diverted.

(c) Definitions.-- (1) Produced.--The terms ``produce'' and ``produced'' have the same meaning that such terms are given under section 11 u. of the Atomic Energy Act of 1954. (2) Production facility.--The term ``production facility'' has the same meaning that such term is given under section 11 v. of the Atomic Energy Act of 1954. (3) Special nuclear material.--The term ``special nuclear material'' has the meaning that such term is given under section 11 aa. of the Atomic Energy Act of 1954.

(a) Requirement to Provide Information.--The head of each department and agency described in section 602(c) of the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 3282(c)) shall promptly provide information to the chairman and ranking minority member of the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives in meeting the requirements of subsection (c) or (d) of section 602 of such Act. (b) Issuance of Directives.--Not later than February 1, 2000, the Secretary of State, the Secretary of Defense, the Secretary of Commerce, the Secretary of Energy, the Director of Central Intelligence, and the Chairman of the Nuclear Regulatory Commission shall issue directives, which shall provide access to information, including information contained in special access programs, to implement their responsibilities under subsections (c) and (d) of section 602 of the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 3282(c) and (d)). Copies of such directives shall be forwarded promptly to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives upon the issuance of the directives.

Section 1523 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-261; 112 Stat. 2180; 42 U.S.C. 2155 note) is amended-- (1) by striking ``Congress'' and inserting ``the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives''; and (2) by adding at the end the following:

``(c) Content of Notification.--The notification required pursuant to this section shall include-- ``(1) a detailed description of the articles or services to be exported or reexported, including a brief description of the capabilities of any article to be exported or reexported; ``(2) an estimate of the number of officers and employees of the United States Government and of United States Government civilian contract personnel expected to be required in such country to carry out the proposed export or reexport; ``(3) the name of each licensee expected to provide the article or service proposed to be sold and a description from the licensee of any offset agreements proposed to be entered

into in connection with such sale (if known on the date of transmittal of such statement); ``(4) the projected delivery dates of the articles or services to be exported or reexported; and ``(5) the extent to which the recipient country in the previous two years has engaged in any of the actions specified in subparagraph (A), (B), or (C) of section 129(2) of the Atomic Energy Act of 1954.

(a) Clarification of Requirement for Control.--Section 74 of the Arms Export Control Act (22 U.S.C. 2797c) is amended-- (1) by inserting ``(a) In General.--'' before ``For purposes of''; and (2) by adding at the end the following:

``(b) International Understanding Defined.--For purposes of subsection (a)(3), as it relates to any international understanding concluded with the United States after January 1, 2000, the term `international understanding' means-- ``(1) any specific agreement by a country not to export, transfer, or otherwise engage in the trade of any MTCR equipment or technology that contributes to the acquisition, design, development, or production of missiles in a country that is not an MTCR adherent and would be, if it were United States-origin equipment or technology, subject to the jurisdiction of the United States under this Act; or ``(2) any specific understanding by a country that, notwithstanding section 73(b) of this Act, the United States retains the right to take the actions under section 73(a)(2) of this Act in the case of any export or transfer of any MTCR equipment or technology that contributes to the acquisition, design, development, or production of missiles in a country that is not an MTCR adherent and would be, if it were United States- origin equipment or technology, subject to the jurisdiction of the United States under this Act.''.

(b) Clarification of Applicability.--Section 73(b) of the Arms Export Control Act (22 U.S.C. 2797b(b)) is amended-- (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and moving such subparagraphs 2 ems to the right; (2) by striking ``Subsection (a)'' and inserting the following: ``(1) In general.--Except as provided in paragraph (2), subsection (a)''; and (3) by adding at the end the following: ``(2) Limitation.--Notwithstanding paragraph (1), subsection (a) shall apply to an entity subordinate to a government that engages in exports or transfers described in section 498A(b)(3)(A) of the Foreign Assistance Act of 1961 (22 U.S.C. 2295a(b)(3)(A)).''.

(c) Enforcement Actions.--Section 73(c) of the Arms Export Control Act (22 U.S.C. 2797b(c)) is amended by inserting before the period at the end the following: ``, and if the President certifies to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives that--

``(1) for any judicial or other enforcement action taken by the MTCR adherent, such action has-- ``(A) been comprehensive; and ``(B) been performed to the satisfaction of the United States; and ``(2) with respect to any finding of innocence of wrongdoing, the United States is satisfied with the basis for such finding''.

(d) Policy Report.--Section 73A of the Arms Export Control Act (22 U.S.C. 2797b-1) is amended-- (1) by striking ``Following any action'' and inserting the following:

``(a) Policy Report.--Following any action''; and (2) by adding at the end the following:

``(b) Intelligence Assessment Report.--At such times that a report is transmitted pursuant to subsection (a), the Director of Central Intelligence shall promptly prepare and submit to the Congress a separate report containing any credible information indicating that the country described in subsection (a) has engaged in any activity identified under subparagraph (A), (B), or (C) of section 73(a)(1) within the previous two years.''. (e) MTCR Defined.--The term ``MTCR'' means the Missile Technology Control Regime, as defined in section 74(a)(2) of the Arms Export Control Act (22 U.S.C. 2797c(a)(2)).

Chapter 7 of the Arms Export Control Act (22 U.S.C. 2797 et seq.) is amended by inserting after section 73A the following new section:

``SEC. 73B. AUTHORITY RELATING TO MTCR ADHERENTS.

``Notwithstanding section 73(b), the President may take the actions under section 73(a)(2) under the circumstances described in section 74(b)(2).''.

FORMER SOVIET UNION.

(a) Authorization.--For fiscal year 2001 and subsequent fiscal years, funds made available under ``Nonproliferation, Antiterrorism, Demining, and Related Programs'' accounts in annual foreign operations appropriations Acts are authorized to be available for science and technology centers in the independent states of the former Soviet Union assisted under section 503(a)(5) of the FREEDOM Support Act (22 U.S.C. 5853(a)(5)) or section 1412(b)(5) of the Former Soviet Union Demilitarization Act of 1992 (title XIV of Public Law 102-484; 22 U.S.C. 5901 et seq.), including the use of those and other funds by any Federal agency having expertise and programs related to the activities carried out by those centers, including the Departments of Agriculture, Commerce, and Health and Human Services and the Environmental Protection Agency. (b) Availability of Funds.--Amounts made available under any provision of law for the activities described in subsection (a) shall be available until expended and may be used notwithstanding any other provision of law.

CENTERS.

(a) In General.--Support for science and technology centers in the independent states of the former Soviet Union, as authorized

by section 503(a)(5) of the FREEDOM Support Act (22 U.S.C. 5853(a)(5)) and section 1412(b) of the Former Soviet Union Demilitarization Act of 1992 (title XIV of Public Law 102-484, 22 U.S.C. 5901 et seq.), is authorized for activities described in subsection (b) to support the redirection of former Soviet weapons scientists, especially those with expertise in weapons of mass destruction (nuclear, radiological, chemical, biological), missile and other delivery systems, and other advanced technologies with military applications. (b) Activities Supported.--Activities supported under subsection (a) include-- (1) any research activity involving the participation of former Soviet weapons scientists and civilian scientists and engineers, if the participation of the weapons scientists predominates; and (2) any program of international exchanges that would provide former Soviet weapons scientists exposure to, and the opportunity to develop relations with, research and industry partners.

This title may be cited as the ``Security Assistance Act of 1999''.

Subtitle A--Transfers of Excess Defense Articles

COUNTRIES.

(a) Transportation and Related Costs.--Section 105 of Public Law 104-164 (110 Stat. 1427) is amended by striking ``1999 and 2000'' and inserting ``2000 and 2001''. (b) Excess Defense Articles for Greece and Turkey.--Section 516(b)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j(b)(2)) is amended by inserting after ``four-year period beginning on October 1, 1996,'' the following: ``and thereafter for the four-period beginning on October 1, 2000,''.

(a) Uses For Which Funds Are Available.--Notwithstanding section 516(e) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j(e)), during each of the fiscal years 2000 and 2001, funds available to the Department of Defense may be expended for crating, packing, handling, and transportation of excess defense articles transferred under the authority of section 516 of that Act to Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Slovakia, Ukraine, and Uzbekistan. (b) Content of Congressional Notification.--Each notification required to be submitted under section 516(f) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j(f)) with respect to a proposed transfer of a defense article described in subsection (a) shall

include an estimate of the amount of funds to be expended under subsection (a) with respect to that transfer.

ARTICLES.

Section 516(g)(1) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j(g)(1)) is amended by striking ``$350,000,000'' and inserting ``$425,000,000''.

Subtitle B--Foreign Military Sales Authorities

Section 617 of the Foreign Assistance Act of 1961 (22 U.S.C. 2367) is amended by adding at the end the following new sentence: ``Such expenses for orderly termination of programs under the Arms Export Control Act may include the obligation and expenditure of funds to complete the training or studies outside the countries of origin of students whose course of study or training program began before assistance was terminated, as long as the origin country's termination was not a result of activities beyond default of financial responsibilities.''.

Section 21(a)(1) of the Arms Export Control Act (22 U.S.C. 2761(a)(1)) is amended in the matter preceding subparagraph (A) by inserting ``and the Coast Guard'' after ``Department of Defense''.

Section 22(d) of the Arms Export Control Act (22 U.S.C. 2762(d)) is amended-- (1) by striking ``Procurement contracts'' and inserting ``(1) Procurement contracts''; and (2) by adding at the end the following:

``(2) Direct costs associated with meeting additional or unique requirements of the purchaser shall be allowable under contracts described in paragraph (1). Loadings applicable to such direct costs shall be permitted at the same rates applicable to procurement of like items purchased by the Department of Defense for its own use.''.

Section 36(c) of the Arms Export Control Act (22 U.S.C. 2776(c)) is amended by adding at the end the following new paragraph: ``(4) The provisions of subsection (b)(5) shall apply to any equipment, article, or service for which a numbered certification has been transmitted to Congress pursuant to paragraph (1) in the same manner and to the same extent as that subsection applies to any equipment, article, or service for which a numbered certification has been transmitted to Congress pursuant to subsection (b)(1). For purposes of such application, any reference in subsection (b)(5) to `a letter of offer' or `an offer' shall be deemed to be a reference to `a contract'.''.

Section 3 of the Arms Export Control Act (22 U.S.C. 2753) is amended by adding at the end the following new subsection: ``(g) Any agreement for the sale or lease of any article on the United States Munitions List entered into by the United States Government after the date of enactment of this subsection shall state that the United States Government retains the right to verify credible reports that such article has been used for a purpose not authorized under section 4 or, if such agreement provides that such article may only be used for purposes more limited than those authorized under section 4, for a purpose not authorized under such agreement.''.

Subtitle C--Stockpiling of Defense Articles for Foreign Countries

Paragraph (2) of section 514(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h(b)(2)) is amended to read as follows: ``(2)(A) The value of such additions to stockpiles of defense articles in foreign countries shall not exceed $60,000,000 for fiscal year 2000. ``(B) Of the amount specified in subparagraph (A), not more than $40,000,000 may be made available for stockpiles in the Republic of Korea and not more than $20,000,000 may be made available for stockpiles in Thailand.''.

THE WAR RESERVES STOCKPILE FOR ALLIES.

(a) Items in the Korean Stockpile.-- (1) In general.--Notwithstanding section 514 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h), the President is authorized to transfer to the Republic of Korea, in return for concessions to be negotiated by the Secretary of Defense, with the concurrence of the Secretary of State, any or all of the items described in paragraph (2). (2) Covered items.--The items referred to in paragraph (1) are munitions, equipment, and material such as tanks, trucks, artillery, mortars, general purpose bombs, repair parts, ammunition, barrier material, and ancillary equipment, if such items are-- (A) obsolete or surplus items; (B) in the inventory of the Department of Defense; (C) intended for use as reserve stocks for the Republic of Korea; and (D) as of the date of the enactment of this Act, located in a stockpile in the Republic of Korea.

(b) Items in the Thailand Stockpile.-- (1) In general.--Notwithstanding section 514 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h), the President is authorized to transfer to Thailand, in return for concessions to be negotiated by the Secretary of Defense, with the concurrence of the Secretary of State, any or all of the items described in paragraph (2).

(2) Covered items.--The items referred to in paragraph (1) are munitions, equipment, and material such as tanks, trucks, artillery, mortars, general purpose bombs, repair parts, ammunition, barrier material, and ancillary equipment, if such items are-- (A) obsolete or surplus items; (B) in the inventory of the Department of Defense; (C) intended for use as reserve stocks for Thailand; and (D) as of the date of the enactment of this Act, located in a stockpile in Thailand.

(c) Valuation of Concessions.--The value of concessions negotiated pursuant to subsections (a) and (b) shall be at least equal to the fair market value of the items transferred. The concessions may include cash compensation, services, waiver of charges otherwise payable by the United States, and other items of value. (d) Prior Notifications of Proposed Transfers.--Not less than 30 days before making a transfer under the authority of this section, the President shall transmit to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives a detailed notification of the proposed transfer, which shall include an identification of the items to be transferred and the concessions to be received. (e) Termination of Authority.--No transfer may be made under the authority of this section more than 3 years after the date of the enactment of this Act.

Subtitle D--Defense Offsets Disclosure

This subtitle may be cited as the ``Defense Offsets Disclosure Act of 1999''.

(a) Findings.--Congress makes the following findings: (1) A fair business environment is necessary to advance international trade, economic stability, and development worldwide, is beneficial for American workers and businesses, and is in the United States national interest. (2) In some cases, mandated offset requirements can cause economic distortions in international defense trade and undermine fairness and competitiveness, and may cause particular harm to small- and medium-sized businesses. (3) The use of offsets may lead to increasing dependence on foreign suppliers for the production of United States weapons systems. (4) The offset demands required by some purchasing countries, including some close allies of the United States, equal or exceed the value of the base contract they are intended to offset, mitigating much of the potential economic benefit of the exports. (5) Offset demands often unduly distort the prices of defense contracts. (6) In some cases, United States contractors are required to provide indirect offsets which can negatively impact nondefense industrial sectors.

(7) Unilateral efforts by the United States to prohibit offsets may be impractical in the current era of globalization and would severely hinder the competitiveness of the United States defense industry in the global market. (8) The development of global standards to manage and restrict demands for offsets would enhance United States efforts to mitigate the negative impact of offsets.

(b) Declaration of Policy.--It is the policy of the United States to monitor the use of offsets in international defense trade, to promote fairness in such trade, and to ensure that foreign participation in the production of United States weapons systems does not harm the economy of the United States.

In this subtitle: (1) Appropriate congressional committees.--The term ``appropriate congressional committees'' means-- (A) the Committee on Foreign Relations of the Senate; and (B) the Committee on International Relations of the House of Representatives. (2) G-8.--The term ``G-8'' means the group consisting of France, Germany, Japan, the United Kingdom, the United States, Canada, Italy, and Russia established to facilitate economic cooperation among the eight major economic powers. (3) Offset.--The term ``offset'' means the entire range of industrial and commercial benefits provided to foreign governments as an inducement or condition to purchase military goods or services, including benefits such as coproduction, licensed production, subcontracting, technology transfer, in- country procurement, marketing and financial assistance, and joint ventures. (4) Transatlantic economic partnership.--The term ``Transatlantic Economic Partnership'' means the joint commitment made by the United States and the European Union to reinforce their close relationship through an initiative involving the intensification and extension of multilateral and bilateral cooperation and common actions in the areas of trade and investment. (5) Wassenaar arrangement.--The term ``Wassenaar Arrangement'' means the multilateral export control regime in which the United States participates that seeks to promote transparency and responsibility with regard to transfers of conventional armaments and sensitive dual-use items. (6) World trade organization.--The term ``World Trade Organization'' means the organization established pursuant to the WTO Agreement. (7) WTO agreement.--The term ``WTO Agreement'' means the Agreement Establishing the World Trade Organization entered into on April 15, 1994.

It is the sense of Congress that-- (1) the executive branch should pursue efforts to address trade fairness by establishing reasonable, business-friendly standards for the use of offsets in international business transactions between the United States and its trading partners and competitors;

(2) the Secretary of Defense, the Secretary of State, the Secretary of Commerce, and the United States Trade Representative, or their designees, should raise with other industrialized nations at every suitable venue the need for transparency and reasonable standards to govern the role of offsets in international defense trade; (3) the United States Government should enter into discussions regarding the establishment of multilateral standards for the use of offsets in international defense trade through the appropriate multilateral fora, including such organizations as the Transatlantic Economic Partnership, the Wassenaar Arrangement, the G-8, and the World Trade Organization; and (4) the United States Government, in entering into the discussions described in paragraph (3), should take into account the distortions produced by the provision of other benefits and subsidies, such as export financing, by various countries to support defense trade.

(a) Initial Reporting of Offset Agreements.-- (1) Government-to-government sales.--Section 36(b)(1) of the Arms Export Control Act (22 U.S.C. 2776(b)(1)) is amended in subparagraph (C) of the fifth sentence, by striking ``and a description'' and all that follows and inserting ``and a description of any offset agreement with respect to such sale;''. (2) Commercial sales.--Section 36(c)(1) of the Arms Export Control Act (22 U.S.C. 2776(c)(1)) is amended in the second sentence, by striking ``(if known on the date of transmittal of such certification)'' and inserting ``and a description of any such offset agreement''.

(b) Confidentiality of Information Relating to Offset Agreements.-- Section 36 of the Arms Export Control Act (22 U.S.C. 2776) is amended-- (1) by redesignating the second subsection (e) (as added by section 155 of Public Law 104-164) as subsection (f); and (2) by adding at the end the following new subsection:

``(g) Information relating to offset agreements provided pursuant to subparagraph (C) of the fifth sentence of subsection (b)(1) and the second sentence of subsection (c)(1) shall be treated as confidential information in accordance with section 12(c) of the Export Administration Act of 1979 (50 U.S.C. App. 2411(c)).''.

(a) In General.--Section 39A(a) of the Arms Export Control Act (22 U.S.C. 2779a(a)) is amended-- (1) by inserting ``or licensed'' after ``sold''; and (2) by inserting ``or export'' after ``sale''.

(b) Definition of United States Person.--Section 39A(d)(3)(B)(ii) of the Arms Export Control Act (22 U.S.C. 2779a(d)(3)(B)(ii)) is amended by inserting ``or by an entity described in clause (i)'' after ``subparagraph (A)''.

(a) In General.--There is established a National Commission on the Use of Offsets in Defense Trade (in this section referred

to as the ``Commission'') to address all aspects of the use of offsets in international defense trade. (b) Commission Membership.--Not later than 120 days after the date of enactment of this Act, the President, with the concurrence of the Majority and Minority Leaders of the Senate and the Speaker and Minority Leader of the House of Representatives, shall appoint 11 individuals to serve as members of the Commission. Commission membership shall include-- (1) representatives from the private sector, including-- (A) one each from-- (i) a labor organization, (ii) a United States defense manufacturing company dependent on foreign sales, (iii) a United States company dependent on foreign sales that is not a defense manufacturer, and (iv) a United States company that specializes in international investment, and (B) two members from academia with widely recognized expertise in international economics; and (2) five members from the executive branch, including a member from-- (A) the Office of Management and Budget, (B) the Department of Commerce, (C) the Department of Defense, (D) the Department of State, and (E) the Department of Labor.

The member designated from the Office of Management and Budget shall serve as Chairperson of the Commission. The President shall ensure that the Commission is nonpartisan and that the full range of perspectives on the subject of offsets in the defense industry is adequately represented. (c) Duties.--The Commission shall be responsible for reviewing and reporting on-- (1) the full range of current practices by foreign governments in requiring offsets in purchasing agreements and the extent and nature of offsets offered by United States and foreign defense industry contractors; (2) the impact of the use of offsets on defense subcontractors and nondefense industrial sectors affected by indirect offsets; and (3) the role of offsets, both direct and indirect, on domestic industry stability, United States trade competitiveness and national security.

(d) Commission Report.--Not later than 12 months after the Commission is established, the Commission shall submit a report to the appropriate congressional committees. In addition to the items described under subsection (c), the report shall include-- (1) an analysis of-- (A) the collateral impact of offsets on industry sectors that may be different than those of the contractor providing the offsets, including estimates of contracts and jobs lost as well as an assessment of damage to industrial sectors; (B) the role of offsets with respect to competitiveness of the United States defense industry in international trade and the potential damage to the ability of United States contractors to compete if offsets were prohibited or limited; and

(C) the impact on United States national security, and upon United States nonproliferation objectives, of the use of coproduction, subcontracting, and technology transfer with foreign governments or companies that results from fulfilling offset requirements, with particular emphasis on the question of dependency upon foreign nations for the supply of critical components or technology; (2) proposals for unilateral, bilateral, or multilateral measures aimed at reducing any detrimental effects of offsets; and (3) an identification of the appropriate executive branch agencies to be responsible for monitoring the use of offsets in international defense trade.

(e) Period of Appointment; Vacancies.--Members shall be appointed for the life of the Commission. Any vacancy in the Commission shall not affect its powers, but shall be filled in the same manner as the original appointment. (f) Initial Meeting.--Not later than 30 days after the date on which all members of the Commission have been appointed, the Commission shall hold its first meeting. (g) Meetings.--The Commission shall meet at the call of the Chairman. (h) Commission Personnel Matters.-- (1) Compensation of members.--Each member of the Commission who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Commission. All members of the Commission who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States. (2) Travel expenses.--The members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Commission. (3) Staff.-- (A) In general.--The Chairman of the Commission may, without regard to the civil service laws and regulations, appoint and terminate an executive director and such other additional personnel as may be necessary to enable the Commission to perform its duties. The employment of an executive director shall be subject to confirmation by the Commission. (B) Compensation.--The Chairman of the Commission may fix the compensation of the executive director and other personnel without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.

(4) Detail of government employees.--Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege. (5) Procurement of temporary and intermittent services.--The Chairman of the Commission may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of such title.

(i) Termination.--The Commission shall terminate 30 days after the transmission of the report from the President as mandated in section 1248(b).

(a) In General.--The President shall initiate a review to determine the feasibility of establishing, and the most effective means of negotiating, a multilateral treaty on standards for the use of offsets in international defense trade, with a goal of limiting all offset transactions that are considered injurious to the economy of the United States. (b) Report Required.--Not later than 90 days after the date on which the Commission submits the report required under section 1247(d), the President shall submit to the appropriate congressional committees a report containing the President's determination pursuant to subsection (a), and, if the President determines a multilateral treaty is feasible or desirable, a strategy for United States negotiation of such a treaty. One year after the date the report is submitted under the preceding sentence, and annually thereafter for 5 years, the President shall submit to the appropriate congressional committees a report detailing the progress toward reaching such a treaty. (c) Required Information.--The report required by subsection (b) shall include-- (1) a description of the United States efforts to pursue multilateral negotiations on standards for the use of offsets in international defense trade; (2) an evaluation of existing multilateral fora as appropriate venues for establishing such negotiations; (3) a description on a country-by-country basis of any United States efforts to engage in negotiations to establish bilateral treaties or agreements with respect to the use of offsets in international defense trade; and (4) an evaluation on a country-by-country basis of any foreign government efforts to address the use of offsets in international defense trade.

(d) Comptroller General Review.--The Comptroller General of the United States shall monitor and periodically report to Congress on the progress in reaching a multilateral treaty.

Subtitle E--Automated Export System Relating to Export Information

This subtitle may be cited as the ``Proliferation Prevention Enhancement Act of 1999''.

CERTAIN SHIPPERS' EXPORT DECLARATIONS.

(a) Authority.--Section 301 of title 13, United States Code, is amended by adding at the end the following new subsection: ``(h) The Secretary is authorized to require by regulation the filing of Shippers' Export Declarations under this chapter through an automated and electronic system for the filing of export information established by the Department of the Treasury.''. (b) Implementing Regulations.-- (1) In general.--The Secretary of Commerce, with the concurrence of the Secretary of State, shall publish regulations in the Federal Register to require that, upon the effective date of those regulations, exporters (or their agents) who are required to file Shippers' Export Declarations under chapter 9 of title 13, United States Code, file such Declarations through the Automated Export System with respect to exports of items on the United States Munitions List or the Commerce Control List. (2) Elements of the regulations.--The regulations referred to in paragraph (1) shall include at a minimum-- (A) provision by the Department of Commerce for the establishment of on-line assistance services to be available for those individuals who must use the Automated Export System; (B) provision by the Department of Commerce for ensuring that an individual who is required to use the Automated Export System is able to print out from the System a validated record of the individual's submission, including the date of the submission and a serial number or other unique identifier, where appropriate, for the export transaction; and (C) a requirement that the Department of Commerce print out and maintain on file a paper copy or other acceptable back-up record of the individual's submission at a location selected by the Secretary of Commerce.

(c) Effective Date.--The amendment made by subsection (a) shall take effect 270 days after the Secretary of Commerce, the Secretary of the Treasury, and the Director of the National Institute of Standards and Technology jointly provide a certification to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives that a secure Automated Export System available through the Internet that is capable of handling the expected volume of information required to be filed under subsection (b), plus the anticipated volume from voluntary use of the Automated Export System, has been successfully implemented and tested and is fully functional with respect to reporting all items on the United States Munitions List, including their quantities and destinations.

