II 

109TH CONGRESS 

1ST SESSION S. 14 

To provide fair wages for America’s workers, to create new jobs through 

investment in America, to provide for fair trade and competitiveness, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2005 

Ms. STABENOW (for herself, Mr. REID, Mr. CORZINE, Mr. KENNEDY, Mr. 

INOUYE, Ms. MIKULSKI, Mr. DORGAN, Mr. LEAHY, Mr. ROCKEFELLER, 

Mr. SCHUMER, Mr. DURBIN, and Mr. DAYTON) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To provide fair wages for America’s workers, to create new 

jobs through investment in America, to provide for fair 

trade and competitiveness, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fair Wage, Competition, and Investment Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents.
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TITLE I—FAIR WAGES FOR AMERICA’S WORKERS 

Subtitle A—Overtime Rights Protection 

Sec. 111. Short title.

Sec. 112. Clarification of regulations relating to overtime compensation.

Subtitle B—Fair Minimum Wage 

Sec. 121. Short title.

Sec. 122. Minimum wage.

Subtitle C—Sense of the Senate Regarding Multiemployer Pension Plans 

Sec. 131. Sense of the Senate regarding multiemployer pension plans.

TITLE II—CREATING NEW JOBS THROUGH INVESTMENT IN 

AMERICA 

Subtitle A—Eliminating Incentives for Outsourcing 

Sec. 211. Taxation of income of controlled foreign corporations attributable to 

imported property.

Sec. 212. Amendments to the Worker Adjustment and Retraining Notification 

Act.

Subtitle B—Investment in Infrastructure 

CHAPTER 1—TRANSPORTATION INFRASTRUCTURE

Sec. 221. Transportation infrastructure funding.

CHAPTER 2—WATER INFRASTRUCTURE

Sec. 231. Water infrastructure funding.

CHAPTER 3—RAIL INFRASTRUCTURE

Sec. 241. Rail infrastructure funding. 

Sec. 242. Grant authority. 

Sec. 243. Grant conditions for right-of-way projects. 

Sec. 244. Use of funds for near-term projects. 

Sec. 245. Treatment of rail operators using grant-funded rail infrastructure. 

CHAPTER 4—TRANSIT INFRASTRUCTURE

Sec. 251. Transit. 

CHAPTER 5—AVIATION INFRASTRUCTURE

Sec. 261. Authorization of appropriations. 

Sec. 262. Distribution of funds. 

Sec. 263. Nonapplicability of certain laws. 

Sec. 264. Use of funds for near-term projects. 

CHAPTER 6—BROADBAND ACCESS TAX CREDIT

Sec. 271. Expensing of broadband Internet access expenditures. 

CHAPTER 7—RESEARCH AND DEVELOPMENT TAX CREDIT
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Sec. 281. Findings.

Sec. 282. Permanent extension of research credit.

Sec. 283. Increase in rates of alternative incremental credit.

Sec. 284. Alternative simplified credit for qualified research expenses.

Sec. 285. Expansion of research credit. 

Subtitle C—Technology Programs 

Sec. 291. Authorizations of appropriations for the Advanced Technology Program and the Manufacturing Extension Partnership Program.

Sec. 292. Sense of the Senate promoting science and technology funding for a 

strong economic future.

TITLE III—FAIR TRADE AND COMPETITIVENESS 

Subtitle A—Trade Enforcement Enhancement 

Sec. 311. Identification of trade expansion priorities. 

Sec. 312. Chief enforcement negotiator. 

Sec. 313. Foreign debt.

Sec. 314. Authorization of appropriations. 

Subtitle B—Exchange Rate Policy and Currency Manipulation 

Sec. 321. Negotiations regarding currency valuation. 

Subtitle C—Trade Adjustment Assistance 

CHAPTER 1—SERVICE WORKERS

Sec. 331. Short title.

Sec. 332. Extension of trade adjustment assistance to services sector.

Sec. 333. Trade adjustment assistance for firms and industries.

Sec. 334. Monitoring and reporting.

Sec. 335. Alternative trade adjustment assistance.

Sec. 336. Effective date.

CHAPTER 2—TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

Sec. 341. Short title.

Sec. 342. Purpose.

Sec. 343. Trade adjustment assistance for communities.

Sec. 344. Conforming amendments.

Sec. 345. Effective date.

CHAPTER 3—OFFICE OF TRADE ADJUSTMENT ASSISTANCE

Sec. 351. Short title.

Sec. 352. Office of Trade Adjustment Assistance.

Sec. 353. Effective date.

CHAPTER 4—IMPROVEMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF

ELIGIBLE INDIVIDUALS

Sec. 361. Improvement of the affordability of the credit.

Sec. 362. Offering of Federal fallback coverage. 

Sec. 363. Clarification of eligibility of spouse of certain individuals entitled to 

medicare.
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Subtitle D—Sense of the Senate on Free Trade Agreements 

Sec. 371. Sense of the Senate on free trade agreements.

1 TITLE I—FAIR WAGES FOR 

2 AMERICA’S WORKERS 

3 Subtitle A—Overtime Rights 

4 Protection 

5 SEC. 111. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘Overtime Rights 

7 Protection Act of 2005’’. 

8 SEC. 112. CLARIFICATION OF REGULATIONS RELATING TO 

9 OVERTIME COMPENSATION. 

10 Section 13 of the Fair Labor Standards Act of 1938 

11 (29 U.S.C. 213) is amended by adding at the end the fol12 lowing: 

13 ‘‘(k)(1) Notwithstanding the provisions of subchapter 

14 II of chapter 5 and chapter 7 of title 5, United States 

15 Code (commonly referred to as the Administrative Proce16 dures Act) or any other provision of law, any portion of 

17 the final rule promulgated on April 23, 2004, revising part 

18 541 of title 29, Code of Federal Regulations, that exempts 

19 from the overtime pay provision of section 7 of this Act 

20 any employee who would not otherwise be exempt if the 

21 regulations in effect on March 31, 2003, remained in ef22 fect, shall have no force or effect and that portion of such 

23 regulations (as in effect on March 31, 2003) that would 
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1 prevent such employee from being exempt shall be rein2 stated. 

