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[Senate Report 108-224]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 415
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-224

======================================================================

 
          AMENDING THE ILLEGAL IMMIGRATION REFORM ACT OF 1996

                                _______
                                

                February 9, 2004.--Ordered to be printed

                                _______
                                

Mr. Hatch, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1545]

    The Committee on the Judiciary, to which was referred the 
bill (S. 1545), to amend the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996 to permit states to 
determine residency requirements for higher education purposes 
and to authorize the cancellation of removal and adjustment of 
status of certain alien students who are long-term United 
States residents, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and need for S. 1545.....................................2
 II. Legislative History..............................................3
III. Votes in the committee...........................................3
 IV. Section-by-section analysis......................................4
  V. Cost Estimate....................................................7
 VI. Regulatory impact statement.....................................10
VII. Changes in existing law.........................................11
Additional Views of Senator Sessions.............................    12
Additional Views of Senator Cornyn...............................    15
Additional Comments of Senator Chambliss.........................    14
Appendix A: Excerpts from Committee Executive Business Meeting 
  Transcript, October 16, 2003...................................    17
Appendix B: Excerpts from Committee Executive Business Meeting 
  Transcript, October 23, 2003...................................    20

                    I. Purpose and Need for S. 1545

    The United States should vigilantly protect its borders and 
enforce its immigration laws. The consequence of illegal entry 
or overstaying a visa should be deportation. Illegal immigrants 
who have eluded authorities should not be rewarded with blanket 
amnesty. At the same time, America's immigration policy must 
also be sufficiently flexible so that our firm stance against 
illegal immigration does not undermine our other national 
interests. The Development, Relief, and Education for Alien 
Minors (DREAM) Act represents a common-sense approach to our 
immigration policy.
    Thousands of children of undocumented immigrants have 
graduated from our high schools. Most came to America as 
children, playing no part in the decision to enter the United 
States, and may not even know they are here illegally. A great 
many grow up to become honest and hardworking young adults who 
are loyal to our country and who strive for academic and 
professional excellence. It is a mistake to lump these children 
together with adults who knowingly crossed our borders 
illegally. Instead, the better policy is to view them as the 
valuable resource that they are for our nation's future.
    The DREAM Act does not guarantee any illegal immigrant the 
right to remain in the United States, and does not grant 
automatic or blanket amnesty to its potential beneficiaries. 
However, it does give some who have been acculturated in the 
United States the privilege of earning the right to remain. The 
bill provides a six-year conditional residence period for those 
who entered the United States prior to attaining sixteen years 
of age, have been here continuously for at least five years, 
stayed away from crime, and either earned at least a high 
school degree or gained acceptance to college.
    During that six-year period, these individuals can earn the 
right to stay permanently by serving in our military, obtaining 
an associate's degree or trade school diploma, or completing 
two years in a bachelor's or graduate program. Because of the 
residency and age requirements described in Section V of this 
report, there is no incentive to enter the United States 
illegally in the future, as anyone who entered the United 
States after the age of sixteen or who has been in the United 
States less than five years at the time of enactment will not 
be able to benefit from this legislation. In other words, the 
act grants absolutely no benefit to anyone who plans to 
illegally enter the United States in the future. Moreover, 
these rigorous standards result not in citizenship, but only in 
permanent residency status that may one day result in 
eligibility to apply for citizenship.
    Our society benefits greatly from educating our immigrant 
population. For example, in its ``policy recommendations for 
the 108th Congress,'' the Cato Institute states that 
``[i]mmigration gives America an economic edge in the global 
economy.'' The same report also found that ``the typical 
immigrant and his or her offspring will pay a net $80,000 more 
in taxes during their lifetimes than they collect in government 
services.'' \1\ Further, in testimony before the Senate 
Immigration subcommittee, a senior economics fellow with the 
Cato Institute estimated that immigrant households paid 
approximately $133 billion in direct taxes to federal, state 
and local governments in 1998. He further estimated that the 
total net benefit (taxes paid over benefits received) to the 
Social Security system from continuing current levels of 
immigration is nearly $500 billion from 1998-2022 and nearly 
$2.0 trillion through 2072.\2\
---------------------------------------------------------------------------
    \1\ Cato Institute, The Cato Handbook for Congress: Policy 
Recommendations for the 108th Congress.
    \2\ Immigration and the U.S. Economy, 107th Cong. Before the Senate 
Comm. on the Judiciary, Subcomm. on Immigration (2001) (statement of 
Stephen Moore, Senior Fellow in Economics, Cato Institute).
---------------------------------------------------------------------------
    Moreover, the RAND Corporation published a study showing 
that higher levels of education are associated with public 
savings in the form of lower expenditures for public income 
transfer and health programs, and higher tax contributions. The 
same study also found that larger savings in public social 
programs would be realized if the educational levels of the 
total population, which includes both native born and immigrant 
segments, were increased.\3\ As such, the DREAM Act will not 
only directly improve the quality of life of its beneficiaries, 
but will also benefit the overall United States economy.
---------------------------------------------------------------------------
    \3\ George Vernez, Richard A. Krop & C. Peter Rydell, Closing the 
Education Gap: Benefits and Costs 30, 78 (RAND Corporation 1999).
---------------------------------------------------------------------------
    America's national interests must shape our immigration 
policy. We must protect our borders and remove those who do not 
have permission to remain within them. At the same time, with 
the DREAM Act, we can extend a welcoming hand, guided by 
specific and rigorous standards, to those who have already been 
integrated as part of our society and whose continued presence 
will benefit our country.
    Finally, it must be emphasized that the DREAM Act does not 
require states to give undocumented alien children in-state 
tuition. Quite to the contrary and consistent with the 
principle of federalism, the DREAM Act returns to the states 
their prerogative to determine how to allocate their own 
resources.

