Floor Statements

I would be happy to yield for a question from the distinguished Senator from Texas.

My cosponsor, Senator Cornyn, raises an important point. While we removed the ``ad-skipping'' language from the statute to avoid this unnecessary controversy, you are absolutely correct that this does not in any way change the scope of the bill. The bill protects the ``making imperceptible . . . limited portions of audio or video content of a motion picture . . .'' An advertisement, under the Copyright Act, is itself a ``motion picture,'' and thus a product or service that enables the skipping of an entire advertisement, in any media, would be beyond the scope of the exemption. Moreover, the phrase ``limited portions'' is intended to refer to portions that are both quantitatively and qualitatively insubstantial in relation to the work as a whole. Where any substantial part of a complete work, such as a commercial advertisement, is made imperceptible, the new section 110(11) exemption would not apply.

The limited scope of this exemption does not, however, imply or show that such a product would be infringing. This legislation does not in any way deal with that issue. It means simply that such a product is not immunized from liability by this exemption.

Certainly.

Yes it is. Let me ask that a copy of the section-by- section analysis of the Family Movie Act as amended by the Senate be included in the Record. This section-by-section analysis contains a more complete analysis of the bill as proposed today in the Senate, including the limited changes made by the bill Senators Leahy, Cornyn, Biden, and I offer today.

The analysis follows.

Section-by-Section Analysis of the Family Movie Act of 2004, Amended

and Passed by the Senate

Overview

Title II of the Family Entertainment and Copyright Act of

2004 incorporates the House-passed provision of the Family

Movie Act of 2004, with limited changes as reflected in this

section-by-section analysis. As discussed herein, these

changes are not intended to and do not affect the scope,

effect or application of the bill.

The purpose of the Family Movie Act is to empower private

individuals to use technology to skip and mute material that

they find objectionable in movies, without impacting

established doctrines of copyright or

trademark law or those whose business models depend upon

advertising. This amendment to the law should be narrowly

construed to effect its intended purpose only. The sponsors

of the legislation have been careful to tailor narrowly the

legislation to clearly allow specific, consumer-directed

activity and not to open or decide collateral issues or to

affect any other potential or actual disputes in the law.

The bill as proposed in the Senate makes clear that, under

certain conditions, ``making imperceptible'' of limited

portions of audio or video content of a motion picture--that

is, skipping and muting limited portions of movies without

adding any content--as well as the creation or provision of a

computer program or other technology that enables such making

imperceptible, does not violate existing copyright or

trademark laws. That is true whether the movie is on

prerecorded media, like a DVD, or is transmitted to the home,

as through pay-per-view and ``video-on-demand'' services.

Subsection (a): Short Title

Subsection (a) sets forth the short title of the bill as

the Family Movie Act of 2004.

Subsection (b): Exemption From Copyright and Trademark

Infringement for Skipping of Audio or Video Content of

Motion Pictures

Subsection (b) is the Family Movie Act's core provision and

creates a new exemption at section 110(11) of the Copyright

Act for the ``making imperceptible'' of limited portions of

audio or video content of a motion picture during a

performance in a private household. This new exemption sets

forth a number of conditions to ensure that it achieves its

intended effect while remaining carefully circumscribed and

avoiding any unintended consequences. The conditions that

allow an exemption, which are discussed in more detail below,

consist of the following:

The making imperceptible must be ``by or at the direction

of a member of a private household.'' This legislation

contemplates that any altered performances of the motion

picture would be made either directly by the viewer or at the

direction of a viewer where the viewer is exercising

substantial choice over the types of content they choose

to skip or mute.

The making imperceptible must occur ``during a performance

in or transmitted to the household for private home

viewing.'' Thus, this provision does not exempt an

unauthorized ``public performance'' of an altered version.

The making imperceptible must be ``from an authorized copy

of a motion picture.'' Thus, skipping and muting from an

unauthorized or ``bootleg'' copy of a motion picture would

not be exempt.

No ``fixed copy'' of the altered version of the motion

picture may be created by the computer program or other

technology that makes imperceptible portions of the audio or

video content of the motion picture. This provision makes

clear that services or technologies that make a fixed copy of

the altered version are not afforded the benefit of this

exemption.

The ``making imperceptible'' of limited portions of a

motion picture does not include the addition of audio or

video content over or in place of other content, such as

placing a modified image of a person, a product, or an

advertisement in place of another, or adding content of any

kind.

These limitations, and other operative provisions of this

new section 110(11) exemption, merit further elaboration as

to their purposes and effects.

The bill makes clear that the ``making imperceptible'' of

limited portions of audio or video content of a motion

picture must be done by or at the direction of a member of a

private household. While this limitation does not require

that the individual member of the private household exercise

ultimate decision-making over each and every scene or element

of dialog in the motion picture that is to be made

imperceptible, it does require that the making imperceptible

be made at the direction of that individual in response to

the individualized preferences expressed by that individual.

The test of ``at the direction of an individual'' would be

satisfied when an individual selects preferences from among

options that are offered by the technology.

An example is the C1earPlay model. C1earPlay provides so-

called ``filter files'' that allow a viewer to express his or

her preferences in a number of different categories,

including language, violence, drug content, sexual content,

and several others. The version of the movie that the viewer

sees depends upon the preferences expressed by that viewer.

Such a model would fall under the liability limitation of the

Family Movie Act.

This limitation, however, would not allow a program

distributor, such as a provider of video-on-demand services,

a cable or satellite channel, or a broadcaster, to make

imperceptible limited portions of a movie in order to provide

an altered version of that movie to all of its customers,

which could violate a number of the copyright owner's

exclusive rights, or to make a determination of scenes to be

skipped or dialog to be muted and to offer to its viewers no

more of a choice than to view an original or an altered

version of that film. Some element of individualized

preferences and control must be present such that the

viewer exercises substantial choice over the types of

content they choose to skip or mute.

It is also important to emphasize that the new section

110(11) exemption is targeted narrowly and specifically at

the act of ``making imperceptible'' limited portions of audio

or video content of a motion picture during a performance

that occurs in, or that is transmitted to, a private

household for private home viewing. This section would not

exempt from liability an otherwise infringing performance, or

a transmission of a performance, during which limited

portions of audio or video content of the motion picture are

made imperceptible. In other words, where a performance in a

household or a transmission of a performance to a household

is done lawfully, the making imperceptible limited portions

of audio or video content of the motion picture during that

performance, consistent with the requirements of this new

section, will not result in infringement liability.

Similarly, an infringing performance in a household, or an

infringing transmission of a performance to a household, are

not rendered non-infringing by section 110(11) by virtue of

the fact that limited portions of audio or video content of

the motion picture being performed are made imperceptible

during such performance or transmission in a manner

consistent with that section.

The bill also provides additional guidance, if not an exact

definition, of what the term ``making imperceptible'' means.

The bill provides specifically that the term ``making

imperceptible'' does not include the addition of audio or

video content that is performed or displayed over or in place

of existing content in a motion picture. This is intended to

make clear in the text of the statute what has been expressed

throughout the consideration of this legislation, which is

that the Family Movie Act does not enable the addition of

content of any kind, including the making imperceptible of

audio or video content by replacing it or by superimposing

other content over it. In other words, for purposes of

section 110(11), ``making imperceptible'' refers solely to

skipping scenes and portions of scenes or muting audio

content from the original, commercially available version of

the motion picture. No other modifications of the content are

addressed or immunized by this legislation.

The House sponsor of this legislation noted in his

explanation of his bill, and the Senate is also aware, that

some copy protection technologies rely on matter placed into

the audio or video signal. The phrase ``limited portions of

audio or video content of a motion picture'' means what it

would naturally seem to mean (i.e., the actual content of the

motion picture) and does not refer to any component of a copy

protection scheme or technology. This provision does not

allow the skipping of technologies or other copy-protection-

related matter for the purpose of defeating copy protection.

Rather, it is expected that skipping and muting of content in

the actual motion picture will be skipped or muted at the

direction of the viewer based on that viewer's desire to

avoid seeing or hearing the action or sound in the motion

picture. Skipping or muting done for the purpose of or having

the effect of avoiding copy protection technologies would be

an abuse of the safe harbor outlined in this legislation and

may violate section 1201 of title 17.

Violating the Digital Millennium Copyright Act, and

particularly its anti-circumvention provisions, is not

necessary to enable technology of the kind contemplated under

the Family Movie Act. Although the amendment to section 110

provides that it is not an infringement of copyright to

engage in the conduct that is the subject of the Family Movie

Act, the Act does not provide any exemption from the anti-

circumvention provisions of section 1201 of title 17, or from

any other provision of chapter 12 of title 17. It would not

be a defense to a claim of violation of section 1201 that the

circumvention is for the purpose of engaging in the conduct

covered by this new exemption in section 110(11), just as it

is not a defense under section 1201 that the circumvention is

for the purpose of engaging in any other non-infringing

conduct.

There are a number of companies currently providing the

type of products and services covered by this Act. The Family

Movie Act is intended to facilitate the offering of such

products and services, and it certainly creates no impediment

to the technology employed by those companies. Indeed, it is

important to underscore the fact that the support for such

technology and consumer offerings that is reflected in this

legislation is driven in some measure by the desire for

copyright law to be respected and to ensure that technology

is deployed in a way that supports the continued creation and

protection of entertainment and information products that

rely on copyright protection. This legislation reflects the

firm expectation that those rights and the interests of

viewers in their homes can work together in the context

defined in this bill. Any suggestion that support for the

exercise of viewer choice in modifying their viewing

experience of copyrighted works requires violation of either

the copyright in the work or of the copy protection schemes

that provide protection for such work should be rejected as

counter to legislative intent or technological necessity.

The House-passed bill included an explicit exclusion to the

new section 110(11) exemption in cases involving the making

imperceptible of commercial advertisements or network or

station promotional announcements. This provision was added

on the House floor to respond to concerns expressed by

Members during the House Judiciary Committee markup that the

bill might be

read somehow to exempt from copyright infringement liability

devices that allow for skipping of advertisements in the

playback of recorded television (so called ``ad-skipping''

devices). Such a reading is not consistent with the language

of the bill or its intent.

The phrase ``limited portions of audio or video content of

a motion picture'' applies only to the skipping and muting of

scenes or dialog that are part of the motion picture itself,

and not to the skipping of commercial advertisements, which

are themselves considered motions pictures under the

Copyright Act. It also should be noted that the phrase

``limited portions'' is intended to refer to portions that

are both quantitatively and qualitatively insubstantial in

relation to the work as a whole. Where any substantial part

of a complete work (including a commercial advertisement) is

made imperceptible, the section 110(11) exemption would not

apply.

The House-passed bill adopted a ``belt and suspenders''

approach to this question by adding exclusionary language in

the statute itself. Ultimately that provision raised concerns

in the Senate that such exclusionary language would result in

an inference that the bill somehow expresses an opinion, or

even decides, the unresolved legal questions underlying

recent litigation related to these so-called ``ad-

skipping'' devices. In the meantime, the Copyright Office

also made clear that such exclusionary language is not

necessary. In other words, the exclusionary language

created unnecessary controversy without adding any needed

clarity to the statute.

Thus, the Senate amendment omits the exclusionary language

while leaving the scope and application of the bill exactly

as it was when it passed the House. The legislation does not

provide a defense in cases involving so-called ``ad-

skipping'' devices, and it also does not affect the legal

issues underlying such litigation, one way or another.

Consistent with the intent of the legislation to fix a narrow

and specific copyright issue, this bill seeks very clearly to

avoid unnecessarily interfering with current business models,

especially with respect to advertising, promotional

announcements, and the like. Simply put, the bill as amended

in the Senate is narrowly targeted to the use of technologies

and services that filter out content in movies that a viewer

finds objectionable, and it in no way relates to or affects

the legality of so-called ``ad-skipping'' technologies.

There are a variety of services currently in litigation

that distribute actual copies of altered movies. This type of

activity is not covered by the section 110(11) exemption

created by the Family Movie Act. There is a basic distinction

between a viewer choosing to alter what is visible or audible

when viewing a film, the focus of this legislation, and a

separate entity choosing to create and distribute a single,

altered version to members of the public. The section 110(11)

exemption only applies to viewer directed changes to the

viewing experience, and not the making or distribution of

actual altered copies of the motion picture.

Related to this point, during consideration of this

legislation in the House there were conflicting expert

opinions on whether fixation is required to infringe the

derivative work right under the Copyright Act, as well as

whether evidence of Congressional intent in enacting the 1976

Copyright Act supports the notion that fixation should not be

a prerequisite for the preparation of an infringing

derivative work. This legislation should not be construed to

be predicated on or to take a position on whether fixation is

necessary to violate the derivative work right, or whether

the conduct that is immunized by this legislation would be

infringing in the absence of this legislation.