3 ‘‘(2) The Secretary shall adjust the minimum salary 

4 level for exemption under section 13(a)(1) in the following 

5 manner: 

6 ‘‘(A) Not later than 60 days after the date of 

7 enactment of this subsection, the Secretary shall in8 crease the minimum salary level for exemption under 

9 subsection (a)(1) for executive, administrative, and 

10 managerial occupations from the level of $155 per 

11 week in 1975 to $591 per week (an amount equal 

12 to the increase in the Employment Cost Index (pub13 lished by the Bureau of Labor Statistics) for execu14 tive, administrative, and managerial occupations be15 tween 1975 and 2005). 

16 ‘‘(B) Not later than December 31 of the cal17 endar year following the increase required in sub18 paragraph (A), and each December 31 thereafter, 

19 the Secretary shall increase the minimum salary 

20 level for exemption under subsection (a)(1) by an 

21 amount equal to the increase in the Employment 

22 Cost Index for executive, administrative, and mana23 gerial occupations for the year involved.’’. 
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1 Subtitle B—Fair Minimum Wage 

2 SEC. 121. SHORT TITLE. 

3 This subtitle may be cited as the ‘‘Fair Minimum 

4 Wage Act of 2005’’. 

5 SEC. 122. MINIMUM WAGE. 

6 (a) IN GENERAL.—Section 6(a)(1) of the Fair Labor 

7 Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended 

8 to read as follows: 

9 ‘‘(1) except as otherwise provided in this sec10 tion, not less than— 

11 ‘‘(A) $5.85 an hour, beginning on the 60th 

12 day after the date of enactment of the Fair 

13 Minimum Wage Act of 2005; 

14 ‘‘(B) $6.55 an hour, beginning 12 months 

15 after that 60th day; and 

16 ‘‘(C) $7.25 an hour, beginning 24 months 

17 after that 60th day;’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall take effect 60 days after the date of 

20 enactment of this Act. 
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1 Subtitle C—Sense of the Senate Re2 garding Multiemployer Pension 

3 Plans 

4 SEC. 131. SENSE OF THE SENATE REGARDING MULTIEM5 PLOYER PENSION PLANS. 

6 (a) FINDINGS.—The Senate makes the following 

7 findings: 

8 (1) Multiemployer pension plans have been a 

9 major force in the delivery of employee benefits to 

10 active and retired American workers and their de11 pendents for over half a century. 

12 (2) There are approximately 1,700 multiem13 ployer defined benefit pension plans in which ap14 proximately 9,700,000 workers and retirees partici15 pate. 

16 (3) Three-quarters of the approximately 60,000 

17 to 65,000 employers that participate in multiem18 ployer plans have fewer that 100 employees. 

19 (4) Multiemployer plans allow for greater access 

20 and affordability for smaller employers and pension 

21 portability for their employees as they move from 

22 one job to another, and permit workers to earn a 

23 pension where they might otherwise not be able to 

24 do so. 
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1 (5) The 2000–2002 drop in the stock market 

2 and decline in equity values has affected all inves3 tors, including multiemployer plans. 

4 (6) The decline in value sustained by multiem5 ployer defined benefit pension plans have threatened 

6 the stability of this private sector source of secure 

7 retirement income. 

8 (7) Participating employers could face onerous 

9 excise taxes and other penalties as a result of the se10 rious, adverse financial impact due to these market 

11 losses. 

12 (8) In 2004, the United States Senate recog13 nized the severity of this situation and passed by an 

14 overwhelmingly, large bipartisan margin of 86 to 9 

15 temporary relief provisions for single and multiem16 ployer defined benefit pension plans. 

17 (b) SENSE OF THE SENATE.—It is the sense of the 

18 Senate that the Senate— 

19 (1) expresses its strong support for multiem20 ployer defined benefit pension plans; 

21 (2) recognizes the importance of an environ22 ment in which multiemployer plans can continue 

23 their vital role in providing benefits to working men 

24 and women; 
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1 (3) recognizes that multiemployer pension plan 

2 relief must be designed for the multiemployer labor3 relations environment that supports the plans; and 

4 (4) supports legislation to strengthen and pro5 tect the viability of multiemployer pension plans for 

6 the continued benefit of current and retired mem7 bers, and their families and survivors, and to 

8 strengthen the ability of all plans to address funding 

9 problems that occur. 

10 TITLE II—CREATING NEW JOBS 

11 THROUGH INVESTMENT IN 

12 AMERICA 

13 Subtitle A—Eliminating Incentives 

14 for Outsourcing 

15 SEC. 211. TAXATION OF INCOME OF CONTROLLED FOREIGN 

16 CORPORATIONS ATTRIBUTABLE TO IM17 PORTED PROPERTY. 

18 (a) GENERAL RULE.—Subsection (a) of section 954 

19 of the Internal Revenue Code of 1986 (defining foreign 

20 base company income) is amended by striking ‘‘and’’ at 

21 the end of paragraph (4), by striking the period at the 

22 end of paragraph (5) and inserting ‘‘, and’’, and by adding 

23 at the end the following new paragraph: 
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1 ‘‘(6) imported property income for the taxable 

2 year (determined under subsection (j) and reduced 

3 as provided in subsection (b)(5)).’’. 

4 (b) DEFINITION OF IMPORTED PROPERTY IN5 COME.—Section 954 of the Internal Revenue Code of 1986 

6 is amended by adding at the end the following new sub7 section: 

8 ‘‘(j) IMPORTED PROPERTY INCOME.— 

9 ‘‘(1) IN GENERAL.—For purposes of subsection 

10 (a)(6), the term ‘imported property income’ means 

11 income (whether in the form of profits, commissions, 

12 fees, or otherwise) derived in connection with— 

13 ‘‘(A) manufacturing, producing, growing, 

14 or extracting imported property; 

15 ‘‘(B) the sale, exchange, or other disposi16 tion of imported property; or 

17 ‘‘(C) the lease, rental, or licensing of im18 ported property. 

19 Such term shall not include any foreign oil and gas 

20 extraction income (within the meaning of section 

21 907(c)) or any foreign oil related income (within the 

22 meaning of section 907(c)). 