                        II. Legislative History

    In the 107th Congress, on August 1, 2001, Senator Hatch 
introduced the DREAM Act, S. 1291. The Leahy amendment of S. 
1291 (in the nature of a substitute) was reported out of the 
Committee on the Judiciary on June 20, 2002. S. 1291 was placed 
on Senate legislative calendar but never received a floor vote.

                       III. Vote by the Committee

    The Senate Committee on the Judiciary, with a quorum 
present on October 23, 2003, considered S. 1545. The Committee 
approved an amended version of the bill in the nature of a 
substitute. The substitute was approved by a 16-3 vote. All 
members of the Committee except Senators Chambliss, Graham, and 
Sessions voted in the affirmative. The Committee also accepted 
an amendment offered by Senators Grassley and Feinstein (as 
orally modified by members of the Committee) by a margin of 18-
1, with Senator Sessions voting in the negative.

                    IV. Section-by-Section Analysis

    The Hatch-Durbin Substitute to S. 1545, as amended by the 
Grassley-Feinstein Amendment, now provides as follows:
    Section 1 contains the short title of the DREAM Act.
    Section 2 explains that ``institution of higher education'' 
is defined by the Higher Education Act of 1965. 20 U.S.C. 
Sec. 1001.
    Section 3 repeals IIRIRA Sec. 505, 8 U.S.C. Sec. 1623. Each 
state is free to determine whom it deems a resident for the 
purpose of determining in-state tuition. The DREAM Act does not 
compel states to offer in-state tuition to undocumented aliens, 
nor does it prevent states from offering in-state tuition to 
anyone else.
    Section 4 provides that applicants may qualify for an 
initial conditional period of six years during which they can 
earn permanent resident status if they entered the United 
States at least five years prior to enactment, were under 16 
years of age at the time of entry and are not inadmissible or 
deportable for specifically enumerated grounds. There is a 
limited waiver only applicable for grounds of inadmissibility 
under Immigration and Nationality Act (INA) Sec. 212(a)(6) or 
deportability under INA Sec. 237(a)(1), (3), and (6). The 
intent behind removing certain grounds of inadmissibility, and 
providing a waiver for others, is to ensure that applicants are 
not denied relief under this act based on circumstances that 
result solely from their undocumented status. The applicant 
must also have graduated from high school, obtained a GED, or 
be admitted to an institution of higher learning as defined in 
20 U.S.C. Sec. 1001. Per the Grassley-Feinstein Amendment, the 
secondary and higher education institutions must be located 
within the United States. It is the opinion of this Committee 
that the term ``United States'' used in this Act incorporates 
definitions provided in INA Sec. 1101(a)(29) (American Samoa 
and Swain Islands) and Sec. 1101(a)(38) (the continental United 
States, Alaska, Hawaii, Puerto Rico, Guam and Virgin Islands).
    Persons previously ordered deported are not eligible for 
adjustment of status under this Act. Exceptions are made for 
those who remain within the United States with the U.S. 
government's consent or who received the deportation order 
while under the age of sixteen. Examples of such U.S. 
government consent would be temporary protected status or a 
stay of deportation. Moreover, the Act presumes that if an 
alien minor receives a removal order prior to the age of 
sixteen, the minor is not accountable for failure to comply 
with the order.
    Section 4 also contains a physical presence requirement 
that the applicant must not have been out of the United States 
for more than ninety days in one visit, or one hundred and 
eighty days in the aggregate during the five year period. There 
is a possible waiver of this requirement if the applicant shows 
exceptional circumstances no less compelling than serious 
illness to self, or death or serious illness to an immediate 
family member. The intent of this language is to provide 
examples to convey the degree of compelling circumstances that 
one who seeks the waiver must demonstrate. Immigration 
officials should not interpret the language as a literal 
prescription of what an alien must demonstrate in order to 
qualify for the waiver.
    Section 5 provides the ways through which conditional 
residents, after proving themselves worthy after six years, may 
become permanent residents. The ways are to earn a degree from 
an institution of higher education or to complete two years in 
a bachelor's or higher program,\4\ or to serve honorably in the 
military for at least two years. The option of performing 
community service was eliminated by the Grassley-Feinstein 
Amendment. The applicant may obtain a waiver for these 
requirements but only at the discretion of the Secretary of 
Homeland Security or the Attorney General and only if applicant 
demonstrates ``exceptional and extreme unusual hardship.'' It 
is the opinion of this Committee that such hardship must be 
circumstances beyond the alien's control and which prevented 
the alien from accomplishing the requirements. A representative 
example of exceptional and extreme hardship would be a 
debilitating illness or permanent injury to the applicant or an 
immediate family member that results in more than 
inconvenience, but that would prevent the alien from attending 
school. Failure to complete the requirements because of 
procrastination, poor planning, or lack of effort should not be 
considered sufficient hardship.
---------------------------------------------------------------------------
    \4\ As a condition for their support at the committee level, 
Senators Kyl and Cornyn expressed that they would like to continue 
working with the Chairman on other changes to S. 1545. Specifically, 
Senator Kyl wished to impose an age limit for beneficiaries, and 
Senator Cornyn circulated but did not offer an amendment that would 
require graduation regardless of the type of institution that a 
beneficiary attends. The members of the Committee then discussed the 
need for a more specific standard that governs beneficiaries who are 
enrolled in a bachelor's program (under the present language, must 
complete ``at least two years, in good standing, in a program for a 
bachelor's degree or higher degree in the United States.''). The 
Chairman pledged his good faith to work with Senators Kyl and Cornyn to 
reach an agreement on an age limit, and to ``make it very clear that it 
is two years toward a bachelor's degree, which means a full course of 
instruction.'' See Transcript of Committee Business, October 23, 2003, 
at 67.