Subsection (b) also provides a savings clause to make clear

that the newly-created copyright exemption is not to be

construed to have any effect on rights, defenses, or

limitations on rights granted under title 17, other than

those explicitly provided for in the new section 110(11)

exemption.

Subsection (c): Exemption From Trademark Infringement

Subsection (c) provides for a limited exemption from

trademark infringement for those engaged in the conduct

described in the new section 110(11) of the Copyright Act.

In short, this subsection makes clear that a person

engaging in the conduct described in section 110(11)--the

``making imperceptible'' of portions of audio or video

content of a motion picture or the creation or provision of

technology to enable such making available--is not subject to

trademark infringement liability based on that conduct,

provided that person's conduct complies with the requirements

of section 110(11). This section provides a similar exemption

for a manufacturer, licensee or licensor of technology that

enables such making imperceptible, but such manufacturer,

licensee or licensor is subject to the additional requirement

that it ensure that the technology provides a clear and

conspicuous notice at the beginning of each performance that

the performance of the motion picture is altered from the

performance intended by the director or the copyright holder.

Of course, nothing in this section would immunize someone

whose conduct, apart from the narrow conduct described by

110(11), rises to the level of a Lanham Act violation. For

example, someone who provides technology to enable the making

imperceptible limited portions of a motion picture consistent

with section 110(11) could not be held liable on account of

such conduct under the Trademark Act, but if in providing

such technology the person also makes an infringing use of a

protected mark or engages in other ancillary conduct that is

infringing, such conduct would not be subject to the

exemption provided here. As amended by the Senate, the bill

also makes clear that failure by a manufacturer, licensee, or

licensor of technology to qualify for the exemption created

by this subsection is not, by itself, enough to establish

trademark infringement. Failure to qualify for the safe

harbor from trademark liability merely means that the

manufacturer, licensee, or other licensor of technology

cannot assert an affirmative defense based on this exemption

in a case where trademark infringement or some other

violation of the Trademark Act is established.

Subsection (d): Definition

Subsection (d) provides definitional clarification

regarding short-hand references throughout this section to

the ``Trademark Act of 1946.''

Mr. President, I commend my esteemed colleagues in the Senate for passing S. 3021, the Family Entertainment and Copyright Act of 2004, which I introduced today with the senior Senator from Vermont. This important legislation is actually a package of several smaller intellectual property bills that the House and Senate have been working to enact over the past 2 years. This bill strengthens the intellectual property laws that are vital to the ongoing growth of our economy. In addition to important clarifications to U.S. intellectual property laws, this bill also contains the Family Movie Act, introduced by Representative Lamar Smith, the Chairman of the House subcommittee with jurisdiction over intellectual property legislation.

Title I of this Act, the Artists' Rights and Theft Prevention Act of 2003, the ART Act, contains a slightly modified version of S. 1932, authored by my colleagues Senators Cornyn and Feinstein, that passed the Senate by unanimous consent earlier this Congress. This bill will close two significant gaps in our copyright laws that are feeding some of the piracy now rampant on the Internet. First, it criminalizes attempts to camcord movies off of theater screens. These camcorded copies of new movies now appear on filesharing networks almost contemporaneously with the theatrical release

of a film. Several states have already taken steps to criminalize this activity, but providing a uniform Federal law, instead of a patchwork of State criminal statutes, will assist law enforcement officials in combating the theft and redistribution of valuable intellectual property embodied in newly-released motion pictures. Second, the bill will create a pre-registration system that will permit criminal penalties and statutory damage awards. This will also provide a tool for law enforcement officials combating the growing problem of music and movies being distributed on filesharing networks and circulating on the Internet before they are even released. Obviously, the increasingly frequent situation of copyrighted works being distributed illegally via the Internet before they are even made available for sale to the public severely undercuts the ability of copyright holders to receive fair and adequate compensation for their works.

Title II of this Act, the Family Movie Act of 2004, resolves some ongoing disputes about e legality of so-called ``jump-and-skip'' technologies that companies like Clearplay in my home state of Utah have developed to permit family-friendly viewing of films that may contain objectionable content. The Family Movie Act creates a narrowly- defined safe-harbor clarifying that distributors of such technologies will not face liability for copyright or trademark infringement, provided that they comply with the requirements of the Act. Throughout the 108th Congress, I have been working to resolve this issue with my colleagues in the Senate and several leaders in the House, including, most importantly Chairman Smith and Chairman Sensenbrenner. The Family Movie Act will help to end aggressive litigation threatening the viability of small companies like Clearplay who are busy creating innovative technologies for consumers that allow them to tailor their home viewing experience to their own individual or family preferences.

I thank my friend, the senior Senator from Arizona, for his and his staff's assistance in drafting this version of the legislation to resolve concerns that the House version might affect entirely unrelated disputes about commercial-skipping technology. Apparently, some were concerned that language in the House bill stating that this particular safe-harbor provision was not intended to resolve disputes about the legality of commercial-skipping technologies might be construed by courts as evidence that Congress believes that such technologies violate the Copyright Act. -

Courts do not, cannot, and should not construe the Copyright Act's safe harbors in this way. For example, when Congress created safe- harbor provisions for certain types of internet service providers, it did not imply that all others were violating the Copyright Act. Nevertheless, I am pleased that we were able to find language that satisfies all so that it is clear the Act's safe-harbor for family- friendly viewing technologies encode absolutely no judgment whatsoever about the proper resolution of entirely unrelated disputes about the legality of commercial-skipping technologies. It would have been tragic if we had allowed a special-interest dispute about advertising to deny parents access to technologies that give them and their children the opportunity to watch movies without being exposed to profanity or images of rape, sex or murder.

Title III of this Act, the National Film Preservation Act of 2004, will reauthorize the National Film Preservation Board and the National Film Preservation Foundation. These entities have worked successfully to recognize and preserve historically or culturally significant films, often by providing the grants and expertise that enable local historical societies to protect and preserve historically significant films for the local communities for which they are most important. This fine work will ensure that the history of the 20th century will be preserved and available to future generations. As a conservative Senator from a socially-conservative-state, I occasionally take a few swings at the movie industry for the quality and content of the motion pictures they are currently creating, but I will note for the record that I commend efforts to ensure that important artistic, cultural, and historically-significant films are preserved for future generations, and I commend the Senator from Vermont for his perseverance in reauthorizing federal funds to continue this important effort.

Title IV of this Act, the Preservation of Orphan Works Act, also ensures the preservation of valuable historic records by correcting a technical error that unnecessarily narrows a limitation on the copyright law applicable to librarians and archivists. This will strengthen the ability of librarians and archivists to better meet the needs of both researchers and ordinary individuals and will result in greater accessibility of important works. I applaud my colleague in the House, Representative Howard Berman of California, for his efforts on this bill and am pleased to see it included in this Senate package.

Title V of this Act, the Anticounterfeiting Act of 2004, amends our criminal and civil anticounterfeiting laws to ensure that these laws keep pace with the counterfeiters. Traffic in counterfeit copies of goods protected by American copyrights, patents or trademarks has become a multi-billion dollar drain on our economy. The proceeds of this illegal traffic are stolen from legitimate American companies and then used to fund other criminal enterprises. Unlike several of the other bills in this package that provide tools for combating music and movie piracy, the Anticounterfeiting Act is directed primarily toward combating counterfeiting practices that enable software piracy around the world.

To combat this counterfeiting, companies are using increasingly sophisticated authentication features to distinguish genuine, authorized copies of their products and to protect their customers and distributors. Now, the counterfeiters are fighting back by counterfeiting authentication features or by stealing legally produced authentication features and selling them to counterfeiters. The Anticounterfeiting Act of 2004 will impose criminal and civil penalties upon those who traffic in counterfeit or stolen authentication features. This will ensure that law-enforcement agencies and private rights-holders can halt criminal traffic in counterfeit or stolen authentication features before it even creates an illusion of authenticity that allows counterfeit goods to penetrate legitimate markets and endanger both the growth of our economy and the personal safety of our citizens.

Title VI of this Act, the Cooperative Research and Technology Enhancement Act of 2004, the CREATE Act, will create new opportunities to innovate when public institutions and private entrepreneurs combine their respective forms of expertise in collaborative, joint research efforts. This type of joint private-public research effort is well- suited to, in the words of President Lincoln, add ``the fuel of interest to the fire of genius in the production of new and useful things.'' As a result, we have long realized the enormous value of these joint research efforts, and we have long realized that their potential cannot be realized unless their participants can benefit from the intellectual property rights generated by such research.

Unfortunately, the literal language of Section 102(g) of the Patent Act suggests that nonpublic information known to some members of a private-public research team can constitute ``prior art'' that may make the final results of the team research obvious, and thus not patentable. Because non-public information does not usually constitute ``prior art'' under the Patent Act, the potentially disparate treatment of such information creates a disincentive for entrepreneurs and public institutions to collaborate in joint research efforts.

I believe that we must encourage, not discourage, public institutions and private entrepreneurs to combine their respective talents in joint research efforts. Indeed, Congress committed itself to this principle when it passed the Bayh-Dole amendments to the Patent Act. The CREATE Act will simply conform the present language of the Patent Act to the intent that has always animated it. I commend Chairman Smith and his staff for their efforts on this legislation and am pleased that it has been made part of this package of bills.

Before I close, I thank all my colleagues and their staff who made passage of this bill today possible. In particular, I commend staff of both Judiciary Committees, including my own staff, Tom Sydnor and Dave Jones, and also Susan Davies, Chip Roy, Rich Phillips, Dan Fine, Jeff Miller, Jonathan Schwantes, Jonathan Meyer, Brooke Roberts, Bill Bailey, Lee Carosi, Jim Hippe, Joseph Gibson, Bill Bailey, Blaine Merrit, David Whitney, Joe Keeley, Alec French, and Sampak Garg.

Finally, I must note that the bicameral, bipartisan approach to these bills in particular and to intellectual property issues in general is a model we should strive to achieve in the 109th Congress.

Mr. President, I would like to take a moment to honor my good friend and colleague, Senator Ben Nighthorse Campbell of Colorado. Ben is my best friend in the Senate. I know every one of my Senate colleagues would join me in expressing how much we care for Senator Campbell and how much we will miss him here in the Senate.

I have always considered Ben to be larger than life, someone you would read about in a novel about the Senate than someone actually serving in the Senate. He is a high-school dropout who became a United States Senator, a veteran of the Korean war, captain of the U.S. judo team, and an extremely successful horse breeder and jeweler. He doesn't conform to any stereotypes. No other senators--let alone Republicans-- wear a ponytail, ride a Harley-Davidson to work, or stubbornly refuse to wear any neckwear more formal than a western bolo tie.

But I am sure I am not surprising any of you by saying Ben is not your typical politician. One of my favorite stories about Ben's independent streak is from a town meeting he held back when he was a Member of the House.

A constituent asked Ben a question, and Ben did his best to answer it. The gentleman didn't like the response, so he tersely rephrased the question and Ben answered it again. The man got very upset, and said ``You have not answered my question!'' Ben firmly told him, ``Look, you asked a question, I answered it. You asked me again, and I answered it. Now I can't help it if you don't like the answer you got, but these other folks are waiting to ask questions of their own, so you and I are just going to have to agree to disagree.''

Ben started to call on another person when the man jumped out of his chair

and yelled to Ben, ``I don't believe you are taking all of the facts that I've stated into account, and you are not going to simply dismiss me like that. I am a taxpayer, and I pay your salary, and I demand an answer!''

Ben, through gritted teeth, said, ``You know, I hate it when people feel that because you're an elected official, they somehow own you. Do you realize that my salary costs every man, woman and child in this country about one-half of one cent each year?'' At that point, Ben reached into his pocket, pulled out a penny, flipped it to the man, and said, ``Here's your refund!'' He turned to the audience and yelled, ``Next question!'' The audience cheered and the man left the meeting.

Now that is a good description of the Ben Nighthorse Campbell that I have come to know and love.

Most of you know that I have sat next to Ben during policy lunches ever since he saw the light and switched parties so many years ago. I still love to tell the story of when he decided to move over to the right side of the aisle.

Ben and I became good friends soon after he joined the Senate, and we repeatedly discussed his growing disillusionment with the policies and politics of those on other side of the aisle. I would point out that power, its accumulation and retention, seemed to be of greater importance to some on his side than finding the right answer, that the worth of an issue should not always be measured simply by political advantage. He would disagree, but over time his protests would grow fewer and less heartfelt.

I was surprised when Ben stopped me one day nearly 10 years ago and said, ``Orrin, you're right. I can't stand it anymore over here.'' He asked whether I could arrange for him to see Senator Dole, and I said, ``I believe I can''--3 minutes later we were in Bob Dole's office.

Bob had the biggest smile on his face I had ever seen and gave Ben a warm hug. He commented about the courage and principle it took to make such a decision, but he didn't need to make a hard sell. It was obvious Ben had already made up his mind to become a Republican.