It is the sense of Congress that exporters (or their agents) who are required to file Shippers' Export Declarations under chapter 9 of title 13, United States Code, but who are not required under section 1252(b) to file such Declarations using the Automated Export System, should do so.

(a) In General.--Not later than 180 days after the date of enactment of this Act, the Secretary of Commerce, in consultation with the Secretary of State, the Secretary of Defense, the Secretary of the Treasury, the Secretary of Energy, and the Director of Central Intelligence, shall submit a report to the appropriate committees of Congress setting forth-- (1) the advisability and feasibility of mandating electronic filing through the Automated Export System for all Shippers' Export Declarations; (2) the manner in which data gathered through the Automated Export System can most effectively be used, consistent with the need to ensure the confidentiality of business information, by other automated licensing systems administered by Federal agencies, including-- (A) the Defense Trade Application System of the Department of State; (B) the Export Control Automated Support System of the Department of Commerce; (C) the Foreign Disclosure and Technology Information System of the Department of Defense; (D) the Proliferation Information Network System of the Department of Energy; (E) the Enforcement Communication System of the Department of the Treasury; and (F) the Export Control System of the Central Intelligence Agency; and (3) a proposed timetable for any expansion of information required to be filed through the Automated Export System.

(b) Definition.--In this section, the term ``appropriate committees of Congress'' means the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives.

Notwithstanding any other provision of law, the Secretary of State may use funds appropriated or otherwise made available to the Department of State to employ-- (1) up to 40 percent of the individuals who are performing services within the Office of Defense Trade Controls of the Department of State in positions classified at GS-14 and GS-15 on the General Schedule under section 5332 of title 5, United States Code; and (2) other individuals within the Office at a rate of basic pay that may exceed the maximum rate payable for positions classified at GS-15 on the General Schedule under section 5332 of that title.

In this subtitle: (1) Automated export system.--The term ``Automated Export System'' means the automated and electronic system for filing export information established under chapter 9 of title 13, United States Code, on June 19, 1995 (60 Federal Register 32040).

(2) Commerce control list.--The term ``Commerce Control List'' has the meaning given the term in section 774.1 of title 15, Code of Federal Regulations. (3) Shippers' export declaration.--The term ``Shippers' Export Declaration'' means the export information filed under chapter 9 of title 13, United States Code, as described in part 30 of title 15, Code of Federal Regulations. (4) United states munitions list.--The term ``United States Munitions List'' means the list of items controlled under section 38 of the Arms Export Control Act (22 U.S.C. 2778).

Subtitle F--International Arms Sales Code of Conduct Act of 1999

This subtitle may be cited as the ``International Arms Sales Code of Conduct Act of 1999''.

(a) Negotiations.--The President shall attempt to achieve the foreign policy goal of an international arms sales code of conduct. The President shall take the necessary steps to begin negotiations within appropriate international fora not later than 120 days after the date of the enactment of this Act. The purpose of these negotiations shall be to establish an international regime to promote global transparency with respect to arms transfers, including participation by countries in the United Nations Register of Conventional Arms, and to limit, restrict, or prohibit arms transfers to countries that do not observe certain fundamental values of human liberty, peace, and international stability. (b) Criteria.--The President shall consider the following criteria in the negotiations referred to in subsection (a): (1) Promotes democracy.--The government of the country-- (A) was chosen by and permits free and fair elections; (B) promotes civilian control of the military and security forces and has civilian institutions controlling the policy, operation, and spending of all law enforcement and security institutions, as well as the armed forces; (C) promotes the rule of law and provides its nationals the same rights that they would be afforded under the United States Constitution if they were United States citizens; and (D) promotes the strengthening of political, legislative, and civil institutions of democracy, as well as autonomous institutions to monitor the conduct of public officials and to combat corruption. (2) Respects human rights.--The government of the country-- (A) does not persistently engage in gross violations of internationally recognized human rights, including-- (i) extrajudicial or arbitrary executions; (ii) disappearances; (iii) torture or severe mistreatment; (iv) prolonged arbitrary imprisonment;

(v) systematic official discrimination on the basis of race, ethnicity, religion, gender, national origin, or political affiliation; and (vi) grave breaches of international laws of war or equivalent violations of the laws of war in internal armed conflicts; (B) vigorously investigates, disciplines, and prosecutes those responsible for gross violations of internationally recognized human rights; (C) permits access on a regular basis to political prisoners by international humanitarian organizations; (D) promotes the independence of the judiciary and other official bodies that oversee the protection of human rights; (E) does not impede the free functioning of domestic and international human rights organizations; and (F) provides access on a regular basis to humanitarian organizations in situations of conflict or famine. (3) Not engaged in certain acts of armed aggression.--The government of the country is not engaged in acts of armed aggression in violation of international law. (4) Not supporting terrorism.--The government of the country does not provide support for international terrorism. (5) Not contributing to proliferation of weapons of mass destruction.--The government of the country does not contribute to the proliferation of weapons of mass destruction. (6) Regional location of country.--The country is not located in a region in which arms transfers would exacerbate regional arms races or international tensions that present a danger to international peace and stability.

(c) Reports to Congress.-- (1) Report relating to negotiations.--Not later than 6 months after the commencement of the negotiations under subsection (a), and not later than the end of every 6-month period thereafter until an agreement described in subsection (a) is concluded, the President shall report to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate on the progress made during these negotiations. (2) Human rights reports.--In the report required in sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151n(b) and 2304(b)), the Secretary of State shall describe the extent to which the practices of each country evaluated meet the criteria in paragraphs (1)(A) and (2) of subsection (a).

Subtitle G--Transfer of Naval Vessels to Certain Foreign Countries

(a) Inapplicability of Aggregate Annual Limitation on Value of Transferred Excess Defense Articles.--The value of a vessel transferred to another country on a grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j) pursuant to authority provided by section 1018(a) of the National Defense Authorization Act for Fiscal Year 2000 shall not be counted

for the purposes of section 516(g) of the Foreign Assistance Act of 1961 in the aggregate value of excess defense articles transferred to countries under that section in any fiscal year. (b) Technical and Conforming Amendments.--Section 1018 of the National Defense Authorization Act for Fiscal Year 2000 is amended-- (1) in subsections (a) and (d), by striking ``Secretary of the Navy'' each place it appears and inserting ``President''; (2) by striking subsection (b); and (3) by redesignating subsections (c) through (e) as subsections (b) through (d), respectively.

(a) In General.--Section 36 of the Arms Export Control Act (22 U.S.C. 2776) is amended in the second subsection (e) (as added by section 155 of Public Law 104-164)-- (1) by inserting ``in a timely manner'' after ``to be published''; and (2) by striking ``the full unclassified text of'' and all that follows and inserting the following: ``the full unclassified text of-- ``(1) each numbered certification submitted pursuant to subsection (b); ``(2) each notification of a proposed commercial sale submitted under subsection (c); and ``(3) each notification of a proposed commercial technical assistance or manufacturing licensing agreement submitted under subsection (d).''.

(b) Notice of Classified Arms Sales.-- (1) Government-to-government sales.--Section 36(b)(1) of the Arms Export Control Act (22 U.S.C. 2776(b)(1)) is amended in the sixth sentence by inserting before the period at the end the following: ``, in which case the information shall be accompanied by a description of the damage to the national security that could be expected to result from public disclosure of the information''. (2) Commercial sales.--Section 36(c)(1) of the Arms Export Control Act (22 U.S.C. 2776(c)(1)) is amended in the fifth sentence by inserting before the period at the end the following: ``, in which case the information shall be accompanied by a description of the damage to the national security that could be expected to result from public disclosure of the information''.

UNITED STATES MUNITIONS LIST.

(a) Notification Requirement.--Section 38 of the Arms Export Control Act (22 U.S.C. 2778) is amended by adding at the end the following: ``(i) As prescribed in regulations issued under this section, a United States person to whom a license has been granted to export an item on the United States Munitions List shall, not later than 15 days after the item is exported, submit to the Department

of State a report containing all shipment information, including a description of the item and the quantity, value, port of exit, and end- user and country of destination of the item.''. (b) Quarterly Reports to Congress.--Section 36(a) of the Arms Export Control Act (22 U.S.C. 2776(a)) is amended-- (A) in paragraph (11), by striking ``and'' at the end; (B) in paragraph (12), by striking ``third-party transfers.'' and inserting ``third-party transfers; and''; and (C) by adding after paragraph (12) (but before the last sentence of the subsection), the following: ``(13) a report on all exports of significant military equipment for which information has been provided pursuant to section 38(i).''.

The Arms Export Control Act (22 U.S.C. 2751 et seq.) is amended in sections 38(e), 39A(c), and 40(k) by inserting after ``except that'' each place it appears the following: ``section 11(c)(2)(B) of such Act shall not apply, and instead, as prescribed in regulations issued under this section, the Secretary of State may assess civil penalties for violations of this Act and regulations prescribed thereunder and further may commence a civil action to recover such civil penalties, and except further that''.

Section 38(g)(1)(A)(iii) of the Arms Export Control Act (22 U.S.C. 2778(g)(1)(A)(iii)) is amended by adding at the end before the comma the following: ``or section 2339A of such title (relating to providing material support to terrorists)''.

BOWMAN COUNTY TO USS LST SHIP MEMORIAL, INC.

(a) Findings.--Congress makes the following findings: (1) It is the long-standing policy of the United States Government to deny requests for the retransfer of significant military equipment that originated in the United States to private entities. (2) In very exceptional circumstances, when the United States public interest would be served by the proposed retransfer and end-use, such requests may be favorably considered. (3) Such retransfers to private entities have been authorized in very exceptional circumstances following appropriate demilitarization and receipt of assurances from the private entity that the item to be transferred would be used solely in furtherance of Federal Government contracts or for static museum display. (4) Nothing in this section should be construed as a revision of long-standing policy referred to in paragraph (1). (5) The Government of Greece has requested the consent of the United States Government to the retransfer of HS Rodos (ex- U.S.S. Bowman County (LST 391)) to the USS LST Ship Memorial, Inc.

(b) Authority To Consent to Retransfer.-- (1) In general.--Subject to paragraph (2), the President may consent to the retransfer by the Government of Greece

of HS Rodos (ex-U.S.S. Bowman County (LST 391)) to the USS LST Ship Memorial, Inc. (2) Conditions for consent.--The President should not exercise the authority under paragraph (1) unless USS LST Memorial, Inc.-- (A) utilizes the vessel for public, nonprofit, museum-related purposes; and (B) complies with applicable law with respect to the vessel, including law related to demilitarization of guns prior to transfer and to facilitation of Federal Government monitoring and mitigation of potential environmental hazards associated with aging vessels, and has a demonstrated financial capability to so comply.

(a) Information Relating to Military Assistance and Military Exports.--Section 655(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2415(b)) is amended to read as follows: ``(b) Information Relating to Military Assistance and Military Exports.--Each such report shall show the aggregate dollar value and quantity of defense articles (including excess defense articles), defense services, and international military education and training activities authorized by the United States and of such articles, services, and activities provided by the United States, excluding any activity that is reportable under title V of the National Security Act of 1947, to each foreign country and international organization. The report shall specify, by category, whether such defense articles-- ``(1) were furnished by grant under chapter 2 or chapter 5 of part II of this Act or under any other authority of law or by sale under chapter 2 of the Arms Export Control Act; ``(2) were furnished with the financial assistance of the United States Government, including through loans and guarantees; or ``(3) were licensed for export under section 38 of the Arms Export Control Act.''.

(b) Availability on Internet.--Section 655 of the Foreign Assistance Act of 1961 (22 U.S.C. 2415) is amended by adding at the end the following: ``(d) Availability on Internet.--All unclassified portions of such report shall be made available to the public on the Internet through the Department of State.''.

Chapter 3 of part III of the Foreign Assistance Act of 1961 (22 U.S.C. 2401 et seq.) is amended by inserting after section 655 the following:

``SEC. 656. ANNUAL FOREIGN MILITARY TRAINING REPORT.

``(a) Annual Report.--Not later than January 31 of each year, the Secretary of Defense and the Secretary of State shall jointly prepare and submit to the appropriate congressional committees a report on all military training provided to foreign military personnel by the Department of Defense and the Department of State during the previous fiscal year and all such training proposed for the current fiscal year. ``(b) Contents.--The report described in subsection (a) shall include the following:

``(1) For each military training activity, the foreign policy justification and purpose for the activity, the number of foreign military personnel provided training and their units of operation, and the location of the training. ``(2) For each country, the aggregate number of students trained and the aggregate cost of the military training activities. ``(3) With respect to United States personnel, the operational benefits to United States forces derived from each military training activity and the United States military units involved in each activity.

``(c) Form.--The report described in subsection (a) shall be in unclassified form but may include a classified annex. ``(d) Availability on Internet.--All unclassified portions of the report described in subsection (a) shall be made available to the public on the Internet through the Department of State. ``(e) Definition.--In this section, the term `appropriate congressional committees' means-- ``(1) the Committee on Appropriations and the Committee on International Relations of the House of Representatives; and ``(2) the Committee on Appropriations and the Committee on Foreign Relations of the Senate.''.

(a) Statement of Policy.--The Congress declares the following: (1) The President should transfer to the Government of the Philippines, on a grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j), the excess defense articles described in subsection (b). (2) The United States should not oppose the transfer of F-5 aircraft by a third country to the Government of the Philippines.

(b) Excess Defense Articles.--The excess defense articles described in this subsection are the following: (1) UH-1 helicopters and A-4 aircraft. (2) Amphibious landing craft, naval patrol vessels (including patrol vessels of the Coast Guard), and other naval vessels (such as frigates), if such vessels are available.

(c) Funding.--Of the amounts made available to carry out section 23 of the Arms Export Control Act (22 U.S.C. 2763) for fiscal years 2000 and 2001, $5,000,000 for each such fiscal year should be made available for assistance on a grant basis for the Philippines.

(a) Licensing regime.-- (1) Establishment.--The Secretary of State shall establish a regulatory regime for the licensing for export of commercial satellites, satellite technologies, their components, and systems which shall include expedited approval, as appropriate, of the licensing for export by United States companies of commercial satellites, satellite technologies, their components, and systems, to NATO allies and major non-NATO allies (as used within the meaning of section 644(q) of the Foreign Assistance Act of 1961).

(2) Requirements.--For proposed exports to those nations which meet the requirements of paragraph (1), the regime should include expedited processing of requests for export authorizations that-- (A) are time-critical, including a transfer or exchange of information relating to a satellite failure or anomaly in-flight or on-orbit; (B) are required to submit bids to procurements offered by foreign persons; (C) relate to the re-export of unimproved materials, products, or data; or (D) are required to obtain launch and on-orbit insurance. (3) Additional requirements.--In establishing the regulatory regime under paragraph (1), the Secretary of State shall ensure that-- (A) United States national security considerations and United States obligations under the Missile Technology Control Regime are given priority in the evaluation of any license; and (B) such time is afforded as is necessary for the Department of Defense, the Department of State, and the United States intelligence community to conduct a review of any license.

(b) Financial and Personnel Resources.--Of the funds authorized to be appropriated in section 101(1)(A), $9,000,000 is authorized to be appropriated for the Office of Defense Trade Controls of the Department of State for each of the fiscal years 2000 and 2001, to enable that office to carry out its responsibilities. (c) Improvement and Assessment.--The Secretary of State should, not later than 6 months after the date of the enactment of this Act, submit to the Congress a plan for-- (1) continuously gathering industry and public suggestions for potential improvements in the Department of State's export control regime for commercial satellites; and (2) arranging for the conduct and submission to Congress, not later than 15 months after the date of the enactment of this Act, of an independent review of the export control regime for commercial satellites as to its effectiveness at promoting national security and economic competitiveness.

(a) Study.--Not later than 180 days after the date of enactment of this Act, the Secretary of State should submit to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives a study on the performance of the licensing process pursuant to the Arms Export Control Act (22 U.S.C. 2751 et seq.), with recommendations on how to improve that performance. (b) Contents.--The study should include the following: (1) An analysis of the typology of licenses on which action was completed in 1999. The analysis should provide information on major categories of license requests, including-- (A) the number for nonautomatic small arms, automatic small arms, technical data, parts and components, and other weapons;

(B) the percentage of each category staffed to other agencies; (C) the average and median time taken for the processing cycle for each category when staffed and not staffed; (D) the average time taken by Presidential or National Security Council review or scrutiny, if significant; and (E) the average time spent at the Department of State after a decision had been taken on a license but before a contractor was notified of the decision. For each major category of license requests under this paragraph, the study should include a breakdown of licenses by country and the identity of each country that has been identified in the past three years pursuant to section 3(e) of the Arms Export Control Act (22 U.S.C. 2753(e)). (2) A review of the current computer capabilities of the Department of State relevant to the processing of licenses and its capability to communicate electronically with other agencies and contractors, and what improvements could be made that would speed the process, including the cost for such improvements. (3) An analysis of the work load and salary structure for export licensing officers of the Office of Defense Trade Controls of the Department of State as compared to comparable jobs at the Department of Commerce and the Department of Defense. (4) Any suggestions of the Department of State relating to resources and regulations, and any relevant statutory changes that might expedite the licensing process while furthering the objectives of the Arms Export Control Act (22 U.S.C. 2751 et seq.).

(a) In General.--Not later than 180 days after the date of the enactment of this Act, the Secretary of State shall submit to the appropriate committees of Congress a report containing-- (1) an assessment of whether the global trade in small arms poses any proliferation problems, including-- (A) estimates of the numbers and sources of licit and illicit small arms and light arms in circulation and their origins; (B) the challenges associated with monitoring small arms; and (C) the political, economic, and security dimensions of this issue, and the threats posed, if any, by these weapons to United States interests, including national security interests; (2) an assessment of whether the export of small arms of the type sold commercially in the United States should be considered a foreign policy or proliferation issue; (3) a description and analysis of the adequacy of current Department of State activities to monitor and, to the extent possible, ensure adequate control of, both the licit and illicit manufacture, transfer, and proliferation of small arms and light weapons, including efforts to survey and assess this matter with respect to Africa and to survey and assess the scope

and scale of the issue, including stockpile security and destruction of excess inventory, in NATO and Partnership for Peace countries; (4) a description of the impact of the reorganization of the Department of State made by the Foreign Affairs Reform and Restructuring Act of 1998 on the transfer of functions relating to monitoring, licensing, analysis, and policy on small arms and light weapons, including-- (A) the integration of and the functions relating to small arms and light weapons of the United States Arms Control and Disarmament Agency with those of the Department of State; (B) the functions of the Bureau of Arms Control, the Bureau of Nonproliferation, the Bureau of Political- Military Affairs, the Bureau of International Narcotics and Law Enforcement, regional bureaus, and any other relevant bureau or office of the Department of State, including the allocation of personnel and funds, as they pertain to small arms and light weapons; (C) the functions of the regional bureaus of the Department of State in providing information and policy coordination in bilateral and multilateral settings on small arms and light weapons; (D) the functions of the Under Secretary of State for Arms Control and International Security pertaining to small arms and light weapons; and (E) the functions of the scientific and policy advisory board on arms control, nonproliferation, and disarmament pertaining to small arms and light weapons; and (5) an assessment of whether foreign governments are enforcing their own laws concerning small arms and light weapons import and sale, including commitments under the Inter-American Convention Against the Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives, and Other Related Materials or other relevant international agreements.

(b) Definition.--In this section, the term ``appropriate committees of Congress'' means the Committee on Foreign Relations and the Select Committee on Intelligence of the Senate and the Committee on International Relations and the Permanent Select Committee on Intelligence of the House of Representatives.

Subsection (d) of section 248 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-261; 112 Stat. 1958) is amended by inserting ``, and to the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives,'' after ``congressional defense committees''.

APPENDIX H--H.R. 3428

CONSOLIDATED FEDERAL MILK MARKETING ORDERS.

(a) Final Rule Defined.--In this section, the term ``final rule'' means the final rule for the consolidation and reform of Federal milk marketing orders that was published in the Federal Register on September 1, 1999 (64 Fed. Reg. 47897-48021), to comply with section 143 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7253). (b) Implementation of Final Rule for Milk Order Reform.--Subject to subsection (c), the final rule shall take effect, and be implemented by the Secretary of Agriculture, on the first day of the first month beginning at least 30 days after the date of the enactment of this Act. (c) Use of Option 1A for Pricing Class I Milk.--In lieu of the Class I price differentials specified in the final rule, the Secretary of Agriculture shall price fluid or Class I milk under the Federal milk marketing orders using the Class I price differentials identified as Option 1A ``Location-Specific Differentials Analysis'' in the proposed rule published in the Federal Register on January 30, 1998 (63 Fed. Reg. 4802, 4809), except that the Secretary shall include the corrections and modifications to such Class I differentials made by the Secretary through April 2, 1999. (d) Effect of Prior Announcement of Minimum Prices.--If the Secretary of Agriculture announces minimum prices for milk under Federal milk marketing orders pursuant to section 1000.50 of title 7, Code of Federal Regulations, before the effective date specified in subsection (b), the minimum prices so announced before that date shall be the only applicable minimum prices under Federal milk marketing orders for the month or months for which the prices have been announced. (e) Implementation of Requirement.--The implementation of the final rule, as modified by subsection (c), shall not be subject to any of the following: (1) The notice and hearing requirements of section 8c(3) of the Agricultural Adjustment Act (7 U.S.C. 608c(3)), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, or the notice and comment provisions of section 553 of title 5, United States Code. (2) A referendum conducted by the Secretary of Agriculture pursuant to subsections (17) or (19) of section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937.

(3) The Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking. (4) Chapter 35 of title 44, United States Code (commonly known as the Paperwork Reduction Act). (5) Any decision, restraining order, or injunction issued by a United States court before the date of the enactment of this Act.

CLASS IV MILK UNDER MARKETING ORDERS.

(a) Congressional Finding.--The Class III and Class IV milk pricing formulas included in the final decision for the consolidation and reform of Federal milk marketing orders, as published in the Federal Register on April 2, 1999 (64 Fed. Reg. 16025), do not adequately reflect public comment on the original proposed rule published in the Federal Register on January 30, 1998 (63 Fed. Reg. 4802), and are sufficiently different from the proposed rule and any comments submitted with regard to the proposed rule that further emergency rulemaking is merited. (b) Rulemaking Required.--The Secretary of Agriculture shall conduct rulemaking, on the record after an opportunity for an agency hearing, to reconsider the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk marketing orders that was published in the Federal Register on September 1, 1999 (64 Fed. Reg. 47897-48021). (c) Time Period for Rulemaking.--On December 1, 2000, the Secretary of Agriculture shall publish in the Federal Register a final decision on the Class III and Class IV milk pricing formulas. The resulting formulas shall take effect, and be implemented by the Secretary, on January 1, 2001. (d) Effect of Court Order.--The actions authorized by subsections (b) and (c) are intended to ensure the timely publication and implementation of new pricing formulas for Class III and Class IV milk. In the event that the Secretary of Agriculture is enjoined or otherwise restrained by a court order from implementing a final decision within the time period specified in subsection (c), the length of time for which that injunction or other restraining order is effective shall be added to the time limitations specified in subsection (c) thereby extending those time limitations by a period of time equal to the period of time for which the injunction or other restraining order is effective. (e) Failure To Timely Complete Rulemaking.--If the Secretary of Agriculture fails to implement new Class III and Class IV milk pricing formulas within the time period required under subsection (c) (plus any additional period provided under subsection (d)), the Secretary may not assess or collect assessments from milk producers or handlers under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, for marketing order administration and services provided under such section after the end of that period until the pricing formulas are implemented. The Secretary may not reduce the level of services provided under that section on account of the prohibition against assessments, but shall rather cover the cost of marketing order administration

and services through funds available for the Agricultural Marketing Service of the Department. (f) Implementation of Requirement.--The implementation of the final decision on new Class III and Class IV milk pricing formulas shall not be subject to congressional review under chapter 8 of title 5, United States Code.

The Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended by adding at the end the following new section:

``SEC. 23. DAIRY FORWARD PRICING PILOT PROGRAM.

``(a) Pilot Program Required.--Not later than 90 days after the date of the enactment of this section, the Secretary of Agriculture shall establish a temporary pilot program under which milk producers and cooperatives are authorized to voluntarily enter into forward price contracts with milk handlers. ``(b) Minimum Milk Price Requirements.--Payments made by milk handlers to milk producers and cooperatives, and prices received by milk producers and cooperatives, under the forward contracts shall be deemed to satisfy-- ``(1) all regulated minimum milk price requirements of paragraphs (B) and (F) of subsection (5) of section 8c; and ``(2) the requirement of paragraph (C) of such subsection regarding total payments by each handler.

``(c) Milk Covered by Pilot Program.-- ``(1) Covered milk.--The pilot program shall apply only with respect to the marketing of federally regulated milk that-- ``(A) is not classified as Class I milk or otherwise intended for fluid use; and ``(B) is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects interstate or foreign commerce in federally regulated milk. ``(2) Relation to class i milk.--To assist milk handlers in complying with the limitation in paragraph (1)(A) without having to segregate or otherwise individually track the source and disposition of milk, a milk handler may allocate milk receipts from producers, cooperatives, and other sources that are not subject to a forward contract to satisfy the handler's obligations with regard to Class I milk usage.