---------------------------------------------------------------------------
    In addition, the applicant must maintain a clean record, 
meaning no crime or other misdeed that would render the 
applicant deportable or inadmissible. The alien cannot be a 
public charge during the six-year period. The applicant also 
must maintain continuous residence, as defined by this act, in 
the United States. If the applicant successfully completes the 
enumerated requirements, the six-year conditional period also 
satisfies the residency requirements for naturalization, 
subject to the limitations set forth in section 316 of the 
Immigration and Nationality Act.
    Section 6 provides that if at the time of enactment an 
alien has already satisfied all requirements under sections 4 
and 5 (meaning that the alien has already ``passed the test'' 
and has proven herself worthy of the DREAM Act benefits) then 
that alien can adjust to permanent resident status without 
going to school or serving in the military again. Pursuant to 
the Grassley-Amendment, those who benefit from this 
``grandfather'' clause must undergo the six-year conditional 
period and comply with all other requirements.
    Section 7 provides that the Secretary of Homeland Security 
has jurisdiction to adjudicate affirmative applications for 
benefits, but the jurisdiction transfers to the EOIR under the 
DOJ when the applicant is in removal proceedings. The DREAM Act 
benefits will be available defensively to those in proceedings. 
Children 12 years of age or older who satisfy all other 
requirements of this act but who are still enrolled full time 
in school shall be granted a stay of proceedings by the EOIR.
    To the extent permissible under existing law, a child whose 
removal proceedings are stayed may obtain work authorization. 
Section 7 does not preempt any existing federal or state labor 
laws, including laws governing minimum age to work.
    Section 8 provides for criminal penalties for falsifying 
the application including fine or imprisonment or both.
    Section 9 contains a confidentiality clause. The Government 
is not permitted to use information gathered in processing an 
application under the DREAM Act to initiate removal proceedings 
against anyone. Violation of the confidentiality agreement 
would result in a fine up to $10,000. However, information 
sharing is permissible for the purpose of investigating a crime 
or a national security breach. Information also may be 
disseminated to a coroner for the purpose of identifying the 
deceased.
    Section 10 prohibits the collection of an application fee.
    A new section 11 created by the Grassley-Feinstein 
Amendment requires an institution of higher education to 
register any student it enrolls who is a beneficiary under this 
Act in the Student and Exchange Visitor Information System 
(SEVIS).
    Section 12, also created by the Grassley-Feinstein 
Amendment, limits the types of federal financial assistance 
that beneficiaries may receive. Members of the Committee 
discussed at length on October 23, 2003 and orally modified the 
Grassley-Feinstein Amendment but did not agree on the precise 
modified language. Section 12 as contained in the Grassley-
Feinstein Amendment limits federal financial assistance under 
Title IV of the Higher Education Act of 1965 to student loans 
under Parts B and D, and work study programs under Part C of 
Title IV. The modification was based on an understanding that 
while DREAM Act beneficiaries would not be eligible for grant 
assistance under Title IV, they would not be limited to 
receiving only the loans specified under the Grassley-Feinstein 
Amendment. The Chairman exhorted the Senators to vote on the 
Grassley-Feinstein Amendment with the understanding that they 
will in good faith work out the financial assistance issue.
    The members of the Committee did work out the precise 
language of section 12. The premises that guided the agreement 
were: (1) a DREAM Act beneficiary shall be eligible to receive 
all loans under Title IV, not just loans under parts B and D; 
(2) The beneficiary shall not be eligible for disbursement of 
funds, such as Pell Grants or other grants or scholarships, 
which do not require repayment. This is true whether the funds 
are disbursed directly from the government to the beneficiary, 
the funds are routed through a third party entity, such as a 
school or a clearinghouse, or the funds are deposited with a 
school in the beneficiary's behalf; (3) Section 12 is not 
intended to bar access to services, such as tutoring, child 
care, mentoring, counseling and all related assistance programs 
that do not consist of the government actually giving the 
beneficiary a specific sum of money; (4) Section 12 is not 
intended to bar financial assistance by any non-federal entity, 
whether or not such entity receives funding from the federal 
government; and (5) The scope of Section 12 is limited to Title 
IV only.\5\
---------------------------------------------------------------------------
    \5\ The above-described premises can be illustrated by the 
following hypothetical situations:
    Situation 1: Federal Government gives Student $100 with the 
understanding that Student will repay the amount. This is a loan and is 
permissible under Section 12.
    Situation 2: Federal Government either directly gives Student $100, 
gives $100 to Institution to pass onto Student, or gives Institution 
$100 but specifically for Student's benefit. This is prohibited under 
Section 12.
    Situation 3: Federal Government gives Institution $100 for reasons 
not specific to Student. Institution then gives B $50 dollars on its 
own volition. This is permissible because it does not involve the 
federal government disbursing money specifically to the beneficiary.
    Situation 4: Federal Government spends $100 for programs and 
services, invites a number of participants to attend these programs and 
services, Student is one of the participants. This is permissible 
because no money is given to the beneficiary.
---------------------------------------------------------------------------
    The original Grassley-Feinstein Amendment permitted the 
beneficiaries under this Act to participate in work study 
programs under Title IV, Part C. Although work study was not 
part of the discussion during the executive business meeting on 
October 23, 2003, the members agreed that the Committee never 
intended to eliminate work study eligibility from Section 12.
    Section 13 requires the Government Accounting Office (GAO) 
to produce a study, seven years after enactment, concerning the 
number of aliens who apply for and receive benefits under this 
Act.