I can vividly remember when Ben attended his first Republican policy luncheon. Ben and I had discussed how disappointed he was with the direction and tone of the Democrat policy meetings. He said they had devolved from honest discussions of differences into angry, one-sided shouting matches dominated by some of the most senior and well-known members. If you didn't agree with their liberal positions, your view wasn't welcome.

I assured Ben that the Republicans were different. We showed great respect for one another and there was always considerable deference given to differing points of view.

When Ben and I took our places at the back of the room--where we have sat together since that day--a quiet discussion soon broke out into bitter argument. One person jumped up, anger seething from his face, stared at another very senior member with a snarl on his face, and then called him a derogatory name. Everyone started shouting, and it took Bob Dole several minutes to restore order.

Ben's eyes got larger and larger as he watched what was happening, then without turning his head, he gave me a quick jab in the ribs. ``Gee, Orrin,'' he muttered, ``it's sure good to see how well we Republicans get along compared to those darn Democrats!''

Thankfully, Ben's decision to join the Republican Party wasn't solely based on policy lunches.

I have plenty more stories to tell of my good friend from Colorado, but I will close by saying that I will miss Ben dearly and wish him the very best as he starts the next phase in his life. I know him too well to think that this is really a retirement from public service. This is just the end of one phase of service that will open up several other ways for him to reach out and make a difference in the lives of those around him.

Zell Miller

Mr. President, I am grateful for the chance to take a few moments to recognize my good friend from across the aisle, Senator Zell Miller of Georgia. Zell is one of my best friends in the United States Senate. I know every one of my Senate colleagues would join me in expressing how much we care for Senator Miller and how much we will miss him.

It is no secret that Zell is his own man, someone who does what he believes is right, not what is politically expedient. His values were shaped while growing up in the South, raised by his strong mother and reinforced through his service in the U.S. Marine Corps.

And for those who say you cannot be a successful politician without sacrificing some of your principles, I point to my good friend from Georgia. When he finishes his Senate term this year, he will complete nearly six decades of publicly elected service, starting with his first election as mayor of his hometown of Young Harris, Georgia, in the late 1950s.

Zell was a popular two-term Governor of Georgia in fact, he was named the most popular Governor in America by The Washington Post in 1998. His popularity came from his successful programs that found national acclaim among them was passing the Nation's first ``two strikes and you're out'' law against violent felons, starting the Nation's only voluntary pre-kindergarten program for 4-year-olds, and creating the nationally acclaimed HOPE scholarship that has had such tremendous success in Georgia.

My good friend swept into the Senate to complete the remaining 4 years of the late Senator Paul Coverdell. Many political observers call Zell the last of the Southern conservative Democrats to serve in the Senate. He has certainly established himself as a strong voice for the conservative, commonsense approach to issues, reaching across the aisle to support tax cuts, improve education, confirm judicial nominations, and strengthen national security.

Zell is widely known for his straight talk on the issues you know where he stands and what he stands for, and everything he says comes straight from the heart. I can't tell you how many times a constituent from my home State of Utah will write to tell me how inspired they were by a speech that Zell had given on this Senate floor.

I am sorry to see Zell leave, but I am grateful for the service he has given these last 4 years. He is beloved by Georgians, and I know he would have easily been reelected, and he is beloved by millions in America. And, last but not least, he is beloved by his colleagues here in the Senate.

Peter G. Fitzgerald

Mr. President, I would like to take a moment of the Senate's time, as we near completion of our duties for the 108th Congress, to honor the work and contribution to Republican Party, the Senate, and the Nation of my friend, the Senator from Illinois, Senator Peter Fitzgerald. Senator Fitzgerald has chosen to take his youth and talents and serve in other areas outside of the Senate. Our loss will be, no doubt, the gain of others.

Senator Fitzgerald provided a good, youthful, and modern face to the Republican Party. Our party will only stay strong if we maintain within it our own diversity of perspectives, and I am grateful for the contribution of Senator Fitzgerald.

Elected to the Senate in 1998 at the very young age of 38, the Senator immediately added his vigor, intelligence, and experience in financial markets to address many of the complicated issues faced by your Government and society as the Nation turned into the 21st century.

When corporate scandals erupted early in this century, threatening to undermine confidence in markets, the Senate was, indeed, fortunate to be able to turn to Senator Fitzgerald for his thoughtful and informed guidance. As a former commercial banking attorney, he used his expertise in his positions on the Commerce and Governmental Affairs Committees, particularly his chairmanship of the subcommittee on Financial Management, the Budget and International Security, to chair or support numerous hearings to illuminate the problems and necessary legislation we needed to return probity to financial dealings and confidence in our markets. The modern capitalist system is what provides growth and wealth to all the societies of the world, and the American markets are the most dynamic in the world. They are also the most diversified, and the vast majority of our citizens depend on them for employment, security and retirement. We owe a

great deal of appreciation to Senator Fitzgerald for his work on corporate fraud issues, and I would like to thank him, once again.

Senator Fitzgerald is a reformer, through and through. It is his dedication to our system of Government and economy that drove him to find ways to improve it. He applied his drive to reform to consumer issues, Government affairs, financial management, and the complicated mesh of revenue collection that is the current tax system of this country. And he quite deservedly received numerous acclamations from groups advocating for consumer and tax reform.

Through this all, he never lost his focus on his home State. He didn't work for Illinois to get re-elected, he worked for Illinois because of his dedication to his State and his high standards of public service. A column in the Chicago Tribune, a good paper not known for being ragingly Republican, commended him for ``elevating courage and honesty to new heights.'' That sounds right to me.

I will miss the presence of Senator Fitzgerald, his thoughtful floor statements before this body, and the impeccable manners of a gentleman that are so naturally his. His State can be proud of the Republican they sent to serve too briefly in this body. We will miss his intelligence and dedication, and I will miss a good Senator and friend. I expect that, with his relative youth, we will hear much more of Peter G. Fitzgerald.

Don Nickles

Mr. President, I rise today to express my sincere gratitude for having had the opportunity to serve with Senator Don Nickles, and to wish him the very best as he retires from the Senate.

A lot of descriptive words come to my mind when I think of Don Nickles. Among the most prominent are courageous, knowledgeable, and engaging. All three of these, as well as many other of Don Nickles' qualities, will be sorely missed in the United States Senate.

I can think of no other Member of the Senate who has been a more rock solid beacon for conservatism than Don Nickles. His is the kind of courage that leads him to speak up alone against the whole world, if necessary, for what he believes. No matter what the issue or whether it is brought up on the floor of the Senate, in one of his committees, or in some other forum, Don Nickles is willing to speak up in his earnest yet friendly manner to ask questions, raise concerns, and stand up for conservative principles. Senator Nickles has been one of the most articulate Senators I have seen in my 28 years of service in the Senate. His voice, in defense for what he and many of us believe to be right, will be noticeably absent in the months and years to come.

Senator Nickles is also one of the most knowledgeable Members of this body. I have long been impressed with his grasp of minute details of economic, tax, and budget issues. His major committee assignments, Budget, Finance, and Energy, all cover complex issues that can take a huge amount of effort to master. Yet, Don clearly does his homework and seems totally at ease in discussing details of the budget or a comprehensive tax bill. As chairman of the Budget Committee, Senator Nickles has served with distinction. With all the challenges facing the budget in the recent past, Don has presided over that committee in particularly trying times. Yet, he has exhibited patience and perseverance in the midst of a number of very difficult problems. Every citizen of this country owes him a debt of gratitude for his service on our behalf.

Don Nickles is also one of the most engaging individuals I have had the privilege of knowing. His quick smile and friendliness to not only other Senators, but also to Senate staff and to everyone he meets marks him as a genuinely fine individual. I know Don has a deep faith in God and strives to do his best to live according to his convictions.

As Senator Nickles moves on toward the next stage in his impressive career, I wish him the very best and hope that we have the opportunity to see him regularly and to have the benefit of his wisdom and knowledge for many years to come.

Tom Daschle

Mr. President, I am grateful for this opportunity to say a few words about our friend and colleague, the distinguished minority leader, Senator Tom Daschle.

Tom's commitment to public service, on behalf of the people of South Dakota and America, is an example I hope more citizens will follow. He served here as a Senate staff member before being elected to the House of Representatives in 1978. South Dakota is one of just seven States with a single House member, which required Tom to run a statewide race. That was familiar territory for him when he ran for and won his Senate seat in 1986. Tom is one of 49 Senators who previously served in the other body, experience which I believe enhances their service here and makes the Senate more effective in serving all Americans.

Yesterday, our colleague Senator Durbin said that it is hard to imagine the Senate without Tom Daschle. Some might merit that compliment because of the sheer length of their tenure. Tom merits it because of the presence he quickly established, both as a Member and as a leader in this body. He was only 2 years into a second term when his fellow Democrats elected him their leader by just one vote. Only Lyndon Johnson became his party's leader more quickly.

Tom's 10 years as Democratic leader included periods as both majority and minority leader. Those positions, especially in a narrowly divided chamber, are each very challenging and each very different. Tom served in each post with class and determination, unifying his caucus and working to achieve their agenda. Needless to say, we have not agreed on every element of that agenda. But in this political world, it is really a compliment to say that Tom effectively and skillfully used whatever tools were available to fight for what he believed and for what his caucus wanted to achieve. Even when we were at loggerheads, when it seemed like the irresistible force was meeting the immovable object, civility has always marked Tom Daschle's presence in this body, as a Senator and as a leader.

I was gratified to hear Senator Daschle's comments on this floor yesterday and a few things really stood out. First, I was struck by the fact that he his number in the chronological list of United States Senators is 1776. Tom offered the valuable reflection that he is, as we all are, part of the broad sweep of American history, from the American revolution to the 108th Congress and into the future.

Second, Tom asked a very important question, whether our power comes just from military might or also from wisdom, compassion, tolerance, and willingness to cooperate. Everyone who serves in this body should maintain that perspective.

Third, Tom spoke of what he called the politics of the common ground. Individual Senators, as well as the two political parties, have certain bottom-line issues, certain fundamental principles or positions on which they just find little room to give. But on others, and I sometimes wonder whether this list is longer than we might think, we must practice the politics of common ground. Reminding us of that was, by itself, an act of leadership by the minority leader.

And finally, he told us of a note he wrote on one of his famous unscheduled driving trips across his State. He wrote, ``Everything was worth doing.'' Each of us who has worked alongside Tom Daschle, whether on the same or opposing sides, knows that this is his approach to, and attitude about, public service. That sets a good example for us all.

Bob Graham

Mr. President, I rise today to commend my colleagues on passage of S. 2154, Dru's Law. After last year's abduction of Dru Sjodin in North Dakota, Senator Dorgan introduced this bill to address a problem with our sex offender registry. The problem is simple, yet great: There is no public national sex offender registry. Each State maintains its own registry of sex offenders, but there is no national database for the public to search.

I was pleased to support this legislation when it was referred to the Judiciary Committee and was happy to work with Senator Dorgan to improve the language of the final bill. Dru's law directs the Attorney General to make available to the public, via the Internet, a national registry of sex offenders. It also requires each State to provide timely notice to the State's attorney general of the impending release of a high-risk sex offender; and upon such notification, the State's attorney general is required to consider whether to institute a civil commitment proceeding. States must intensively monitor for at least 1 year any high-risk sex offender who has not been civilly committed and has been unconditionally released from incarceration.

I want to thank my colleague Senator Dorgan for his dedication to this legislation.

Mr. President, I rise to introduce with my colleague, Senator Biden, the Controlled Substances Export Reform Act of 2004. This bill would make a minor, but long overdue, change to the Controlled Substances Act to reflect the reality of commerce in the 21st Century and to protect high-paying American jobs, while maintaining strong safeguards on exports.

Before I discuss this bill, I want to thank Senator Biden for working with me on this important legislation. Senator Biden has long been recognized as a national leader on drug-related measures, and we have a history of working together on a bipartisan basis to enact sensible reforms in this area, as evidenced by the recent enactment of our steroid precursor bill. I respect his thoughtful collaboration, and I thank him for his work on the proposal we are introducing today.

In sum, this proposed legislation will amend the Controlled Substances Act of 1970 providing greater parity for U.S. manufacturers, who wish to export their products while retaining full DEA authority over U.S. exports.

Current law places severe restrictions on exports of certain drug products from the United States. The Controlled Substances Export Reform Act proposes to amend that law to correct one small, but onerous provision that is unnecessarily threatening American jobs. This change is entirely consistent with the long-established regulatory scheme pursuant to the Federal Food, Drug and Cosmetic Act.

At present U.S. pharmaceutical manufacturers are permitted to export most controlled substances only to the immediate country where the products will be consumed. Shipments to centralized sites for further distribution across national boundaries are prohibited. This contrasts with the freedom of pharmaceutical manufacturers throughout the rest of the world to readily move approved medical products among and between international drug control treaty countries without limitation or restriction.