23 ‘‘(2) IMPORTED PROPERTY.—For purposes of 

24 this subsection— 
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1 ‘‘(A) IN GENERAL.—Except as otherwise 

2 provided in this paragraph, the term ‘imported 

3 property’ means property which is imported 

4 into the United States by the controlled foreign 

5 corporation or a related person. 

6 ‘‘(B) IMPORTED PROPERTY INCLUDES CER7 TAIN PROPERTY IMPORTED BY UNRELATED

8 PERSONS.—The term ‘imported property’ in9 cludes any property imported into the United 

10 States by an unrelated person if, when such 

11 property was sold to the unrelated person by 

12 the controlled foreign corporation (or a related 

13 person), it was reasonable to expect that— 

14 ‘‘(i) such property would be imported 

15 into the United States; or 

16 ‘‘(ii) such property would be used as 

17 a component in other property which would 

18 be imported into the United States. 

19 ‘‘(C) EXCEPTION FOR PROPERTY SUBSE20 QUENTLY EXPORTED.—The term ‘imported 

21 property’ does not include any property which is 

22 imported into the United States and which— 

23 ‘‘(i) before substantial use in the 

24 United States, is sold, leased, or rented by 

25 the controlled foreign corporation or a re-
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1 lated person for direct use, consumption, 

2 or disposition outside the United States; or 

3 ‘‘(ii) is used by the controlled foreign 

4 corporation or a related person as a com5 ponent in other property which is so sold, 

6 leased, or rented. 

7 ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 

8 ‘‘(A) IMPORT.—For purposes of this sub9 section, the term ‘import’ means entering, or 

10 withdrawal from warehouse, for consumption or 

11 use. Such term includes any grant of the right 

12 to use intangible property (as defined in section 

13 936(h)(3)(B)) in the United States. 

14 ‘‘(B) UNITED STATES.—For purposes of 

15 this subsection, the term ‘United States’ in16 cludes the Commonwealth of Puerto Rico, the 

17 Virgin Islands of the United States, Guam, 

18 American Samoa, and the Commonwealth of 

19 the Northern Mariana Islands. 

20 ‘‘(C) UNRELATED PERSON.—For purposes 

21 of this subsection, the term ‘unrelated person’ 

22 means any person who is not a related person 

23 with respect to the controlled foreign corpora24 tion. 
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1 ‘‘(D) COORDINATION WITH FOREIGN BASE

2 COMPANY SALES INCOME.—For purposes of this 

3 section, the term ‘foreign base company sales 

4 income’ shall not include any imported property 

5 income.’’. 

6 (c) SEPARATE APPLICATION OF LIMITATIONS ON

7 FOREIGN TAX CREDIT FOR IMPORTED PROPERTY IN8 COME.— 

9 (1) BEFORE 2007.— 

10 (A) IN GENERAL.—Paragraph (1) of sec11 tion 904(d) of the Internal Revenue Code of 

12 1986 (relating to separate application of section 

13 with respect to certain categories of income), as 

14 in effect for taxable years beginning before Jan15 uary 1, 2007, is amended by striking ‘‘and’’ at 

16 the end of subparagraph (H), by redesignating 

17 subparagraph (I) as subparagraph (J), and by 

18 inserting after subparagraph (H) the following 

19 new subparagraph: 

20 ‘‘(I) imported property income, and’’. 

21 (B) IMPORTED PROPERTY INCOME DE22 FINED.—Paragraph (2) of section 904(d) of 

23 such Code, as so in effect, is amended by redes24 ignating subparagraphs (H) and (I) as subpara25 graphs (I) and (J), respectively, and by insert-
14 

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1 ing after subparagraph (G) the following new 

2 subparagraph: 

3 ‘‘(H) IMPORTED PROPERTY INCOME.—The 

4 term ‘imported property income’ means any in5 come received or accrued by any person which 

6 is of a kind which would be imported property 

7 income (as defined in section 954(j)).’’. 

8 (C) LOOK-THRU RULES TO APPLY.—Sub9 paragraph (F) of section 904(d)(3) of such 

10 Code, as so in effect, is amended by striking 

11 ‘‘or (D)’’ and inserting ‘‘(D), or (I)’’. 

12 (2) AFTER 2006.— 

13 (A) IN GENERAL.—Paragraph (1) of sec14 tion 904(d) of such Code (relating to separate 

15 application of section with respect to certain 

16 categories of income), as in effect for taxable 

17 years beginning after December 31, 2006, is 

18 amended by striking ‘‘and’’ at the end of sub19 paragraph (A), by redesignating subparagraph 

20 (B) as subparagraph (C), and by inserting after 

21 subparagraph (A) the following new subpara22 graph: 

23 ‘‘(B) imported property income, and’’. 

24 (B) IMPORTED PROPERTY INCOME DE25 FINED.—Paragraph (2) of section 904(d) of 
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1 such Code, as so in effect, is amended by redes2 ignating subparagraphs (I) and (J) as subpara3 graphs (J) and (K), respectively, and by insert4 ing after subparagraph (H) the following new 

5 subparagraph: 

6 ‘‘(I) IMPORTED PROPERTY INCOME.—The 

7 term ‘imported property income’ means any in8 come received or accrued by any person which 

9 is of a kind which would be imported property 

10 income (as defined in section 954(j)).’’. 

11 (C) CONFORMING AMENDMENT.—Clause 

12 (ii) of section 904(d)(2)(A) of such Code, as so 

13 in effect, is amended by inserting ‘‘or imported 

14 property income’’ after ‘‘passive category in15 come’’. 

16 (d) TECHNICAL AMENDMENTS.— 

17 (1) Clause (iii) of section 952(c)(1)(B) of the 

18 Internal Revenue Code of 1986 (relating to certain 

19 prior year deficits may be taken into account) is 

20 amended— 

21 (A) by redesignating subclauses (II), (III), 

22 (IV), and (V) as subclauses (III), (IV), (V), and 

23 (VI), and 

24 (B) by inserting after subclause (I) the fol25 lowing new subclause: 
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1 ‘‘(II) imported property in2 come,’’. 