                            V. Cost Estimate

    The Congressional Budget Office (CBO) estimates that 
enacting S. 1545 would increase direct spending by an 
insignificant amount from 2004 through 2008. The estimate 
assumes, based upon historical data, that the cost for Medicare 
and food stamps will be $90 million from 2009 through 2014 (the 
CBO estimate does not specifically reference the effects higher 
education and initial bar to public assistance have on future 
dependency on public assistance).
    The CBO further estimates that the cost of expanding SEVIS 
to beneficiaries of S. 1545 could be up to $1 million.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1545--Development, Relief, and Education for Alien Minors Act

    Summary: S. 1545 would authorize the Secretary of Homeland 
Security to adjust the status of certain undocumented alien 
children to conditional legal permanent resident status if they 
meet specific criteria. This change in status would make these 
aliens eligible to participate in federal student loan programs 
and receive certain other federal benefits. In addition, the 
bill would require institutions of higher education that enroll 
aliens who are beneficiaries of this legislation to register 
those students in the Student and Exchange Visitor Information 
System (SEVIS).
    CBO estimates that enacting S. 1545 would increase direct 
spending for the student loan, Food Stamp, and Medicaid 
programs by an insignificant amount in 2004 and by $90 million 
over the 2004-2014 period. In addition, CBO estimates that 
implementing S. 1545 would cost up to $1 million in 2005 to 
expand SEVIS, assuming the availability of appropriated funds.
    S. 1545 contains an intergovernmental and private-sector 
mandate as defined in the Unfunded Mandates Reform Act (UMRA) 
because it would increase the number of students that colleges 
and universities must track in SEVIS. CBO estimates that the 
cost of this mandate would be well below the annual thresholds 
established in UMRA ($60 million for intergovernmental mandates 
and $120 million for private-sector mandates in 2004, adjusted 
annually for inflation).
    In addition, as legal permanent residents, some individuals 
would be eligible for Medicaid assistance as a result of the 
bill. Benefits under the Medicaid program for these individuals 
would cost states approximately $45 million over the 2009-2014 
period. Because states have sufficient flexibility to offset 
such costs if they choose, they would not be considered 
mandates under UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1545 is shown in the following table. 
The costs of this legislation fall within budget functions 500 
(education, training, employment, and social services), 550 
(health), 600 (income security), and 750 (administration of 
justice).

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......      0      1      0      0      0      0      0      0      0      0      0
Estimated Outlays..................      0      1      0      0      0      0      0      0      0      0      0

                                           CHANGES IN DIRECT SPENDING

Student Loans:
    Estimated Budget Authority.....      *      *      *      *      *      *      *      *      *      *      *
    Estimated Outlays..............      *      *      *      *      *      *      *      *      *      *      *
Food Stamps:
    Estimated Budget Authority.....      0      0      0      0      0      5      5      5      5      5      5
    Estimated Outlays..............      0      0      0      0      0      5      5      5      5      5      5
Medicaid:
    Estimated Budget Authority.....      0      0      0      0      0      5     10     10     10     10     15
    Estimated Outlays..............      0      0      0      0      0      5     10     10     10     10     15
Total Changes in Direct Spending:
    Estimated Budget Authority.....      *      *      *      *      *     10     15     15     15     15     20
    Estimated Outlays..............      *      *      *      *      *     10     15     15     15     15     20
----------------------------------------------------------------------------------------------------------------
Notes.--* = Less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted by July 1, 2004, and that the necessary 
amounts to implement the bill will be appropriated for 2005.
    S. 1545 would make certain undocumented alien children 
eligible for conditional legal permanent resident status. The 
Secretary of Homeland Security would have the authority to 
adjust the status of undocumented high school graduates and 
undocumented high school students admitted to an institution of 
higher education if they had lived in the United States for at 
least five years prior to the bill's enactment, were less than 
16 years of age at time of entry into the United States, and 
meet several other criteria. After six years, individuals could 
petition to have the conditional basis removed if they have 
received a degree from an institution of higher education, 
completed at least two years toward a bachelor's degree or 
higher, or served for at least two years in the United States 
military.
    Aliens who convert to conditional legal permanent resident 
status would become eligible for federal financial aid. These 
aliens also could become eligible for other federal benefits 
such as Food Stamps and Medicaid after five years--assuming 
they meet other program requirements.

Spending subject to appropriation

    Implementation of S. 1545 would require institutions of 
higher education that enroll alien beneficiaries of the bill to 
register them in SEVIS, which is administered by the Bureau of 
Immigration and Customs Enforcement (ICE). Based on information 
from ICE, CBO estimates that it would cost up to $1 million in 
2005 to expand and modify SEVIS to collect information on 
aliens benefitting from S. 1545. CBO expects that any such 
spending would come from appropriated funds.