``(d) Duration.--The authority of the Secretary of Agriculture to carry out the pilot program shall terminate on December 31, 2004. No forward price contract entered into under the program may extend beyond that date. ``(e) Study and Report on Effect of Pilot Program.-- ``(1) Study.--The Secretary of Agriculture shall conduct a study on forward contracting between milk producers and cooperatives and milk handlers to determine the impact on milk prices paid to producers in the United States. To obtain information for the study, the Secretary may use the authorities available to the Secretary under section 8d, subject to the confidentiality requirements of subsection (2) of such section. ``(2) Report.--Not later than April 30, 2002, the Secretary shall submit to the Committee on Agriculture, Nutrition and Forestry of the Senate and the Committee on Agriculture of

the House of Representatives a report containing the results of the study.''.

DAIRY COMPACT.

Section 147(3) of the Agricultural Market Transition Act (7 U.S.C. 7256(3)) is amended by striking ``concurrent with'' and all that follows through the period at the end and inserting ``on September 30, 2001.''.

APPENDIX I--S. 1948

SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Intellectual Property and Communications Omnibus Reform Act of 1999''. (b) Table of Contents.--The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

This title may be cited as the ``Satellite Home Viewer Improvement Act of 1999''.

LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS WITHIN LOCAL MARKETS.

(a) In General.--Chapter 1 of title 17, United States Code, is amended by adding after section 121 the following new section: ``Sec. 122. Limitations on exclusive rights; secondary transmissions by satellite carriers within local markets

``(a) Secondary Transmissions of Television Broadcast Stations by Satellite Carriers.--A secondary transmission of a performance or display of a work embodied in a primary transmission of a television broadcast station into the station's local market shall be subject to statutory licensing under this section if-- ``(1) the secondary transmission is made by a satellite carrier to the public; ``(2) with regard to secondary transmissions, the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals; and ``(3) the satellite carrier makes a direct or indirect charge for the secondary transmission to-- ``(A) each subscriber receiving the secondary transmission; or ``(B) a distributor that has contracted with the satellite carrier for direct or indirect delivery of the secondary transmission to the public.

``(b) Reporting Requirements.-- ``(1) Initial lists.--A satellite carrier that makes secondary transmissions of a primary transmission made by a network station under subsection (a) shall, within 90 days after commencing such secondary transmissions, submit to the network

that owns or is affiliated with the network station a list identifying (by name in alphabetical order and street address, including county and zip code) all subscribers to which the satellite carrier makes secondary transmissions of that primary transmission under subsection (a). ``(2) Subsequent lists.--After the list is submitted under paragraph (1), the satellite carrier shall, on the 15th of each month, submit to the network a list identifying (by name in alphabetical order and street address, including county and zip code) any subscribers who have been added or dropped as subscribers since the last submission under this subsection. ``(3) Use of subscriber information.--Subscriber information submitted by a satellite carrier under this subsection may be used only for the purposes of monitoring compliance by the satellite carrier with this section. ``(4) Requirements of networks.--The submission requirements of this subsection shall apply to a satellite carrier only if the network to which the submissions are to be made places on file with the Register of Copyrights a document identifying the name and address of the person to whom such submissions are to be made. The Register of Copyrights shall maintain for public inspection a file of all such documents.

``(c) No Royalty Fee Required.--A satellite carrier whose secondary transmissions are subject to statutory licensing under subsection (a) shall have no royalty obligation for such secondary transmissions. ``(d) Noncompliance With Reporting and Regulatory Requirements.-- Notwithstanding subsection (a), the willful or repeated secondary transmission to the public by a satellite carrier into the local market of a television broadcast station of a primary transmission embodying a performance or display of a work made by that television broadcast station is actionable as an act of infringement under section 501, and is fully subject to the remedies provided under sections 502 through 506 and 509, if the satellite carrier has not complied with the reporting requirements of subsection (b) or with the rules, regulations, and authorizations of the Federal Communications Commission concerning the carriage of television broadcast signals. ``(e) Willful Alterations.--Notwithstanding subsection (a), the secondary transmission to the public by a satellite carrier into the local market of a television broadcast station of a performance or display of a work embodied in a primary transmission made by that television broadcast station is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and sections 509 and 510, if the content of the particular program in which the performance or display is embodied, or any commercial advertising or station announcement transmitted by the primary transmitter during, or immediately before or after, the transmission of such program, is in any way willfully altered by the satellite carrier through changes, deletions, or additions, or is combined with programming from any other broadcast signal. ``(f ) Violation of Territorial Restrictions on Statutory License for Television Broadcast Stations.-- ``(1) Individual violations.--The willful or repeated secondary transmission to the public by a satellite carrier of a primary transmission embodying a performance or display of

a work made by a television broadcast station to a subscriber who does not reside in that station's local market, and is not subject to statutory licensing under section 119 or a private licensing agreement, is actionable as an act of infringement under section 501 and is fully subject to the remedies provided by sections 502 through 506 and 509, except that-- ``(A) no damages shall be awarded for such act of infringement if the satellite carrier took corrective action by promptly withdrawing service from the ineligible subscriber; and ``(B) any statutory damages shall not exceed $5 for such subscriber for each month during which the violation occurred. ``(2) Pattern of violations.--If a satellite carrier engages in a willful or repeated pattern or practice of secondarily transmitting to the public a primary transmission embodying a performance or display of a work made by a television broadcast station to subscribers who do not reside in that station's local market, and are not subject to statutory licensing under section 119 or a private licensing agreement, then in addition to the remedies under paragraph (1)-- ``(A) if the pattern or practice has been carried out on a substantially nationwide basis, the court-- ``(i) shall order a permanent injunction barring the secondary transmission by the satellite carrier of the primary transmissions of that television broadcast station (and if such television broadcast station is a network station, all other television broadcast stations affiliated with such network); and ``(ii) may order statutory damages not exceeding $250,000 for each 6-month period during which the pattern or practice was carried out; and ``(B) if the pattern or practice has been carried out on a local or regional basis with respect to more than one television broadcast station, the court-- ``(i) shall order a permanent injunction barring the secondary transmission in that locality or region by the satellite carrier of the primary transmissions of any television broadcast station; and ``(ii) may order statutory damages not exceeding $250,000 for each 6-month period during which the pattern or practice was carried out.

``(g) Burden of Proof.--In any action brought under subsection (f ), the satellite carrier shall have the burden of proving that its secondary transmission of a primary transmission by a television broadcast station is made only to subscribers located within that station's local market or subscribers being served in compliance with section 119 or a private licensing agreement. ``(h) Geographic Limitations on Secondary Transmissions.--The statutory license created by this section shall apply to secondary transmissions to locations in the United States. ``(i) Exclusivity With Respect to Secondary Transmissions of Broadcast Stations by Satellite to Members of the Public.--No provision of section 111 or any other law (other than this section and section 119) shall be construed to contain any authorization, exemption, or license through which secondary transmissions by satellite carriers of programming contained in a primary

transmission made by a television broadcast station may be made without obtaining the consent of the copyright owner. ``( j) Definitions.--In this section-- ``(1) Distributor.--The term `distributor' means an entity which contracts to distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary transmission either directly to individual subscribers or indirectly through other program distribution entities. ``(2) Local market.-- ``(A) In general.--The term `local market', in the case of both commercial and noncommercial television broadcast stations, means the designated market area in which a station is located, and-- ``(i) in the case of a commercial television broadcast station, all commercial television broadcast stations licensed to a community within the same designated market area are within the same local market; and ``(ii) in the case of a noncommercial educational television broadcast station, the market includes any station that is licensed to a community within the same designated market area as the noncommercial educational television broadcast station. ``(B) County of license.--In addition to the area described in subparagraph (A), a station's local market includes the county in which the station's community of license is located. ``(C) Designated market area.--For purposes of subparagraph (A), the term `designated market area' means a designated market area, as determined by Nielsen Media Research and published in the 1999-2000 Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates or any successor publication. ``(3) Network station; satellite carrier; secondary transmission.--The terms `network station', `satellite carrier', and `secondary transmission' have the meanings given such terms under section 119(d). ``(4) Subscriber.--The term `subscriber' means a person who receives a secondary transmission service from a satellite carrier and pays a fee for the service, directly or indirectly, to the satellite carrier or to a distributor. ``(5) Television broadcast station.--The term `television broadcast station'-- ``(A) means an over-the-air, commercial or noncommercial television broadcast station licensed by the Federal Communications Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television station; and ``(B) includes a television broadcast station licensed by an appropriate governmental authority of Canada or Mexico if the station broadcasts primarily in the English language and is a network station as defined in section 119(d)(2)(A).''.

(b) Infringement of Copyright.--Section 501 of title 17, United States Code, is amended by adding at the end the following new subsection: ``(f )(1) With respect to any secondary transmission that is made by a satellite carrier of a performance or display of a work embodied in a primary transmission and is actionable as an act of infringement under section 122, a television broadcast station holding a copyright or other license to transmit or perform the same version of that work shall, for purposes of subsection (b) of this section, be treated as a legal or beneficial owner if such secondary transmission occurs within the local market of that station. ``(2) A television broadcast station may file a civil action against any satellite carrier that has refused to carry television broadcast signals, as required under section 122(a)(2), to enforce that television broadcast station's rights under section 338(a) of the Communications Act of 1934.''. (c) Technical and Conforming Amendments.--The table of sections for chapter 1 of title 17, United States Code, is amended by adding after the item relating to section 121 the following: ``122. Limitations on exclusive rights; secondary transmissions by satellite carriers within local market.''.

TITLE 17, UNITED STATES CODE.

Section 4(a) of the Satellite Home Viewer Act of 1994 (17 U.S.C. 119 note; Public Law 103-369; 108 Stat. 3481) is amended by striking ``December 31, 1999'' and inserting ``December 31, 2004''.

Section 119(c) of title 17, United States Code, is amended by adding at the end the following new paragraph: ``(4) Reduction.-- ``(A) Superstation.--The rate of the royalty fee in effect on January 1, 1998, payable in each case under subsection (b)(1)(B)(i) shall be reduced by 30 percent. ``(B) Network and public broadcasting satellite feed.--The rate of the royalty fee in effect on January 1, 1998, payable under subsection (b)(1)(B)(ii) shall be reduced by 45 percent. ``(5) Public broadcasting service as agent.--For purposes of section 802, with respect to royalty fees paid by satellite carriers for retransmitting the Public Broadcasting Service satellite feed, the Public Broadcasting Service shall be the agent for all public television copyright claimants and all Public Broadcasting Service member stations.''.

(a) Unserved Household.-- (1) In general.--Section 119(d) of title 17, United States Code, is amended by striking paragraph (10) and inserting the following: ``(10) Unserved household.--The term `unserved household', with respect to a particular television network, means a household that-- ``(A) cannot receive, through the use of a conventional, stationary, outdoor rooftop receiving antenna, an over-the-air signal of a primary network station affiliated with

that network of Grade B intensity as defined by the Federal Communications Commission under section 73.683(a) of title 47 of the Code of Federal Regulations, as in effect on January 1, 1999; ``(B) is subject to a waiver granted under regulations established under section 339(c)(2) of the Communications Act of 1934; ``(C) is a subscriber to whom subsection (e) applies; ``(D) is a subscriber to whom subsection (a)(11) applies; or ``(E) is a subscriber to whom the exemption under subsection (a)(2)(B)(iii) applies.''. (2) Conforming amendment.--Section 119(a)(2)(B) of title 17, United States Code, is amended to read as follows: ``(B) Secondary transmissions to unserved households.-- ``(i) In general.--The statutory license provided for in subparagraph (A) shall be limited to secondary transmissions of the signals of no more than two network stations in a single day for each television network to persons who reside in unserved households. ``(ii) Accurate determinations of eligibility.-- ``(I) Accurate predictive model.--In determining presumptively whether a person resides in an unserved household under subsection (d)(10)(A), a court shall rely on the Individual Location Longley-Rice model set forth by the Federal Communications Commission in Docket No. 98-201, as that model may be amended by the Commission over time under section 339(c)(3) of the Communications Act of 1934 to increase the accuracy of that model. ``(II) Accurate measurements.--For purposes of site measurements to determine whether a person resides in an unserved household under subsection (d)(10)(A), a court shall rely on section 339(c)(4) of the Communications Act of 1934. ``(iii) C-band exemption to unserved households.-- ``(I) In general.--The limitations of clause (i) shall not apply to any secondary transmissions by C-band services of network stations that a subscriber to C-band service received before any termination of such secondary transmissions before October 31, 1999. ``(II) Definition.--In this clause the term `C-band service' means a service that is licensed by the Federal Communications Commission and operates in the Fixed Satellite Service under part 25 of title 47 of the Code of Federal Regulations.''.

(b) Exception to Limitation on Secondary Transmissions.--Section 119(a)(5) of title 17, United States Code, is amended by adding at the end the following: ``(E) Exception.--The secondary transmission by a satellite carrier of a performance or display of a work embodied in a primary transmission made by a network station to

subscribers who do not reside in unserved households shall not be an act of infringement if-- ``(i) the station on May 1, 1991, was retransmitted by a satellite carrier and was not on that date owned or operated by or affiliated with a television network that offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States; ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of this section; and ``(iii) the station is not owned or operated by or affiliated with a television network that, as of January 1, 1995, offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States.''.

(c) Moratorium on Copyright Liability.--Section 119(e) of title 17, United States Code, is amended to read as follows: ``(e) Moratorium on Copyright Liability.--Until December 31, 2004, a subscriber who does not receive a signal of Grade A intensity (as defined in the regulations of the Federal Communications Commission under section 73.683(a) of title 47 of the Code of Federal Regulations, as in effect on January 1, 1999, or predicted by the Federal Communications Commission using the Individual Location Longley-Rice methodology described by the Federal Communications Commission in Docket No. 98-201) of a local network television broadcast station shall remain eligible to receive signals of network stations affiliated with the same network, if that subscriber had satellite service of such network signal terminated after July 11, 1998, and before October 31, 1999, as required by this section, or received such service on October 31, 1999.''. (d) Recreational Vehicle and Commercial Truck Exemption.--Section 119(a) of title 17, United States Code, is amended by adding at the end the following: ``(11) Service to recreational vehicles and commercial trucks.-- ``(A) Exemption.-- ``(i) In general.--For purposes of this subsection, and subject to clauses (ii) and (iii), the term `unserved household' shall include-- ``(I) recreational vehicles as defined in regulations of the Secretary of Housing and Urban Development under section 3282.8 of title 24 of the Code of Federal Regulations; and ``(II) commercial trucks that qualify as commercial motor vehicles under regulations of the Secretary of Transportation under section 383.5 of title 49 of the Code of Federal Regulations. ``(ii) Limitation.--Clause (i) shall apply only to a recreational vehicle or commercial truck if any satellite carrier that proposes to make a secondary transmission of a network station to the operator of such a recreational vehicle or commercial truck complies with the documentation requirements under subparagraphs (B) and (C).

``(iii) Exclusion.--For purposes of this subparagraph, the terms `recreational vehicle' and `commercial truck' shall not include any fixed dwelling, whether a mobile home or otherwise. ``(B) Documentation requirements.--A recreational vehicle or commercial truck shall be deemed to be an unserved household beginning 10 days after the relevant satellite carrier provides to the network that owns or is affiliated with the network station that will be secondarily transmitted to the recreational vehicle or commercial truck the following documents: ``(i) Declaration.--A signed declaration by the operator of the recreational vehicle or commercial truck that the satellite dish is permanently attached to the recreational vehicle or commercial truck, and will not be used to receive satellite programming at any fixed dwelling. ``(ii) Registration.--In the case of a recreational vehicle, a copy of the current State vehicle registration for the recreational vehicle. ``(iii) Registration and license.--In the case of a commercial truck, a copy of-- ``(I) the current State vehicle registration for the truck; and ``(II) a copy of a valid, current commercial driver's license, as defined in regulations of the Secretary of Transportation under section 383 of title 49 of the Code of Federal Regulations, issued to the operator. ``(C) Updated documentation requirements.--If a satellite carrier wishes to continue to make secondary transmissions to a recreational vehicle or commercial truck for more than a 2-year period, that carrier shall provide each network, upon request, with updated documentation in the form described under subparagraph (B) during the 90 days before expiration of that 2-year period.''.

(e) Conforming Amendment.--Section 119(d)(11) of title 17, United States Code, is amended to read as follows: ``(11) Local market.--The term `local market' has the meaning given such term under section 122( j).''.

(a) Secondary Transmissions.--Section 119(a)(1) of title 17, United States Code, is amended-- (1) by striking the paragraph heading and inserting ``(1) Superstations and pbs satellite feed.--''; (2) by inserting ``or by the Public Broadcasting Service satellite feed'' after ``superstation''; and (3) by adding at the end the following: ``In the case of the Public Broadcasting Service satellite feed, the statutory license shall be effective until January 1, 2002.''.

(b) Royalty Fees.--Section 119(b)(1)(B)(iii) of title 17, United States Code, is amended by inserting ``or the Public Broadcasting Service satellite feed'' after ``network station''. (c) Definitions.--Section 119(d) of title 17, United States Code, is amended-- (1) by amending paragraph (9) to read as follows:

``(9) Superstation.--The term `superstation'-- ``(A) means a television broadcast station, other than a network station, licensed by the Federal Communications Commission that is secondarily transmitted by a satellite carrier; and ``(B) except for purposes of computing the royalty fee, includes the Public Broadcasting Service satellite feed.''; and (2) by adding at the end the following: ``(12) Public broadcasting service satellite feed.--The term `Public Broadcasting Service satellite feed' means the national satellite feed distributed and designated for purposes of this section by the Public Broadcasting Service consisting of educational and informational programming intended for private home viewing, to which the Public Broadcasting Service holds national terrestrial broadcast rights.''.

REGULATIONS.

Section 119(a) of title 17, United States Code, is amended-- (1) in paragraph (1), by inserting ``with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals,'' after ``satellite carrier to the public for private home viewing,''; (2) in paragraph (2), by inserting ``with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing the carriage of television broadcast station signals,'' after ``satellite carrier to the public for private home viewing,''; and (3) by adding at the end of such subsection (as amended by section 1005(e) of this Act) the following new paragraph: ``(12) Statutory license contingent on compliance with fcc rules and remedial steps.--Notwithstanding any other provision of this section, the willful or repeated secondary transmission to the public by a satellite carrier of a primary transmission embodying a performance or display of a work made by a broadcast station licensed by the Federal Communications Commission is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and 509, if, at the time of such transmission, the satellite carrier is not in compliance with the rules, regulations, and authorizations of the Federal Communications Commission concerning the carriage of television broadcast station signals.''.

BROADCAST SIGNALS.

(a) Amendments to Communications Act of 1934.--Title III of the Communications Act of 1934 is amended by inserting after section 337 (47 U.S.C. 337) the following new sections: ``SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE CARRIERS.

``(a) Carriage Obligations.--

``(1) In general.--Subject to the limitations of paragraph (2), each satellite carrier providing, under section 122 of title 17, United States Code, secondary transmissions to subscribers located within the local market of a television broadcast station of a primary transmission made by that station shall carry upon request the signals of all television broadcast stations located within that local market, subject to section 325(b). ``(2) Remedies for failure to carry.--The remedies for any failure to meet the obligations under this subsection shall be available exclusively under section 501(f ) of title 17, United States Code. ``(3) Effective date.--No satellite carrier shall be required to carry local television broadcast stations under paragraph (1) until January 1, 2002.

``(b) Good Signal Required.-- ``(1) Costs.--A television broadcast station asserting its right to carriage under subsection (a) shall be required to bear the costs associated with delivering a good quality signal to the designated local receive facility of the satellite carrier or to another facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market. ``(2) Regulations.--The regulations issued under subsection (g) shall set forth the obligations necessary to carry out this subsection.

``(c) Duplication Not Required.-- ``(1) Commercial stations.--Notwithstanding subsection (a), a satellite carrier shall not be required to carry upon request the signal of any local commercial television broadcast station that substantially duplicates the signal of another local commercial television broadcast station which is secondarily transmitted by the satellite carrier within the same local market, or to carry upon request the signals of more than one local commercial television broadcast station in a single local market that is affiliated with a particular television network unless such stations are licensed to communities in different States. ``(2) Noncommercial stations.--The Commission shall prescribe regulations limiting the carriage requirements under subsection (a) of satellite carriers with respect to the carriage of multiple local noncommercial television broadcast stations. To the extent possible, such regulations shall provide the same degree of carriage by satellite carriers of such multiple stations as is provided by cable systems under section 615.

``(d) Channel Positioning.--No satellite carrier shall be required to provide the signal of a local television broadcast station to subscribers in that station's local market on any particular channel number or to provide the signals in any particular order, except that the satellite carrier shall retransmit the signal of the local television broadcast stations to subscribers in the stations' local market on contiguous channels and provide access to such station's signals at a nondiscriminatory price and in a nondiscriminatory manner on any navigational device, on-screen program guide, or menu. ``(e) Compensation for Carriage.--A satellite carrier shall not accept or request monetary payment or other valuable consideration in exchange either for carriage of local television broadcast stations in fulfillment of the requirements of this section or for

channel positioning rights provided to such stations under this section, except that any such station may be required to bear the costs associated with delivering a good quality signal to the local receive facility of the satellite carrier. ``(f ) Remedies.-- ``(1) Complaints by broadcast stations.--Whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations under subsections (b) through (e) of this section, such station shall notify the carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier failed to comply with such obligations. The satellite carrier shall, within 30 days after such written notification, respond in writing to such notification and comply with such obligations or state its reasons for believing that it is in compliance with such obligations. A local television broadcast station that disputes a response by a satellite carrier that it is in compliance with such obligations may obtain review of such denial or response by filing a complaint with the Commission. Such complaint shall allege the manner in which such satellite carrier has failed to meet its obligations and the basis for such allegations. ``(2) Opportunity to respond.--The Commission shall afford the satellite carrier against which a complaint is filed under paragraph (1) an opportunity to present data and arguments to establish that there has been no failure to meet its obligations under this section. ``(3) Remedial actions; dismissal.--Within 120 days after the date a complaint is filed under paragraph (1), the Commission shall determine whether the satellite carrier has met its obligations under subsections (b) through (e). If the Commission determines that the satellite carrier has failed to meet such obligations, the Commission shall order the satellite carrier to take appropriate remedial action. If the Commission determines that the satellite carrier has fully met the requirements of such subsections, the Commission shall dismiss the complaint.

``(g) Regulations by Commission.--Within 1 year after the date of the enactment of this section, the Commission shall issue regulations implementing this section following a rulemaking proceeding. The regulations prescribed under this section shall include requirements on satellite carriers that are comparable to the requirements on cable operators under sections 614(b) (3) and (4) and 615(g) (1) and (2). ``(h) Definitions.--As used in this section: ``(1) Distributor.--The term `distributor' means an entity which contracts to distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary transmission either directly to individual subscribers or indirectly through other program distribution entities. ``(2) Local receive facility.--The term `local receive facility' means the reception point in each local market which a satellite carrier designates for delivery of the signal of the station for purposes of retransmission. ``(3) Local market.--The term `local market' has the meaning given that term under section 122( j) of title 17, United States Code.

``(4) Satellite carrier.--The term `satellite carrier' has the meaning given such term under section 119(d) of title 17, United States Code. ``(5) Secondary transmission.--The term `secondary transmission' has the meaning given such term in section 119(d) of title 17, United States Code. ``(6) Subscriber.--The term `subscriber' has the meaning given that term under section 122( j) of title 17, United States Code. ``(7) Television broadcast station.--The term `television broadcast station' has the meaning given such term in section 325(b)(7). ``SEC. 339. CARRIAGE OF DISTANT TELEVISION STATIONS BY SATELLITE CARRIERS.

``(a) Provisions Relating to Carriage of Distant Signals.-- ``(1) Carriage permitted.-- ``(A) In general.--Subject to section 119 of title 17, United States Code, any satellite carrier shall be permitted to provide the signals of no more than two network stations in a single day for each television network to any household not located within the local markets of those network stations. ``(B) Additional service.--In addition to signals provided under subparagraph (A), any satellite carrier may also provide service under the statutory license of section 122 of title 17, United States Code, to the local market within which such household is located. The service provided under section 122 of such title may be in addition to the two signals provided under section 119 of such title. ``(2) Penalty for violation.--Any satellite carrier that knowingly and willfully provides the signals of television stations to subscribers in violation of this subsection shall be liable for a forfeiture penalty under section 503 in the amount of $50,000 for each violation or each day of a continuing violation.

``(b) Extension of Network Nonduplication, Syndicated Exclusivity, and Sports Blackout to Satellite Retransmission.-- ``(1) Extension of protections.--Within 45 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall commence a single rulemaking proceeding to establish regulations that-- ``(A) apply network nonduplication protection (47 CFR 76.92) syndicated exclusivity protection (47 CFR 76.151), and sports blackout protection (47 CFR 76.67) to the retransmission of the signals of nationally distributed superstations by satellite carriers to subscribers; and ``(B) to the extent technically feasible and not economically prohibitive, apply sports blackout protection (47 CFR 76.67) to the retransmission of the signals of network stations by satellite carriers to subscribers. ``(2) Deadline for action.--The Commission shall complete all actions necessary to prescribe regulations required by this section so that the regulations shall become effective within 1 year after such date of enactment.