3 (2) Paragraph (5) of section 954(b) of such 

4 Code (relating to deductions to be taken into ac5 count) is amended by striking ‘‘and the foreign base 

6 company oil related income’’ and inserting ‘‘the for7 eign base company oil related income, and the im8 ported property income’’. 

9 (e) EFFECTIVE DATES.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), the amendments made by this section 

12 shall apply to taxable years of foreign corporations 

13 beginning after the date of the enactment of this 

14 Act, and to taxable years of United States share15 holders within which or with which such taxable 

16 years of such foreign corporations end. 

17 (2) SUBSECTION (c).—The amendments made 

18 by subsection (c)(1) shall apply to taxable years be19 ginning after the date of the enactment of this Act 

20 and before January 1, 2007, and the amendments 

21 made by subsection (c)(2) shall apply to taxable 

22 years beginning after December 31, 2006. 
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1 SEC. 212. AMENDMENTS TO THE WORKER ADJUSTMENT 

2 AND RETRAINING NOTIFICATION ACT. 

3 (a) DEFINITION.—Section 2(a) of the Worker Ad4 justment and Retraining Notification Act (29 U.S.C. 

5 2101(a)) is amended— 

6 (1) in paragraph (3)(B), by striking ‘‘for—’’ 

7 and all that follows through ‘‘500 employees’’ in 

8 clause (ii), and inserting ‘‘for not less than 50 em9 ployees’’; 

10 (2) in paragraph (7), by striking ‘‘and’’ after 

11 the semicolon; 

12 (3) in paragraph (8), by striking the period and 

13 inserting ‘‘; and’’; and 

14 (4) by adding at the end the following: 

15 ‘‘(9) the term ‘offshoring of jobs’ means any ac16 tion taken by an employer the effect of which is to 

17 create, shift, or transfer employment positions or fa18 cilities outside the United States and which results 

19 in an employment loss during any 30-day period for 

20 15 or more employees.’’. 

21 (b) NOTICE.—Section 3 of the Worker Adjustment 

22 and Retraining Notification Act (29 U.S.C. 2102) is 

23 amended— 

24 (1) in subsection (a)— 

25 (A) in the matter preceding paragraph (1), 

26 by striking ‘‘60-day’’ and inserting ‘‘90-day’’; 
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1 (B) in paragraph (1), by striking ‘‘and’’ 

2 after the semicolon; 

3 (C) in paragraph (2), by striking the pe4 riod and inserting ‘‘; and’’; and 

5 (D) by inserting after paragraph (2), the 

6 following: 

7 ‘‘(3) to the Secretary of Labor.’’; 

8 (2) in subsection (b), by striking ‘‘60-day’’ both 

9 places that such term appears and inserting ‘‘90- 

10 day’’; and 

11 (3) by adding at the end the following: 

12 ‘‘(e) NOTICE FOR OFFSHORING OF JOBS.—In the 

13 case of a notice under subsection (a) regarding the 

14 offshoring of jobs, the notice shall include, in addition to 

15 the information otherwise required by the Secretary with 

16 respect to other notices under such subsection, informa17 tion concerning— 

18 ‘‘(1) the number of jobs affected; 

19 ‘‘(2) the location that the jobs are being shifted 

20 or transferred to; and 

21 ‘‘(3) the reasons that such shifting or transfer22 ring of jobs is occurring.’’. 

23 (c) TECHNICAL AMENDMENTS.—The Worker Adjust24 ment and Retraining Notification Act (29 U.S.C. 2101 et 

25 seq.) is amended— 
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1 (1) by striking ‘‘plant closing or mass layoff’’ 

2 each place that such term appears and inserting 

3 ‘‘plant closing, mass layoff, or offshoring of jobs’’; 

4 (2) by striking ‘‘closing or layoff’’ each place 

5 that such term appears and inserting ‘‘closing, lay6 off, or offshoring’’; 

7 (3) in section 3— 

8 (A) in the section heading by striking 

9 ‘‘PLANT CLOSINGS AND MASS LAYOFFS’’ 

10 and inserting ‘‘PLANT CLOSINGS, MASS LAY11 OFFS, AND OFFSHORING OF JOBS’’; 

12 (B) in subsection (b)(2)(A), by striking 

13 ‘‘the closing or mass layoff’’ and inserting ‘‘the 

14 closing, layoff, or offshoring’’; and 

15 (C) in subsection (d), by striking ‘‘section 

16 2(a) (2) or (3)’’ and inserting ‘‘paragraph (2), 

17 (3), or (9) of section 2(a)’’; and 

18 (4) in section 5(a)(1), in the matter following 

19 subparagraph (B), by striking ‘‘60 days’’ and insert20 ing ‘‘90 days’’. 

21 (d) POSTING OF EMPLOYEE RIGHTS.—The Worker 

22 Adjustment and Retraining Notification Act (29 U.S.C. 

23 2101 et seq.) is amended by adding at the end the fol24 lowing: 
20 

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1 ‘‘SEC. 12. POSTING OF NOTICE OF RIGHTS. 

2 ‘‘(a) DEVELOPMENT.—Not later than 60 days after 

3 the date of enactment of this section, the Secretary of 

4 Labor shall develop a notice of employee rights under this 

5 Act for posting by employers. 

6 ‘‘(b) POSTING.—Each employer shall post in a con7 spicuous place in places of employment the notice of the 

8 rights of employees as developed by the Secretary under 

9 subsection (a).’’. 

10 (e) ANNUAL REPORT.—The Worker Adjustment and 

11 Retraining Notification Act (29 U.S.C. 2101 et seq.), as 

12 amended by subsection (d), is further amended by adding 

13 at the end the following: 

14 ‘‘SEC. 13. CONTENTS OF ANNUAL REPORTS BY THE SEC15 RETARY OF LABOR. 

16 ‘‘(a) IN GENERAL.—The Secretary of Labor shall col17 lect and compile statistics based on the information sub18 mitted to the Secretary under subsections (a)(3) and (e) 

19 of section 3. 