The unique prohibitions imposed on domestic manufacturers disadvantage U.S. businesses by requiring smaller, more frequent and costly shipments to each country of use without any demonstrable benefit to public health or safety. By imposing significant logistical challenges and financial burdens on U.S. companies, the law creates a strong incentive for domestic pharmaceutical manufacturers to move production operations overseas, threatening high-wage American jobs.

The Controlled Substances Act of 1970 permits U.S. manufacturers of Schedule I and II substances and

Schedule III and IV narcotics to export their products from U.S. manufacturing sites only to the receiving country where the drug will be used. The law prohibits export of these products if the drugs are to be distributed outside the country to which they are initially sent. The effect of this restriction is to prevent American businesses from using cost-effective, centralized foreign distribution facilities. In addition, under the current regime, unexpected cross-border demands or surges in patient needs cannot be met. Likewise, complex and time- sensitive export licensing procedures prevent the shipment of pharmaceuticals on a real time basis.

European drug manufacturers face no such constraints. They are able to freely move their exported products from one nation to another while complying with host country laws. This is entirely consistent with the scheme of regulation imposed by international drug control treaties. Only the United States imposes the additional limitation of prohibiting the further transfer of controlled substances.

Thus, while a French or British company can ship its products to a central warehouse in Germany for subsequent distribution across the European Union, an American company must incur the added costs of shipping its products separately to each individual country.

The Controlled Substances Export Reform Act would correct this imbalance and permit the highly regulated transshipment of exported pharmaceuticals placing American businesses on an equal footing with the rest of the world. Importantly, however, DEA's authority to control U.S. exports would not be diminished.

The legislation authorizes the Attorney General, or his designee, the DEA, to permit the re-export of Schedule I and II substances and Schedule III and IV narcotics to countries that are parties to the Single Convention on Narcotic Drugs and the Convention on Psychotropic Substances under tightly controlled circumstances: First, each country is required to have an established system of controls deemed adequate by the DEA. Next, only permit or license holders in those countries may receive regulated products. Third, re-exports are limited to one single cross-border transfer. Then the DEA must be satisfied by substantial evidence that the exported substance will be used to meet an actual medical, scientific or other legitimate need, and that the second country of receipt will hold or issue appropriate import licenses or permits. Fifth, in addition, the exporter must notify the DEA in writing within 30 days of a re-export. And finally, an export permit must have been issued by the DEA.

These safeguards are rigorous but fair, and represent a much-needed modernization of the law. The current restrictions on U.S. pharmaceutical exports have remained essentially unchanged for more than thirty years. In that time, the global economy has changed dramatically. For those among us who express concerns about the outsourcing of American jobs and the competitiveness of U.S. companies, this modest change represents an opportunity to address such problems head-on.

The Controlled Substance Act's limitation on U.S. pharmaceutical exports imposes unique, unnecessary, and significant logistical and financial burdens on American businesses. The effect of this outdated policy is to create a strong incentive for domestic pharmaceutical companies to move production overseas, threatening American jobs and eliminating DEA jurisdiction over the manufacture and shipment of their products. The Controlled Substances Export Reform Act removes this unwarranted barrier to U.S. manufacturers' use of cost-effective distribution techniques while retaining full DEA control of U.S. exports and re-exports. Accordingly, I urge my colleagues to join Senator Biden and myself in support of this bill.

section 1003

I appreciate the distinguished Senator from Delaware's work on this legislation and am pleased to join with him in correcting this small, but important provision of law.

Section 1003 of the Controlled Substances Import and Export Act currently permits U.S. pharmaceutical manufacturers to export schedule I and II drugs and schedule III and IV narcotics only to the exact country where the products will be used. While American companies are prohibited from using centralized foreign distribution facilities, our international competitors face no similar restrictions and can freely ship medicines for cross-border distribution between all international drug control treaty countries.

Yes.

Yes, the Senator is correct. In addition to the burden imposed on U.S. manufacturing exporters, the advent of the European Union has created a situation that places our foreign distributors in violation of European law. Member countries of the EU are considered borderless in terms of trade. Products introduced into the European Union are required to be available for transport and shipment among and between all member countries under their law. However, because we don't recognize the European Union as a single entity and cross-border transfers are prohibited, our distributors are placed in the position of violating European law in being forced to deny inter-country distribution of U.S. drugs.

Yes.

That it is correct. The purpose and intent of this legislation is to place U.S. pharmaceutical companies on equal footing with their international competitors. Moreover, this change is entirely consistent with the long-established regulatory scheme pursuant to the Federal Food, Drug and Cosmetic Act. Eliminating the need for multiple, small shipments and the associated wasteful, small batch testing, will save U.S. companies nearly 80 percent over current export distribution costs, savings that will result in more American jobs and stronger international markets for U.S. products.

As the Senator noted, the bill has been crafted with the assistance of the Drug Enforcement Administration to ensure all necessary controls will remain in place while creating a level playing field for American business. It is simply a commonsense update to an outdated law, and I urge its passage.

Mr. President, every year U.S. businesses lose several billion dollars in revenues due to international theft of their products. Every time a book is photocopied without permission, a bootleg movie DVD is sold, or a piece of music is downloaded from the Internet, engineers, authors, musicians, actors, technicians, camera crews, lighting crews, building owners, investors--indeed, everyone involved in the process--lose money. The United States has long been the world leader in the creation of products protected by intellectual property. Almost every growing industry in the United States uses intellectual property laws as the single most important tool they have to ensure their companies will be viable and competitive in the world marketplace. Millions of employees throughout the United States can directly or indirectly tie their jobs to companies who use intellectual property protections for their products.

Because intellectual property is so important to the U.S. economy, our Government has a long tradition of working hard with the international community to enforce the basic and fair rights established by intellectual property law. Enforcement of these rights in foreign countries is extremely important to the U.S. economy and so the Congress has long provided Government officials with the direction and tools they need to pursue fair treatment of intellectual property on an international basis.

Be it through the Trade Act of 1974 or through the WTO establishment of the Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS Agreement, the U.S. Government has been very active in pursuing the protection of intellectual property that brings me to the bill at hand.

As passed by the Senate on March 4, 2004, H.R. 1047 contained five important measures that would have given the U.S. Government more tools in our effort to protect intellectual property around the world. Specifically, the five intellectual property sections of H.R. 1047 would provide the U.S. Trade Representative additional time to negotiate and consult with countries prior to bringing a World Trade Organization intellectual property dispute; it would have given companies and innovators the ability to request the U.S. Government suspend certain trade benefits to Caribbean and Central American countries who are not meeting their intellectual property commitments; and it would have standardized the criteria for adequate and effective protection of intellectual property under several U.S. trade programs, thereby giving U.S. companies greater ability to protect their IP in several countries around the world.

Unfortunately, during the conference with the House, H.R. 1047 was stripped of four of the five IP protections I just outlined. This is of great concern to me. I fear the House conferees who were opposed to these important IP measures are selling our economy short and jeopardizing thousands of U.S. jobs. Failure to pass these important protections diminishes the U.S. Government's ability to encourage foreign governments to crack down on intellectual property violations. It is difficult to motivate foreign governments to seek out and prosecute those who steal the property of U.S. companies and sell it to consumers at reduced prices. However, this language would have provided an extra incentive for foreign governments to prosecute intellectual property theft and, hopefully, would have led to billions of dollars of additional U.S. exports across several industries.

Few U.S. industries enjoy a positive trade balance in the world marketplace; however, those few U.S. industries which do enjoy large positive trade balances with other countries depend on strong, internationally enforced intellectual property protections. It is beyond me why anyone would want to make it more difficult for these industries to enforce their property rights internationally. It is beyond me why anyone would want to stand idly by and watch American employees get ripped off by foreign companies.

Although this legislation was stripped of most of the intellectual property protections I worked so hard to include, I am supporting its passage because it provides tariff relief to many industries throughout the country. Many of our Nation's largest manufacturers and employers in industries such as agriculture, textiles, chemicals, pharmaceuticals, electronics, heavy equipment, and food and beverages all benefit greatly from the reduced tariffs provided by this legislation.

In fact, several large employers in my home State of Utah will benefit directly from this legislation. The reduced tariffs contained in this bill will provide these companies with the ability to compete for effectively in the global marketplace, to sell more products and services throughout the world, and create jobs in Utah. For these important reasons, I will support this legislation.

Although the Senate has not been able to take advantage of this opportunity to pass four very important intellectual property provisions on the Miscellaneous Tariffs Bill, I am hopeful that we can come together at the start of the 109th Congress and take up and pass these important protections. Those industries which depend on IP protections agree that we need them; the U.S. Trade Representative's Office agrees that we need them; and I call on my Senate colleagues to work with me next Congress to pass these important tools to help us combat international IP theft.

I yield the floor.

Mr. President, over the last several years, a significant and growing body of scientific research has emerged detailing the important role micronutrients play in the prevention of many types of chronic disease.

While the science supporting optimal nutrition for disease prevention has grown, the average American's diet has progressively gotten worse. As we have heard so often, a large percentage of Americans do not eat the right mix of foods to meet the Government's RDIs--or recommended daily intakes.

Our top nutrition priority should be getting people to eat a more varied, balanced diet. However, there is a simple and inexpensive way to help Americans get many of the micronutrients they need--encourage the use of a daily multivitamin. Multivitamins--as a complement to a healthy diet--are a simple, safe and cost-effective preventive measure.

Indeed, several recent studies have shown their efficacy. For example, in June 2002, an article published in the Journal of the American Medical Association recommended that all Americans take a multivitamin daily to help prevent chronic diseases such as heart disease, cancer and osteoporosis. A year late, the Journal of Nutrition published the results of the Stockholm Heart Study, which showed that the use of multivitamins may aid in the prevention of heart attacks.

In March, a study published in the Annals of Internal Medicine found that multivitamin use decreased the risk of infection for people with diabetes. And the science continues to mount demonstrating the potential of daily multivitamin use which can have a whole range of benefits. These include reducing the incidence of neural tube defects by 50 percent or more, decreasing the number of sick days in the elderly due to infectious illnesses by up to 50 percent, delaying or avoiding more than 20 percent of hip fractures caused by osteoporosis, delaying the onset of cataracts and age-related macular degeneration, reducing the incidence of heart disease, stroke and possibly Alzheimer's, and protecting against some types of cancer.

Additionally, I would like to recognize a study that was commissioned by Wyeth Consumer Healthcare and conducted by The Lewin Group. The study examined the potential cost savings--within the Medicare health care model--that could occur if more of our aging population took a daily multivitamin. This study also served as a means for evaluating the impact daily multivitamin use can have on preventive health, particularly in the areas of cardiovascular disease and immune function. The results of the study indicate that increased multivitamin use by adults over 65 could result in an estimated savings to Medicare of more than $1.6 billion over a 5-year period.

Research shows that a significant number of elderly in our country do not receive proper amounts of essential vitamins, minerals and other nutrients, making them more vulnerable to disease and infection. By adding a multivitamin to their diets, seniors--and all Americans--can help ensure they get the nutrients they need to stay healthy.

While it is always prudent for an individual to take supplements in close consultation with his or her health care advisers, it is obvious from the research that dietary supplements continue to have important health care benefits for consumers and policymakers alike.

I ask unanimous consent that the attached release outlining the Lewin study printed in the Record.

Mr. President, I am delighted to take this opportunity to recognize the 90th Anniversary of ASCAP, the American Society of Composers, Authors and Publishers.

In 1913, nine men braved foul New York weather to attend a small meeting at a restaurant called Luchow's. The meeting had been organized by three of the men; Raymond Hubbell, a composer, George Maxwell; a publisher; and Nathan Burkan, an attorney. They were brought together by the novel idea of creating a society to ensure writers and publishers received the recognition and revenue their works generated. Enlisting the help of songwriter Victor Herbert, the group found five other writers and publishers to get the word out. A second meeting was scheduled, and in February 1914, over 100 members of the music community officially began the American Society of Composers, Authors and Publishers.

In the time that has passed, ASCAP has represented many of the greatest musical talents in recent history. The society's members have included Louis Armstrong, Cab Calloway, Peggy Lee, Garth Brooks, Jimmy Hendrix, Carly Simon, Bob Marley, Henry Mancini, Billy Joel, Bruce Springsteen and Madonna. Members have won countless awards for their work, including current president Marilyn Bergman, who, in collaboration with her husband, has won three Oscars, two Grammys and four Emmys. Under her outstanding leadership it has grown to 185,000 members, including many of the newest and greatest names in music.

This year, ASCAP celebrates its 90th anniversary in a time of great importance to the music copyright community. With the current debate over file sharing and constantly developing technology, individual artists are virtually powerless to protect their own work from illegal copying. As a songwriter and member of ASCAP myself, I truly understand the joy and pride that comes with the creation of a song, as I also understand the need for artists' rights to their songs to be protected. I have also had a professional connection with the property rights issues the society addresses. As the chairman and a long-time member of the Senate Judiciary Committee, which oversees matters of intellectual property law, I appreciate the dedication the society has shown toward maintaining the integrity and efficiency of copyright laws.