``(c) Eligibility for Retransmission.-- ``(1) Signal standard for satellite carrier purposes.--For the purposes of identifying an unserved household under section 119(d)(10) of title 17, United States Code, within 1 year after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall conclude an inquiry to evaluate all possible standards and factors for determining eligibility for retransmissions of the signals of network stations, and, if appropriate-- ``(A) recommend modifications to the Grade B intensity standard for analog signals set forth in section 73.683(a) of its regulations (47 CFR 73.683(a)), or recommend alternative standards or factors for purposes of determining such eligibility; and ``(B) make a further recommendation relating to an appropriate standard for digital signals. ``(2) Waivers.--A subscriber who is denied the retransmission of a signal of a network station under section 119 of title 17, United States Code, may request a waiver from such denial by submitting a request, through such subscriber's satellite carrier, to the network station asserting that the retransmission is prohibited. The network station shall accept or reject a subscriber's request for a waiver within 30 days after receipt of the request. The subscriber shall be permitted to receive such retransmission under section 119(d)(10)(B) of title 17, United States Code, if such station agrees to the waiver request and files with the satellite carrier a written waiver with respect to that subscriber allowing the subscriber to receive such retransmission. If a television network station fails to accept or reject a subscriber's request for a waiver within the 30-day period after receipt of the request, that station shall be deemed to agree to the waiver request and have filed such written waiver. ``(3) Establishment of improved predictive model required.-- Within 180 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall take all actions necessary, including any reconsideration, to develop and prescribe by rule a point-to-point predictive model for reliably and presumptively determining the ability of individual locations to receive signals in accordance with the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code. In prescribing such model, the Commission shall rely on the Individual Location Longley-Rice model set forth by the Federal Communications Commission in Docket No. 98-201 and ensure that such model takes into account terrain, building structures, and other land cover variations. The Commission shall establish procedures for the continued refinement in the application of the model by the use of additional data as it becomes available. ``(4) Objective verification.-- ``(A) In general.--If a subscriber's request for a waiver under paragraph (2) is rejected and the subscriber submits to the subscriber's satellite carrier a request for a test verifying the subscriber's inability to receive a signal that meets the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, the satellite carrier and the network station or stations asserting that

the retransmission is prohibited with respect to that subscriber shall select a qualified and independent person to conduct a test in accordance with section 73.686(d) of its regulations (47 CFR 73.686(d)), or any successor regulation. Such test shall be conducted within 30 days after the date the subscriber submits a request for the test. If the written findings and conclusions of a test conducted in accordance with such section (or any successor regulation) demonstrate that the subscriber does not receive a signal that meets or exceeds the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, the subscriber shall not be denied the retransmission of a signal of a network station under section 119 of title 17, United States Code. ``(B) Designation of tester and allocation of costs.--If the satellite carrier and the network station or stations asserting that the retransmission is prohibited are unable to agree on such a person to conduct the test, the person shall be designated by an independent and neutral entity designated by the Commission by rule. Unless the satellite carrier and the network station or stations otherwise agree, the costs of conducting the test under this paragraph shall be borne by the satellite carrier, if the station's signal meets or exceeds the signal intensity standard in effect under section 119(d)(10)(A) of title 17, United States Code, or by the network station, if its signal fails to meet or exceed such standard. ``(C) Avoidance of undue burden.--Commission regulations prescribed under this paragraph shall seek to avoid any undue burden on any party.

``(d) Definitions.--For the purposes of this section: ``(1) Local market.--The term `local market' has the meaning given that term under section 122( j) of title 17, United States Code. ``(2) Nationally distributed superstation.--The term `nationally distributed superstation' means a television broadcast station, licensed by the Commission, that-- ``(A) is not owned or operated by or affiliated with a television network that, as of January 1, 1995, offered interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more States; ``(B) on May 1, 1991, was retransmitted by a satellite carrier and was not a network station at that time; and ``(C) was, as of July 1, 1998, retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code. ``(3) Network station.--The term `network station' has the meaning given such term under section 119(d) of title 17, United States Code. ``(4) Satellite carrier.--The term `satellite carrier' has the meaning given such term under section 119(d) of title 17, United States Code. ``(5) Television network.--The term `television network' means a television network in the United States which offers an interconnected program service on a regular basis for 15

or more hours per week to at least 25 affiliated broadcast stations in 10 or more States.''.

(b) Network Station Definition.--Section 119(d)(2) of title 17, United States Code, is amended-- (1) in subparagraph (B) by striking the period and inserting a semicolon; and (2) by adding after subparagraph (B) the following:

``except that the term does not include the signal of the Alaska Rural Communications Service, or any successor entity to that service.''.

(a) In General.--Section 325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)) is amended-- (1) by amending paragraphs (1) and (2) to read as follows:

``(b)(1) No cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except-- ``(A) with the express authority of the originating station; ``(B) under section 614, in the case of a station electing, in accordance with this subsection, to assert the right to carriage under such section; or ``(C) under section 338, in the case of a station electing, in accordance with this subsection, to assert the right to carriage under such section.

``(2) This subsection shall not apply-- ``(A) to retransmission of the signal of a noncommercial television broadcast station; ``(B) to retransmission of the signal of a television broadcast station outside the station's local market by a satellite carrier directly to its subscribers, if-- ``(i) such station was a superstation on May 1, 1991; ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code; and ``(iii) the satellite carrier complies with any network nonduplication, syndicated exclusivity, and sports blackout rules adopted by the Commission under section 339(b) of this Act; ``(C) until December 31, 2004, to retransmission of the signals of network stations directly to a home satellite antenna, if the subscriber receiving the signal-- ``(i) is located in an area outside the local market of such stations; and ``(ii) resides in an unserved household; ``(D) to retransmission by a cable operator or other multichannel video provider, other than a satellite carrier, of the signal of a television broadcast station outside the station's local market if such signal was obtained from a satellite carrier and-- ``(i) the originating station was a superstation on May 1, 1991; and ``(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the statutory license of section 119 of title 17, United States Code; or ``(E) during the 6-month period beginning on the date of the enactment of the Satellite Home Viewer Improvement Act

of 1999, to the retransmission of the signal of a television broadcast station within the station's local market by a satellite carrier directly to its subscribers under the statutory license of section 122 of title 17, United States Code.

For purposes of this paragraph, the terms `satellite carrier' and `superstation' have the meanings given those terms, respectively, in section 119(d) of title 17, United States Code, as in effect on the date of the enactment of the Cable Television Consumer Protection and Competition Act of 1992, the term `unserved household' has the meaning given that term under section 119(d) of such title, and the term `local market' has the meaning given that term in section 122( j) of such title.''; (2) by adding at the end of paragraph (3) the following new subparagraph:

``(C) Within 45 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall commence a rulemaking proceeding to revise the regulations governing the exercise by television broadcast stations of the right to grant retransmission consent under this subsection, and such other regulations as are necessary to administer the limitations contained in paragraph (2). The Commission shall complete all actions necessary to prescribe such regulations within 1 year after such date of enactment. Such regulations shall-- ``(i) establish election time periods that correspond with those regulations adopted under subparagraph (B) of this paragraph; and ``(ii) until January 1, 2006, prohibit a television broadcast station that provides retransmission consent from engaging in exclusive contracts for carriage or failing to negotiate in good faith, and it shall not be a failure to negotiate in good faith if the television broadcast station enters into retransmission consent agreements containing different terms and conditions, including price terms, with different multichannel video programming distributors if such different terms and conditions are based on competitive marketplace considerations.''; (3) in paragraph (4), by adding at the end the following new sentence: ``If an originating television station elects under paragraph (3)(C) to exercise its right to grant retransmission consent under this subsection with respect to a satellite carrier, section 338 shall not apply to the carriage of the signal of such station by such satellite carrier.''; (4) in paragraph (5), by striking ``614 or 615'' and inserting ``338, 614, or 615''; and (5) by adding at the end the following new paragraph: ``(7) For purposes of this subsection, the term-- ``(A) `network station' has the meaning given such term under section 119(d) of title 17, United States Code; and ``(B) `television broadcast station' means an over- the-air commercial or noncommercial television broadcast station licensed by the Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television station.''.

(b) Enforcement Provisions for Consent for Retransmissions.--Section 325 of the Communications Act of 1934 (47

U.S.C. 325) is amended by adding at the end the following new subsection: ``(e) Enforcement Proceedings Against Satellite Carriers Concerning Retransmissions of Television Broadcast Stations in the Respective Local Markets of Such Carriers.-- ``(1) Complaints by television broadcast stations.--If after the expiration of the 6-month period described under subsection (b)(2)(E) a television broadcast station believes that a satellite carrier has retransmitted its signal to any person in the local market of such station in violation of subsection (b)(1), the station may file with the Commission a complaint providing-- ``(A) the name, address, and call letters of the station; ``(B) the name and address of the satellite carrier; ``(C) the dates on which the alleged retransmission occurred; ``(D) the street address of at least one person in the local market of the station to whom the alleged retransmission was made; ``(E) a statement that the retransmission was not expressly authorized by the television broadcast station; and ``(F) the name and address of counsel for the station. ``(2) Service of complaints on satellite carriers.--For purposes of any proceeding under this subsection, any satellite carrier that retransmits the signal of any broadcast station shall be deemed to designate the Secretary of the Commission as its agent for service of process. A television broadcast station may serve a satellite carrier with a complaint concerning an alleged violation of subsection (b)(1) through retransmission of a station within the local market of such station by filing the original and two copies of the complaint with the Secretary of the Commission and serving a copy of the complaint on the satellite carrier by means of two commonly used overnight delivery services, each addressed to the chief executive officer of the satellite carrier at its principal place of business, and each marked `URGENT LITIGATION MATTER' on the outer packaging. Service shall be deemed complete one business day after a copy of the complaint is provided to the delivery services for overnight delivery. On receipt of a complaint filed by a television broadcast station under this subsection, the Secretary of the Commission shall send the original complaint by United States mail, postage prepaid, receipt requested, addressed to the chief executive officer of the satellite carrier at its principal place of business. ``(3) Answers by satellite carriers.--Within five business days after the date of service, the satellite carrier shall file an answer with the Commission and shall serve the answer by a commonly used overnight delivery service and by United States mail, on the counsel designated in the complaint at the address listed for such counsel in the complaint. ``(4) Defenses.-- ``(A) Exclusive defenses.--The defenses under this paragraph are the exclusive defenses available to a satellite carrier against which a complaint under this subsection is filed.

``(B) Defenses.--The defenses referred to under subparagraph (A) are the defenses that-- ``(i) the satellite carrier did not retransmit the television broadcast station to any person in the local market of the station during the time period specified in the complaint; ``(ii) the television broadcast station had, in a writing signed by an officer of the television broadcast station, expressly authorized the retransmission of the station by the satellite carrier to each person in the local market of the television broadcast station to which the satellite carrier made such retransmissions for the entire time period during which it is alleged that a violation of subsection (b)(1) has occurred; ``(iii) the retransmission was made after January 1, 2002, and the television broadcast station had elected to assert the right to carriage under section 338 as against the satellite carrier for the relevant period; or ``(iv) the station being retransmitted is a noncommercial television broadcast station. ``(5) Counting of violations.--The retransmission without consent of a particular television broadcast station on a particular day to one or more persons in the local market of the station shall be considered a separate violation of subsection (b)(1). ``(6) Burden of proof.--With respect to each alleged violation, the burden of proof shall be on a television broadcast station to establish that the satellite carrier retransmitted the station to at least one person in the local market of the station on the day in question. The burden of proof shall be on the satellite carrier with respect to all defenses other than the defense under paragraph (4)(B)(i). ``(7) Procedures.-- ``(A) Regulations.--Within 60 days after the date of the enactment of the Satellite Home Viewer Improvement Act of 1999, the Commission shall issue procedural regulations implementing this subsection which shall supersede procedures under section 312. ``(B) Determinations.-- ``(i) In general.--Within 45 days after the filing of a complaint, the Commission shall issue a final determination in any proceeding brought under this subsection. The Commission's final determination shall specify the number of violations committed by the satellite carrier. The Commission shall hear witnesses only if it clearly appears, based on written filings by the parties, that there is a genuine dispute about material facts. Except as provided in the preceding sentence, the Commission may issue a final ruling based on written filings by the parties. ``(ii) Discovery.--The Commission may direct the parties to exchange pertinent documents, and if necessary to take prehearing depositions, on such schedule as the Commission may approve, but only if the Commission first determines that such discovery is necessary to resolve a genuine dispute about material

facts, consistent with the obligation to make a final determination within 45 days. ``(8) Relief.--If the Commission determines that a satellite carrier has retransmitted the television broadcast station to at least one person in the local market of such station and has failed to meet its burden of proving one of the defenses under paragraph (4) with respect to such retransmission, the Commission shall be required to-- ``(A) make a finding that the satellite carrier violated subsection (b)(1) with respect to that station; and ``(B) issue an order, within 45 days after the filing of the complaint, containing-- ``(i) a cease-and-desist order directing the satellite carrier immediately to stop making any further retransmissions of the television broadcast station to any person within the local market of such station until such time as the Commission determines that the satellite carrier is in compliance with subsection (b)(1) with respect to such station; ``(ii) if the satellite carrier is found to have violated subsection (b)(1) with respect to more than two television broadcast stations, a cease-and-desist order directing the satellite carrier to stop making any further retransmission of any television broadcast station to any person within the local market of such station, until such time as the Commission, after giving notice to the station, that the satellite carrier is in compliance with subsection (b)(1) with respect to such stations; and ``(iii) an award to the complainant of that complainant's costs and reasonable attorney's fees. ``(9) Court proceedings on enforcement of commission order.-- ``(A) In general.--On entry by the Commission of a final order granting relief under this subsection-- ``(i) a television broadcast station may apply within 30 days after such entry to the United States District Court for the Eastern District of Virginia for a final judgment enforcing all relief granted by the Commission; and ``(ii) the satellite carrier may apply within 30 days after such entry to the United States District Court for the Eastern District of Virginia for a judgment reversing the Commission's order. ``(B) Appeal.--The procedure for an appeal under this paragraph by the satellite carrier shall supersede any other appeal rights under Federal or State law. A United States district court shall be deemed to have personal jurisdiction over the satellite carrier if the carrier, or a company under common control with the satellite carrier, has delivered television programming by satellite to more than 30 customers in that district during the preceding 4-year period. If the United States District Court for the Eastern District of Virginia does not have personal jurisdiction over the satellite carrier, an enforcement action or appeal shall be brought in the United States District Court for the District of Columbia, which may find personal jurisdiction based

on the satellite carrier's ownership of licenses issued by the Commission. An application by a television broadcast station for an order enforcing any cease-and- desist relief granted by the Commission shall be resolved on a highly expedited schedule. No discovery may be conducted by the parties in any such proceeding. The district court shall enforce the Commission order unless the Commission record reflects manifest error and an abuse of discretion by the Commission. ``(10) Civil action for statutory damages.--Within 6 months after issuance of an order by the Commission under this subsection, a television broadcast station may file a civil action in any United States district court that has personal jurisdiction over the satellite carrier for an award of statutory damages for any violation that the Commission has determined to have been committed by a satellite carrier under this subsection. Such action shall not be subject to transfer under section 1404(a) of title 28, United States Code. On finding that the satellite carrier has committed one or more violations of subsection (b), the District Court shall be required to award the television broadcast station statutory damages of $25,000 per violation, in accordance with paragraph (5), and the costs and attorney's fees incurred by the station. Such statutory damages shall be awarded only if the television broadcast station has filed a binding stipulation with the court that such station will donate the full amount in excess of $1,000 of any statutory damage award to the United States Treasury for public purposes. Notwithstanding any other provision of law, a station shall incur no tax liability of any kind with respect to any amounts so donated. Discovery may be conducted by the parties in any proceeding under this paragraph only if and to the extent necessary to resolve a genuinely disputed issue of fact concerning one of the defenses under paragraph (4). In any such action, the defenses under paragraph (4) shall be exclusive, and the burden of proof shall be on the satellite carrier with respect to all defenses other than the defense under paragraph (4)(B)(i). A judgment under this paragraph may be enforced in any manner permissible under Federal or State law. ``(11) Appeals.-- ``(A) In general.--The nonprevailing party before a United States district court may appeal a decision under this subsection to the United States Court of Appeals with jurisdiction over that district court. The Court of Appeals shall not issue any stay of the effectiveness of any decision granting relief against a satellite carrier unless the carrier presents clear and convincing evidence that it is highly likely to prevail on appeal and only after posting a bond for the full amount of any monetary award assessed against it and for such further amount as the Court of Appeals may believe appropriate. ``(B) Appeal.--If the Commission denies relief in response to a complaint filed by a television broadcast station under this subsection, the television broadcast station filing the complaint may file an appeal with the United States Court of Appeals for the District of Columbia Circuit.

``(12) Sunset.--No complaint or civil action may be filed under this subsection after December 31, 2001. This subsection shall continue to apply to any complaint or civil action filed on or before such date.''.

If any provision of section 325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)), or the application of that provision to any person or circumstance, is held by a court of competent jurisdiction to violate any provision of the Constitution of the United States, then the other provisions of that section, and the application of that provision to other persons and circumstances, shall not be affected.

(a) Technical Amendments Relating to Cable Systems.--Title 17, United States Code, is amended as follows: (1) Such title is amended by striking ``programing'' each place it appears and inserting ``programming''. (2) Section 111 is amended by striking ``compulsory'' each place it appears and inserting ``statutory''. (3) Section 510(b) is amended by striking ``compulsory'' and inserting ``statutory''.

(b) Technical Amendments Relating to Performance or Displays Of Works.-- (1) Section 111 of title 17, United States Code, is amended-- (A) in subsection (a), in the matter preceding paragraph (1), by striking ``primary transmission embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''; (B) in subsection (b), in the matter preceding paragraph (1), by striking ``primary transmission embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''; and (C) in subsection (c)-- (i) in paragraph (1)-- (I) by inserting ``a performance or display of a work embodied in'' after ``by a cable system of''; and (II) by striking ``and embodying a performance or display of a work''; and (ii) in paragraphs (3) and (4)-- (I) by striking ``a primary transmission'' and inserting ``a performance or display of a work embodied in a primary transmission''; and (II) by striking ``and embodying a performance or display of a work''. (2) Section 119(a) of title 17, United States Code, is amended-- (A) in paragraph (1), by striking ``primary transmission made by a superstation and embodying a performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission made by a superstation'';

(B) in paragraph (2)(A), by striking ``programming'' and all that follows through ``a work'' and inserting ``a performance or display of a work embodied in a primary transmission made by a network station''; (C) in paragraph (4)-- (i) by inserting ``a performance or display of a work embodied in'' after ``by a satellite carrier of''; and (ii) by striking ``and embodying a performance or display of a work''; and (D) in paragraph (6)-- (i) by inserting ``performance or display of a work embodied in'' after ``by a satellite carrier of''; and (ii) by striking ``and embodying a performance or display of a work''. (3) Section 501(e) of title 17, United States Code, is amended by striking ``primary transmission embodying the performance or display of a work'' and inserting ``performance or display of a work embodied in a primary transmission''.

(c) Conforming Amendment.--Section 119(a)(2)(C) of title 17, United States Code, is amended in the first sentence by striking ``currently''. (d) Work Made for Hire.--Section 101 of title 17, United States Code, is amended in the definition relating to work for hire in paragraph (2) by inserting ``as a sound recording,'' after ``audiovisual work''.

Sections 1001, 1003, 1005, 1007, 1008, 1009, 1010, and 1011 (and the amendments made by such sections) shall take effect on the date of the enactment of this Act. The amendments made by sections 1002, 1004, and 1006 shall be effective as of July 1, 1999.

This title may be cited as the ``Rural Local Broadcast Signal Act''.

MARKETS.

(a) In General.--Not later than 1 year after the date of the enactment of this Act, the Federal Communications Commission (``the Commission'') shall take all actions necessary to make a determination regarding licenses or other authorizations for facilities that will utilize, for delivering local broadcast television station signals to satellite television subscribers in unserved and underserved local television markets, spectrum otherwise allocated to commercial use. (b) Rules.-- (1) Form of business.--To the extent not inconsistent with the Communications Act of 1934 and the Commission's rules, the Commission shall permit applicants under subsection

(a) to engage in partnerships, joint ventures, and similar operating arrangements for the purpose of carrying out subsection (a). (2) Harmful interference.--The Commission shall ensure that no facility licensed or authorized under subsection (a) causes harmful interference to the primary users of that spectrum or to public safety spectrum use. (3) Limitation on commission.--Except as provided in paragraphs (1) and (2), the Commission may not restrict any entity granted a license or other authorization under subsection (a) from using any reasonable compression, reformatting, or other technology.

(c) Report.--Not later than January 1, 2001, the Commission shall report to the Agriculture, Appropriations, and the Judiciary Committees of the Senate and the House of Representatives, the Senate Committee on Commerce, Science, and Transportation, and the House of Representatives Committee on Commerce, on the extent to which licenses and other authorizations under subsection (a) have facilitated the delivery of local signals to satellite television subscribers in unserved and underserved local television markets. The report shall include-- (1) an analysis of the extent to which local signals are being provided by direct-to-home satellite television providers and by other multichannel video program distributors; (2) an enumeration of the technical, economic, and other impediments each type of multichannel video programming distributor has encountered; and (3) recommendations for specific measures to facilitate the provision of local signals to subscribers in unserved and underserved markets by direct-to-home satellite television providers and by other distributors of multichannel video programming service.

SHORT TITLE; REFERENCES.

(a) Short Title.--This title may be cited as the ``Anticybersquatting Consumer Protection Act''. (b) References to the Trademark Act of 1946.--Any reference in this title to the Trademark Act of 1946 shall be a reference to the Act entitled ``An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.).

(a) In General.--Section 43 of the Trademark Act of 1946 (15 U.S.C. 1125) is amended by inserting at the end the following: ``(d)(1)(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person-- ``(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and

``(ii) registers, traffics in, or uses a domain name that-- ``(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark; ``(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or ``(III) is a trademark, word, or name protected by reason of section 706 of title 18, United States Code, or section 220506 of title 36, United States Code.

``(B)(i) In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to-- ``(I) the trademark or other intellectual property rights of the person, if any, in the domain name; ``(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person; ``(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; ``(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; ``(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; ``(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; ``(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct; ``(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and ``(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of section 43.

``(ii) Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful. ``(C) In any civil action involving the registration, trafficking, or use of a domain name under this paragraph, a court may order

the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark. ``(D) A person shall be liable for using a domain name under subparagraph (A) only if that person is the domain name registrant or that registrant's authorized licensee. ``(E) As used in this paragraph, the term `traffics in' refers to transactions that include, but are not limited to, sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration. ``(2)(A) The owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located if-- ``(i) the domain name violates any right of the owner of a mark registered in the Patent and Trademark Office, or protected under subsection (a) or (c); and ``(ii) the court finds that the owner-- ``(I) is not able to obtain in personam jurisdiction over a person who would have been a defendant in a civil action under paragraph (1); or ``(II) through due diligence was not able to find a person who would have been a defendant in a civil action under paragraph (1) by-- ``(aa) sending a notice of the alleged violation and intent to proceed under this paragraph to the registrant of the domain name at the postal and e-mail address provided by the registrant to the registrar; and ``(bb) publishing notice of the action as the court may direct promptly after filing the action.

``(B) The actions under subparagraph (A)(ii) shall constitute service of process. ``(C) In an in rem action under this paragraph, a domain name shall be deemed to have its situs in the judicial district in which-- ``(i) the domain name registrar, registry, or other domain name authority that registered or assigned the domain name is located; or ``(ii) documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court.

``(D)(i) The remedies in an in rem action under this paragraph shall be limited to a court order for the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark. Upon receipt of written notification of a filed, stamped copy of a complaint filed by the owner of a mark in a United States district court under this paragraph, the domain name registrar, domain name registry, or other domain name authority shall-- ``(I) expeditiously deposit with the court documents sufficient to establish the court's control and authority regarding the disposition of the registration and use of the domain name to the court; and ``(II) not transfer, suspend, or otherwise modify the domain name during the pendency of the action, except upon order of the court.

``(ii) The domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order. ``(3) The civil action established under paragraph (1) and the in rem action established under paragraph (2), and any remedy available under either such action, shall be in addition to any other civil action or remedy otherwise applicable. ``(4) The in rem jurisdiction established under paragraph (2) shall be in addition to any other jurisdiction that otherwise exists, whether in rem or in personam.''. (b) Cyberpiracy Protections for Individuals.-- (1) In general.-- (A) Civil liability.--Any person who registers a domain name that consists of the name of another living person, or a name substantially and confusingly similar thereto, without that person's consent, with the specific intent to profit from such name by selling the domain name for financial gain to that person or any third party, shall be liable in a civil action by such person. (B) Exception.--A person who in good faith registers a domain name consisting of the name of another living person, or a name substantially and confusingly similar thereto, shall not be liable under this paragraph if such name is used in, affiliated with, or related to a work of authorship protected under title 17, United States Code, including a work made for hire as defined in section 101 of title 17, United States Code, and if the person registering the domain name is the copyright owner or licensee of the work, the person intends to sell the domain name in conjunction with the lawful exploitation of the work, and such registration is not prohibited by a contract between the registrant and the named person. The exception under this subparagraph shall apply only to a civil action brought under paragraph (1) and shall in no manner limit the protections afforded under the Trademark Act of 1946 (15 U.S.C. 1051 et seq.) or other provision of Federal or State law. (2) Remedies.--In any civil action brought under paragraph (1), a court may award injunctive relief, including the forfeiture or cancellation of the domain name or the transfer of the domain name to the plaintiff. The court may also, in its discretion, award costs and attorneys fees to the prevailing party. (3) Definition.--In this subsection, the term ``domain name'' has the meaning given that term in section 45 of the Trademark Act of 1946 (15 U.S.C. 1127). (4) Effective date.--This subsection shall apply to domain names registered on or after the date of the enactment of this Act.