20 ‘‘(b) REPORT.—Not later than 120 days after the 

21 date on which each regular session of Congress com22 mences, the Secretary of Labor shall prepare and submit 

23 to the President and the appropriate committees of Con24 gress a report on the offshoring of jobs (as defined in sec25 tion 2(a)(9)). Each such report shall include information 

26 concerning— 
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1 ‘‘(1) the number of jobs affected by offshoring; 

2 ‘‘(2) the locations to which jobs are being shift3 ed or transferred; 

4 ‘‘(3) the reasons why such shifts and transfers 

5 are occurring; and 

6 ‘‘(4) any other relevant data compiled under 

7 subsection (a).’’. 

8 Subtitle B—Investment in 

9 Infrastructure 

10 CHAPTER 1—TRANSPORTATION 

11 INFRASTRUCTURE 

12 SEC. 221. TRANSPORTATION INFRASTRUCTURE FUNDING. 

13 (a) FUNDING.— 

14 (1) AUTHORIZATION OF APPROPRIATIONS.— 

15 There is authorized to be appropriated to carry out 

16 this chapter for each of fiscal years 2005 and 2006 

17 $7,000,000,000, to remain available until expended. 

18 (2) DISTRIBUTION.—The Secretary of Trans19 portation, acting through the Administrator of the 

20 Federal Highway Administration, shall distribute 

21 funds made available under this subsection to States 

22 in accordance with section 105 of title 23, United 

23 States Code. 

24 (b) ADDITIONAL REQUIREMENTS.— 
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1 (1) NONAPPLICABILITY OF CERTAIN PROVI2 SIONS.—Funds made available under this section 

3 shall not be subject to— 

4 (A) section 120 of title 23, United States 

5 Code; or 

6 (B) any limitation on obligations under 

7 any other provision of law. 

8 (2) USE OF FUNDS FOR NEAR-TERM

9 PROJECTS.—The Secretary of Transportation shall 

10 ensure, to the maximum extent practicable, that 

11 funds made available under this section are directed 

12 to projects that may be obligated in the near term, 

13 as determined by the Secretary of Transportation. 

14 CHAPTER 2—WATER INFRASTRUCTURE 

15 SEC. 231. WATER INFRASTRUCTURE FUNDING. 

16 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

17 authorized to be appropriated to the Administrator of the 

18 Environmental Protection Agency to make grants to 

19 States under— 

20 (1) title VI of the Federal Water Pollution Con21 trol Act (33 U.S.C. 1381 et seq.), $3,000,000,000 

22 for each of fiscal years 2005 and 2006; and 

23 (2) section 1452 of the Safe Drinking Water 

24 Act (42 U.S.C. 300j–12), $3,000,000,000 for each 

25 of fiscal years 2005 and 2006. 
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1 (b) AVAILABILITY OF FUNDS.—Funds transferred 

2 under subsection (a) shall remain available until expended. 

3 CHAPTER 3—RAIL INFRASTRUCTURE 

4 SEC. 241. RAIL INFRASTRUCTURE FUNDING. 

5 (a) AMOUNT FOR CAPITAL PROJECTS GRANTS.— 

6 There is authorized to be appropriated to the Secretary 

7 of Transportation for each of fiscal years 2005 and 2006, 

8 $1,500,000,000, which shall be available for the Secretary 

9 of Transportation to make grants to States, rail carriers, 

10 and other entities as determined by the Secretary of 

11 Transportation for intercity passenger and freight railroad 

12 capital projects in accordance with this chapter. 

13 (b) AVAILABILITY OF FUNDS.—Funds transferred 

14 under subsection (a) shall remain available until expended. 

15 (c) NONAPPLICABILITY OF CERTAIN PROVISIONS.— 

16 Funds made available under this chapter shall not be sub17 ject to any limitation on obligations under any other provi18 sion of law. 

19 SEC. 242. GRANT AUTHORITY. 

20 (a) PUBLIC BENEFIT PROJECTS.—The Secretary of 

21 Transportation shall make grants to States, rail carriers, 

22 and other entities, as determined by the Secretary, for 

23 intercity passenger and freight railroad capital projects 

24 that provide a public benefit, including projects involving 

25 the following purposes: 
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1 (1) Track and track structure rehabilitation, re2 location, improvement, and development. 

3 (2) Railroad safety and security improvements. 

4 (3) Communications and signaling improve5 ments. 

6 (4) Intercity passenger rail equipment acquisi7 tion. 

8 (5) Rail station and intermodal facilities devel9 opment. 

10 (b) PUBLIC BENEFIT DEFINED.—In this section, the 

11 term ‘‘public benefit’’ means a benefit accrued to the pub12 lic in the form of enhanced mobility of people or goods, 

13 environmental protection or enhancement, congestion miti14 gation, enhanced trade and economic development, im15 proved air quality or land use, more efficient energy use, 

16 enhanced public safety or security, reduction of public ex17 penditures due to improved transportation efficiency or in18 frastructure preservation, and any other positive commu19 nity effects (as defined by the Secretary after any con20 sultation with State official and rail carriers that the Sec21 retary determines appropriate). 

22 SEC. 243. GRANT CONDITIONS FOR RIGHT-OF-WAY 

23 PROJECTS. 

24 The Secretary of Transportation shall require as a 

25 condition of making any grant under this chapter that in-
25 

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1 cludes the improvement or use of rights-of-way owned by 

2 a railroad that— 

3 (1) a written agreement exist between the appli4 cant and the railroad regarding such use and owner5 ship, including— 

6 (A) any compensation for such use; 

7 (B) assurances regarding the adequacy of 

8 infrastructure capacity to accommodate both 

9 existing and future freight and passenger oper10 ations; and 

11 (C) an assurance by the railroad that col12 lective bargaining agreements with the rail13 road’s employees (including terms regulating 

14 the contracting of work) will remain in full 

15 force and effect according to their terms for 

16 work performed by the railroad on the railroad 

17 transportation corridor; and 

18 (2) the applicant agrees to comply with— 

19 (A) the standards under section 24312 of 

20 title 49, United States Code, as such section 

21 was in effect on September 1, 2003, with re22 spect to the project in the same manner that 

23 the National Railroad Passenger Corporation is 

24 required to comply with those standards for 
26 

•S 14 IS 

1 construction work financed under an agreement 

2 made under section; and 

3 (B) the protective agreements established 

4 under section 504 of the Railroad Revitalization 

5 and Regulatory Reform Act of 1976 with re6 spect to employees affected by actions taken in 

7 connection with the project. 