In the past 90 years, ASCAP has witnessed the transitions from records to 8 tracks to cassettes to compact discs and now to mp3s. It has been through the many trends of music, from big band and swing in 1920s and 1930s, to the wide range of musical styles available today. ASCAP has stood the test of time. I hope my colleagues will join me in recognizing its great contributions to the world of intellectual property law and wishing ASCAP and its members well in the years to come.

Mr. President, I ask unanimous consent that my reading of this procedural matter will not be counted against my 1 minute on the amendment.

Mr. President, I ask unanimous consent that the Senate immediately proceed to the consideration of H.R. 5107, the DNA bill, which is at the desk; further, that the bill be read a third time and passed and the motion to reconsider be laid upon the table; provided further, that when the Senate receives from the House a correcting enrollment resolution relating to H.R. 5107, the Senate proceed to its consideration and the resolution be agreed to and the motion to reconsider be laid upon the table. Finally, I ask unanimous consent that if the House does not adopt the correcting enrollment resolution by the end of this Congress, then the Senate action on H.R. 5107 be vitiated.

Mr. President, this is the very important DNA bill which will help resolve the difficulties with over 400,000 rape kits in this country, some of which are 20 years old or older.

Mr. President, I would just like to compliment Debbie Smith and Kirk Bloodsworth, who are two of the initiating people who have helped bring this about, but also all the people who worked so hard: Senator Leahy, Senator Biden, Senator Specter, Senator Feinstein, Senator DeWine and, of course on the House side, Chairman Sensenbrenner and Representative Bill Delahunt for their dogged determination, and to Senators Kyl, Sessions, and Cornyn who did a really great job on this bill; also staff on both sides, in both Houses.

With that, I yield the floor.

Before we agree to send this bill to the House, there are a number of concerns raised with respect to the capital-counsel section of Title IV that I would like to address with my colleagues. I know that this title has been of particular concern to my friend from Texas, Senator Cornyn.

That is my belief. And let me first say that I appreciate the concerns of the Senator from Texas as well as those of Senators Kyl and Sessions, each of whom have worked very hard on this important issue. You bring to the debate a wealth of experience in this area, having served as Attorney General of your home State of Texas and as a Judge, and you have worked tirelessly on this, and I thank you for it.

The recent modifications to the bill are a great improvement. The bill is the result of the hard work and dedication of many on both sides of the aisle. Most importantly, we have significantly reworked this bill so as to address the legitimate concerns you, Senators Kyl and Sessions as well as others have raised.

Specifically, we made some changes to the capital representation section of the Innocence Protection Act. We worked with the House to add language similar to language in the amendment that you offered in the Judiciary Committee language that would require that a large majority of the funding in this area to go to the trial level, rather than to the appellate or habeas litigation. This shift in funding allocation is a further safeguard against your concerns that funds might go to particular advocacy groups because they typically become involved in these cases at the appellate level.

Yes. Section 421(d)(1)(C) was added specifically to ensure that Texas, or any other State with a similarly structured system, would qualify as an ``effective system'' under the statute. This provision has been referred to as the ``Texas carve-out'' throughout debate over this bill. It is appropriate in light of the changes Texas enacted in order to improve its capital-representation system just 3 years ago.

That is absolutely my understanding.

Absolutely. In fact, it is my understanding that at least half a dozen other states also will automatically pre-qualify for funding under this proviso.

I would say that the ``carve-out'' is a compromise that is consistent with past Federal assistance to the States' criminal justice systems, and it sets appropriate limits on the level of Federal involvement in the administration of the death penalty at the state level.

I would be pleased to do so. In choosing the term ``compelling,'' we relied on previous interpretation of that term in cases such as United States v. Walser, a 1993 case out of the Eleventh Circuit. That court analyzed a previous jury's decision--and whether it disadvantaged the defendant--under a standard of ``compelling prejudice.'' The court there made clear that it could not find ``compelling prejudice'' if ``under all the circumstances of [the] particular case it is within the capacity of jurors'' to reach the proper result--in the case of this bill, to find that the defendant committed the crime. If, in light of the DNA test, it would not be within the capacity of jurors to conclude that the defendant is guilty, a new trial must be granted under 3600(g). But if they could possibly find guilty, no new trial is allowed. As the Eleventh Circuit explained, under the ``compelling'' standard, if a decision is ``within the jury's capacity''--if it is reasonably possible--then ``though the task be difficult [for the hypothetical jury], there is no compelling prejudice''--or in our case, no compelling evidence requiring a new trial.

As the Walser case also explains, you look to the trial transcript to decide what constitutes ``compelling'' evidence. Obviously, it is the defendant's burden to produce this evidence by other means if there is no trial transcript. If the defendant pleaded guilty, and received the inevitable benefits that come with a plea agreement, he cannot later turn the lack of a record against the State. It remains the defendant's burden of both persuasion and production to show that it would not have been possible for the jury to have concluded that he is guilty. This is again implicit in the adoption of the term of art ``compelling''--as Walser elaborates, under the ``compelling'' standard, ``absent evidence to the contrary, we presume that the jury'' could properly reach the result that it did.

The other case to which I believe that you referred is the Seventh Circuit's 1979 decision in NLRB v. Austin Development Center, which makes clear that previously available evidence is not ``compelling'' evidence. The relevant passage from that case for our purposes was that only ``[t]he discovery of new evidence is a compelling circumstance justifying relitigation. The proffer of evidence not presented earlier, however, will not justify relitigation where it is not shown that the evidence was unavailable at the time of the prior proceeding.'' In other words, for our purposes, if the DNA evidence that a prisoner relies on is something that would have been available to him earlier, it does not qualify as ``compelling'' evidence justifying a new trial. If he failed to seek a test when he could have, he cannot later use that test result to argue for a new trial, once witnesses have died or become unavailable or had their memories fade, and other evidence has deteriorated and disappeared. To allow a new trial under these circumstances would be fundamentally unfair to society and its interest in the finality of criminal judgments. As some of my colleagues have noted, Federal Rule of Criminal Procedure specifically limits its liberal new-trial rule to new evidence discovered within 3 years. Implicit in that limit is the judgment that the same evidence cannot carry the same weight in a new trial motion if it is brought at a later time. By adopting the ``compelling'' standard in this bill, we make that same judgement, and we protect these same societal interests.

I hope that this conforms to your previous understanding of this provision and clarifies matters for the record, Senator. We have chosen a tough standard here--in fact, I believe tougher than all those that we have discussed previously. This is not a standard that will grant new trials to people who probably did it--and then allow them to walk free when prosecutors are unable to try them after the passage of time. I hope that you can have confidence in that, Senator.

That is correct.

That is correct. The new limitation that you noted--the new subsection 14132(d)(2)(A)(ii) corresponds to the limited ``unindicted arrestee'' category in the new (a)(1)(C). It does not apply to DNA analyses uploaded under other ``applicable legal authorities.'' Our intent was to provide States with maximum flexibility in exchanging DNA profile information through NDIS. The only exception that we made in this bill was for arrestees, who had DNA samples taken from them involuntarily, and who, because of those circumstances, we give the right to have those samples withdrawn from

I agree with the Senator. I, too, am pleased that, with the exception of samples collected from arrestees who have charges dismissed or are acquitted, States and local governments can now upload and compare analyses collected under applicable legal authorities on the national database without running afoul of arbitrary expungement requirements.

Yes. Anyone with knowledge of capital cases--not just someone who has litigated capital cases--can now serve on the entity. Most importantly, this includes members of the bench. It could also include law professors with knowledge of capital cases, or, as you mentioned, even advocates for crime victims--if they

have a demonstrated familiarity with the death penalty. The interests of victims too often are left out in our justice system--I am pleased to see that we have now changed this bill to ensure that someone who has experience in guiding crime victims through a capital trial would be eligible to sit at the table of this important new capital-counsel entity. I think that such an entity certainly could benefit from diverse perspectives on the criminal-justice system.

Absolutely. This a matter that is properly left up to the States, and we have so left it.

That understanding is correct. As long as the person to whom authority is delegated would herself be eligible to serve on the entity, there is no reason to centralize all functions in one office. Nor is there any limit or requirement as to how many people can serve on the capital counsel entity. I know that in some of our discussions earlier this week, Senator Kyl posed the example of a State that creates a panel of three judges--trial judges, appellate judges, or some combination thereof--and has that panel carry out the functions of the entity. With the modification to the bill made today, this would be permissible. The State could use 5 judges, or 12, or even 1, though I can't imagine that the latter would be practical, except in the case where authority is delegated in local areas.

Yes. There is no such restriction.

I move to reconsider the vote, and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 4015

Mr. President, I will change places with you so you can make the unanimous consent request.

As I understand it, Senator Stevens has asked for 5 minutes to make a speech before I make mine.

Then, as I also understand it, the order should be Senator Warner to make his unanimous consent request, Senator Stevens for 5 minutes, then I for whatever time I need, and then Senator Landrieu for whatever time she wanted.

If we can do it the way I suggested, it would be very acceptable.

I ask unanimous consent that be the order.

Mr. President, I agree with the distinguished chairman of the Appropriations Committee. It is a catastrophic failure not to take care of these problems. I salute the chairman for making the statement he made and for the leadership he has provided in this Senate. We all know what a feisty, wonderful man he is. I hope we can get this resolved. I hope whoever has these objections will identify himself or herself and why they are making the objections.

I listened to the statement of the Senator from Massachusetts this afternoon, and to hear him you would think we are living in the most calamitous times in the history of the world, that our country is falling apart, that we are not employing people, that people are getting poorer, and nobody has a chance in our society anymore, all because George W. Bush became President of the United States. It is amazing to me how many comments are made by people who are in the business of politicizing these matters rather than talking sensibly about them.

Think about it, we lost over a million jobs shortly after September 11. Lost them. September 11 was the reason.

That was no fault of President Bush. That was the fault of the people who attacked our country. Over 1.9 million jobs have been created since August of 2003. We now have the lowest unemployment rate in the last 4 or 5 years, 5.4 percent. When I was chairman of the Labor Committee, if you could get unemployment below 6 percent, if you got it to 5.6 percent, you had full employment. When you count those who cannot work, those who don't need to work, and those who won't work, you basically had full employment. 5.4 percent is incredibly low by historical standards.

I might add that the Household Employment Survey shows 2.2 million jobs have been created, many more jobs than shown in the Payroll Survey. This is because the Household Survey counts the self-employed and the Payroll Survey does not. We have the highest rate of home ownership in history, which has been developed during this administration. I can go on and on. The fact of the matter is we can play politics with about everything in this overheated political campaign.

Since September 11, the employment rate peaked at 6.3 percent last year and has come down to 5.4 percent. The current 5.4 percent rate is well below the average rates of the 1970s, the 1980s, and the 1990s. Some have said the job growth has failed to keep up with population growth. That is simply not true. Since last June, total employment has increased by 2.2 million. The labor force has increased by 949,000. Unemployment has fallen by 1.2 million people.

In addition, we hear all the time how people are not making a good living. Let's be honest. In some respects we have priced ourselves out of the marketplace with some of the heavy-duty industries, and we know there are many reasons why that happens, and that goods and services are being produced elsewhere at a lower cost, and this benefits the consumers of America. The consumers of America then have more money and they will be spending more so we can create other businesses that will compete.

The fact of the matter is, I have listened to these complaints about the labor overtime regulations that the Secretary of Labor worked on. I happened to have chatted with her during that process and she was doing an absolutely wonderful job of trying to make sure we got more people eligible to receive overtime pay than ever before. But to listen to some on the other side, you would think the whole world was coming to an end and the fact is she has come up with very good regulations.

We could talk about these things all day, and I guess anyone can distort any statistical analysis. There is a lot of distortion that goes on in this Senate from time to time in these matters. Of course, we are in a heated Presidential election campaign and I have to say I make a certain allowance for that, but I hope the folks out there watching make an allowance for that as well, because we have a lot of heated rhetoric in the Senate that sometimes does not make sense.

I intend to speak about three different things today and I ask unanimous consent my respective remarks be placed in the appropriate context.

Mr. President, I come to the Senate to discuss H.R. 5107, the Justice For All Act that the Senate adopted this morning. After days, months, and now years of hard-fought negotiations, we finally reached an agreement on one of the most significant bills that has come out of the 108th Congress.

Just days ago, the House passed H.R. 5107 by an overwhelming bipartisan vote of 393-14. I especially commend my friends and colleagues, chairman of the House Judiciary Committee Jim Sensenbrenner from Wisconsin and Congressman Bill Delahunt of Massachusetts, for their leadership on this important bill. Nor could we have accomplished this matter without the cooperation and leadership of my friend from Vermont, Senator Patrick Leahy. As we know, the Senate adopted this bill this morning and we are pleased to send it to the President for his signature.