Direct spending

    CBO estimates that enacting S. 1545 would increase direct 
spending by an insignificant amount in 2004 and $90 million 
over the 2004-2014 period.
    Student Loans. Granting conditional legal permanent 
resident status would allow these students to participate in 
the federal student loan programs, CBO estimates that about 
13,000 undocumented alien children would enroll during the 
2004-2005 academic year and meet all of the other criteria. CBO 
assumes this number would remain around this level through 2008 
and then decline relatively rapidly after that. CBO assumes 
that these students would be less likely to participate in 
federal student loan programs than other students for two main 
reasons. First, these students are more likely to be enrolled 
in lower-cost community colleges where the need for financial 
assistance is less great. Second, they would be less willing to 
submit financial aid forms for fear of exposing the presence of 
other family members who remain undocumented. Assuming that 1 
in 10 enrolled students borrow student loans, CBO estimates the 
bill would have a negligible effect on federal spending.
    Food Stamps. CBO estimates that enacting the bill would 
increase costs in the Food Stamp program. By allowing certain 
aliens who are in the United States illegally to adjust their 
status to conditional legal permanent residents, they would 
then be considered qualified aliens for Food Stamp eligibility 
purposes. However, such individuals would be ineligible for 
Food Stamp benefits during their first five years as qualified 
aliens, so no additional costs would occur until 2009.
    Based on data from the Current Population Survey on 
participation by noncitizens before the changes in eligibility 
that were enacted in 1996, CBO estimates that an additional 
6,000 people would receive Food Stamps in 2009, declining to 
about 4,000 a year by 2014. Food Stamp costs would increase by 
$5 million in 2009 and a total of $30 million over the 2009-
2014 period.
    Medicaid. CBO estimates that enacting the bill would 
increase federal Medicaid spending by $60 million over the 
2009-2014 period. CBO anticipates that the individuals affected 
by the bill would qualify for Medicaid primarily through 
eligibility categories for pregnant women or disabled people 
with high medical expenses. Based on historical data on 
Medicaid participation, CBO estimates that an additional 1,000 
people would receive Medicaid in 2009 under the bill, rising to 
about 3,000 by 2014. Most of these new recipients would be 
pregnant women. The estimate of the per capita for the new 
recipients excludes emergency services, which are already 
covered under current law.
    Department of Homeland Security. The Bureau of U.S. 
Citizenship and Immigration Services (CIS) would charge fees 
totaling several hundred dollars per case to provide 
certifications of legal permanent resident status, 
authorizations of employment, and cancellations of deportation. 
Thus, the agency could collect several million dollars annually 
over the next few years from individuals who would be affected 
by the bill. The CIS is authorized to spend such fees without 
further appropriation, so the net impact on that agency's 
spending would be negligible. CIS fees are classified as 
offsetting receipts (a credit against direct spending).
    Intergovernmental and private-sector impact: S. 1545 
contains an intergovernmental and private-sector mandate as 
defined in the Unfunded Mandates Reform Act because it would 
increase the number of students that colleges and universities 
must track in the SEVIS system. SEVIS was created to collect 
timely information on foreign students who come to the United 
States for educational or student exchange purposes. Colleges 
and universities are responsible for collecting and submitting 
information on student registration, address, and work 
activities. Currently, colleges and universities are only 
required to track students who enter the country using three 
specific types of visas (F, J, and M) for academic students, 
vocation students, and exchange visitors. There are currently 1 
million students registered in the system. Section 11 would add 
a new classification of students, those that have attained the 
status of conditional permanent resident under this bill.
    CBO estimates that about 46,000 college students over the 
2004-2014 period would be eligible to have their status changed 
to conditional permanent resident. This represents an increase 
of less than 5 percent in students who must be tracked in 
SEVIS. CBO estimates that while universities and colleges 
currently incur significant costs to comply with the 
requirements of SEVIS, the incremental costs that would result 
from these additional students would be small and well below 
the annual thresholds established in UMRA ($60 million for 
intergovernmental mandates and $120 million for private-sector 
mandates in 2004, adjusted annually for inflation).
    In addition, as legal permanent residents, some individuals 
would be eligible for Medicaid assistance as a result of the 
bill. Benefits under the Medicaid program for these individuals 
would cost states approximately $45 million over the 2009-2014 
period. Because states have sufficient flexibility to offset 
such costs if they choose, they would not be considered 
mandates under UMRA.
    Furthermore, the repeal of section 505 of the Illegal 
Immigration Reform and Immigration Responsibility Act of 1996 
(8 U.S.C. 1623) would give states the discretion to provide 
state-level educational benefits to illegal aliens if they so 
choose.
    Estimate prepared by: Federal Costs: Student Loans: Deborah 
Kalcevic; Food Stamps: Kathleen FitzGerald; Medicaid: Jeanne De 
Sa; and CIS and ICE: Mark Grabowicz. Impact on State, Local, 
and Tribal Governments: Melissa Merrell. Impact on the Private 
Sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    VI. Regulatory Impact Statement

    The passage of S. 1545 will require the Departments of 
Homeland Security and Justice to promulgate regulations 
governing the application as well as the review process.

                      VII. Changes in Existing Law

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate to dispense with the 
requirements of Paragraph 12 of Rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

               ADDITIONAL VIEWS OF SENATOR JEFF SESSIONS

    The legislation reported by the Committee today, S. 1545, 
is no DREAM. Instead, it represents a cyclical nightmare for 
the rule of law in immigration policy reform. It does not 
address the overall problem of illegal immigration, but instead 
grants legal status to a select, carved-out group of illegally 
present individuals. Regardless of the carved-out category, 
absolving illegal aliens of their illegal status through 
piecemeal legislation erodes the rule of law and promotes 
future illegal immigration by sending a clear message to future 
and current illegal aliens: ``The United States has enacted 
immigration laws, but lacks the intent to meaningfully enforce 
them.''
    The majority alleges that the DREAM Act is a ``one-time'' 
fix that will not be repeated.\1\ That same claim was made by 
the sponsors of 245 I--an amnesty that Congress has repeatedly 
extended. If the DREAM Act passes, five years from now we will 
have no principled or moral basis to deny these same benefits 
to those brought here after the enactment of this legislation. 
The cycle will continue.
---------------------------------------------------------------------------
    \1\ In explaining the need for the DREAM Act, the majority of the 
committee relies on a figure cited by CATO in its ``policy'' 
recommendations for the 108th Congress,'' which states that ``the 
typical immigrant and his or her offspring will pay a net $80,000 more 
in taxes during their lifetimes than they collect in government 
services.'' Cato Institute, The Cato Handbook for Congress: Policy 
Recommendations for the 108th Congress. This figure is based on a 
hypothetical calculation done by the National Research Council that 
projected the net costs of immigrant descendants 300 years into the 
future. In the report itself, the National Research Council states, 
``The NPV calculations are based on projections that reach 300 years 
into the future, and it would be absurd to claim that the projections 
into the 23rd century are very reliable.'' National Research Council, 
The New Americas: Economic, Demographic, and Fiscal Effects of 
Immigration, National Academy Press, 1997. P.342.
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                      I. EFFECTS OF THE DREAM ACT