8 SEC. 244. USE OF FUNDS FOR NEAR-TERM PROJECTS. 

9 The Secretary of Transportation shall ensure, to the 

10 maximum extent practicable, that funds made available 

11 under this chapter are directed to projects that may be 

12 obligated in the near term, as determined by the Secretary 

13 of Transportation. 

14 SEC. 245. TREATMENT OF RAIL OPERATORS USING GRANT15 FUNDED RAIL INFRASTRUCTURE. 

16 A person that conducts rail operations over rail infra17 structure constructed or improved with funding provided 

18 in whole or in part in a grant made under this chapter— 

19 (1) shall be considered an employer for pur20 poses of the Railroad Retirement Act of 1974 (45 

21 20 U.S.C. 231 et seq.); and 

22 (2) shall be considered a carrier for purposes of 

23 the Railway Labor Act (43 U.S.C. 151 et seq.) un24 less such a person is an operator with respect to 

25 commuter rail passenger transportation (as defined 
27 

•S 14 IS 

1 in section 24102(4) of title 49, United States Code) 

2 of a State or local government authority (as such 

3 terms are defined in section 5302 of such title) eligi4 ble to receive financial assistance under section 5307 

5 of such title, a contractor performing services in con6 nection with the operations with respect to com7 muter rail passenger transportation (as so defined), 

8 or the Alaska Railroad or its contractors. 

9 CHAPTER 4—TRANSIT INFRASTRUCTURE 

10 SEC. 251. TRANSIT. 

11 (a) AUTHORIZATION OF APPROPRIATIONS.— 

12 (1) AMOUNTS FOR FISCAL YEARS 2005 AND

13 2006.—There is authorized to be appropriated to the 

14 Secretary of Transportation for each of the fiscal 

15 years 2005 and 2006, $1,750,000,000. 

16 (2) AVAILABILITY OF FUNDS.—Funds appro17 priated under paragraph (1) shall remain available 

18 until expended. 

19 (b) DISTRIBUTION OF FUNDS.— 

20 (1) IN GENERAL.—Of the funds authorized to 

21 be appropriated under subsection (a)— 

22 (A) 50.18 percent shall be available to 

23 carry out section 5307 of title 49, United 

24 States Code; 
28 

•S 14 IS 

1 (B) 45 percent shall be available to carry 

2 out section 5309(a)(1) of title 49, United 

3 States Code, of which— 

4 (i) 40 percent shall be available to 

5 carry out subparagraph (A) of such para6 graph; 

7 (ii) 40 percent shall be available to 

8 carry out subparagraph (E) of such para9 graph; and 

10 (iii) 20 percent shall be available to 

11 carry out subparagraph (F) of such para12 graph; 

13 (C) 1.32 percent shall be available to carry 

14 out section 5310 of title 49, United States 

15 Code; and 

16 (D) 3.5 percent shall be available to carry 

17 out section 5311 of title 49, United States 

18 Code. 

19 (2) FORMULAS.—Funds made available under 

20 subparagraphs (A), (C), and (D) of paragraph (1) 

21 shall be distributed in accordance with the formulas 

22 established under sections 5307, 5310, and 5311, 

23 respectively, of title 49, United States Code. 

24 (3) DETERMINATION BY SECRETARY.— 
29 

•S 14 IS 

1 (A) IN GENERAL.—The Secretary of 

2 Transportation shall determine the allocation of 

3 funds made available under clauses (i) and (iii) 

4 of paragraph (1)(B). 

5 (B) MODERNIZATION OF EXISTING FIXED

6 GUIDEWAY SYSTEMS.—The Secretary of Trans7 portation shall determine the amount appor8 tioned to each urbanized area under paragraph 

9 (1)(B)(ii) on a pro rata basis in accordance 

10 with the distribution formula established under 

11 section 5337 of title 49, United States Code. 

12 (C) NEAR TERM PROJECTS.—In allocating 

13 funds under this paragraph, the Secretary of 

14 Transportation shall ensure, to the maximum 

15 extent practicable, that funds are directed to 

16 near term projects. 

17 (c) LIMITATION FOR CAPITAL PROJECTS.—Funds 

18 may be used under this section only for capital projects. 

19 (d) INAPPLICABILITY OF CERTAIN PROVISIONS.— 

20 Funds distributed under subsection (b) shall not be sub21 ject to sections 5307(e), 5309(h), or 5311(g) of title 49, 

22 United States Code. 
30 

•S 14 IS 

1 CHAPTER 5—AVIATION INFRASTRUCTURE 

2 SEC. 261. AUTHORIZATION OF APPROPRIATIONS FOR AVIA3 TION INFRASTRUCTURE. 

4 There is authorized to be appropriated for each of 

5 fiscal years 2005 and 2006 to carry out this chapter, 

6 $1,500,000,000, to remain available until expended. 

7 SEC. 262. DISTRIBUTION OF FUNDS. 

8 The Secretary of Transportation, acting through the 

9 Administrator of the Federal Aviation Administration, 

10 shall distribute funds made available under this chapter 

11 to public use airports for the purposes provided under 

12 chapter 471 of title 49, United States Code, including for 

13 enhancement of aviation safety, enhancement of aviation 

14 capacity, and defrayal of the cost of security requirements 

15 imposed on airport operators by the Administrator or by 

16 the Administrator of the Transportation Security Admin17 istration. 

18 SEC. 263. NONAPPLICABILITY OF CERTAIN LAWS. 

19 Funds made available under this chapter shall not be 

20 subject to— 

21 (1) a matching requirement under section 

22 47109 of title 49, United States Code; or 

23 (2) any limitation on obligation under any other 

24 provision of law. 
31 

•S 14 IS 

1 SEC. 264. USE OF FUNDS FOR NEAR-TERM PROJECTS. 

2 The Secretary of Transportation shall ensure, to the 

3 maximum extent practicable, that funds made available 

4 under this chapter are directed to projects that may be 

5 obligated in the near-term, as determined by the Secretary 

6 of Transportation. 