Our bill, the Justice for All Act, contains President Bush's DNA initiative. It also contains Senator Leahy's Innocence Protection Act which has been modified by almost everyone on the committee, and Senators Kyl and Feinstein's victims' rights legislation. This is a groundbreaking crime bill, one of the most important in history, that will allow us to unleash the power of evidentiary DNA and help provide law enforcement the ability to find and punish the guilty, yet give us the comfort of more certainty in criminal prosecution.

Passage of the bill is extremely important to people such as Debbie Smith and Kirk Bloodsworth after whom individual parts of the bill are named. March 3, 1989, Debbie Smith--who I know very well--was the victim of a brutal rape in Williamsburg, Virginia. It took 6 long years to finally analyze Debbie Smith's rape kit. Debbie Smith's rapist was ultimately caught because of this, but it took far too long to catch him.

According to the U.S. Department of Justice, a woman is raped every 6 minutes in this country and many rapists commit this crime 8 to 10 times before they are caught, which means that at any given moment there are literally millions of rape survivors waiting to hear that their attacker has been apprehended.

Debbie Smith waited 6 agonizing years for justice to be served. It was not just waiting for justice to be served; it was agonizing because she was never sure when she walked out of her house or even within her house whether this brutal rapist would return. It was something that affected her all of those years. Thankfully, through the use of DNA evidence, this awful person was apprehended and slammed in jail, where he deserves to be.

Some women are not that fortunate. The Justice Department reports there are approximately 150,000 to 500,000 rape kits nationwide that have yet to be analyzed because law enforcement officials are short on both the funds and the skilled personnel necessary to process these rape kits and match the evidence collected to existing DNA samples of known criminals. Imagine how many rapists we would have caught by now had those up to 500,000 rape kits been analyzed. By the way, some of those are 20 years old. I have been fighting for this bill for years. It is so difficult to get it through, but today is the day it has gone through the Senate and has passed the House.

This bill makes a giant leap in the rape kit backlog and specifies when and how DNA tests should and should not be used. The President has often indicated his commitment to unlocking the power of DNA to solve these crimes. Today the Senate has joined the House in stepping up to follow through with the President's plan.

It cannot be said any better than in Debbie Smith's own words:

Each one of these stalled cases represents women's lives.

Many women are paralyzed after an attack because their rapist

is still out there, and you never know if he's going to come

back.

Now, this bill will not take away the pain and anguish these victims have endured. It can, however, allow for health care professionals, law enforcement, and other first responders to assist victims by using the evidentiary power of DNA to apprehend and prosecute those responsible for these horrible crimes.

This bill was too important to be delayed any longer. As so many of my colleagues, I am well aware of the incomparable power of DNA testing to solve crimes, particularly sexual assault. This fact is reflected in newspaper headlines spread across the country each week. During the week of August 16 alone, the media reported that DNA evidence pinpointed a suspect in three rapes in Miami, FL, caused a man to be charged in a 20-year-old Missouri rape case, and proved critical in convicting a New York man accused of committing nine rapes over the course of a decade.

That is what DNA can do. If we had all these rape cases analyzed, we would be catching these rapists right and left and we would be protecting women all over this country from this type of violent, criminal activity in many cases. So I want to stand here and thank Debbie Smith from the bottom of my heart for her constant efforts to help us pass this bill. I have known her for

a long time. We have flown together. She has appeared at our hearings. She is leading the fight throughout America, along with a number of other very courageous women. This has to be a very important day for her.

When this bill is finally signed into law by our President, who will sign it into law, it is going to be a big day for the Debbie Smiths of this world and, I might add, every woman in this world who is the potential target of these vicious rapists.

Also contained in this bill are provisions that will give us assurance that those whom we arrest and convict are indeed those who have committed the crime. Kirk Bloodsworth, a former marine with no criminal background whatsoever, was arrested in 1984 for the brutal rape and murder of 9-year-old Dawn Hamilton on Maryland's Eastern Shore. Kirk Bloodsworth maintained his innocence but was convicted and sentenced to death. After 9 years in prison, two of them on death row, Kirk Bloodsworth, an innocent man, was exonerated by post-conviction DNA testing. Last year, prosecutors matched the DNA evidence in the case to another man, who subsequently pleaded guilty to the crime, for which he was sentenced to death.

This is the power of DNA when it is used and analyzed properly. I want to stand here and thank Kirk Bloodsworth from the bottom of my heart for his efforts to improve and pass this bill. The bill will help to protect unintentional victims of the criminal justice system.

I think we all owe a debt of gratitude to Kirk Bloodsworth. One reason I have stayed around here all day, although there are no more votes, is to be able to stand on this floor and personally pay tribute to Debbie Smith and Kirk Bloodsworth. They deserve it. They have been with us throughout this process, and I have nothing but respect for both of them.

Moreover, this bill includes Senator Kyl's and Senator Feinstein's critical Crime Victims Act that ensures victims rights are protected in criminal prosecutions. This bill is truly justice for all.

It is an important bill, and they fought for this for years and years, and we helped them to get it out of committee. I am so grateful it was matched with the DNA bill, and we now have these two bills brought together in one bill that will do a great deal of good for our society.

Finally, let me say I am grateful for the hard work and determination of so many people to get such a vital bill passed.

I thank my cosponsors of this bill. First, let me thank my good friend from Vermont, Senator Leahy, for his commitment and willingness to set aside politics in a very political year and work with me to get such a critical bill passed.

I also want to recognize and specifically thank Senator Biden, Senator Specter, Senator Feinstein, and Senator DeWine for their calming voices of wisdom throughout the negotiations, our difficult committee markup, and in the final preparations to achieve a properly balanced bill. Without their unwavering support and counsel, this bill would not have occurred.

I also thank the chairman of the House Judiciary Committee, Jim Sensenbrenner, and Representative Delahunt for their dogged determination on the House side in leading the House in passing this bill through the House on two occasions by overwhelming majorities.

I have worked side by side with Chairman Sensenbrenner on many occasions. He is a true friend and he is a man of his word. I am pleased to have had the opportunity to work closely with Congressman Delahunt on this measure, and I can tell you, he is a man of honor and wisdom. I have enjoyed working with him. I will look forward to working with both of them again in the future.

I also want to make special mention that without the thorough consideration of this bill by Senators Kyl, Sessions, and Cornyn, we would not be here today. Nearly two dozen changes were addressed and implemented at the insisting of these fine Senators, and this bill is a better bill because of it. And I have to admit, they have helped to improve the bill.

At times the process through the committee was a bit tension filled, but I commend Senators Kyl, Sessions, and Cornyn for working to improve and refine this legislation. Some have unfairly criticized their efforts, but that is only because these critics apparently do not understand the committee process. I commend these colleagues and all of my colleagues for giving this bill the scrutiny it deserves.

Now, let me say that many have worked to make this bill a successful effort. We could not get much done around here if we did not have such an intelligent and dedicated staff. I want to thank those on my staff, including Reed O'Conner and Ted Lehman, for their commitment and dedication in getting this bill done. I especially want to single out Brett Tolman, a bright, young assistant U.S. attorney from Salt Lake City who is on assignment to the Judiciary Committee. We are fortunate to have him, and he has made a tremendous difference on this bill. Brett took the initiative for undertaking a lot of the analysis and negotiations that led to the final compromise language.

I am proud of him, and I think everybody else ought to be, too.

I want to thank Senator Leahy's chief counsel Bruce Cohen and his lead counsel on this issue, Julie Katzman. Their efforts helped guide and drive this effort throughout and are greatly appreciated. We are also indebted to chief counsel Neil MacBride, Jon Meyer, and Louisa Terrell from Senator Biden's office. They continuously helped move the ball forward.

I give special thanks to Rob Steinbuch, a senior counsel in Senator DeWine's Judiciary Committee office. Rob and Brett Tolman were key players on our side of the aisle in educating Members and staff about this bill and proposing creative solutions to problems that surfaced.

I also thank Joe Matal, William Smith, and Chip Roy, who ably represented the views of, respectively, Senators Kyl, Sessions, and Cornyn.

On the House side, Phil Kiko, chief counsel for Chairman Sensenbrenner, Jay Apperson, Katy Crooks, and Christine Leonard were instrumental in building the overwhelming support for this bill.

As well, I give special thanks to Matt McGhie and Bill Jensen from legislative counsel. On this type of bill it is critical to get the language exactly right, and they did so time and time again.

The list of contributors could go on and on because so many private and governmental organizations have also provided critical assistance.

Let me also say, while I had to get a little rough with the Justice Department--and I am still not over it--I am, nonetheless, grateful for their help in coming to compromises and getting this bill in acceptable form. I call upon Attorney General Ashcroft to urge the President to sign this good bill, and to do it quickly.

I thank the leadership, Majority Leader Frist and Senator McConnell, as well as Minority Leader Daschle and Senator Reid for giving us floor time to get this done today.

Most of all, I am pleased to send to the President a bill that will make such a difference in the lives of victims of crime, including those wrongly accused or convicted of crimes across this country.

This bill passed 393 to 14 over in the House. We amended it in many ways to make it a far better bill because of the work of all of these people I have been chatting about. I have to say that it passed unanimously by the Senate today. This body sent that version back over to the House, and I am pleased to report that they took it up and passed it so that it may be sent to the President for his signature.

Madam President, finally, I have to respond to the outrageous charges made by colleagues on the other side of the aisle regarding the Medicare statement I delivered on the Senate floor yesterday. I was disturbed by several remarks--especially that seniors have flatly rejected the Medicare prescription drug benefit. That may be the hope of some people on the other side, but that is not reality.

How is that even possible when the drug benefit doesn't even go into effect until January 1, 2006? That is pure, unmitigated bunk. I am offended that this argument is even being made on the floor of the Senate by my colleagues because it is absolutely not true. It is being made to scare our seniors. And that is wrong. How is that possible when many Medicare beneficiaries are participating in the Medicare drug discount card and have seen savings in their drug costs up to 20 percent per drug? What is being said is just not true. I don't see that as an outright rejection. My colleagues need to be careful about their charges, especially when they don't have facts to back them up.

I take issue with the assertion that our prescription drug law is only a drug law in name. What do they mean by that? Let me remind the Senator from Illinois that because of this new Medicare prescription drug law, 40 million Medicare beneficiaries will have drug coverage if they want it. They will have the choice. The bill provides generous subsidies to low-income Medicare beneficiaries, who today cannot afford to purchase drugs; today they don't have the help. They are talking like this bill does nothing--the bill which spends $400 billion-plus to improve Medicare for our seniors and the disabled.

Prior to enactment of the Medicare Modernization Act, these beneficiaries had to make tough choices between buying prescription drugs and putting gas in their cars or buying prescription drugs and putting food on the table or buying prescription drugs and paying their rent. Once a Medicare drug plan goes into effect on January 1, 2006, those Medicare beneficiaries will no longer have to worry about this matter that they have to worry about now. To scare our seniors into thinking these benefits are not going to be great for them--it is incomprehensible to me that anybody has the gall to make those kinds of claims.

Here is another point that needs to be raised regarding this matter: If there were any proposals that deserve to be recognized as offering a drug benefit in name only, it is the two Democratic plans of 2 years ago, which were supported by 50 and 45 Democrats respectively, including the Democrat leader and Senator Kerry, their candidate for President. My colleague, Senator Grassley, described these plans a few days ago. Let me take a few minutes to recap.

The first Democratic plan had a drug benefit that lasted just 6 years; that was the end of it. Talk about offering a drug benefit in name only. The second plan didn't even offer a benefit to the vast majority of beneficiaries. Seventy percent of beneficiaries would not have received any basic coverage, and they are coming on the floor and saying this $400 billion-plus plan does nothing? Give me a break. A plan that shuts out the vast majority, 70 percent, of beneficiaries-- how can you call that a drug benefit? Those were their plans.

Guess what those 70 percent got. You are not going to believe this. They got a 5-percent discount on their drugs in their plan. Once they spent $3,300 out of pocket, they could qualify for catastrophic coverage. That was their plan. And they are criticizing this plan, which was bipartisan, overwhelmingly passed?

Some have taken issue with the Medicare reform bill, saying that the ``benefit'' stops after an initial coverage amount. I remind my colleagues on the other side of the aisle that their basic benefit would have never even started for 70 percent of beneficiaries--for 70 percent. They would have been left out by their plan, and they are criticizing this plan? Talk about a donut hole. These beneficiaries didn't even get a donut.

The Congressional Budget Office estimated that 66 percent of beneficiaries would not even meet the $3,300 threshold. Again, for these folks, the only help they would get was a 5-percent discount. And they are criticizing our drug discount card where they are getting an average of 20 percent and in some cases even more?