    The DREAM Act will give amnesty, through cancellation of 
removal, to approximately 500,000 illegal aliens, a number 
which could easily increase because the DREAM Act contains no 
numerical cap. Once the illegal alien beneficiaries of the 
DREAM Act cancel their removal, they will be eligible for legal 
permanent residence, which puts them on a direct path to 
citizenship. After 5 years of legal status, all legal permanent 
residents are eligible to apply for citizenship.
    The DREAM Act will allow states to give in-state tuition 
rates to illegal aliens, when those tax-payer subsidized 
tuition rates are not even available to citizens of other 
states. Illegal aliens that are the beneficiaries of the Act 
will be eligible for all student loans under Title IV of the 
Higher Education Act of 1965, just like citizens and legal 
immigrants. Although children of legal aliens, such as H1B visa 
holders, are not allowed to work, the DREAM Act will allow 
illegal alien children that added privilege. Most offensively, 
the DREAM Act contemplates no enforcement provisions or 
penalties for the people that knowingly violated our 
immigration laws to bring the Act's beneficiaries illegally 
into the United States. This bill will give those illegal alien 
parents exactly what they broke our laws to get--legal 
permission for their children to live and work permanently in 
the United States and one day become citizens.

  II. PROVIDING ILLEGAL IMMIGRANTS WITH INCENTIVES IS BAD IMMIGRATION 
                                 POLICY

    We must not provide legal incentives and rewards for 
violations of our immigration laws. We cannot threaten 
deportation for illegal entry, while we simultaneously tell 
illegal aliens that if they manage to stay in the United States 
for just a few years illegally working or going to school, we 
will pass legislation that gives them permission to stay 
forever, and gives them a guaranteed route to citizenship. It 
is a confusing and contradictory message, a message that cannot 
be the basis for the sound immigration policy of a mature 
nation.

   III. RETROACTIVE BENEFITS AND AMNESTIES ENCOURAGE FUTURE ILLEGAL 
                              IMMIGRATION

    The conclusion by the majority that retroactive benefits 
are not an incentive for future illegal immigration is not 
correct. If the DREAM Act becomes law, we will openly state to 
the world that it is the policy of the United States to 
continue our cycle of rewarding people who break our 
immigration laws with eventual legal status and even 
citizenship. People will rightly conclude that they can come 
here illegally and wait for the next amnesty.

  IV. IT IS TIME FOR COMPREHENSIVE IMMIGRATION REFORM, NOT PIECEMEAL 
                              LEGISLATION

    One thing we all can agree on is that our immigration 
system is broken. The time has come to take an honest look at 
the broad problem of illegal immigration in America and to 
enact comprehensive reform that addresses the lack of interior 
enforcement resources and promotes homeland security. The 
President has put comprehensive immigration reform on the table 
by announcing his plan for a large-scale guest worker program. 
From what I have heard, I cannot agree to all parts of the 
proposal. Still, discussing the problem as a whole is the right 
approach. We have no choice but to focus our efforts on a 
comprehensive reform package that rewards those who follow 
proper immigration procedures. We must reject piecemeal 
legislation that only addresses part of the problem while we 
study comprehensive reform. Secondly, no sensible reform plan 
can provide financial benefits to aliens who are here 
illegally. Likewise, comprehensive reform cannot result in 
rewarding illegal activity with permanent residence and 
citizenship.
                                                     Jeff Sessions.

                ADDITIONAL COMMENTS OF SENATOR CHAMBLISS

    At the markup on October 16, 2003, the Committee took up 
the DREAM Act, S. 1545. Senator Chambliss filed and spoke on an 
amendment that addressed financial assistance for beneficiaries 
of S. 1545. This amendment was ultimately included, word-for-
word, as part of the Grassley amendment, which the Committee 
considered and accepted on October 23, 2003.
    To provide legislative history for Section 12 of S. 1545 as 
reported with the Grassley amendment, attached is Senator 
Chambliss' statement as the original author of that Section's 
financial assistance language. This statement is taken directly 
from pages 41-46 of the Committee's October 16 transcript 
(Appendix A).
    In particular, Senator Chambliss, as addressed beginning on 
page 43 of the October 16 transcript, intended the financial 
assistance amendment to continue to make DREAM Act 
beneficiaries ineligible for HOPE scholarships as illegal 
aliens are ineligible under the current law. This amendment 
ensures that DREAM Act beneficiaries will not be considered 
eligible for HOPE scholarships under the definition of 
eligibility in Title IV of the Higher Education Act.
                                                   Saxby Chambliss.