(a) Remedies in Cases of Domain Name Piracy.-- (1) Injunctions.--Section 34(a) of the Trademark Act of 1946 (15 U.S.C. 1116(a)) is amended in the first sentence by striking ``(a) or (c)'' and inserting ``(a), (c), or (d)''.

(2) Damages.--Section 35(a) of the Trademark Act of 1946 (15 U.S.C. 1117(a)) is amended in the first sentence by inserting ``, (c), or (d)'' after ``section 43(a)''.

(b) Statutory Damages.--Section 35 of the Trademark Act of 1946 (15 U.S.C. 1117) is amended by adding at the end the following: ``(d) In a case involving a violation of section 43(d)(1), the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits, an award of statutory damages in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.

Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) is amended-- (1) in the matter preceding subparagraph (A) by striking ``under section 43(a)'' and inserting ``under section 43 (a) or (d)''; and (2) by redesignating subparagraph (D) as subparagraph (E) and inserting after subparagraph (C) the following: ``(D)(i)(I) A domain name registrar, a domain name registry, or other domain name registration authority that takes any action described under clause (ii) affecting a domain name shall not be liable for monetary relief or, except as provided in subclause (II), for injunctive relief, to any person for such action, regardless of whether the domain name is finally determined to infringe or dilute the mark. ``(II) A domain name registrar, domain name registry, or other domain name registration authority described in subclause (I) may be subject to injunctive relief only if such registrar, registry, or other registration authority has-- ``(aa) not expeditiously deposited with a court, in which an action has been filed regarding the disposition of the domain name, documents sufficient for the court to establish the court's control and authority regarding the disposition of the registration and use of the domain name; ``(bb) transferred, suspended, or otherwise modified the domain name during the pendency of the action, except upon order of the court; or ``(cc) willfully failed to comply with any such court order. ``(ii) An action referred to under clause (i)(I) is any action of refusing to register, removing from registration, transferring, temporarily disabling, or permanently canceling a domain name-- ``(I) in compliance with a court order under section 43(d); or ``(II) in the implementation of a reasonable policy by such registrar, registry, or authority prohibiting the registration of a domain name that is identical to, confusingly similar to, or dilutive of another's mark. ``(iii) A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another absent a showing of

bad faith intent to profit from such registration or maintenance of the domain name. ``(iv) If a registrar, registry, or other registration authority takes an action described under clause (ii) based on a knowing and material misrepresentation by any other person that a domain name is identical to, confusingly similar to, or dilutive of a mark, the person making the knowing and material misrepresentation shall be liable for any damages, including costs and attorney's fees, incurred by the domain name registrant as a result of such action. The court may also grant injunctive relief to the domain name registrant, including the reactivation of the domain name or the transfer of the domain name to the domain name registrant. ``(v) A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this Act. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.''.

Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is amended by inserting after the undesignated paragraph defining the term ``counterfeit'' the following: ``The term `domain name' means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet. ``The term `Internet' has the meaning given that term in section 230(f )(1) of the Communications Act of 1934 (47 U.S.C. 230(f )(1)).''.

PERSONAL NAMES.

(a) In General.--Not later than 180 days after the date of the enactment of this Act, the Secretary of Commerce, in consultation with the Patent and Trademark Office and the Federal Election Commission, shall conduct a study and report to Congress with recommendations on guidelines and procedures for resolving disputes involving the registration or use by a person of a domain name that includes the personal name of another person, in whole or in part, or a name confusingly similar thereto, including consideration of and recommendations for-- (1) protecting personal names from registration by another person as a second level domain name for purposes of selling or otherwise transferring such domain name to such other person or any third party for financial gain; (2) protecting individuals from bad faith uses of their personal names as second level domain names by others with malicious intent to harm the reputation of the individual or the goodwill associated with that individual's name; (3) protecting consumers from the registration and use of domain names that include personal names in the second level domain in manners which are intended or are likely to confuse or deceive the public as to the affiliation, connection, or association of the domain name registrant, or a site accessible

under the domain name, with such other person, or as to the origin, sponsorship, or approval of the goods, services, or commercial activities of the domain name registrant; (4) protecting the public from registration of domain names that include the personal names of government officials, official candidates, and potential official candidates for Federal, State, or local political office in the United States, and the use of such domain names in a manner that disrupts the electoral process or the public's ability to access accurate and reliable information regarding such individuals; (5) existing remedies, whether under State law or otherwise, and the extent to which such remedies are sufficient to address the considerations described in paragraphs (1) through (4); and (6) the guidelines, procedures, and policies of the Internet Corporation for Assigned Names and Numbers and the extent to which they address the considerations described in paragraphs (1) through (4).

(b) Guidelines and Procedures.--The Secretary of Commerce shall, under its Memorandum of Understanding with the Internet Corporation for Assigned Names and Numbers, collaborate to develop guidelines and procedures for resolving disputes involving the registration or use by a person of a domain name that includes the personal name of another person, in whole or in part, or a name confusingly similar thereto.

Section 101(a)(1)(A) of the National Historic Preservation Act (16 U.S.C. 470a(a)(1)(A)) is amended by adding at the end the following: ``Notwithstanding section 43(c) of the Act entitled `An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes', approved July 5, 1946 (commonly known as the `Trademark Act of 1946' (15 U.S.C. 1125(c))), buildings and structures on or eligible for inclusion on the National Register of Historic Places (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government, may retain the name historically associated with the building or structure.''.

Nothing in this title shall affect any defense available to a defendant under the Trademark Act of 1946 (including any defense under section 43(c)(4) of such Act or relating to fair use) or a person's right of free speech or expression under the first amendment of the United States Constitution.

Chapter 85 of title 28, United States Code, is amended as follows: (1) Section 1338 of title 28, United States Code, is amended-- (A) in the section heading by striking ``trade- marks'' and inserting ``trademarks''; (B) in subsection (a) by striking ``trade-marks'' and inserting ``trademarks''; and

(C) in subsection (b) by striking ``trade-mark'' and inserting ``trademark''. (2) The item relating to section 1338 in the table of sections for chapter 85 of title 28, United States Code, is amended by striking ``trade-marks'' and inserting ``trademarks''.

Sections 3002(a), 3003, 3004, 3005, and 3008 of this title shall apply to all domain names registered before, on, or after the date of the enactment of this Act, except that damages under subsection (a) or (d) of section 35 of the Trademark Act of 1946 (15 U.S.C. 1117), as amended by section 3003 of this title, shall not be available with respect to the registration, trafficking, or use of a domain name that occurs before the date of the enactment of this Act.

This title may be cited as the ``American Inventors Protection Act of 1999''.

Subtitle A--Inventors' Rights

This subtitle may be cited as the ``Inventors' Rights Act of 1999''.

(a) In General.--Chapter 29 of title 35, United States Code, is amended by adding at the end the following new section:

``Sec. 297. Improper and deceptive invention promotion

``(a) In General.--An invention promoter shall have a duty to disclose the following information to a customer in writing, prior to entering into a contract for invention promotion services-- ``(1) the total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations; ``(2) the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other nonmarketing services from the invention promoter, or who have defaulted in their payment to the invention promoter; ``(3) the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter; ``(4) the total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such invention promoter; and ``(5) the names and addresses of all previous invention promotion companies with which the invention promoter or

its officers have collectively or individually been affiliated in the previous 10 years.

``(b) Civil Action.--(1) Any customer who enters into a contract with an invention promoter and who is found by a court to have been injured by any material false or fraudulent statement or representation, or any omission of material fact, by that invention promoter (or any agent, employee, director, officer, partner, or independent contractor of such invention promoter), or by the failure of that invention promoter to disclose such information as required under subsection (a), may recover in a civil action against the invention promoter (or the officers, directors, or partners of such invention promoter), in addition to reasonable costs and attorneys' fees-- ``(A) the amount of actual damages incurred by the customer; or ``(B) at the election of the customer at any time before final judgment is rendered, statutory damages in a sum of not more than $5,000, as the court considers just.

``(2) Notwithstanding paragraph (1), in a case where the customer sustains the burden of proof, and the court finds, that the invention promoter intentionally misrepresented or omitted a material fact to such customer, or willfully failed to disclose such information as required under subsection (a), with the purpose of deceiving that customer, the court may increase damages to not more than three times the amount awarded, taking into account past complaints made against the invention promoter that resulted in regulatory sanctions or other corrective actions based on those records compiled by the Commissioner of Patents under subsection (d). ``(c) Definitions.--For purposes of this section-- ``(1) a `contract for invention promotion services' means a contract by which an invention promoter undertakes invention promotion services for a customer; ``(2) a `customer' is any individual who enters into a contract with an invention promoter for invention promotion services; ``(3) the term `invention promoter' means any person, firm, partnership, corporation, or other entity who offers to perform or performs invention promotion services for, or on behalf of, a customer, and who holds itself out through advertising in any mass media as providing such services, but does not include-- ``(A) any department or agency of the Federal Government or of a State or local government; ``(B) any nonprofit, charitable, scientific, or educational organization, qualified under applicable State law or described under section 170(b)(1)(A) of the Internal Revenue Code of 1986; ``(C) any person or entity involved in the evaluation to determine commercial potential of, or offering to license or sell, a utility patent or a previously filed nonprovisional utility patent application; ``(D) any party participating in a transaction involving the sale of the stock or assets of a business; or ``(E) any party who directly engages in the business of retail sales of products or the distribution of products; and

``(4) the term `invention promotion services' means the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer.

``(d) Records of Complaints.-- ``(1) Release of complaints.--The Commissioner of Patents shall make all complaints received by the Patent and Trademark Office involving invention promoters publicly available, together with any response of the invention promoters. The Commissioner of Patents shall notify the invention promoter of a complaint and provide a reasonable opportunity to reply prior to making such complaint publicly available. ``(2) Request for complaints.--The Commissioner of Patents may request complaints relating to invention promotion services from any Federal or State agency and include such complaints in the records maintained under paragraph (1), together with any response of the invention promoters.''.

(b) Conforming Amendment.--The table of sections at the beginning of chapter 29 of title 35, United States Code, is amended by adding at the end the following new item:

``297. Improper and deceptive invention promotion.''.

This subtitle and the amendments made by this subtitle shall take effect 60 days after the date of the enactment of this Act.

Subtitle B--Patent and Trademark Fee Fairness

This subtitle may be cited as the ``Patent and Trademark Fee Fairness Act of 1999''.

(a) Original Filing Fee.--Section 41(a)(1)(A) of title 35, United States Code, relating to the fee for filing an original patent application, is amended by striking ``$760'' and inserting ``$690''. (b) Reissue Fee.--Section 41(a)(4)(A) of title 35, United States Code, relating to the fee for filing for a reissue of a patent, is amended by striking ``$760'' and inserting ``$690''. (c) National Fee for Certain International Applications.--Section 41(a)(10) of title 35, United States Code, relating to the national fee for certain international applications, is amended by striking ``$760'' and inserting ``$690''. (d) Maintenance Fees.--Section 41(b)(1) of title 35, United States Code, relating to certain maintenance fees, is amended by striking ``$940'' and inserting ``$830''.

Notwithstanding the second sentence of section 31(a) of the Trademark Act of 1946 (15 U.S.C. 111(a)), the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office is authorized in fiscal year 2000 to adjust trademark fees without regard to fluctuations in the Consumer Price Index during the preceding 12 months.

The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall conduct a study of alternative fee structures that could be adopted by the United States Patent and Trademark Office to encourage maximum participation by the inventor community in the United States. The Director shall submit such study to the Committees on the Judiciary of the House of Representatives and the Senate not later than 1 year after the date of the enactment of this Act.

Section 42(c) of title 35, United States Code, is amended in the second sentence-- (1) by striking ``Fees available'' and inserting ``All fees available''; and (2) by striking ``may'' and inserting ``shall''.

(a) In General.--Except as provided in subsection (b), the amendments made by this subtitle shall take effect on the date of the enactment of this Act. (b) Section 4202.--The amendments made by section 4202 of this subtitle shall take effect 30 days after the date of the enactment of this Act.

Subtitle C--First Inventor Defense

This subtitle may be cited as the ``First Inventor Defense Act of 1999''.

INVENTOR.

(a) Defense.--Chapter 28 of title 35, United States Code, is amended by adding at the end the following new section:

``Sec. 273. Defense to infringement based on earlier inventor

``(a) Definitions.--For purposes of this section-- ``(1) the terms `commercially used' and `commercial use' mean use of a method in the United States, so long as such use is in connection with an internal commercial use or an actual arm's-length sale or other arm's-length commercial transfer of a useful end result, whether or not the subject matter at issue is accessible to or otherwise known to the public, except that the subject matter for which commercial marketing or use is subject to a premarketing regulatory review period during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall be deemed `commercially used' and in `commercial use' during such regulatory review period; ``(2) in the case of activities performed by a nonprofit research laboratory, or nonprofit entity such as a university, research center, or hospital, a use for which the public is the intended beneficiary shall be considered to be a use described in paragraph (1), except that the use--

``(A) may be asserted as a defense under this section only for continued use by and in the laboratory or nonprofit entity; and ``(B) may not be asserted as a defense with respect to any subsequent commercialization or use outside such laboratory or nonprofit entity; ``(3) the term `method' means a method of doing or conducting business; and ``(4) the `effective filing date' of a patent is the earlier of the actual filing date of the application for the patent or the filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title.

``(b) Defense to Infringement.-- ``(1) In general.--It shall be a defense to an action for infringement under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims for a method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent. ``(2) Exhaustion of right.--The sale or other disposition of a useful end product produced by a patented method, by a person entitled to assert a defense under this section with respect to that useful end result shall exhaust the patent owner's rights under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the patent owner. ``(3) Limitations and qualifications of defense.--The defense to infringement under this section is subject to the following: ``(A) Patent.--A person may not assert the defense under this section unless the invention for which the defense is asserted is for a method. ``(B) Derivation.--A person may not assert the defense under this section if the subject matter on which the defense is based was derived from the patentee or persons in privity with the patentee. ``(C) Not a general license.--The defense asserted by a person under this section is not a general license under all claims of the patent at issue, but extends only to the specific subject matter claimed in the patent with respect to which the person can assert a defense under this chapter, except that the defense shall also extend to variations in the quantity or volume of use of the claimed subject matter, and to improvements in the claimed subject matter that do not infringe additional specifically claimed subject matter of the patent. ``(4) Burden of proof.--A person asserting the defense under this section shall have the burden of establishing the defense by clear and convincing evidence. ``(5) Abandonment of use.--A person who has abandoned commercial use of subject matter may not rely on activities performed before the date of such abandonment in establishing a defense under this section with respect to actions taken after the date of such abandonment.

``(6) Personal defense.--The defense under this section may be asserted only by the person who performed the acts necessary to establish the defense and, except for any transfer to the patent owner, the right to assert the defense shall not be licensed or assigned or transferred to another person except as an ancillary and subordinate part of a good faith assignment or transfer for other reasons of the entire enterprise or line of business to which the defense relates. ``(7) Limitation on sites.--A defense under this section, when acquired as part of a good faith assignment or transfer of an entire enterprise or line of business to which the defense relates, may only be asserted for uses at sites where the subject matter that would otherwise infringe one or more of the claims is in use before the later of the effective filing date of the patent or the date of the assignment or transfer of such enterprise or line of business. ``(8) Unsuccessful assertion of defense.--If the defense under this section is pleaded by a person who is found to infringe the patent and who subsequently fails to demonstrate a reasonable basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section 285 of this title. ``(9) Invalidity.--A patent shall not be deemed to be invalid under section 102 or 103 of this title solely because a defense is raised or established under this section.''.

(b) Conforming Amendment.--The table of sections at the beginning of chapter 28 of title 35, United States Code, is amended by adding at the end the following new item:

``273. Defense to infringement based on earlier inventor.''.

This subtitle and the amendments made by this subtitle shall take effect on the date of the enactment of this Act, but shall not apply to any action for infringement that is pending on such date of enactment or with respect to any subject matter for which an adjudication of infringement, including a consent judgment, has been made before such date of enactment.

Subtitle D--Patent Term Guarantee

This subtitle may be cited as the ``Patent Term Guarantee Act of 1999''.

(a) Adjustment of Patent Term.--Section 154(b) of title 35, United States Code, is amended to read as follows: ``(b) Adjustment of Patent Term.-- ``(1) Patent term guarantees.-- ``(A) Guarantee of prompt patent and trademark office responses.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the Patent and Trademark Office to-- ``(i) provide at least one of the notifications under section 132 of this title or a notice of allowance under

section 151 of this title not later than 14 months after-- ``(I) the date on which an application was filed under section 111(a) of this title; or ``(II) the date on which an international application fulfilled the requirements of section 371 of this title; ``(ii) respond to a reply under section 132, or to an appeal taken under section 134, within 4 months after the date on which the reply was filed or the appeal was taken; ``(iii) act on an application within 4 months after the date of a decision by the Board of Patent Appeals and Interferences under section 134 or 135 or a decision by a Federal court under section 141, 145, or 146 in a case in which allowable claims remain in the application; or ``(iv) issue a patent within 4 months after the date on which the issue fee was paid under section 151 and all outstanding requirements were satisfied, the term of the patent shall be extended 1 day for each day after the end of the period specified in clause (i), (ii), (iii), or (iv), as the case may be, until the action described in such clause is taken. ``(B) Guarantee of no more than 3-year application pendency.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application in the United States, not including-- ``(i) any time consumed by continued examination of the application requested by the applicant under section 132(b); ``(ii) any time consumed by a proceeding under section 135(a), any time consumed by the imposition of an order under section 181, or any time consumed by appellate review by the Board of Patent Appeals and Interferences or by a Federal court; or ``(iii) any delay in the processing of the application by the United States Patent and Trademark Office requested by the applicant except as permitted by paragraph (3)(C), the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued. ``(C) Guarantee or adjustments for delays due to interferences, secrecy orders, and appeals.--Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to-- ``(i) a proceeding under section 135(a); ``(ii) the imposition of an order under section 181; or ``(iii) appellate review by the Board of Patent Appeals and Interferences or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability,

the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order, or review, as the case may be. ``(2) Limitations.-- ``(A) In general.--To the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed. ``(B) Disclaimed term.--No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer. ``(C) Reduction of period of adjustment.-- ``(i) The period of adjustment of the term of a patent under paragraph (1) shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. ``(ii) With respect to adjustments to patent term made under the authority of paragraph (1)(B), an applicant shall be deemed to have failed to engage in reasonable efforts to conclude processing or examination of an application for the cumulative total of any periods of time in excess of 3 months that are taken to respond to a notice from the Office making any rejection, objection, argument, or other request, measuring such 3-month period from the date the notice was given or mailed to the applicant. ``(iii) The Director shall prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application. ``(3) Procedures for patent term adjustment determination.-- ``(A) The Director shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments under this subsection. ``(B) Under the procedures established under subparagraph (A), the Director shall-- ``(i) make a determination of the period of any patent term adjustment under this subsection, and shall transmit a notice of that determination with the written notice of allowance of the application under section 151; and ``(ii) provide the applicant one opportunity to request reconsideration of any patent term adjustment determination made by the Director. ``(C) The Director shall reinstate all or part of the cumulative period of time of an adjustment under paragraph (2)(C) if the applicant, prior to the issuance of the patent, makes a showing that, in spite of all due care, the applicant was unable to respond within the 3- month period, but in no case shall more than three additional months for each such response beyond the original 3-month period be reinstated.

``(D) The Director shall proceed to grant the patent after completion of the Director's determination of a patent term adjustment under the procedures established under this subsection, notwithstanding any appeal taken by the applicant of such determination. ``(4) Appeal of patent term adjustment determination.-- ``(A) An applicant dissatisfied with a determination made by the Director under paragraph (3) shall have remedy by a civil action against the Director filed in the United States District Court for the District of Columbia within 180 days after the grant of the patent. Chapter 7 of title 5, United States Code, shall apply to such action. Any final judgment resulting in a change to the period of adjustment of the patent term shall be served on the Director, and the Director shall thereafter alter the term of the patent to reflect such change. ``(B) The determination of a patent term adjustment under this subsection shall not be subject to appeal or challenge by a third party prior to the grant of the patent.''.

(b) Conforming Amendments.-- (1) Section 282 of title 35, United States Code, is amended in the fourth paragraph by striking ``156 of this title'' and inserting ``154(b) or 156 of this title''. (2) Section 1295(a)(4)(C) of title 28, United States Code, is amended by striking ``145 or 146'' and inserting ``145, 146, or 154(b)''.

Section 132 of title 35, United States Code, is amended-- (1) in the first sentence by striking ``Whenever'' and inserting ``(a) Whenever''; and (2) by adding at the end the following:

``(b) The Director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant. The Director may establish appropriate fees for such continued examination and shall provide a 50 percent reduction in such fees for small entities that qualify for reduced fees under section 41(h)(1) of this title.''.

Section 156(a) of title 35, United States Code, is amended in the matter preceding paragraph (1) by inserting ``, which shall include any patent term adjustment granted under section 154(b),'' after ``the original expiration date of the patent''.

(a) Amendments Made by Sections 4402 and 4404.--The amendments made by sections 4402 and 4404 shall take effect on the date that is 6 months after the date of the enactment of this Act and, except for a design patent application filed under chapter 16 of title 35, United States Code, shall apply to any application filed on or after the date that is 6 months after the date of the enactment of this Act. (b) Amendments Made by Section 4403.--The amendments made by section 4403-- (1) shall take effect on the date that is 6 months after the date of the enactment of this Act, and shall apply to

all applications filed under section 111(a) of title 35, United States Code, on or after June 8, 1995, and all applications complying with section 371 of title 35, United States Code, that resulted from international applications filed on or after June 8, 1995; and (2) do not apply to applications for design patents under chapter 16 of title 35, United States Code.

Subtitle E--Domestic Publication of Patent Applications Published Abroad

This subtitle may be cited as the ``Domestic Publication of Foreign Filed Patent Applications Act of 1999''.

(a) Publication.--Section 122 of title 35, United States Code, is amended to read as follows: ``Sec. 122. Confidential status of applications; publication of patent applications

``(a) Confidentiality.--Except as provided in subsection (b), applications for patents shall be kept in confidence by the Patent and Trademark Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director. ``(b) Publication.-- ``(1) In general.--(A) Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a benefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period. ``(B) No information concerning published patent applications shall be made available to the public except as the Director determines. ``(C) Notwithstanding any other provision of law, a determination by the Director to release or not to release information concerning a published patent application shall be final and nonreviewable. ``(2) Exceptions.--(A) An application shall not be published if that application is-- ``(i) no longer pending; ``(ii) subject to a secrecy order under section 181 of this title; ``(iii) a provisional application filed under section 111(b) of this title; or ``(iv) an application for a design patent filed under chapter 16 of this title. ``(B)(i) If an applicant makes a request upon filing, certifying that the invention disclosed in the application has not and will not be the subject of an application filed in another country, or under a multilateral international agreement, that requires publication of applications 18 months after filing, the

application shall not be published as provided in paragraph (1). ``(ii) An applicant may rescind a request made under clause (i) at any time. ``(iii) An applicant who has made a request under clause (i) but who subsequently files, in a foreign country or under a multilateral international agreement specified in clause (i), an application directed to the invention disclosed in the application filed in the Patent and Trademark Office, shall notify the Director of such filing not later than 45 days after the date of the filing of such foreign or international application. A failure of the applicant to provide such notice within the prescribed period shall result in the application being regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the notice was unintentional. ``(iv) If an applicant rescinds a request made under clause (i) or notifies the Director that an application was filed in a foreign country or under a multilateral international agreement specified in clause (i), the application shall be published in accordance with the provisions of paragraph (1) on or as soon as is practical after the date that is specified in clause (i). ``(v) If an applicant has filed applications in one or more foreign countries, directly or through a multilateral international agreement, and such foreign filed applications corresponding to an application filed in the Patent and Trademark Office or the description of the invention in such foreign filed applications is less extensive than the application or description of the invention in the application filed in the Patent and Trademark Office, the applicant may submit a redacted copy of the application filed in the Patent and Trademark Office eliminating any part or description of the invention in such application that is not also contained in any of the corresponding applications filed in a foreign country. The Director may only publish the redacted copy of the application unless the redacted copy of the application is not received within 16 months after the earliest effective filing date for which a benefit is sought under this title. The provisions of section 154(d) shall not apply to a claim if the description of the invention published in the redacted application filed under this clause with respect to the claim does not enable a person skilled in the art to make and use the subject matter of the claim.