7 CHAPTER 6—BROADBAND ACCESS TAX 

8 CREDIT 

9 SEC. 271. EXPENSING OF BROADBAND INTERNET ACCESS 

10 EXPENDITURES. 

11 (a) IN GENERAL.—Part VI of subchapter B of chap12 ter 1 of the Internal Revenue Code of 1986 (relating to 

13 itemized deductions for individuals and corporations) is 

14 amended by inserting after section 190 the following new 

15 section: 

16 ‘‘SEC. 191. BROADBAND EXPENDITURES. 

17 ‘‘(a) TREATMENT OF EXPENDITURES.— 

18 ‘‘(1) IN GENERAL.—A taxpayer may elect to 

19 treat any qualified broadband expenditure which is 

20 paid or incurred by the taxpayer as an expense 

21 which is not chargeable to capital account. Any ex22 penditure which is so treated shall be allowed as a 

23 deduction. 

24 ‘‘(2) ELECTION.—An election under paragraph 

25 (1) shall be made at such time and in such manner 

26 as the Secretary may prescribe by regulation. 
32 

•S 14 IS 

1 ‘‘(b) QUALIFIED BROADBAND EXPENDITURES.—For 

2 purposes of this section— 

3 ‘‘(1) IN GENERAL.—The term ‘qualified 

4 broadband expenditure’ means, with respect to any 

5 taxable year, any direct or indirect costs incurred 

6 and properly taken into account with respect to— 

7 ‘‘(A) the purchase or installation of quali8 fied equipment (including any upgrades there9 to), and 

10 ‘‘(B) the connection of such qualified 

11 equipment to any qualified subscriber. 

12 ‘‘(2) CERTAIN SATELLITE EXPENDITURES EX13 CLUDED.—Such term shall not include any costs in14 curred with respect to the launching of any satellite 

15 equipment. 

16 ‘‘(3) LEASED EQUIPMENT.—Such term shall in17 clude so much of the purchase price paid by the les18 sor of qualified equipment subject to a lease de19 scribed in subsection (c)(2)(B) as is attributable to 

20 expenditures incurred by the lessee which would oth21 erwise be described in paragraph (1). 

22 ‘‘(4) LIMITATION WITH REGARD TO CURRENT

23 GENERATION BROADBAND SERVICES.—Only 50 per24 cent of the amounts taken into account under para25 graph (1) with respect to qualified equipment 
33 

•S 14 IS 

1 through which current generation broadband serv2 ices are provided shall be treated as qualified 

3 broadband expenditures. 

4 ‘‘(c) WHEN EXPENDITURES TAKEN INTO AC5 COUNT.—For purposes of this section— 

6 ‘‘(1) IN GENERAL.—Qualified broadband ex7 penditures with respect to qualified equipment shall 

8 be taken into account with respect to the first tax9 able year in which— 

10 ‘‘(A) current generation broadband services 

11 are provided through such equipment to quali12 fied subscribers, or 

13 ‘‘(B) next generation broadband services 

14 are provided through such equipment to quali15 fied subscribers. 

16 ‘‘(2) LIMITATION.— 

17 ‘‘(A) IN GENERAL.—Qualified expenditures 

18 shall be taken into account under paragraph (1) 

19 only with respect to qualified equipment— 

20 ‘‘(i) the original use of which com21 mences with the taxpayer, and 

22 ‘‘(ii) which is placed in service, after 

23 the date of the enactment of this Act. 

24 ‘‘(B) SALE-LEASEBACKS.—For purposes of 

25 subparagraph (A), if property— 
34 

•S 14 IS 

1 ‘‘(i) is originally placed in service 

2 after the date of the enactment of this Act 

3 by any person, and 

4 ‘‘(ii) sold and leased back by such per5 son within 3 months after the date such 

6 property was originally placed in service, 

7 such property shall be treated as originally 

8 placed in service not earlier than the date on 

9 which such property is used under the leaseback 

10 referred to in clause (ii). 

11 ‘‘(d) SPECIAL ALLOCATION RULES.— 

12 ‘‘(1) CURRENT GENERATION BROADBAND SERV13 ICES.—For purposes of determining the amount of 

14 qualified broadband expenditures under subsection 

15 (a)(1) with respect to qualified equipment through 

16 which current generation broadband services are 

17 provided, if the qualified equipment is capable of 

18 serving both qualified subscribers and other sub19 scribers, the qualified broadband expenditures shall 

20 be multiplied by a fraction— 

21 ‘‘(A) the numerator of which is the sum of 

22 the number of potential qualified subscribers 

23 within the rural areas and the underserved 

24 areas which the equipment is capable of serving 

25 with current generation broadband services, and 
35 

•S 14 IS 

1 ‘‘(B) the denominator of which is the total 

2 potential subscriber population of the area 

3 which the equipment is capable of serving with 

4 current generation broadband services. 

5 ‘‘(2) NEXT GENERATION BROADBAND SERV6 ICES.—For purposes of determining the amount of 

7 qualified broadband expenditures under subsection 

8 (a)(1) with respect to qualified equipment through 

9 which next generation broadband services are pro10 vided, if the qualified equipment is capable of serv11 ing both qualified subscribers and other subscribers, 

12 the qualified expenditures shall be multiplied by a 

13 fraction— 

14 ‘‘(A) the numerator of which is the sum 

15 of— 

16 ‘‘(i) the number of potential qualified 

17 subscribers within the rural areas and un18 derserved areas, plus 

19 ‘‘(ii) the number of potential qualified 

20 subscribers within the area consisting only 

21 of residential subscribers not described in 

22 clause (i), 

23 which the equipment is capable of serving with 

24 next generation broadband services, and 
36 

•S 14 IS 

1 ‘‘(B) the denominator of which is the total 

2 potential subscriber population of the area 

3 which the equipment is capable of serving with 

4 next generation broadband services. 

5 ‘‘(e) DEFINITIONS.—For purposes of this section— 

6 ‘‘(1) ANTENNA.—The term ‘antenna’ means 

7 any device used to transmit or receive signals 

8 through the electromagnetic spectrum, including sat9 ellite equipment. 