                ADDITIONAL VIEWS OF SENATOR JOHN CORNYN

    Supporters of the Dream Act cite the goal of education, and 
specifically the benefits of having an educated workforce, as 
one of the most basic reasons to support this legislation. I 
believe it is in our best interest to have an educated 
workforce that can contribute to this great nation in a 
productive way. The Dream Act as introduced in 2001 required 
undocumented students to graduate from a qualified four or two 
year institution in order to obtain legal permanent residency 
under the Act. If we are serious that the intent of the Dream 
Act is about education, then I think we should require these 
students to graduate from a qualified institution of higher 
learning in order to receive legal permanent residency under 
the Act. As I said during the committee markup on this bill, I 
think we need to ``make clear that what we are seeking is 
people that actually receive a degree which will provide them 
the opportunity that I think this bill is determined to 
provide.'' See Transcript of Committee Business, October 23, 
2003, at 67 (Appendix B).
                                                       John Cornyn.
                               APPENDIX A

                              ----------                              

  Excerpts From Committee Executive Business Meeting Transcript From 
                            October 16, 2003

    * * * immigrant voices urging us to close our borders and 
jealously guard our citizenship privileges. If these voices had 
completely won out, America today would be weaker, its 
democracy less cohesive and dynamic, and its place in the world 
much diminished.
    Much work remains to be done to make our immigration system 
more responsive to the needs of the American economy and the 
need of the immigrants on whom our economy depends. But I think 
this legislation is an important first step.
    And, again, I do sincerely commend you, Mr. Chairman, for 
taking such a leadership role, along with Senator Durbin, on 
this bill.
    Chairman Hatch. Well, thank you so much.
    Senator Chambliss is next.
    Senator Chambliss. Mr. Chairman, I would just like to make 
a very brief comment about this bill.
    First of all, I would just like to say to the Chairman that 
I am extremely appreciative of this bill being brought forward 
because this, I think, is the first in probably a series of 
bills that is going to bring an issue to the forefront that the 
American people are well aware of and that Congress has been 
giving a wink and a nod to for so many years, and that is, how 
do we deal with the huge number of illegal aliens that we know 
are in this country? And what sort of status should they be put 
in? There are too many economic sectors of our country that are 
dependent on illegal aliens, and we know it. But we have been 
giving that wink and nod, and I think this helps raise the 
profile of that issue.
    By the same token, as I listened to my colleagues on both 
sides talk about the effect of this Act and the background of 
this Act, what you are talking about primarily is the legal 
aliens who have come to this country, either in legal status or 
have become legal once they got here. And that is a whole 
different category of individuals than what we are going to be 
dealing with here.
    We have in my home State, as an example, a large population 
of illegal aliens. We have a large population of legal aliens. 
We have a large population of folks who are here illegally 
whose children are U.S. citizens because they were born here. 
So there are different categories of aliens. Here we are 
dealing with folks who truly are illegal.
    Now, the fact of the matter is they didn't cause that to 
happen. Their parents did. And the issue is whether or not they 
are to be penalized because of--the issue is not whether they 
are to be penalized because of that, but the issue is whether 
or not they are to be treated the same as children who are born 
to legal U.S. citizens, whether they were born in the United 
States or not, or whether you are going to put them in the same 
category as those individuals who are hard-working, tax-paying 
Americans when it comes to the education of the children of 
those folks who came into this country illegally and are here 
illegally.
    In my home State, we do have that large population, and we 
also have a provision in the Georgia law that allows for 
children who graduated from Georgia high schools with a B 
average to go free tuition to our State-sponsored schools, to 
our State institutions. It is called the HOPE Scholarship. It 
was enacted, conceived as an idea by my senior Senator, then-
Governor Zell Miller, and it has been a terrific program. The 
same program has been adopted in may other States around the 
country.
    Under current law, because of the definition of the 
eligibility under Higher Education Act, children of illegal 
aliens who are illegally here are not eligible for that HOPE 
scholarship. If this bill passes, all of a sudden those 
children who are here illegally will be eligible for the HOPE 
Scholarship. The HOPE Scholarship is under extreme financial 
pressure right now. It is funded by our State lottery. It is 
projected that over the next 5 years we are going to have to go 
into general revenues to keep up the standards that we are now 
using to determine whether or not children who graduated from 
Georgia high schools are eligible for those scholarships.
    This bill will put more individuals in the pool and really 
will dictate that children who are here illegally are put in 
the same category as the children of hard-working, tax-paying 
Americans when it comes to divvying up the pool of available 
money for the HOPE Scholarship in my State and many other 
States.
    Now, every State in America today, for the most part, is in 
a financial crisis. You talk about a bill that will increase 
the pressure on each and every one of our governors and our 
State legislatures. This bill will cause more people to have 
the availability of in-state tuition access. It is going to 
increase the funding, the entitlement funding of Pell grants. 
We are looking at a hugh financial increase on our State and 
our Federal Government as a result of the passage of this.
    Now, the Chairman had a bill last year that truly was 
narrowly drawn and is a bill that I think with some 
modification I would have been inclined to support. This bill 
is not the same bill that the chairman introduced last year, 
and I am afraid this bill expands the availability of the DREAM 
Act so broadly that it is going to cause a financial burden and 
it is going to put a reward on people who really are violating 
the law by being here illegally. It is not the intention to 
penalize the children of those folks, but the fact of the 
matter is they are what they are. And I think we have to 
recognize that, realize that, and, again, I commend the 
chairman for bringing it forward. In my subcommittee, we are 
going to have some hearings on broadening the availability for 
access to our legal immigration status for a number of these 
folks who are here illegally. Senator Craig, Senator Cornyn, 
Senator Kyl, and I know others have expressed interest, and our 
bill is on H2-A, which is our agricultural working program. We 
are working now on an expansion of that H2-A program to broaden 
it so that people who are here illegally that are not just 
working in agriculture but are in our carpet mills and our 
construction industry and other aspects of my State, and 
certainly your States, will have easier access to come into 
legal status. And I think that puts them in an entirely 
different category than what this bill is going to put them in.
    So in the present form, I am not going to be able to 
support the bill, and I am going to have an amendment that I 
think will make it a little more palatable, and as we move 
forward through this, I look forward to continuing to discuss 
it with all of our colleagues.
    Senator Durbin. Would the Senator yield for a question?
    Senator Chambliss. Sure.
    Senator Durbin. Just a comment. Section 3 of the bill 
leaves to each State the authority to make the decision as to 
whether any of these students will be eligible for in-state 
tuition or for any State scholarship. And if your State of 
Georgia did not want to extend HOPE Scholarships to these 
students, that is that State's right to do. We just give the 
States the option to make that decision. Today the Federal law 
mandates how the decision must be made.
    Senator Feinstein. Mr. Chairman.
    Chairman Hatch. Senator Grassley was next, and then Senator 
Sessions, and then I will come to Senator Feinstein.
    Senator Grassley. I thank Senator Durbin for the statement 
that he just made because that is the thought that went through 
my mind as I heard Senator Chambliss make his statement, and it 
is my understanding of the legislation as well.
    As a cosponsor of this bill, I commend Senator Hatch and 
Senator Durbin for working together on it and producing a 
pretty good compromise. I have heard from many Iowans about 
this bill, and I have heard from both sides of the fence, 
people very opposed to it and people supportive of the 
legislation. I know that some members have fears that we are 
rewarding illegal immigration and that the more reward that we 
offer, somehow more people want to come to the United States. 
Coming to the United States is something that we ought to be 
proud of because it speaks well for our * * *