``(c) Protest and Pre-Issuance Opposition.--The Director shall establish appropriate procedures to ensure that no protest or other form of pre-issuance opposition to the grant of a patent on an application may be initiated after publication of the application without the express written consent of the applicant. ``(d) National Security.--No application for patent shall be published under subsection (b)(1) if the publication or disclosure of such invention would be detrimental to the national security. The Director shall establish appropriate procedures to ensure that such applications are promptly identified and the secrecy of such inventions is maintained in accordance with chapter 17 of this title.''. (b) Study.--

(1) In general.--The Comptroller General shall conduct a 3- year study of the applicants who file only in the United States on or after the effective date of this subtitle and shall provide the results of such study to the Judiciary Committees of the House of Representatives and the Senate. (2) Contents.--The study conducted under paragraph (1) shall-- (A) consider the number of such applicants in relation to the number of applicants who file in the United States and outside of the United States; (B) examine how many domestic-only filers request at the time of filing not to be published; (C) examine how many such filers rescind that request or later choose to file abroad; (D) examine the status of the entity seeking an application and any correlation that may exist between such status and the publication of patent applications; and (E) examine the abandonment/issuance ratios and length of application pendency before patent issuance or abandonment for published versus unpublished applications.

(a) In a Foreign Country.--Section 119(b) of title 35, United States Code, is amended to read as follows: ``(b)(1) No application for patent shall be entitled to this right of priority unless a claim is filed in the Patent and Trademark Office, identifying the foreign application by specifying the application number on that foreign application, the intellectual property authority or country in or for which the application was filed, and the date of filing the application, at such time during the pendency of the application as required by the Director. ``(2) The Director may consider the failure of the applicant to file a timely claim for priority as a waiver of any such claim. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed claim under this section. ``(3) The Director may require a certified copy of the original foreign application, specification, and drawings upon which it is based, a translation if not in the English language, and such other information as the Director considers necessary. Any such certification shall be made by the foreign intellectual property authority in which the foreign application was filed and show the date of the application and of the filing of the specification and other papers.''. (b) In the United States.-- (1) In general.--Section 120 of title 35, United States Code, is amended by adding at the end the following: ``No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept

an unintentionally delayed submission of an amendment under this section.''. (2) Right of priority.--Section 119(e)(1) of title 35, United States Code, is amended by adding at the end the following: ``No application shall be entitled to the benefit of an earlier filed provisional application under this subsection unless an amendment containing the specific reference to the earlier filed provisional application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this subsection. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this subsection during the pendency of the application.''.

Section 154 of title 35, United States Code, is amended-- (1) in the section caption by inserting ``; provisional rights'' after ``patent''; and (2) by adding at the end the following new subsection:

``(d) Provisional Rights.-- ``(1) In general.--In addition to other rights provided by this section, a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application for such patent under section 122(b), or in the case of an international application filed under the treaty defined in section 351(a) designating the United States under Article 21(2)(a) of such treaty, the date of publication of the application, and ending on the date the patent is issued-- ``(A)(i) makes, uses, offers for sale, or sells in the United States the invention as claimed in the published patent application or imports such an invention into the United States; or ``(ii) if the invention as claimed in the published patent application is a process, uses, offers for sale, or sells in the United States or imports into the United States products made by that process as claimed in the published patent application; and ``(B) had actual notice of the published patent application and, in a case in which the right arising under this paragraph is based upon an international application designating the United States that is published in a language other than English, had a translation of the international application into the English language. ``(2) Right based on substantially identical inventions.-- The right under paragraph (1) to obtain a reasonable royalty shall not be available under this subsection unless the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application. ``(3) Time limitation on obtaining a reasonable royalty.-- The right under paragraph (1) to obtain a reasonable royalty shall be available only in an action brought not later than 6 years after the patent is issued. The right under paragraph (1) to obtain a reasonable royalty shall not be affected by the duration of the period described in paragraph (1).

``(4) Requirements for international applications.-- ``(A) Effective date.--The right under paragraph (1) to obtain a reasonable royalty based upon the publication under the treaty defined in section 351(a) of an international application designating the United States shall commence on the date on which the Patent and Trademark Office receives a copy of the publication under the treaty of the international application, or, if the publication under the treaty of the international application is in a language other than English, on the date on which the Patent and Trademark Office receives a translation of the international application in the English language. ``(B) Copies.--The Director may require the applicant to provide a copy of the international application and a translation thereof.''.

Section 102(e) of title 35, United States Code, is amended to read as follows: ``(e) The invention was described in-- ``(1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351(a) shall have the effect under this subsection of a national application published under section 122(b) only if the international application designating the United States was published under Article 21(2)(a) of such treaty in the English language; or ``(2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that a patent shall not be deemed filed in the United States for the purposes of this subsection based on the filing of an international application filed under the treaty defined in section 351(a); or''.

The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall recover the cost of early publication required by the amendment made by section 4502 by charging a separate publication fee after notice of allowance is given under section 151 of title 35, United States Code.

The following provisions of title 35, United States Code, are amended: (1) Section 11 is amended in paragraph 1 of subsection (a) by inserting ``and published applications for patents'' after ``Patents''. (2) Section 12 is amended-- (A) in the section caption by inserting ``and applications'' after ``patents''; and (B) by inserting ``and published applications for patents'' after ``patents''. (3) Section 13 is amended-- (A) in the section caption by inserting ``and applications'' after ``patents''; and

(B) by inserting ``and published applications for patents'' after ``patents''. (4) The items relating to sections 12 and 13 in the table of sections for chapter 1 are each amended by inserting ``and applications'' after ``patents''. (5) The item relating to section 122 in the table of sections for chapter 11 is amended by inserting ``; publication of patent applications'' after ``applications''. (6) The item relating to section 154 in the table of sections for chapter 14 is amended by inserting ``; provisional rights'' after ``patent''. (7) Section 181 is amended-- (A) in the first undesignated paragraph-- (i) by inserting ``by the publication of an application or'' after ``disclosure''; and (ii) by inserting ``the publication of the application or'' after ``withhold''; (B) in the second undesignated paragraph by inserting ``by the publication of an application or'' after ``disclosure of an invention''; (C) in the third undesignated paragraph-- (i) by inserting ``by the publication of the application or'' after ``disclosure of the invention''; and (ii) by inserting ``the publication of the application or'' after ``withhold''; and (D) in the fourth undesignated paragraph by inserting ``the publication of an application or'' after ``and'' in the first sentence. (8) Section 252 is amended in the first undesignated paragraph by inserting ``substantially'' before ``identical'' each place it appears. (9) Section 284 is amended by adding at the end of the second undesignated paragraph the following: ``Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title.''. (10) Section 374 is amended to read as follows:

``Sec. 374. Publication of international application

``The publication under the treaty defined in section 351(a) of this title, of an international application designating the United States shall confer the same rights and shall have the same effect under this title as an application for patent published under section 122(b), except as provided in sections 102(e) and 154(d) of this title.''. (11) Section 135(b) is amended-- (A) by inserting ``(1)'' after ``(b)''; and (B) by adding at the end the following:

``(2) A claim which is the same as, or for the same or substantially the same subject matter as, a claim of an application published under section 122(b) of this title may be made in an application filed after the application is published only if the claim is made before 1 year after the date on which the application is published.''.

Sections 4502 through 4507, and the amendments made by such sections, shall take effect on the date that is 1 year after

the date of the enactment of this Act and shall apply to all applications filed under section 111 of title 35, United States Code, on or after that date, and all applications complying with section 371 of title 35, United States Code, that resulted from international applications filed on or after that date. The amendments made by sections 4504 and 4505 shall apply to any such application voluntarily published by the applicant under procedures established under this subtitle that is pending on the date that is 1 year after the date of the enactment of this Act. The amendment made by section 4504 shall also apply to international applications designating the United States that are filed on or after the date that is 1 year after the date of the enactment of this Act.

Subtitle F--Optional Inter Partes Reexamination Procedure

This subtitle may be cited as the ``Optional Inter Partes Reexamination Procedure Act of 1999''.

The chapter heading for chapter 30 of title 35, United States Code, is amended by inserting ``EX PARTE'' before ``REEXAMINATION OF PATENTS''.

Section 100 of title 35, United States Code, is amended by adding at the end the following new subsection: ``(e) The term `third-party requester' means a person requesting ex parte reexamination under section 302 or inter partes reexamination under section 311 who is not the patent owner.''.

(a) In General.--Part 3 of title 35, United States Code, is amended by adding after chapter 30 the following new chapter:

``CHAPTER 31--OPTIONAL INTER PARTES REEXAMINATION PROCEDURES

``Sec. ``311. Request for inter partes reexamination. ``312. Determination of issue by Director. ``313. Inter partes reexamination order by Director. ``314. Conduct of inter partes reexamination proceedings. ``315. Appeal. ``316. Certificate of patentability, unpatentability, and claim cancellation. ``317. Inter partes reexamination prohibited. ``318. Stay of litigation.

``Sec. 311. Request for inter partes reexamination

``(a) In General.--Any person at any time may file a request for inter partes reexamination by the Office of a patent on the basis of any prior art cited under the provisions of section 301. ``(b) Requirements.--The request shall-- ``(1) be in writing, include the identity of the real party in interest, and be accompanied by payment of an inter partes reexamination fee established by the Director under section 41; and

``(2) set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested. ``(c) Copy.--Unless the requesting person is the owner of the patent, the Director promptly shall send a copy of the request to the owner of record of the patent.

``Sec. 312. Determination of issue by Director

``(a) Reexamination.--Not later than 3 months after the filing of a request for inter partes reexamination under section 311, the Director shall determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other patents or printed publications. On the Director's initiative, and at any time, the Director may determine whether a substantial new question of patentability is raised by patents and publications. ``(b) Record.--A record of the Director's determination under subsection (a) shall be placed in the official file of the patent, and a copy shall be promptly given or mailed to the owner of record of the patent and to the third-party requester, if any. ``(c) Final Decision.--A determination by the Director under subsection (a) shall be final and non-appealable. Upon a determination that no substantial new question of patentability has been raised, the Director may refund a portion of the inter partes reexamination fee required under section 311.

``Sec. 313. Inter partes reexamination order by Director

``If, in a determination made under section 312(a), the Director finds that a substantial new question of patentability affecting a claim of a patent is raised, the determination shall include an order for inter partes reexamination of the patent for resolution of the question. The order may be accompanied by the initial action of the Patent and Trademark Office on the merits of the inter partes reexamination conducted in accordance with section 314.

``Sec. 314. Conduct of inter partes reexamination proceedings

``(a) In General.--Except as otherwise provided in this section, reexamination shall be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133. In any inter partes reexamination proceeding under this chapter, the patent owner shall be permitted to propose any amendment to the patent and a new claim or claims, except that no proposed amended or new claim enlarging the scope of the claims of the patent shall be permitted. ``(b) Response.--(1) This subsection shall apply to any inter partes reexamination proceeding in which the order for inter partes reexamination is based upon a request by a third-party requester. ``(2) With the exception of the inter partes reexamination request, any document filed by either the patent owner or the third-party requester shall be served on the other party. In addition, the third- party requester shall receive a copy of any communication sent by the Office to the patent owner concerning the patent subject to the inter partes reexamination proceeding. ``(3) Each time that the patent owner files a response to an action on the merits from the Patent and Trademark Office, the third-party requester shall have one opportunity to file written comments addressing issues raised by the action of the Office or

the patent owner's response thereto, if those written comments are received by the Office within 30 days after the date of service of the patent owner's response. ``(c) Special Dispatch.--Unless otherwise provided by the Director for good cause, all inter partes reexamination proceedings under this section, including any appeal to the Board of Patent Appeals and Interferences, shall be conducted with special dispatch within the Office.

``Sec. 315. Appeal

``(a) Patent Owner.--The patent owner involved in an inter partes reexamination proceeding under this chapter-- ``(1) may appeal under the provisions of section 134 and may appeal under the provisions of sections 141 through 144, with respect to any decision adverse to the patentability of any original or proposed amended or new claim of the patent; and ``(2) may be a party to any appeal taken by a third-party requester under subsection (b).

``(b) Third-Party Requester.--A third-party requester may-- ``(1) appeal under the provisions of section 134 with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; or ``(2) be a party to any appeal taken by the patent owner under the provisions of section 134, subject to subsection (c).

``(c) Civil Action.--A third-party requester whose request for an inter partes reexamination results in an order under section 313 is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, United States Code, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings. ``Sec. 316. Certificate of patentability, unpatentability, and claim cancellation

``(a) In General.--In an inter partes reexamination proceeding under this chapter, when the time for appeal has expired or any appeal proceeding has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent any proposed amended or new claim determined to be patentable. ``(b) Amended or New Claim.--Any proposed amended or new claim determined to be patentable and incorporated into a patent following an inter partes reexamination proceeding shall have the same effect as that specified in section 252 of this title for reissued patents on the right of any person who made, purchased, or used within the United States, or imported into the United States, anything patented by such proposed amended or new claim, or who made substantial preparation therefor, prior to issuance of a certificate under the provisions of subsection (a) of this section.

``Sec. 317. Inter partes reexamination prohibited

``(a) Order for Reexamination.--Notwithstanding any provision of this chapter, once an order for inter partes reexamination of a patent has been issued under section 313, neither the patent owner nor the third-party requester, if any, nor privies of either, may file a subsequent request for inter partes reexamination of the patent until an inter partes reexamination certificate is issued and published under section 316, unless authorized by the Director. ``(b) Final Decision.--Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, United States Code, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.

``Sec. 318. Stay of litigation

``Once an order for inter partes reexamination of a patent has been issued under section 313, the patent owner may obtain a stay of any pending litigation which involves an issue of patentability of any claims of the patent which are the subject of the inter partes reexamination order, unless the court before which such litigation is pending determines that a stay would not serve the interests of justice.''. (b) Conforming Amendment.--The table of chapters for part III of title 25, United States Code, is amended by striking the item relating to chapter 30 and inserting the following:

``30. Prior Art Citations to Office and Ex Parte Reexamination of Patents........................................................... 301 ``31. Optional Inter Partes Reexamination of Patents..............311''.

(a) Patent Fees; Patent Search Systems.--Section 41(a)(7) of title 35, United States Code, is amended to read as follows: ``(7) On filing each petition for the revival of an unintentionally abandoned application for a patent, for the unintentionally delayed payment of the fee for issuing each patent, or for an unintentionally delayed response by the patent owner in any reexamination proceeding, $1,210, unless the petition is filed under section 133 or 151 of this title, in which case the fee shall be $110.''.

(b) Appeal to the Board of Patent Appeals and Interferences.-- Section 134 of title 35, United States Code, is amended to read as follows:

``Sec. 134. Appeal to the Board of Patent Appeals and Interferences

``(a) Patent Applicant.--An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the administrative patent judge to the Board of Patent Appeals and Interferences, having once paid the fee for such appeal. ``(b) Patent Owner.--A patent owner in any reexamination proceeding may appeal from the final rejection of any claim by the administrative patent judge to the Board of Patent Appeals and Interferences, having once paid the fee for such appeal. ``(c) Third-Party.--A third-party requester in an inter partes proceeding may appeal to the Board of Patent Appeals and Interferences from the final decision of the administrative patent judge favorable to the patentability of any original or proposed amended or new claim of a patent, having once paid the fee for such appeal. The third-party requester may not appeal the decision of the Board of Patent Appeals and Interferences.''. (c) Appeal to Court of Appeals for the Federal Circuit.--Section 141 of title 35, United States Code, is amended by adding the following after the second sentence: ``A patent owner in any reexamination proceeding dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.''. (d) Proceedings on Appeal.--Section 143 of title 35, United States Code, is amended by amending the third sentence to read as follows: ``In any reexamination case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all the issues involved in the appeal.''. (e) Civil Action To Obtain Patent.--Section 145 of title 35, United States Code, is amended in the first sentence by inserting ``(a)'' after ``section 134''.

Not later than 5 years after the date of the enactment of this Act, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall submit to the Congress a report evaluating whether the inter partes reexamination proceedings established under the amendments made by this subtitle are inequitable to any of the parties in interest and, if so, the report shall contain recommendations for changes to the amendments made by this subtitle to remove such inequity.

Any party who requests an inter partes reexamination under section 311 of title 35, United States Code, is estopped from challenging at a later time, in any civil action, any fact determined during the process of such reexamination, except with respect to a fact determination later proved to be erroneous based on information unavailable at the time of the inter partes reexamination decision. If this section is held to be unenforceable, the enforceability of the remainder of this subtitle or of this title shall not be denied as a result.

(a) In General.--Subject to subsection (b), this subtitle and the amendments made by this subtitle shall take effect on the date of the enactment of this Act and shall apply to any patent that issues from an original application filed in the United States on or after that date. (b) Section 4605(a).--The amendments made by section 4605(a) shall take effect on the date that is 1 year after the date of the enactment of this Act.

Subtitle G--Patent and Trademark Office

This subtitle may be cited as the ``Patent and Trademark Office Efficiency Act''.

CHAPTER 1--UNITED STATES PATENT AND TRADEMARK OFFICE

Section 1 of title 35, United States Code, is amended to read as follows:

``Sec. 1. Establishment

``(a) Establishment.--The United States Patent and Trademark Office is established as an agency of the United States, within the Department of Commerce. In carrying out its functions, the United States Patent and Trademark Office shall be subject to the policy direction of the Secretary of Commerce, but otherwise shall retain responsibility for decisions regarding the management and administration of its operations and shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions in accordance with this title and applicable provisions of law. Those operations designed to grant and issue patents and those operations which are designed to facilitate the registration of trademarks shall be treated as separate operating units within the Office. ``(b) Offices.--The United States Patent and Trademark Office shall maintain its principal office in the metropolitan Washington, D.C., area, for the service of process and papers and for the purpose of carrying out its functions. The United States Patent and Trademark Office shall be deemed, for purposes of venue in civil actions, to be a resident of the district in which its principal office is located, except where jurisdiction is otherwise provided by law. The United States Patent and Trademark Office may establish satellite offices in such other places in the United States as it considers necessary and appropriate in the conduct of its business. ``(c) Reference.--For purposes of this title, the United States Patent and Trademark Office shall also be referred to as the `Office' and the `Patent and Trademark Office'.''.

Section 2 of title 35, United States Code, is amended to read as follows:

``Sec. 2. Powers and duties

``(a) In General.--The United States Patent and Trademark Office, subject to the policy direction of the Secretary of Commerce-- ``(1) shall be responsible for the granting and issuing of patents and the registration of trademarks; and ``(2) shall be responsible for disseminating to the public information with respect to patents and trademarks.

``(b) Specific Powers.--The Office-- ``(1) shall adopt and use a seal of the Office, which shall be judicially noticed and with which letters patent, certificates of trademark registrations, and papers issued by the Office shall be authenticated; ``(2) may establish regulations, not inconsistent with law, which-- ``(A) shall govern the conduct of proceedings in the Office; ``(B) shall be made in accordance with section 553 of title 5, United States Code; ``(C) shall facilitate and expedite the processing of patent applications, particularly those which can be filed, stored, processed, searched, and retrieved electronically, subject to the provisions of section 122 relating to the confidential status of applications; ``(D) may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office, and may require them, before being recognized as representatives of applicants or other persons, to show that they are of good moral character and reputation and are possessed of the necessary qualifications to render to applicants or other persons valuable service, advice, and assistance in the presentation or prosecution of their applications or other business before the Office; ``(E) shall recognize the public interest in continuing to safeguard broad access to the United States patent system through the reduced fee structure for small entities under section 41(h)(1) of this title; and ``(F) provide for the development of a performance- based process that includes quantitative and qualitative measures and standards for evaluating cost-effectiveness and is consistent with the principles of impartiality and competitiveness; ``(3) may acquire, construct, purchase, lease, hold, manage, operate, improve, alter, and renovate any real, personal, or mixed property, or any interest therein, as it considers necessary to carry out its functions; ``(4)(A) may make such purchases, contracts for the construction, maintenance, or management and operation of facilities, and contracts for supplies or services, without regard to the provisions of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.), the Public Buildings Act (40 U.S.C. 601 et seq.), and the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.); and ``(B) may enter into and perform such purchases and contracts for printing services, including the process of composition, platemaking, presswork, silk screen processes, binding, microform, and the products of such processes, as it considers

necessary to carry out the functions of the Office, without regard to sections 501 through 517 and 1101 through 1123 of title 44, United States Code; ``(5) may use, with their consent, services, equipment, personnel, and facilities of other departments, agencies, and instrumentalities of the Federal Government, on a reimbursable basis, and cooperate with such other departments, agencies, and instrumentalities in the establishment and use of services, equipment, and facilities of the Office; ``(6) may, when the Director determines that it is practicable, efficient, and cost-effective to do so, use, with the consent of the United States and the agency, instrumentality, Patent and Trademark Office, or international organization concerned, the services, records, facilities, or personnel of any State or local government agency or instrumentality or foreign patent and trademark office or international organization to perform functions on its behalf; ``(7) may retain and use all of its revenues and receipts, including revenues from the sale, lease, or disposal of any real, personal, or mixed property, or any interest therein, of the Office; ``(8) shall advise the President, through the Secretary of Commerce, on national and certain international intellectual property policy issues; ``(9) shall advise Federal departments and agencies on matters of intellectual property policy in the United States and intellectual property protection in other countries; ``(10) shall provide guidance, as appropriate, with respect to proposals by agencies to assist foreign governments and international intergovernmental organizations on matters of intellectual property protection; ``(11) may conduct programs, studies, or exchanges of items or services regarding domestic and international intellectual property law and the effectiveness of intellectual property protection domestically and throughout the world; ``(12)(A) shall advise the Secretary of Commerce on programs and studies relating to intellectual property policy that are conducted, or authorized to be conducted, cooperatively with foreign intellectual property offices and international intergovernmental organizations; and ``(B) may conduct programs and studies described in subparagraph (A); and ``(13)(A) in coordination with the Department of State, may conduct programs and studies cooperatively with foreign intellectual property offices and international intergovernmental organizations; and ``(B) with the concurrence of the Secretary of State, may authorize the transfer of not to exceed $100,000 in any year to the Department of State for the purpose of making special payments to international intergovernmental organizations for studies and programs for advancing international cooperation concerning patents, trademarks, and other matters.

``(c) Clarification of Specific Powers.--(1) The special payments under subsection (b)(13)(B) shall be in addition to any other payments or contributions to international organizations described in subsection (b)(13)(B) and shall not be subject to any limitations

imposed by law on the amounts of such other payments or contributions by the United States Government. ``(2) Nothing in subsection (b) shall derogate from the duties of the Secretary of State or from the duties of the United States Trade Representative as set forth in section 141 of the Trade Act of 1974 (19 U.S.C. 2171). ``(3) Nothing in subsection (b) shall derogate from the duties and functions of the Register of Copyrights or otherwise alter current authorities relating to copyright matters. ``(4) In exercising the Director's powers under paragraphs (3) and (4)(A) of subsection (b), the Director shall consult with the Administrator of General Services. ``(5) In exercising the Director's powers and duties under this section, the Director shall consult with the Register of Copyrights on all copyright and related matters. ``(d) Construction.--Nothing in this section shall be construed to nullify, void, cancel, or interrupt any pending request-for-proposal let or contract issued by the General Services Administration for the specific purpose of relocating or leasing space to the United States Patent and Trademark Office.''.

Section 3 of title 35, United States Code, is amended to read as follows:

``Sec. 3. Officers and employees

``(a) Under Secretary and Director.-- ``(1) In general.--The powers and duties of the United States Patent and Trademark Office shall be vested in an Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (in this title referred to as the `Director'), who shall be a citizen of the United States and who shall be appointed by the President, by and with the advice and consent of the Senate. The Director shall be a person who has a professional background and experience in patent or trademark law. ``(2) Duties.-- ``(A) In general.--The Director shall be responsible for providing policy direction and management supervision for the Office and for the issuance of patents and the registration of trademarks. The Director shall perform these duties in a fair, impartial, and equitable manner. ``(B) Consulting with the public advisory committees.--The Director shall consult with the Patent Public Advisory Committee established in section 5 on a regular basis on matters relating to the patent operations of the Office, shall consult with the Trademark Public Advisory Committee established in section 5 on a regular basis on matters relating to the trademark operations of the Office, and shall consult with the respective Public Advisory Committee before submitting budgetary proposals to the Office of Management and Budget or changing or proposing to change patent or trademark user fees or patent or trademark regulations which are subject to the requirement to provide notice and opportunity for public comment under section 553 of title 5, United States Code, as the case may be.

``(3) Oath.--The Director shall, before taking office, take an oath to discharge faithfully the duties of the Office. ``(4) Removal.--The Director may be removed from office by the President. The President shall provide notification of any such removal to both Houses of Congress.