I was also extremely disappointed by the arguments by the Senator from Illinois and the Senator from California against what some have termed the ``non-interference'' provision. As I outlined, this provision has been included in the most prominent Democrat initiatives, starting with the Clinton Health Security Act a decade ago. Despite that fact--and it was in their bills--here we are listening to arguments against this bill. Apparently, what was good in a Democratic administration is very bad in a Republican one. They ought to be shouting for joy that we are putting some of their provisions into this bill. The problem is, these were not their provisions; they were all of our provisions, those of us who worked in a bipartisan way.

What was good in a Democrat Senate is bad in a Republican Senate-- during an election year especially. It is almost as if my colleagues were not listening to what I said the other day. The argument that there is no authority for the Federal Government to bargain with pharmaceutical companies is getting to be a tired, wornout, old argument. Again, I will repeat myself from yesterday. First, the Democrat-sponsored bill from 2000, introduced by the Senator from South Dakota and cosponsored by 33 Democrats, had a specific provision which stated the following:

In administering the prescription drug benefit program

established under this part, the secretary may not [this is

the Democrat language in their bill, which had almost every

Democrat on it] (1) require a particular formulary or

institute a price structure for benefits; (2) interfere in

any way with negotiations between private entities and drug

manufacturers or wholesalers; or (3) otherwise interfere with

the competitive nature of providing a prescription drug

benefit through private entities.

Again, this provision is from the bill introduced by Senator Daschle, which was cosponsored by 33 Democrats, including not only Senator Kerry, their candidate for President, but also Senators Durbin and Boxer, who spoke against it on the floor yesterday. It takes time to do it correctly. CMS, the agency in charge of the Medicare program, needs time to implement the MMA regulations, accept bids from plans that wish to participate in the Medicare advantage programs, and, most important, it takes time to educate Medicare beneficiaries about the options that will be offered to them.

Let me remind all of my colleagues that even the Democrat proposals that have been considered in the past did not have the Medicare prescription drug programs go into effect immediately. So that is just a ludicrous charge.

In addition, I remind my colleagues that both the Democratic plans in consideration in December of 2002 didn't go into effect until 2005. I suspect that the authors of these plans recognized the same thing that we did, that it takes time to get a new, comprehensive drug program up and running. That is why the drug plan will not be available until January 1, 2006.

So, there is no subterfuge behind the 2006 date in the MMA. Moreover, at least the MMA offers immediate assistance through the drug card program. Their plans offered nothing until 2005, and then very little after that. And cost us a bundle more. They were not even well thought out, in my opinion.

I would also like to respond to the comments of my colleague from California comments about the Veterans

Administration system and the deficiencies which I described yesterday morning. If my colleague from California is surprised at the Republicans not using the VA model then my only guess is she is even more surprised that her own party did not. No, they wanted to have private plans negotiate with drug companies, the same approach taken in the MMA, the Medicare reform bill.

The VA system was not a model for any Medicare prescription drug plans considered on the Senate floor, advanced by either Democrats or Republicans.

Finally, let me address the idea of importing cheap drugs from Canada. First, nobody has a greater desire than I do to make prescription drugs more affordable, particularly for our seniors and the disabled who depend so heavily upon pharmaceuticals for their quality of life. I co-authored the 1984 bill, the Hatch-Waxman Act, which in essence created the modern generic drug industry, brought generic drugs to the marketplace to become the force for competition and affordability that they are today. It has been called the most important consumer legislation in the last century by some. It has saved at least $10 billion every year since 1984. That law was written by a conservative Republican in the Senate, myself, and a liberal Democrat in the House, Congressman Henry Waxman, because we were willing to put differences aside, get together and do what was right.

With regard to drug importation, my colleagues seem to forget that the MMA does include a provision to permit the importation of prescription drugs from Canada, once a program is in place that is approved and certified for, guess what, safety and cost by the Secretary of the Department of Health and Human Services.

That sounds logical to me. We want those drugs to be safe and we want to know that we can afford to implement this program.

The bill also calls for the Secretary to establish a 13-member task force that will study proposals to make reimportation safe and cost effective. HHS Secretary Tommy Thompson has indicated that the panel's recommendations will be completed by the end of this year.

Up to 80 percent of imported drugs coming through our ports today, are knockoffs, out-of-date drugs or placebos.

Can you imagine what could happened if drugs tainted by terrorists come into this country? Drugs filled with gradual poison, or even instant poison? Our nation must be concerned about these things because they impact the safety of our citizens.

We should not overlook the fact that the FDA has documented many cases of what appeared to be FDA approved imported drugs that were in fact contaminated or counterfeit, contained the wrong product or incorrect dose, or were accompanied by incorrect directions or had outlived their expiration date. These drugs would be at minimum ineffective and could actually be harmful or even fatal.

The FDA is also concerned with the safety of allowing companies which are not licensed by States to practice pharmacy to sell prescription drugs without any limitation on the amount or frequency of drug imports permitted for individuals. In addition, reimportation legislation as it is written would allow risky drugs that are currently available in the U.S. only under strict safety rules or controls, to be reimported in any amount or frequency to anyone, even those who are at high risk to be seriously injured by the medication.

The FDA underscored these concerns in the Judiciary Committee's hearings on reimportation last July. The Agency stressed that opening our tightly regulated closed system of prescription drug distribution will open the door counterfeit and otherwise adulterated and misbranded drugs being widely distributed to unwitting American public. Mr. William K. Hubbard, Associate Commissioner for Policy and Planning for the FDA testified at this hearing and I would like to take this opportunity to read some of his testimony to my colleagues.

FDA remains concerns about the public health implications of unapproved prescription drugs from entities seeking to profit by getting around U.S. legal standards for drug safety and effectiveness. Many drugs obtained from foreign sources that either purport to be or appear to be the same as U.S. approved prescription drugs are in fact of unknown quality. Consumers are exposed to a number of potential risks when they purchase drugs from foreign sources or from sources that are not operated by pharmacies properly licensed under State pharmacy laws.

Patients are also at greater risk because there is no certainty what they are getting when they purchase some of these drugs. Although some purchasers of drugs from foreign sources may receive genuine product, others may unknowingly buy counterfeit copies that contain only inert ingredients, legitimate drugs that have been outdated and have been diverted to unscrupulous or dangerous sellers, subpotent or superpotent products that were improperly manufactured. Furthermore in the case of foreign based sources, if the consumer has an adverse drug reaction or any other problem, the consumer may have little or no recourse either because the operator of the pharmacy often is not known, or the physical location of the seller is unknown, or beyond the consumer's reach.

FDA has only limited ability to take action against these foreign operators.

These safety concerns are real. I strongly believe if we truly care about seniors and other patients who depend upon prescription drugs, we should not expose them to what currently amounts to pharmaceutical Russian roulette.

The FDA is working with some of my colleague on legislation that would give the FDA greater resources, limit the scope of imports, and provide greater power to the FDA to police imports. In recent comments, former Commissioner Mark McClellan, now head of CMS, has said these measures would give the agency the ability to assure the safety of prescription drugs imported from Canada.

In addition to these safety concerns, however, I am also concerned that reimported drugs pose a threat to the innovation that Americans and the rest of the world have come to expect from our pharmaceutical industry, the greatest industry in the world. Canada and other countries with lower drug prices generally import superior American products, but impose price controls to keep those costs down.

It may cost as much as $1 billion to produce a new drug, test it, win FDA approval, educate doctors, and make the drug available to patients. No pharmaceutical company can or would go through this immensely expensive process without a chance to recover some of those costs, which will not be possible if we impose, in America, however incorrectly, Canada's style of price controls.

But, wait, it not only costs $1 billion to create one of these drugs--6,000 experimentations that failed to finally arrive at a drug that is efficacious. And, in most cases, about three-quarters of the patent life is also consumed by that process. So the companies, to recoup that $1 billion and make a profit, they have maybe 5 years, in some cases, maybe less, to recoup their profits. That is the reason why drug prices are so high. These safety concerns are real and I strongly believe if we truly care about seniors and other patients who depend upon prescription drugs, we should not expose them to what currently amounts to pharmaceutical Russian roulette.

I do not believe that sacrificing the safety and future supply of our drugs by reimportation is the right answer to the high cost of prescription drugs.

I hope I have cleared up some of the misunderstandings that Medicare beneficiaries have about the MNA law. Again, we gain nothing by spreading untruths about the Medicare bill. I have been discouraged with some of the comments made by some of our colleagues who know better, or should know better. They need to review the bills that they cosponsored and wanted to pass on the Senate floor. In my opinion, those bills did not do nearly as much for seniors as the MMA. Frankly, those bills were more costly, and provided seniors with less benefits. The MMA law passed with bipartisan support in both Houses. The only thing that results from charges which have been made on this floor, is confusion of Medicare beneficiaries, the very people all of us are trying to help. I think that is regrettable.

It is astounding to me that some of our colleagues are scaring our seniors to death when we are spending $400-plus billion to provide them with better Medicare coverage. The MMA helps the truly poor so they don't have to worry about donut holes. In my opinion, the MMA is something all of us should support.

What gets me upset are some of the arguments being made on the floor that are not only erroneous but, I think, are misleading. I believe many are just being made for political purposes.

I think one Senator called my argument flimflam--yesterday. I defy anybody to refute the principles I have discussed here today and the remarks I have made here today. You can differ with them, you can disagree with them, but I don't think you can disagree with the facts.

It is time for all of us to start helping seniors by helping them to understand this bill so they can benefit from it. Deep down, I think one reason some oppose this bill so much is because it represents liberty and freedom in the case of the health savings accounts. HSAs was one of the most hard-fought provisions in the entire bill by the other side. I believe the opponents of the bill do not think the American people can save for their own health care. They don't trust the American people to save for their own health care. They believe the Government is the last answer to everything. They believe without the Federal Government telling them how to live, what to do, and what they can consume that they can't help themselves.

Can you imagine a young person who took advantage of that health savings account? That young person would have to assume the burden of paying for all of these Federal programs in health care. If that young person saved $1,000 a year tax free for his or her entire working life up to 56 or perhaps 70, because we are all living longer these days, that young person would have hundreds of thousands of dollars, if not a million, to take care of his or her own health care.

That is the way it ought to be. Isn't that the American way? Shouldn't we try to take care of ourselves first and then help others?

I believe the Federal Government should help those who cannot help themselves. Where I draw the line is I don't believe that the Federal Government should help those who could help themselves but won't. I think there is a difference between the two. But there is nobody more compassionate than I in helping those who truly need the help.

I wanted to set the record straight. I am disappointed in some of the remarks which have been made on the floor against the MMA. Some of those remarks have been overly excessive and I hope that type of rhetoric will be discontinued.

I yield the floor.

Madam President, if the Senator will yield, I thank the Senator for his comments. I thank him for his energetic good work on this bill. He and Senator Cornyn in particular helped to improve this bill, and we should all be proud of it.

I thank the Senator.

Mr. President, I express my strong support for the conference report to accompany the American Jobs Creation Act. In order to protect our domestic manufacturers, strengthen our economy, better help U.S.-based multinational firms compete globally, and honor our trade obligations, the Senate must pass this critically important and overdue legislation before recessing for the elections.

I wish to start by congratulating the chairman of the conference committee on this bill, Congressman Bill Thomas, and the cochairman, Senator Chuck Grassley, for their leadership and exceptional cooperation in finishing the conference on this bill in time to bring it to the House and Senate floor this week. Many thought completion of this task would be difficult or impossible, given the large differences in the Senate and House versions and the time constraints the conference committee faced.

The innovative conference process developed by the chairman and cochairman made success possible. Conferencing a large and diverse pair of tax bills in the usual fashion could have taken many weeks and led to a likely failure to finish this bill before sine die adjournment of the 108th Congress. Again, I recognize the extraordinary achievement of this conference committee and thank its leaders and my fellow conferees for their hard and dedicated work.

This conference report represents what we hope will be the culmination of a very lengthy and fascinating issue that had its genesis decades ago but has festered into a growing problem over the past several years.

I will leave to others to go into detail about the long history of the export subsidies in our tax law that gave rise to this conference report, but the unusual nature of this bill and its difficulty in passing the Congress are reflections of the complexity of this issue.

The crux of the difficulty of the bill is that the rulings of the World Trade Organization on the trade-legality of our export tax subsidies put the Congress in a very tough position. In essence, we found ourselves needing to repeal these export subsidies, known as the Foreign Sales Corporation, FSC, provision and its replacement regime known as the Extraterritorial Income, ET, exclusion.

By repealing these provisions, which we must do in order to honor our trade obligations, we effectively raise taxes by almost $6 billion per year on thousands of U.S. businesses that manufacture goods for export.

Leaving it at this is simply unacceptable. Why should we have to convert a provision designed to help U.S. manufacturers compete in an ever-increasingly difficult global marketplace to a

situation where they suffer a competitive disadvantage?

Yet, this is exactly the problem the Congress faces now that it is forced to repeal the export tax benefits.