                               APPENDIX B

                              ----------                              

  Excerpts From Committee Executive Business Meeting Transcript From 
                            October 23, 2003

    * * * three other places, but I am perfectly willing to 
stay if we can keep some here.
    Senator Feinstein. I do have to leave in ten minutes, just 
so you know.
    Chairman Hatch. Well, let's give it ten more minutes. If 
you could, Senator Sessions, I would appreciate it. I know you 
are an active member of the Armed Services Committee.
    Senator Kyl. Mr. Chairman, if there are other amendments, 
perhaps we can at least conduct some business before--just a 
constructive suggestion.
    Chairman Hatch. Well, let me just say this. We will stack 
amendments. Are there any further amendments?
    Senator Cornyn. Mr. Chairman.
    Chairman Hatch. Senator Cornyn.
    Senator Cornyn. Mr. Chairman, I had an amendment that I, in 
the interest of trying to be constructive and working 
together--I hope the process will not end once this bill is 
passed, but that we will continue to work together to try to 
strengthen this bill even further.
    I had an amendment that, true to the original purpose of 
this bill, which was to promote education and educational 
opportunity, would provide that the immigrant student must 
graduate from a qualified four- or two-year institution in 
order to be eligible to become a legal permanent resident under 
the bill, which I believe would actually strengthen this, 
rather than just merely attending but not being sincere about 
the educational goal that we are all seeking to advance.
    I think that would actually help improve the bill even 
further above and beyond what has been done now with the 
Grassley-Feinstein amendment. But rather than offer it at this 
time, what I would like to do is to continue to work with 
everyone here to see if we might be able to improve the bill 
even further by making sure that the goal that we are all 
trying to achieve, and that is education, is advanced and not 
provide an opportunity for those who perhaps were trying to use 
this Act in a way that does not serve that purpose.
    Senator Kyl. Mr. Chairman, might I ask Senator Cornyn or 
you a question on this?
    Chairman Hatch. Well, let me just say that I appreciate the 
Senator's willingness to withhold and work with us to see if 
there is some way we can accommodate.
    Senator Kyl.
    Senator Kyl. I thought there were some kind of minimal 
requirements, not just to take one class for two years. I mean, 
there is some kind of minimal requirement, is there not?
    Senator Cornyn. If I may respond to that----
    Chairman Hatch. They have to take two full years of 
classes.
    Senator Cornyn. The provisions of the Act, which is 
5(d)(1)(D)(i) of the Act, says the alien has acquired a degree 
from an institution of higher education or has completed at 
least two years in good standing in a program for a bachelor's 
degree or a higher degree, or served in the armed forces.
    Chairman Hatch. In other words, they are going to have to 
take a regular course toward a bachelor's degree.
    Senator Cornyn. I am not sure what that means exactly.
    Senator Kyl. Yes. Mr. Chairman, I think Senator Cornyn 
raises a very good point--``completed two years.'' 
Unfortunately, at some of our universities now, it takes you 
six years to get through, and I am not sure how many credits. 
``Completed two years'' would be--I mean, we clearly have to 
get a little bit more precise about that.
    Senator Cornyn. I think I understand where the authors and 
the sponsors are heading, and I just think we may need to firm 
that up and make that clear.
    Chairman Hatch. Let's see if we can work that out between 
now and the floor.
    Senator Feinstein. May I ask a question of Senator Cornyn?
    Senator Cornyn. And also make clear that what we are 
seeking is people that actually receive a degree which will 
provide them the opportunity that I think this bill is 
determined to provide.
    Chairman Hatch. Senator Feinstein.
    Senator Feinstein. I think the thrust of the amendment is a 
good one. The question I would have about it is does this then 
subject the youngster to deportation during those two years?
    Senator Cornyn. That certainly would not be my intent, not 
at all.
    Senator Feinstein. That would be my question.
    Senator Cornyn. As far as I am concerned, we could make 
that even plain.
    Chairman Hatch. Let's work in good faith to accommodate 
language that will make it very clear that it is two years 
toward a bachelor's degree, which means a full course of 
instruction. We might have to put in a certain amount of 
credits they have to go for.
    Are there any other amendments to this bill at this time 
that we can stack?
    If there are no other amendments to this bill, it is 
apparent we are not going to get a quorum. So what I think we 
will do is recess until after the first vote, and then as far 
as I can see it will be a vote up and down on final passage. I 
would prefer to do that right now if we could * * *

                                
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