``(b) Officers and Employees of the Office.-- ``(1) Deputy under secretary and deputy director.--The Secretary of Commerce, upon nomination by the Director, shall appoint a Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office who shall be vested with the authority to act in the capacity of the Director in the event of the absence or incapacity of the Director. The Deputy Director shall be a citizen of the United States who has a professional background and experience in patent or trademark law. ``(2) Commissioners.-- ``(A) Appointment and duties.--The Secretary of Commerce shall appoint a Commissioner for Patents and a Commissioner for Trademarks, without regard to chapter 33, 51, or 53 of title 5, United States Code. The Commissioner for Patents shall be a citizen of the United States with demonstrated management ability and professional background and experience in patent law and serve for a term of 5 years. The Commissioner for Trademarks shall be a citizen of the United States with demonstrated management ability and professional background and experience in trademark law and serve for a term of 5 years. The Commissioner for Patents and the Commissioner for Trademarks shall serve as the chief operating officers for the operations of the Office relating to patents and trademarks, respectively, and shall be responsible for the management and direction of all aspects of the activities of the Office that affect the administration of patent and trademark operations, respectively. The Secretary may reappoint a Commissioner to subsequent terms of 5 years as long as the performance of the Commissioner as set forth in the performance agreement in subparagraph (B) is satisfactory. ``(B) Salary and performance agreement.--The Commissioners shall be paid an annual rate of basic pay not to exceed the maximum rate of basic pay for the Senior Executive Service established under section 5382 of title 5, United States Code, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of title 5, United States Code. The compensation of the Commissioners shall be considered, for purposes of section 207(c)(2)(A) of title 18, United States Code, to be the equivalent of that described under clause (ii) of section 207(c)(2)(A) of title 18, United States Code. In addition, the Commissioners may receive a bonus in an amount of up to, but not in excess of, 50 percent of the Commissioners' annual rate of basic pay, based upon an evaluation by the Secretary of Commerce, acting through the Director, of the Commissioners' performance as defined in an annual performance agreement between the Commissioners and the Secretary. The annual performance agreements shall incorporate measurable organization

and individual goals in key operational areas as delineated in an annual performance plan agreed to by the Commissioners and the Secretary. Payment of a bonus under this subparagraph may be made to the Commissioners only to the extent that such payment does not cause the Commissioners' total aggregate compensation in a calendar year to equal or exceed the amount of the salary of the Vice President under section 104 of title 3, United States Code. ``(C) Removal.--The Commissioners may be removed from office by the Secretary for misconduct or nonsatisfactory performance under the performance agreement described in subparagraph (B), without regard to the provisions of title 5, United States Code. The Secretary shall provide notification of any such removal to both Houses of Congress. ``(3) Other officers and employees.--The Director shall-- ``(A) appoint such officers, employees (including attorneys), and agents of the Office as the Director considers necessary to carry out the functions of the Office; and ``(B) define the title, authority, and duties of such officers and employees and delegate to them such of the powers vested in the Office as the Director may determine. The Office shall not be subject to any administratively or statutorily imposed limitation on positions or personnel, and no positions or personnel of the Office shall be taken into account for purposes of applying any such limitation. ``(4) Training of examiners.--The Office shall submit to the Congress a proposal to provide an incentive program to retain as employees patent and trademark examiners of the primary examiner grade or higher who are eligible for retirement, for the sole purpose of training patent and trademark examiners. ``(5) National security positions.--The Director, in consultation with the Director of the Office of Personnel Management, shall maintain a program for identifying national security positions and providing for appropriate security clearances, in order to maintain the secrecy of certain inventions, as described in section 181, and to prevent disclosure of sensitive and strategic information in the interest of national security.

``(c) Continued Applicability of Title 5, United States Code.-- Officers and employees of the Office shall be subject to the provisions of title 5, United States Code, relating to Federal employees. ``(d) Adoption of Existing Labor Agreements.--The Office shall adopt all labor agreements which are in effect, as of the day before the effective date of the Patent and Trademark Office Efficiency Act, with respect to such Office (as then in effect). ``(e) Carryover of Personnel.-- ``(1) From pto.--Effective as of the effective date of the Patent and Trademark Office Efficiency Act, all officers and employees of the Patent and Trademark Office on the day before such effective date shall become officers and employees of the Office, without a break in service. ``(2) Other personnel.--Any individual who, on the day before the effective date of the Patent and Trademark Office

Efficiency Act, is an officer or employee of the Department of Commerce (other than an officer or employee under paragraph (1)) shall be transferred to the Office, as necessary to carry out the purposes of this Act, if-- ``(A) such individual serves in a position for which a major function is the performance of work reimbursed by the Patent and Trademark Office, as determined by the Secretary of Commerce; ``(B) such individual serves in a position that performed work in support of the Patent and Trademark Office during at least half of the incumbent's work time, as determined by the Secretary of Commerce; or ``(C) such transfer would be in the interest of the Office, as determined by the Secretary of Commerce in consultation with the Director. Any transfer under this paragraph shall be effective as of the same effective date as referred to in paragraph (1), and shall be made without a break in service.

``(f ) Transition Provisions.-- ``(1) Interim appointment of director.--On or after the effective date of the Patent and Trademark Office Efficiency Act, the President shall appoint an individual to serve as the Director until the date on which a Director qualifies under subsection (a). The President shall not make more than one such appointment under this subsection. ``(2) Continuation in office of certain officers.--(A) The individual serving as the Assistant Commissioner for Patents on the day before the effective date of the Patent and Trademark Office Efficiency Act may serve as the Commissioner for Patents until the date on which a Commissioner for Patents is appointed under subsection (b). ``(B) The individual serving as the Assistant Commissioner for Trademarks on the day before the effective date of the Patent and Trademark Office Efficiency Act may serve as the Commissioner for Trademarks until the date on which a Commissioner for Trademarks is appointed under subsection (b).''.

Chapter 1 of part I of title 35, United States Code, is amended by inserting after section 4 the following: ``Sec. 5. Patent and Trademark Office Public Advisory Committees

``(a) Establishment of Public Advisory Committees.-- ``(1) Appointment.--The United States Patent and Trademark Office shall have a Patent Public Advisory Committee and a Trademark Public Advisory Committee, each of which shall have nine voting members who shall be appointed by the Secretary of Commerce and serve at the pleasure of the Secretary of Commerce. Members of each Public Advisory Committee shall be appointed for a term of 3 years, except that of the members first appointed, three shall be appointed for a term of 1 year, and three shall be appointed for a term of 2 years. In making appointments to each Committee, the

Secretary of Commerce shall consider the risk of loss of competitive advantage in international commerce or other harm to United States companies as a result of such appointments. ``(2) Chair.--The Secretary shall designate a chair of each Advisory Committee, whose term as chair shall be for 3 years. ``(3) Timing of appointments.--Initial appointments to each Advisory Committee shall be made within 3 months after the effective date of the Patent and Trademark Office Efficiency Act. Vacancies shall be filled within 3 months after they occur.

``(b) Basis for Appointments.--Members of each Advisory Committee-- ``(1) shall be citizens of the United States who shall be chosen so as to represent the interests of diverse users of the United States Patent and Trademark Office with respect to patents, in the case of the Patent Public Advisory Committee, and with respect to trademarks, in the case of the Trademark Public Advisory Committee; ``(2) shall include members who represent small and large entity applicants located in the United States in proportion to the number of applications filed by such applicants, but in no case shall members who represent small entity patent applicants, including small business concerns, independent inventors, and nonprofit organizations, constitute less than 25 percent of the members of the Patent Public Advisory Committee, and such members shall include at least one independent inventor; and ``(3) shall include individuals with substantial background and achievement in finance, management, labor relations, science, technology, and office automation.

In addition to the voting members, each Advisory Committee shall include a representative of each labor organization recognized by the United States Patent and Trademark Office. Such representatives shall be nonvoting members of the Advisory Committee to which they are appointed. ``(c) Meetings.--Each Advisory Committee shall meet at the call of the chair to consider an agenda set by the chair. ``(d) Duties.--Each Advisory Committee shall-- ``(1) review the policies, goals, performance, budget, and user fees of the United States Patent and Trademark Office with respect to patents, in the case of the Patent Public Advisory Committee, and with respect to Trademarks, in the case of the Trademark Public Advisory Committee, and advise the Director on these matters; ``(2) within 60 days after the end of each fiscal year-- ``(A) prepare an annual report on the matters referred to in paragraph (1); ``(B) transmit the report to the Secretary of Commerce, the President, and the Committees on the Judiciary of the Senate and the House of Representatives; and ``(C) publish the report in the Official Gazette of the United States Patent and Trademark Office.

``(e) Compensation.--Each member of each Advisory Committee shall be compensated for each day (including travel time) during which such member is attending meetings or conferences of that Advisory Committee or otherwise engaged in the business of that Advisory Committee, at the rate which is the daily equivalent of the annual rate of basic pay in effect for level III of the

Executive Schedule under section 5314 of title 5, United States Code. While away from such member's home or regular place of business such member shall be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code. ``(f ) Access to Information.--Members of each Advisory Committee shall be provided access to records and information in the United States Patent and Trademark Office, except for personnel or other privileged information and information concerning patent applications required to be kept in confidence by section 122. ``(g) Applicability of Certain Ethics Laws.--Members of each Advisory Committee shall be special Government employees within the meaning of section 202 of title 18, United States Code. ``(h) Inapplicability of Federal Advisory Committee Act.--The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to each Advisory Committee. ``(i) Open Meetings.--The meetings of each Advisory Committee shall be open to the public, except that each Advisory Committee may by majority vote meet in executive session when considering personnel or other confidential information.''.

(a) Duties.--Chapter 1 of title 35, United States Code, is amended by striking section 6. (b) Regulations for Agents and Attorneys.--Section 31 of title 35, United States Code, and the item relating to such section in the table of sections for chapter 3 of title 35, United States Code, are repealed. (c) Suspension or Exclusion From Practice.--Section 32 of title 35, United States Code, is amended by striking ``31'' and inserting ``2(b)(2)(D)''.

Section 17 of the Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as follows: ``Sec. 17. (a) In every case of interference, opposition to registration, application to register as a lawful concurrent user, or application to cancel the registration of a mark, the Director shall give notice to all parties and shall direct a Trademark Trial and Appeal Board to determine and decide the respective rights of registration. ``(b) The Trademark Trial and Appeal Board shall include the Director, the Commissioner for Patents, the Commissioner for Trademarks, and administrative trademark judges who are appointed by the Director.''.

Chapter 1 of title 35, United States Code, is amended-- (1) by striking section 7 and redesignating sections 8 through 14 as sections 7 through 13, respectively; and (2) by inserting after section 5 the following:

``Sec. 6. Board of Patent Appeals and Interferences

``(a) Establishment and Composition.--There shall be in the United States Patent and Trademark Office a Board of Patent Appeals and Interferences. The Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Board. The administrative patent

judges shall be persons of competent legal knowledge and scientific ability who are appointed by the Director. ``(b) Duties.--The Board of Patent Appeals and Interferences shall, on written appeal of an applicant, review adverse decisions of examiners upon applications for patents and shall determine priority and patentability of invention in interferences declared under section 135(a). Each appeal and interference shall be heard by at least three members of the Board, who shall be designated by the Director. Only the Board of Patent Appeals and Interferences may grant rehearings.''.

Section 13 of title 35, United States Code, as redesignated by section 4717 of this subtitle, is amended to read as follows:

``Sec. 13. Annual report to Congress

``The Director shall report to the Congress, not later than 180 days after the end of each fiscal year, the moneys received and expended by the Office, the purposes for which the moneys were spent, the quality and quantity of the work of the Office, the nature of training provided to examiners, the evaluation of the Commissioner of Patents and the Commissioner of Trademarks by the Secretary of Commerce, the compensation of the Commissioners, and other information relating to the Office.''.

Section 32 of title 35, United States Code, is amended by inserting before the last sentence the following: ``The Director shall have the discretion to designate any attorney who is an officer or employee of the United States Patent and Trademark Office to conduct the hearing required by this section.''.

(a) Pay of Director.--Section 5314 of title 5, United States Code, is amended by striking: ``Assistant Secretary of Commerce and Commissioner of Patents and Trademarks.''.

and inserting: ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.''.

(b) Pay of Deputy Director.--Section 5315 of title 5, United States Code, is amended by adding at the end the following: ``Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office.''.

CHAPTER 2--EFFECTIVE DATE; TECHNICAL AMENDMENTS

This subtitle and the amendments made by this subtitle shall take effect 4 months after the date of the enactment of this Act.

(a) Amendments to Title 35, United States Code.--

(1) The item relating to part I in the table of parts for chapter 35, United States Code, is amended to read as follows:

``I. United States Patent and Trademark Office.................... 1''.

(2) The heading for part I of title 35, United States Code, is amended to read as follows:

``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

(3) The table of chapters for part I of title 35, United States Code, is amended by amending the item relating to chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions............. 1''.

(4) The table of sections for chapter 1 of title 35, United States Code, is amended to read as follows:

``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec. `` 1. Establishment. `` 2. Powers and duties. `` 3. Officers and employees. `` 4. Restrictions on officers and employees as to interest in patents. `` 5. Patent and Trademark Office Public Advisory Committees. `` 6. Board of Patent Appeals and Interferences. `` 7. Library. `` 8. Classification of patents. `` 9. Certified copies of records. ``10. Publications. ``11. Exchange of copies of patents and applications with foreign countries. ``12. Copies of patents and applications for public libraries. ``13. Annual report to Congress.''.

(5) Section 41(h) of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (6) Section 155 of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (7) Section 155A(c) of title 35, United States Code, is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Director''. (8) Section 302 of title 35, United States Code, is amended by striking ``Commissioner of Patents'' and inserting ``Director''. (9)(A) Section 303 of title 35, United States Code, is amended-- (i) in the section heading by striking ``Commissioner'' and inserting ``Director''; and (ii) by striking ``Commissioner's'' and inserting ``Director's''. (B) The item relating to section 303 in the table of sections for chapter 30 of title 35, United States Code, is amended by striking ``Commissioner'' and inserting ``Director''. (10)(A) Except as provided in subparagraph (B), title 35, United States Code, is amended by striking ``Commissioner'' each place it appears and inserting ``Director''. (B) Chapter 17 of title 35, United States Code, is amended by striking ``Commissioner'' each place it appears and inserting ``Commissioner of Patents''.

(11) Section 157(d) of title 35, United States Code, is amended by striking ``Secretary of Commerce'' and inserting ``Director''. (12) Section 202(a) of title 35, United States Code, is amended-- (A) by striking ``iv)'' and inserting ``(iv)''; and (B) by striking the second period after ``Department of Energy'' at the end of the first sentence.

(b) Other Provisions of Law.-- (1)(A) Section 45 of the Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1127), is amended by striking ``The term `Commissioner' means the Commissioner of Patents and Trademarks.'' and inserting ``The term `Director' means the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.''. (B) The Act of July 5, 1946 (commonly referred to as the ``Trademark Act of 1946''; 15 U.S.C. 1051 et seq.), except for section 17, as amended by 4716 of this subtitle, is amended by striking ``Commissioner'' each place it appears and inserting ``Director''. (C) Sections 8(e) and 9(b) of the Trademark Act of 1946 are each amended by striking ``Commissioner'' and inserting ``Director''. (2) Section 500(e) of title 5, United States Code, is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (3) Section 5102(c)(23) of title 5, United States Code, is amended to read as follows: ``(23) administrative patent judges and designated administrative patent judges in the United States Patent and Trademark Office;''. (4) Section 5316 of title 5, United States Code (5 U.S.C. 5316) is amended by striking ``Commissioner of Patents, Department of Commerce.'', ``Deputy Commissioner of Patents and Trademarks.'', ``Assistant Commissioner for Patents.'', and ``Assistant Commissioner for Trademarks.''. (5) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 638(p)(1)(B)) is amended to read as follows: ``(B) the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; and''. (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 1511) is amended-- (A) by striking ``(d) Patent and Trademark Office;'' and inserting: ``(4) United States Patent and Trademark Office''; and (B) by redesignating subsections (a), (b), (c), (e), (f ), and (g) as paragraphs (1), (2), (3), (5), (6), and (7), respectively and indenting the paragraphs as so redesignated 2 ems to the right. (7) Section 19 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831r) is amended-- (A) by striking ``Patent Office of the United States'' and inserting ``United States Patent and Trademark Office''; and

(B) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (8) Section 182(b)(2)(A) of the Trade Act of 1974 (19 U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (9) Section 302(b)(2)(D) of the Trade Act of 1974 (19 U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (10) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (11) Sections 505(m) and 512(o) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each amended by striking ``Patent and Trademark Office of the Department of Commerce'' and inserting ``United States Patent and Trademark Office''. (12) Section 702(d) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office'' and by striking ``Commissioner'' and inserting ``Director''. (13) Section 105(e) of the Federal Alcohol Administration Act (27 U.S.C. 205(e)) is amended by striking ``United States Patent Office'' and inserting ``United States Patent and Trademark Office''. (14) Section 1295(a)(4) of title 28, United States Code, is amended-- (A) in subparagraph (A) by inserting ``United States'' before ``Patent and Trademark''; and (B) in subparagraph (B) by striking ``Commissioner of Patents and Trademarks'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (15) Chapter 115 of title 28, United States Code, is amended-- (A) in the item relating to section 1744 in the table of sections by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''; (B) in section 1744-- (i) by striking ``Patent Office'' each place it appears in the text and section heading and inserting ``United States Patent and Trademark Office''; and (ii) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''; and (C) by striking ``Commissioner'' and inserting ``Director''.

(16) Section 1745 of title 28, United States Code, is amended by striking ``United States Patent Office'' and inserting ``United States Patent and Trademark Office''. (17) Section 1928 of title 28, United States Code, is amended by striking ``Patent Office'' and inserting ``United States Patent and Trademark Office''. (18) Section 151 of the Atomic Energy Act of 1954 (42 U.S.C. 2181) is amended in subsections c. and d. by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (19) Section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182) is amended by striking ``Commissioner of Patents'' each place it appears and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (20) Section 305 of the National Aeronautics and Space Act of 1958 (42 U.S.C. 2457) is amended-- (A) in subsection (c) by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (hereafter in this section referred to as the `Director')''; and (B) by striking ``Commissioner'' each subsequent place it appears and inserting ``Director''. (21) Section 12(a) of the Solar Heating and Cooling Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by striking ``Commissioner of the Patent Office'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''. (22) Section 1111 of title 44, United States Code, is amended by striking ``the Commissioner of Patents,''. (23) Section 1114 of title 44, United States Code, is amended by striking ``the Commissioner of Patents,''. (24) Section 1123 of title 44, United States Code, is amended by striking ``the Patent Office,''. (25) Sections 1337 and 1338 of title 44, United States Code, and the items relating to those sections in the table of contents for chapter 13 of such title, are repealed. (26) Section 10(i) of the Trading with the Enemy Act (50 U.S.C. App. 10(i)) is amended by striking ``Commissioner of Patents'' and inserting ``Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office''.

CHAPTER 3--MISCELLANEOUS PROVISIONS

(a) In General.--Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to a department or office from which a function is transferred by this subtitle-- (1) to the head of such department or office is deemed to refer to the head of the department or office to which such function is transferred; or (2) to such department or office is deemed to refer to the department or office to which such function is transferred.

(b) Specific References.--Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Patent and Trademark Office-- (1) to the Commissioner of Patents and Trademarks is deemed to refer to the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; (2) to the Assistant Commissioner for Patents is deemed to refer to the Commissioner for Patents; or (3) to the Assistant Commissioner for Trademarks is deemed to refer to the Commissioner for Trademarks.

Except as otherwise provided by law, a Federal official to whom a function is transferred by this subtitle may, for purposes of performing the function, exercise all authorities under any other provision of law that were available with respect to the performance of that function to the official responsible for the performance of the function immediately before the effective date of the transfer of the function under this subtitle.

(a) Legal Documents.--All orders, determinations, rules, regulations, permits, grants, loans, contracts, agreements, certificates, licenses, and privileges-- (1) that have been issued, made, granted, or allowed to become effective by the President, the Secretary of Commerce, any officer or employee of any office transferred by this subtitle, or any other Government official, or by a court of competent jurisdiction, in the performance of any function that is transferred by this subtitle; and (2) that are in effect on the effective date of such transfer (or become effective after such date pursuant to their terms as in effect on such effective date), shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, any other authorized official, a court of competent jurisdiction, or operation of law.

(b) Proceedings.--This subtitle shall not affect any proceedings or any application for any benefits, service, license, permit, certificate, or financial assistance pending on the effective date of this subtitle before an office transferred by this subtitle, but such proceedings and applications shall be continued. Orders shall be issued in such proceedings, appeals shall be taken therefrom, and payments shall be made pursuant to such orders, as if this subtitle had not been enacted, and orders issued in any such proceeding 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 subsection shall be considered 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 subtitle had not been enacted. (c) Suits.--This subtitle shall not affect suits commenced before the effective date of this subtitle, 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 subtitle had not been enacted. (d) Nonabatement of Actions.--No suit, action, or other proceeding commenced by or against the Department of Commerce or the Secretary of Commerce, or by or against any individual in the official capacity of such individual as an officer or employee of an office transferred by this subtitle, shall abate by reason of the enactment of this subtitle. (e) Continuance of Suits.--If any Government officer in the official capacity of such officer is party to a suit with respect to a function of the officer, and under this subtitle such function is transferred to any other officer or office, then such suit shall be continued with the other officer or the head of such other office, as applicable, substituted or added as a party. (f ) Administrative Procedure and Judicial Review.--Except as otherwise provided by this subtitle, any statutory requirements relating to notice, hearings, action upon the record, or administrative or judicial review that apply to any function transferred by this subtitle shall apply to the exercise of such function by the head of the Federal agency, and other officers of the agency, to which such function is transferred by this subtitle.

Except as otherwise provided in this subtitle, so much of the personnel, property, records, and unexpended balances of appropriations, allocations, and other funds employed, used, held, available, or to be made available in connection with a function transferred to an official or agency by this subtitle shall be available to the official or the head of that agency, respectively, at such time or times as the Director of the Office of Management and Budget directs for use in connection with the functions transferred.

Except as otherwise expressly prohibited by law or otherwise provided in this subtitle, an official to whom functions are transferred under this subtitle (including the head of any office to which functions are transferred under this subtitle) may delegate any of the functions so transferred to such officers and employees of the office of the official as the official may designate, and may authorize successive redelegations of such functions as may be necessary or appropriate. No delegation of functions under this section or under any other provision of this subtitle shall relieve the official to whom a function is transferred under this subtitle of responsibility for the administration of the function.

BUDGET WITH RESPECT TO FUNCTIONS TRANSFERRED.

(a) Determinations.--If necessary, the Director of the Office of Management and Budget shall make any determination of the functions that are transferred under this subtitle. (b) 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 subtitle, and to 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 the provisions of this subtitle. The Director shall provide for the termination of the affairs of all entities terminated by this subtitle and for such further measures and dispositions as may be necessary to effectuate the purposes of this subtitle.

For purposes of this subtitle, the vesting of a function in a department or office pursuant to reestablishment of an office shall be considered to be the transfer of the function.

Existing appropriations and funds available for the performance of functions, programs, and activities terminated pursuant to this subtitle shall remain available, for the duration of their period of availability, for necessary expenses in connection with the termination and resolution of such functions, programs, and activities, subject to the submission of a plan to the Committees on Appropriations of the House and Senate in accordance with the procedures set forth in section 605 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1999, as contained in Public Law 105-277.

For purposes of this subtitle-- (1) the term ``function'' includes any duty, obligation, power, authority, responsibility, right, privilege, activity, or program; and (2) the term ``office'' includes any office, administration, agency, bureau, institute, council, unit, organizational entity, or component thereof.

Subtitle H--Miscellaneous Patent Provisions

(a) Abandonment.--Section 111(b)(5) of title 35, United States Code, is amended to read as follows: ``(5) Abandonment.--Notwithstanding the absence of a claim, upon timely request and as prescribed by the Director, a provisional application may be treated as an application filed under subsection (a). Subject to section 119(e)(3) of this title, if no such request is made, the provisional application shall be regarded as abandoned 12 months after the filing date of such application and shall not be subject to revival after such 12-month period.''.

(b) Technical Amendment Relating to Weekends and Holidays.--Section 119(e) of title 35, United States Code, is amended by adding at the end the following: ``(3) If the day that is 12 months after the filing date of a provisional application falls on a Saturday, Sunday, or Federal holiday within the District of Columbia, the period of pendency of the provisional application shall be extended to the next succeeding secular or business day.''.

(c) Elimination of Copendency Requirement.--Section 119(e)(2) of title 35, United States Code, is amended by striking ``and the provisional application was pending on the filing date of the application for patent under section 111(a) or section 363 of this title''. (d) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to any provisional application filed on or after June 8, 1995, except that the amendments made by subsections (b) and (c) shall have no effect with respect to any patent which is the subject of litigation in an action commenced before such date of enactment.

Section 119 of title 35, United States Code, is amended as follows: (1) In subsection (a), insert ``or in a WTO member country,'' after ``or citizens of the United States,''. (2) At the end of section 119 add the following new subsections:

``(f ) Applications for plant breeder's rights filed in a WTO member country (or in a foreign UPOV Contracting Party) shall have the same effect for the purpose of the right of priority under subsections (a) through (c) of this section as applications for patents, subject to the same conditions and requirements of this section as apply to applications for patents. ``(g) As used in this section-- ``(1) the term `WTO member country' has the same meaning as the term is defined in section 104(b)(2) of this title; and ``(2) the term `UPOV Contracting Party' means a member of the International Convention for the Protection of New Varieties of Plants.''.

NOT APPLICABLE.

Section 287(c)(4) of title 35, United States Code, is amended by striking ``before the date of enactment of this subsection'' and inserting ``based on an application the earliest effective filing date of which is prior to September 30, 1996''.