When confronted with a similar problem in 2000 after the WTO ruled the FSC provision to be in violation of international trade rules, Congress passed the ETI in its place. With the ETI, we were able largely to replicate the benefits of the FSC regime, so that exporting taxpayers paid few if any extra taxes with the repeal of FSC. Unfortunately, the WTO subsequently ruled that the ETI provision also was an illegal trade subsidy that also must be repealed.

So, the conundrum facing the Congress with this situation was to find a way to enact other tax cut benefits for exporting manufacturers, to offset the increase from repealing ETI, without violating the WTO rules.

Unfortunately, this has proven impossible, so both the Senate and House bills attempted to find rough justice for business taxpayers by finding other ways to deliver tax benefits besides basing them on exports. Such attempts gave rise to the political and practical difficulties of this bill, including the fact that it took many months of hard effort to reach the point we are today.

For example, my own bill to address the FSC/ETI problem was S. 1475, the Promote Growth and Jobs in the USA Act, which I introduced in July 2003. This bill would have delivered rough justice tax relief in two ways.

First, it would simplify and rationalize the international tax rules that currently harm the ability of U.S. firms to compete globally, and second, it would provide incentives for companies to increase their ability to produce goods by acquiring new equipment and engaging in more research and development.

Other FSC/ETI solution bills were also introduced. On the same day I introduced S. 1475, Chairman Thomas introduced H.R. 2896, the American Jobs Creation Act. The two bills were similar in many ways, and both included international tax reforms. The Thomas bill, however, included a number of other provisions designed to help U.S. businesses create jobs and better compete.

Another bill, introduced last year by Congressmen Crane, Rangel, and Manzullo, offered a different direction still. This bill provided a deduction equal to 10 percent of a company's production activities.

In the Senate, Senators Grassley and Baucus introduced a bill that included some of the best elements of all the other bills. Even though I preferred the solution set forth in my bill, I cosponsored the Grassley-Baucus bill because it represents a solid and reasonable solution to the problem. This bill, as modified, became the legislation reported by the Finance Committee and passed by the Senate.

After a great deal of travail and adjustments, the House also passed a FSC/ETI bill, and it was quite similar in many respects to the first Thomas American Jobs Creation Act. These are the bills the conference committee had to combine into one.

The result, as we all know, is a bill that is far from perfect. Its enactment will result in a net tax increase for some exporting companies that now use the ETI provision, and in a net tax cut for many other U.S. manufacturing firms that may have not taken advantage of the ETI exclusion.

And while the bill includes many important other provisions, it leaves out some very important provisions that the Senate conferees agreed with me should be in there. Unfortunately, the House conferees disagreed and they were omitted from the final product.

For example, I am personally very disappointed that the House conferees voted against including the CLEAR ACT in this conference report. This bill, which has passed the Senate at least three times and also has passed the House, would transform our auto industry by granting strong tax incentives for consumers who buy alternative fueled and advance technology vehicles, such as hybrid electric cars.

Moreover, it would move us to a more responsible age of cleaner air and less fuel dependency on the Middle East by simultaneously breaking down the three barriers that keep our nation from adopting the already- existing technology to help us meet these goals--the higher cost of such vehicles, the higher cost of alternative fuel, and the lack of a refueling infrastructure.

From a broader point of view, most of my fellow Senate conferees and I would have liked to see the entire set of energy tax provisions from the Senate-passed bill included in the conference report. It was a mistake to omit these important provisions.

I also very much regret that the House conferees refused to adopt the amendment I offered, accepted by the Senate conferees, which would have bolstered our research tax credit. While it is true that the research credit was extended for a short time in the most recently passed tax bill dealing with individual tax cuts, that legislation left out an important element that was contained in the Senate FSC/ETI bill designed to improve the incentives this provision gives for companies to engage in R&D activities.

Nevertheless, the conference report is worthy of our support. As I mentioned, as a nation we must honor the obligations under the World Trade Organization. Of more immediate importance is the fact that the Europeans are levying an increasing level of trade sanctions against certain of our products exported to the E. U. This level is currently at 12 percent and is growing by one percentage point per month and is definitely having a very serious negative effect on certain U.S. industries.

Moreover, the trade sanctions are authorized to continue to increase until next March, when they will have reached 17 percent. After this, the E. U. may authorize even more serious sanctions against us that would surely harm our economic growth.

As all of my colleagues well know, if we do not succeed in passing this conference report before sine die adjournment of the 108th Congress, we must start the process all over again next year.

Will this result in a better bill?

Perhaps, but such an outcome is far from certain. What is more likely is that the resolution to this issue would be delayed for many more months, giving the trade sanctions more time to damage our economy and harm U.S. businesses.

Now, I take a few minutes to discuss some of the specific provisions that did make it into the conference report and why I believe my colleagues should enthusiastically support them.

First, let me express my satisfaction that this conference report has a good balance to it. In addition to the vital repeal of the ETI provision and the quite reasonable transition relief it provides for current ETI users, the bill offers significant provisions for both small businesses and large multinational firms. Mixed in is a generous portion of important tax relief for business interests of all kinds.

Central among these relief provisions is the manufacturing deduction. This provision is designed to lower the tax burden of any business entity that engages in production activities in the United States. I am happy to see that the Senate provision allowing this deduction to be taken by unincorporated businesses was retained in conference.

Also included in the conference report is a significant section of relief designed specifically for small businesses. Foremost in this category are the five sections that would simplify and reform the taxation of S corporations. These are changes I have long sought. Along with my colleagues, Senators Breaux, Smith, and Lincoln, we have attempted to get these and other S corporation improvements passed for several years now. I am gratified to see them included in the conference report.

Other provisions that are very important to the balance of this bill are those designed to simplify and improve the rules by which this Nation taxes international business transactions. Quite simply, the current state of our international tax rules is appalling. This part of our Tax Code generally dates back to the early 1960s, and was designed for a different world from the one in which we live now.

U.S. businesses, whether large, medium, or smaller, that decide to expand their markets beyond the borders of the United States confront a set of tax rules that are not only mind-numbingly complex, but far worse result in double taxation and often leave them on the down side of a tilted playing board when compared with competitors based in most other industrialized nations.

Our rules governing the foreign tax credit, for example, which are designed to eliminate the double taxation of income, often are ineffective, some blatantly so. A provision added to the Internal Revenue Code in 1986 reduces the foreign tax credit by 10 percent to the extent it reduces the alternative minimum tax. There is little or no justification for this double taxation that I can see, and this conference report repeals this unfair provision.

The bill includes about two dozen provisions that will help improve the tax law for our companies that have expanded their markets overseas. I have long been interested in getting this type of reform passed by the Congress, having introduced bills to do this since the mid-1990s. It is gratifying to finally see this long overdue relief come to pass.

Some of my colleagues have incorrectly concluded that improving our rules on international taxation will give an incentive to U.S. companies to move their jobs overseas. This is unfortunate. Cross- border investing is not only a necessity of our modern world, it is usually beneficial to both nations. Most U.S. companies that invest in expansion into markets in other nations do so to compete effectively with other suppliers in those markets and here at home.

A fact of life of our modern economy is that our U.S.-based business enterprises face competition from all parts of the globe. It is unrealistic to think that an American business can simply focus on markets here at home and thrive. Instead, most of today's businesses must be mindful of both markets and material and labor supplies around the world if they are to stay in business very long.

While no one likes to see U.S. jobs move overseas, we should be more concerned about creating and maintaining in the United States the kind of environment that attracts businesses. Part of that environment is ensuring that our tax system does not drive businesses offshore to other nations that tax them in a more favorable fashion. This bill moves our tax system a big step in that direction, and I am pleased to see these changes finally reach the point where they are about to become law.

I now say a few words about the issues regarding tobacco associated with this conference report. I have not forgotten that at the center of the tobacco buyout is the tobacco farmer. I understand that the tobacco price support and tobacco quota programs have helped to secure a reasonable living for many family farmers.

I have also come to the understanding that breaking the dependency of U.S. citizens and especially children on nicotine requires us to address the dependency of tobacco growers on the tobacco industry and on the government programs. It will not be an easy transition for many tobacco growers, and we need to help these families to survive it.

Contrary to the belief of some, the United States Department of Agriculture, USDA, does not provide a direct subsidy to tobacco growers. However, the USDA does maintain artificially high prices for tobacco leaf by managing the loan, or-price support, program for tobacco growers which serves to maintain artificially high prices for tobacco and cigarettes in this country.

The USDA also manages the tobacco quota system to keep down the amount of tobacco grown each year. This, again, keeps the price of tobacco and cigarettes high. All direct and administrative costs for these two programs are reimbursed to the USDA by tobacco farmers and their trade association. There is no net cost to the government as a result of the tobacco program. In fact, smokers carry most of the burden of the tobacco program through higher costs for the tobacco products they purchase.

Shifting tobacco farming away from tight government management toward the free market has risks for our farmers. This proposal does a good job of getting the government out the farming business while making temporary assistance available to farmers as they adjust to the free market. And, it is at no cost to our government.

As far as the provision requiring the Food and Drug Administration to regulate tobacco, let me say that I fully support measures to end tobacco use in the United States.

I can think of few public health dangers worse than tobacco, and this is especially true for young people.

I have heard from many concerned parents and health advocates in Utah who point out the need to stop the devastating health consequences of tobacco use.

In many aspects, the DeWine/Kennedy language was written to achieve that goal, and in that spirit I supported it in conference. In fact, much of the bill is taken from a measure that I authored several years ago with Senator Dianne Feinstein.

That being said, I am concerned about some aspects of the way the bill was written, and especially the impact of this language on the resources of the Food and Drug Administration.

First, the Committee of jurisdiction, the HELP Committee, should have the opportunity to consider this legislation before it is brought to the full Senate for a vote the next time. Having been the chairman of that committee for several years, I know full well the complexities of the Federal Food, Drug and Cosmetic Act. Three hours of debate on the Senate floor was not enough time to consider legislation that made such dramatic changes to current law.

I also want to make sure that we in the Congress are clear about the impact that such legislation would have on the Food and Drug Administration and whether or not the FDA has adequate resources to regulate tobacco, and, in addition, keep up with its other, extremely important responsibilities, such as the approval of drugs, medical devices, and protecting our food supply.

While I understand that user fees were included in the legislation, I am not convinced that those user fees would have provided the FDA with sufficient resources to regulate tobacco. I am someone who has fought to provide FDA with adequate resources and have led the fight on unifying the FDA campus. I do not want anything to jeopardize the progress we have made in those areas so before we consider similar legislation again. I believe it is imperative to work closely with the FDA to find out exactly how much money is necessary for the agency to regulate tobacco, and whether or not the agency is capable of overseeing the regulation of tobacco.

Again, let me make one thing perfectly clear--I believe that tobacco should be regulated, however, it needs to be a well-thought-out process. Therefore, allowing the proper committees of jurisdiction to review and consider the legislation and consultation with the FDA must take place before similar legislation is voted upon by the full Senate and House of Representatives before we consider another measure.

Finally, I want to touch on some of the revenue offsets included in the conference report. I want to make it clear that I support the principle of keeping this bill revenue neutral, and I congratulate the conferees for doing so. This was a particularly sticky problem with the House Members, so I especially recognize their hard work in bowing to the Senate's demands that this bill be fully offset.

I am very pleased to see that several revenue offset provisions that were in the Senate bill are not part of the conference report. One of these is the codification of the economic substance doctrine. I believe enactment of this provision would have led to a great deal of unnecessary conflicts between taxpayers and the Internal Revenue Service, and would have unfairly penalized companies for engaging in legitimate tax planning techniques.

One provision that did make it into the conference report raises revenue in connection with the donation of used vehicles. In essence, the provision requires that taxpayers wait to take a deduction for the donation of a used vehicle until the donee charity has sold the item in an auction. Then, the deduction is limited to the actual purchase price.

While this may appear to be a reasonable requirement, particularly in light of some of the alleged abuse surrounding the charitable donation of used vehicles, I am concerned that these changes will result in far fewer used vehicles being donated to charities. Some charities, such as the National Kidney Foundation of Utah, rely heavily on such donation programs for a great deal of their funding. A chilling

effect on the donation of these used cars could leave many worthy charities short of vital funds needed to perform their invaluable services to needy citizens in Utah and elsewhere.

I will keep a watchful eye over the implementation of this change in the law, to make certain it does not harm the charities that have relied on donated vehicles for funding. While I agree that we should preclude any real abuse of the law, I do not think we should create a burdensome new requirement that would discourage charitable giving. It may well be that we need to revisit this area of the law in the future.

In conclusion, the conference report before us represents a good bill that deserves our support.

As I have tried to indicate in these remarks, the bill is far from perfect. But given the very difficult political and other circumstances surrounding the issues this bill addresses, it is remarkable we were able to bring to the Senate floor a product that is as good as it is. I urge my colleagues to support the conference agreement.

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