(a) Printing of Papers Filed.--Section 22 of title 35, United States Code, is amended by striking ``printed or typewritten'' and inserting ``printed, typewritten, or on an electronic medium''. (b) Publications.--Section 11(a) of title 35, United States Code, is amended by amending the matter preceding paragraph 1 to read as follows: ``(a) The Director may publish in printed, typewritten, or electronic form, the following:''. (c) Copies of Patents for Public Libraries.--Section 13 of title 35, United States Code, is amended by striking ``printed copies of specifications and drawings of patents'' and inserting ``copies of specifications and drawings of patents in printed or electronic form''. (d) Maintenance of Collections.-- (1) Electronic collections.--Section 41(i)(1) of title 35, United States Code, is amended by striking ``paper or microform'' and inserting ``paper, microform, or electronic''.

(2) Continuation of maintenance.--The Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office shall not, pursuant to the amendment made by paragraph (1), cease to maintain, for use by the public, paper or microform collections of United States patents, foreign patent documents, and United States trademark registrations, except pursuant to notice and opportunity for public comment and except that the Director shall first submit a report to the Committees on the Judiciary of the Senate and the House of Representatives detailing such plan, including a description of the mechanisms in place to ensure the integrity of such collections and the data contained therein, as well as to ensure prompt public access to the most current available information, and certifying that the implementation of such plan will not negatively impact the public.

BIOTECHNOLOGY PATENTS.

(a) In General.--Not later than 6 months after the date of the enactment of this Act, the Comptroller General of the United States, in consultation with the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, shall conduct a study and submit a report to Congress on the potential risks to the United States biotechnology industry relating to biological deposits in support of biotechnology patents. (b) Contents.--The study conducted under this section shall include-- (1) an examination of the risk of export and the risk of transfers to third parties of biological deposits, and the risks posed by the change to 18-month publication requirements made by this subtitle; (2) an analysis of comparative legal and regulatory regimes; and (3) any related recommendations.

(c) Consideration of Report.--In drafting regulations affecting biological deposits (including any modification of title 37, Code of Federal Regulations, section 1.801 et seq.), the United States Patent and Trademark Office shall consider the recommendations of the study conducted under this section.

Section 102(g) of title 35, United States Code, is amended to read as follows: ``(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.''.

PATENTS.

(a) Prior Art Exclusion.--Section 103(c) of title 35, United States Code, is amended by striking ``subsection (f ) or (g)'' and inserting ``one or more of subsections (e), (f ), and (g)''. (b) Effective Date.--The amendment made by this section shall apply to any application for patent filed on or after the date of the enactment of this Act.

Section 12 of title 35, United States Code, is amended by adding at the end the following: ``The Director shall not enter into an agreement to provide such copies of specifications and drawings of United States patents and applications to a foreign country, other than a NAFTA country or a WTO member country, without the express authorization of the Secretary of Commerce. For purposes of this section, the terms `NAFTA country' and `WTO member country' have the meanings given those terms in section 104(b).''.

(a) References.--Wherever in this section an amendment is expressed in terms of an amendment to any provision, the reference shall be considered to be made to such provision of section 1405 of the Child Online Protection Act (47 U.S.C. 231 note). (b) Membership.--Subsection (b) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) Industry members.--The Commission shall include 16 members who shall consist of representatives of-- ``(A) providers of Internet filtering or blocking services or software; ``(B) Internet access services; ``(C) labeling or ratings services; ``(D) Internet portal or search services; ``(E) domain name registration services; ``(F) academic experts; and ``(G) providers that make content available over the Internet. Of the members of the Commission by reason of this paragraph, an equal number shall be appointed by the Speaker of the House of Representatives and by the Majority Leader of the Senate. Members of the Commission appointed on or before October 31, 1999, shall remain members.''; and (2) by adding at the end the following new paragraph: ``(3) Prohibition of pay.--Members of the Commission shall not receive any pay by reason of their membership on the Commission.''.

(c) Extension of Reporting Deadline.--The matter in subsection (d) that precedes paragraph (1) is amended by striking ``1 year'' and inserting ``2 years''.

(d) Termination.--Subsection (f ) is amended by inserting before the period at the end the following: ``or November 30, 2000, whichever occurs earlier''. (e) First Meeting and Chairperson.--Section 1405 is amended-- (1) by striking subsection (e); (2) by redesignating subsections (f ) (as amended by the preceding provisions of this section) and (g) as subsections (l) and (m), respectively; (3) by redesignating subsections (c) and (d) (as amended by the preceding provisions of this section) as subsections (e) and (f ), respectively; and (4) by inserting after subsection (b) the following new subsections:

``(c) First Meeting.--The Commission shall hold its first meeting not later than March 31, 2000. ``(d) Chairperson.--The chairperson of the Commission shall be elected by a vote of a majority of the members, which shall take place not later than 30 days after the first meeting of the Commission.''. (f ) Rules of the Commission.--Section 1405 is amended by inserting after subsection (f ) (as so redesignated by subsection (e)(3) of this section) the following new subsection: ``(g) Rules of the Commission.-- ``(1) Quorum.--Nine members of the Commission shall constitute a quorum for conducting the business of the Commission. ``(2) Meetings.--Any meetings held by the Commission shall be duly noticed at least 14 days in advance and shall be open to the public. ``(3) Opportunities to testify.--The Commission shall provide opportunities for representatives of the general public to testify. ``(4) Additional rules.--The Commission may adopt other rules as necessary to carry out this section.''.

ENTITIES.

(a) Amendment.--Section 396(k) of the Communications Act of 1934 (47 U.S.C. 396(k)) is amended by adding at the end the following new paragraph: ``(12) Funds may not be distributed under this subsection to any public broadcasting entity that directly or indirectly-- ``(A) rents contributor or donor names (or other personally identifiable information) to or from, or exchanges such names or information with, any Federal, State, or local candidate, political party, or political committee; or ``(B) discloses contributor or donor names, or other personally identifiable information, to any nonaffiliated third party unless-- ``(i) such entity clearly and conspicuously discloses to the contributor or donor that such information may be disclosed to such third party; ``(ii) the contributor or donor is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party; and

``(iii) the contributor or donor is given an explanation of how the contributor or donor may exercise that nondisclosure option.''.

(b) Effective Date.--The amendment made by subsection (a) shall apply with respect to funds distributed on or after 6 months after the date of the enactment of this Act.

Within 180 days after the date of the enactment of this Act, the Federal Communications Commission shall complete the first biennial review required by section 202(h) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 111).

(a) Civil Remittance of Damages.--Section 1203(c)(5)(B) of title 17, United States Code, is amended to read as follows: ``(B) Nonprofit library, archives, educational institutions, or public broadcasting entities.-- ``(i) Definition.--In this subparagraph, the term `public broadcasting entity' has the meaning given such term under section 118(g). ``(ii) In general.--In the case of a nonprofit library, archives, educational institution, or public broadcasting entity, the court shall remit damages in any case in which the library, archives, educational institution, or public broadcasting entity sustains the burden of proving, and the court finds, that the library, archives, educational institution, or public broadcasting entity was not aware and had no reason to believe that its acts constituted a violation.''.

(b) Criminal Offenses and Penalties.--Section 1204(b) of title 17, United States Code, is amended to read as follows: ``(b) Limitation for Nonprofit Library, Archives, Educational Institution, or Public Broadcasting Entity.--Subsection (a) shall not apply to a nonprofit library, archives, educational institution, or public broadcasting entity (as defined under section 118(g)).''.

PROTECTION.

(a) In General.-- (1) Section 504(a) of the Digital Millennium Copyright Act (Public Law 105-304) is amended to read as follows:

``(a) In General.--Not later than November 1, 2003, the Register of Copyrights and the Commissioner of Patents and Trademarks shall submit to the Committees on the Judiciary of the Senate and the House of Representatives a joint report evaluating the effect of the amendments made by this title.''. (2) Section 505 of the Digital Millennium Copyright Act is amended by striking ``and shall remain in effect'' and all that follows through the end of the section and inserting a period. (3) Section 1301(b)(3) of title 17, United States Code, is amended to read as follows: ``(3) A `vessel' is a craft-- ``(A) that is designed and capable of independently steering a course on or through water through its own means of propulsion; and

``(B) that is designed and capable of carrying and transporting one or more passengers.''. (4) Section 1313(c) of title 17, United States Code, is amended by adding at the end the following: ``Costs of the cancellation procedure under this subsection shall be borne by the nonprevailing party or parties, and the Administrator shall have the authority to assess and collect such costs.''.

(b) Tariff Act of 1930.--Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) is amended-- (1) in subsection (a)-- (A) in paragraph (1)-- (i) in subparagraph (A), by striking ``and (D)'' and inserting ``(D), and (E)''; and (ii) by adding at the end the following: ``(E) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consigner, of an article that constitutes infringement of the exclusive rights in a design protected under chapter 13 of title 17, United States Code.''; and (B) in paragraphs (2) and (3), by striking ``or mask work'' and inserting ``mask work, or design''; and (2) in subsection (l), by striking ``or mask work'' each place it appears and inserting ``mask work, or design''.

Section 1201(a)(1)(C) of title 17, United States Code, is amended in the first sentence by striking ``on the record''.

Section 9306 of title 31, United States Code, is amended-- (1) in subsection (a) by striking all beginning with ``designates a person by written power of attorney'' through the end of such subsection and inserting the following: ``has a resident agent for service of process for that district. The resident agent-- ``(1) may be an official of the State, the District of Columbia, the territory or possession in which the court sits who is authorized or appointed under the law of the State, District, territory or possession to receive service of process on the corporation; or ``(2) may be an individual who resides in the jurisdiction of the district court for the district in which a surety bond is to be provided and who is appointed by the corporation as provided in subsection (b)''; and (2) in subsection (b) by striking ``The'' and inserting ``If the surety corporation meets the requirement of subsection (a) by appointing an individual under subsection (a)(2), the''.

(a) Short Title.--This section may be cited as the ``Community Broadcasters Protection Act of 1999''. (b) Findings.--Congress finds the following: (1) Since the creation of low-power television licenses by the Federal Communications Commission, a small number of license holders have operated their stations in a manner beneficial to the public good providing broadcasting to their communities that would not otherwise be available.

(2) These low-power broadcasters have operated their stations in a manner consistent with the programming objectives and hours of operation of full-power broadcasters providing worthwhile services to their respective communities while under severe license limitations compared to their full-power counterparts. (3) License limitations, particularly the temporary nature of the license, have blocked many low-power broadcasters from having access to capital, and have severely hampered their ability to continue to provide quality broadcasting, programming, or improvements. (4) The passage of the Telecommunications Act of 1996 has added to the uncertainty of the future status of these stations by the lack of specific provisions regarding the permanency of their licenses, or their treatment during the transition to high definition, digital television. (5) It is in the public interest to promote diversity in television programming such as that currently provided by low- power television stations to foreign-language communities.

(c) Preservation of Low-Power Community Television Broadcasting.-- Section 336 of the Communications Act of 1934 (47 U.S.C. 336) is amended-- (1) by redesignating subsections (f ) and (g) as subsections (g) and (h), respectively; and (2) by inserting after subsection (e) the following new subsection:

``(f ) Preservation of Low-Power Community Television Broadcasting.-- ``(1) Creation of class a licenses.-- ``(A) Rulemaking Required.--Within 120 days after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall prescribe regulations to establish a class A television license to be available to licensees of qualifying low-power television stations. Such regulations shall provide that-- ``(i) the license shall be subject to the same license terms and renewal standards as the licenses for full-power television stations except as provided in this subsection; and ``(ii) each such class A licensee shall be accorded primary status as a television broadcaster as long as the station continues to meet the requirements for a qualifying low-power station in paragraph (2). ``(B) Notice to and certification by licensees.-- Within 30 days after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall send a notice to the licensees of all low-power television licenses that describes the requirements for class A designation. Within 60 days after such date of enactment, licensees intending to seek class A designation shall submit to the Commission a certification of eligibility based on the qualification requirements of this subsection. Absent a material deficiency, the Commission shall grant certification of eligibility to apply for class A status. ``(C) Application for and award of licenses.-- Consistent with the requirements set forth in paragraph (2)(A)

of this subsection, a licensee may submit an application for class A designation under this paragraph within 30 days after final regulations are adopted under subparagraph (A) of this paragraph. Except as provided in paragraphs (6) and (7), the Commission shall, within 30 days after receipt of an application of a licensee of a qualifying low-power television station that is acceptable for filing, award such a class A television station license to such licensee. ``(D) Resolution of technical problems.--The Commission shall act to preserve the service areas of low-power television licensees pending the final resolution of a class A application. If, after granting certification of eligibility for a class A license, technical problems arise requiring an engineering solution to a full-power station's allotted parameters or channel assignment in the digital television Table of Allotments, the Commission shall make such modifications as necessary-- ``(i) to ensure replication of the full-power digital television applicant's service area, as provided for in sections 73.622 and 73.623 of the Commission's regulations (47 CFR 73.622, 73.623); and ``(ii) to permit maximization of a full-power digital television applicant's service area consistent with such sections 73.622 and 73.623, if such applicant has filed an application for maximization or a notice of its intent to seek such maximization by December 31, 1999, and filed a bona fide application for maximization by May 1, 2000. Any such applicant shall comply with all applicable Commission rules regarding the construction of digital television facilities. ``(E) Change applications.--If a station that is awarded a construction permit to maximize or significantly enhance its digital television service area, later files a change application to reduce its digital television service area, the protected contour of that station shall be reduced in accordance with such change modification. ``(2) Qualifying low-power television stations.--For purposes of this subsection, a station is a qualifying low-power television station if-- ``(A)(i) during the 90 days preceding the date of the enactment of the Community Broadcasters Protection Act of 1999-- ``(I) such station broadcast a minimum of 18 hours per day; ``(II) such station broadcast an average of at least 3 hours per week of programming that was produced within the market area served by such station, or the market area served by a group of commonly controlled low-power stations that carry common local programming produced within the market area served by such group; and ``(III) such station was in compliance with the Commission's requirements applicable to low- power television stations; and ``(ii) from and after the date of its application for a class A license, the station is in compliance with the

Commission's operating rules for full-power television stations; or ``(B) the Commission determines that the public interest, convenience, and necessity would be served by treating the station as a qualifying low-power television station for purposes of this section, or for other reasons determined by the Commission. ``(3) Common ownership.--No low-power television station authorized as of the date of the enactment of the Community Broadcasters Protection Act of 1999 shall be disqualified for a class A license based on common ownership with any other medium of mass communication. ``(4) Issuance of licenses for advanced television services to television translator stations and qualifying low-power television stations.--The Commission is not required to issue any additional license for advanced television services to the licensee of a class A television station under this subsection, or to any licensee of any television translator station, but shall accept a license application for such services proposing facilities that will not cause interference to the service area of any other broadcast facility applied for, protected, permitted, or authorized on the date of filing of the advanced television application. Such new license or the original license of the applicant shall be forfeited after the end of the digital television service transition period, as determined by the Commission. A licensee of a low-power television station or television translator station may, at the option of licensee, elect to convert to the provision of advanced television services on its analog channel, but shall not be required to convert to digital operation until the end of such transition period. ``(5) No preemption of section 337.--Nothing in this subsection preempts or otherwise affects section 337 of this Act. ``(6) Interim qualification.-- ``(A) Stations operating within certain bandwidth.-- The Commission may not grant a class A license to a low- power television station for operation between 698 and 806 megahertz, but the Commission shall provide to low- power television stations assigned to and temporarily operating in that bandwidth the opportunity to meet the qualification requirements for a class A license. If such a qualified applicant for a class A license is assigned a channel within the core spectrum (as such term is defined in MM Docket No. 87-286, February 17, 1998), the Commission shall issue a class A license simultaneously with the assignment of such channel. ``(B) Certain channels off-limits.--The Commission may not grant under this subsection a class A license to a low-power television station operating on a channel within the core spectrum that includes any of the 175 additional channels referenced in paragraph 45 of its February 23, 1998, Memorandum Opinion and Order on Reconsideration of the Sixth Report and Order (MM Docket No. 87-268). Within 18 months after the date of the enactment of the Community Broadcasters Protection Act of 1999, the Commission shall identify by channel, location, and applicable technical parameters those 175 channels.

``(7) No interference requirement.--The Commission may not grant a class A license, nor approve a modification of a class A license, unless the applicant or licensee shows that the class A station for which the license or modification is sought will not cause-- ``(A) interference within-- ``(i) the predicted Grade B contour (as of the date of the enactment of the Community Broadcasters Protection Act of 1999, or November 1, 1999, whichever is later, or as proposed in a change application filed on or before such date) of any television station transmitting in analog format; or ``(ii)(I) the digital television service areas provided in the DTV Table of Allotments; (II) the areas protected in the Commission's digital television regulations (47 CFR 73.622 (e) and (f )); (III) the digital television service areas of stations subsequently granted by the Commission prior to the filing of a class A application; and (IV) stations seeking to maximize power under the Commission's rules, if such station has complied with the notification requirements in paragraph (1)(D); ``(B) interference within the protected contour of any low-power television station or low-power television translator station that-- ``(i) was licensed prior to the date on which the application for a class A license, or for the modification of such a license, was filed; ``(ii) was authorized by construction permit prior to such date; or ``(iii) had a pending application that was submitted prior to such date; or ``(C) interference within the protected contour of 80 miles from the geographic center of the areas listed in section 22.625(b)(1) or 90.303 of the Commission's regulations (47 CFR 22.625(b)(1) and 90.303) for frequencies in-- ``(i) the 470-512 megahertz band identified in section 22.621 or 90.303 of such regulations; or ``(ii) the 482-488 megahertz band in New York. ``(8) Priority for displaced low-power stations.--Low-power stations that are displaced by an application filed under this section shall have priority over other low-power stations in the assignment of available channels.''.

(a) Purposes.--The purposes of this section are-- (1) to promote the reuse and recycling of scrap material in furtherance of the goals of waste minimization and natural resource conservation while protecting human health and the environment; (2) to create greater equity in the statutory treatment of recycled versus virgin materials; and

(3) to remove the disincentives and impediments to recycling created as an unintended consequence of the 1980 Superfund liability provisions.

(b) Clarification of Liability Under CERCLA for Recycling Transactions.-- (1) Clarification.--Title I of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) is amended by adding at the end the following new section:

``SEC. 127. RECYCLING TRANSACTIONS.

``(a) Liability Clarification.-- ``(1) As provided in subsections (b), (c), (d), and (e), a person who arranged for recycling of recyclable material shall not be liable under sections 107(a)(3) and 107(a)(4) with respect to such material. ``(2) A determination whether or not any person shall be liable under section 107(a)(3) or section 107(a)(4) for any material that is not a recyclable material as that term is used in subsections (b) and (c), (d), or (e) of this section shall be made, without regard to subsections (b), (c), (d), or (e) of this section.

``(b) Recyclable Material Defined.--For purposes of this section, the term `recyclable material' means scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries, as well as minor amounts of material incident to or adhering to the scrap material as a result of its normal and customary use prior to becoming scrap; except that such term shall not include-- ``(1) shipping containers of a capacity from 30 liters to 3,000 liters, whether intact or not, having any hazardous substance (but not metal bits and pieces or hazardous substance that form an integral part of the container) contained in or adhering thereto; or ``(2) any item of material that contained polychlorinated biphenyls at a concentration in excess of 50 parts per million or any new standard promulgated pursuant to applicable Federal laws.

``(c) Transactions Involving Scrap Paper, Plastic, Glass, Textiles, or Rubber.--Transactions involving scrap paper, scrap plastic, scrap glass, scrap textiles, or scrap rubber (other than whole tires) shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that all of the following criteria were met at the time of the transaction: ``(1) The recyclable material met a commercial specification grade. ``(2) A market existed for the recyclable material. ``(3) A substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a new saleable product. ``(4) The recyclable material could have been a replacement or substitute for a virgin raw material, or the product to be

made from the recyclable material could have been a replacement or substitute for a product made, in whole or in part, from a virgin raw material. ``(5) For transactions occurring 90 days or more after the date of enactment of this section, the person exercised reasonable care to determine that the facility where the recyclable material was handled, processed, reclaimed, or otherwise managed by another person (hereinafter in this section referred to as a `consuming facility') was in compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with recyclable material. ``(6) For purposes of this subsection, `reasonable care' shall be determined using criteria that include (but are not limited to)-- ``(A) the price paid in the recycling transaction; ``(B) the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with recyclable material; and ``(C) the result of inquiries made to the appropriate Federal, State, or local environmental agency (or agencies) regarding the consuming facility's past and current compliance with substantive (not procedural or administrative) provisions of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with the recyclable material. For the purposes of this paragraph, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activity associated with the recyclable materials shall be deemed to be a substantive provision.

``(d) Transactions Involving Scrap Metal.-- ``(1) Transactions involving scrap metal shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that at the time of the transaction-- ``(A) the person met the criteria set forth in subsection (c) with respect to the scrap metal; ``(B) the person was in compliance with any applicable regulations or standards regarding the storage, transport, management, or other activities associated with the recycling of scrap metal that the Administrator promulgates under the Solid Waste Disposal Act subsequent to the enactment of this section and with regard to transactions occurring after the effective date of such regulations or standards; and ``(C) the person did not melt the scrap metal prior to the transaction. ``(2) For purposes of paragraph (1)(C), melting of scrap metal does not include the thermal separation of 2 or more

materials due to differences in their melting points (referred to as `sweating'). ``(3) For purposes of this subsection, the term `scrap metal' means bits and pieces of metal parts (e.g., bars, turnings, rods, sheets, wire) or metal pieces that may be combined together with bolts or soldering (e.g., radiators, scrap automobiles, railroad box cars), which when worn or superfluous can be recycled, except for scrap metals that the Administrator excludes from this definition by regulation.

``(e) Transactions Involving Batteries.--Transactions involving spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries shall be deemed to be arranging for recycling if the person who arranged for the transaction (by selling recyclable material or otherwise arranging for the recycling of recyclable material) can demonstrate by a preponderance of the evidence that at the time of the transaction-- ``(1) the person met the criteria set forth in subsection (c) with respect to the spent lead-acid batteries, spent nickel- cadmium batteries, or other spent batteries, but the person did not recover the valuable components of such batteries; and ``(2)(A) with respect to transactions involving lead-acid batteries, the person was in compliance with applicable Federal environmental regulations or standards, and any amendments thereto, regarding the storage, transport, management, or other activities associated with the recycling of spent lead-acid batteries; ``(B) with respect to transactions involving nickel-cadmium batteries, Federal environmental regulations or standards are in effect regarding the storage, transport, management, or other activities associated with the recycling of spent nickel-cadmium batteries, and the person was in compliance with applicable regulations or standards or any amendments thereto; or ``(C) with respect to transactions involving other spent batteries, Federal environmental regulations or standards are in effect regarding the storage, transport, management, or other activities associated with the recycling of such batteries, and the person was in compliance with applicable regulations or standards or any amendments thereto.

``(f) Exclusions.-- ``(1) The exemptions set forth in subsections (c), (d), and (e) shall not apply if-- ``(A) the person had an objectively reasonable basis to believe at the time of the recycling transaction-- ``(i) that the recyclable material would not be recycled; ``(ii) that the recyclable material would be burned as fuel, or for energy recovery or incineration; or ``(iii) for transactions occurring before 90 days after the date of the enactment of this section, that the consuming facility was not in compliance with a substantive (not procedural or administrative) provision of any Federal, State, or local environmental law or regulation, or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, or other management activities associated with the recyclable material;

``(B) the person had reason to believe that hazardous substances had been added to the recyclable material for purposes other than processing for recycling; or ``(C) the person failed to exercise reasonable care with respect to the management and handling of the recyclable material (including adhering to customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances). ``(2) For purposes of this subsection, an objectively reasonable basis for belief shall be determined using criteria that include (but are not limited to) the size of the person's business, customary industry practices (including customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances), the price paid in the recycling transaction, and the ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with the recyclable material. ``(3) For purposes of this subsection, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activities associated with recyclable material shall be deemed to be a substantive provision.

``(g) Effect on Other Liability.--Nothing in this section shall be deemed to affect the liability of a person under paragraph (1) or (2) of section 107(a). ``(h) Regulations.--The Administrator has the authority, under section 115, to promulgate additional regulations concerning this section. ``(i) Effect on Pending or Concluded Actions.--The exemptions provided in this section shall not affect any concluded judicial or administrative action or any pending judicial action initiated by the United States prior to enactment of this section. ``(j) Liability for Attorney's Fees for Certain Actions.--Any person who commences an action in contribution against a person who is not liable by operation of this section shall be liable to that person for all reasonable costs of defending that action, including all reasonable attorney's and expert witness fees. ``(k) Relationship to Liability Under Other Laws.--Nothing in this section shall affect-- ``(1) liability under any other Federal, State, or local statute or regulation promulgated pursuant to any such statute, including any requirements promulgated by the Administrator under the Solid Waste Disposal Act; or ``(2) the ability of the Administrator to promulgate regulations under any other statute, including the Solid Waste Disposal Act.

``(l) Limitation on Statutory Construction.--Nothing in this section shall be construed to-- ``(1) affect any defenses or liabilities of any person to whom subsection (a)(1) does not apply; or ``(2) create any presumption of liability against any person to whom subsection (a)(1) does not apply.''.

(2) Technical amendment.--The table of contents for title I of such Act is amended by adding at the end the following item:

``Sec. 127. Recycling transactions.''.