10 ‘‘(2) CABLE OPERATOR.—The term ‘cable oper11 ator’ has the meaning given such term by section 

12 602(5) of the Communications Act of 1934 (47 

13 U.S.C. 522(5)). 

14 ‘‘(3) COMMERCIAL MOBILE SERVICE CAR15 RIER.—The term ‘commercial mobile service carrier’ 

16 means any person authorized to provide commercial 

17 mobile radio service as defined in section 20.3 of 

18 title 47, Code of Federal Regulations. 

19 ‘‘(4) CURRENT GENERATION BROADBAND SERV20 ICE.—The term ‘current generation broadband serv21 ice’ means the transmission of signals at a rate of 

22 at least 1,000,000 bits per second to the subscriber 

23 and at least 128,000 bits per second from the sub24 scriber. 
37 

•S 14 IS 

1 ‘‘(5) MULTIPLEXING OR DEMULTIPLEXING.— 

2 The term ‘multiplexing’ means the transmission of 2 

3 or more signals over a single channel, and the term 

4 ‘demultiplexing’ means the separation of 2 or more 

5 signals previously combined by compatible multi6 plexing equipment. 

7 ‘‘(6) NEXT GENERATION BROADBAND SERV8 ICE.—The term ‘next generation broadband service’ 

9 means the transmission of signals at a rate of at 

10 least 22,000,000 bits per second to the subscriber 

11 and at least 5,000,000 bits per second from the sub12 scriber. 

13 ‘‘(7) NONRESIDENTIAL SUBSCRIBER.—The 

14 term ‘nonresidential subscriber’ means any person 

15 who purchases broadband services which are deliv16 ered to the permanent place of business of such per17 son. 

18 ‘‘(8) OPEN VIDEO SYSTEM OPERATOR.—The 

19 term ‘open video system operator’ means any person 

20 authorized to provide service under section 653 of 

21 the Communications Act of 1934 (47 U.S.C. 573). 

22 ‘‘(9) OTHER WIRELESS CARRIER.—The term 

23 ‘other wireless carrier’ means any person (other than 

24 a telecommunications carrier, commercial mobile 

25 service carrier, cable operator, open video system op-
38 

•S 14 IS 

1 erator, or satellite carrier) providing current genera2 tion broadband services or next generation 

3 broadband service to subscribers through the radio 

4 transmission of energy. 

5 ‘‘(10) PACKET SWITCHING.—The term ‘packet 

6 switching’ means controlling or routing the path of 

7 any digitized transmission signal which is assembled 

8 into packets or cells. 

9 ‘‘(11) PROVIDER.—The term ‘provider’ means, 

10 with respect to any qualified equipment— 

11 ‘‘(A) a cable operator, 

12 ‘‘(B) a commercial mobile service carrier, 

13 ‘‘(C) an open video system operator, 

14 ‘‘(D) a satellite carrier, 

15 ‘‘(E) a telecommunications carrier, or 

16 ‘‘(F) any other wireless carrier, 

17 providing current generation broadband services or 

18 next generation broadband services to subscribers 

19 through such qualified equipment. 

20 ‘‘(12) PROVISION OF SERVICES.—A provider 

21 shall be treated as providing services to 1 or more 

22 subscribers if— 

23 ‘‘(A) such a subscriber has been passed by 

24 the provider’s equipment and can be connected 
39 

•S 14 IS 

1 to such equipment for a standard connection 

2 fee, 

3 ‘‘(B) the provider is physically able to de4 liver current generation broadband services or 

5 next generation broadband services, as applica6 ble, to such a subscriber without making more 

7 than an insignificant investment with respect to 

8 such subscriber, 

9 ‘‘(C) the provider has made reasonable ef10 forts to make such subscribers aware of the 

11 availability of such services, 

12 ‘‘(D) such services have been purchased by 

13 1 or more such subscribers, and 

14 ‘‘(E) such services are made available to 

15 such subscribers at average prices comparable 

16 to those at which the provider makes available 

17 similar services in any areas in which the pro18 vider makes available such services. 

19 ‘‘(13) QUALIFIED EQUIPMENT.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualified 

21 equipment’ means equipment which provides 

22 current generation broadband services or next 

23 generation broadband services— 

24 ‘‘(i) at least a majority of the time 

25 during periods of maximum demand to 
40 

•S 14 IS 

1 each subscriber who is utilizing such serv2 ices, and 

3 ‘‘(ii) in a manner substantially the 

4 same as such services are provided by the 

5 provider to subscribers through equipment 

6 with respect to which no deduction is al7 lowed under subsection (a)(1). 

8 ‘‘(B) ONLY CERTAIN INVESTMENT TAKEN

9 INTO ACCOUNT.—Except as provided in sub10 paragraph (C) or (D), equipment shall be taken 

11 into account under subparagraph (A) only to 

12 the extent it— 

13 ‘‘(i) extends from the last point of 

14 switching to the outside of the unit, build15 ing, dwelling, or office owned or leased by 

16 a subscriber in the case of a telecommuni17 cations carrier, 

18 ‘‘(ii) extends from the customer side 

19 of the mobile telephone switching office to 

20 a transmission/receive antenna (including 

21 such antenna) owned or leased by a sub22 scriber in the case of a commercial mobile 

23 service carrier, 

24 ‘‘(iii) extends from the customer side 

25 of the headend to the outside of the unit, 
41 

•S 14 IS 

1 building, dwelling, or office owned or 

2 leased by a subscriber in the case of a 

3 cable operator or open video system oper4 ator, or 

5 ‘‘(iv) extends from a transmission/re6 ceive antenna (including such antenna) 

7 which transmits and receives signals to or 

8 from multiple subscribers, to a trans9 mission/receive antenna (including such 

10 antenna) on the outside of the unit, build11 ing, dwelling, or office owned or leased by 

12 a subscriber in the case of a satellite car13 rier or other wireless carrier, unless such 

14 other wireless carrier is also a tele15 communications carrier. 

16 ‘‘(C) PACKET SWITCHING EQUIPMENT.— 

17 Packet switching equipment, regardless of loca18 tion, shall be taken into account under subpara19 graph (A) only if it is deployed in connection 

20 with equipment described in subparagraph (B) 

21 and is uniquely designed to perform the func22 tion of packet switching for current generation 

23 broadband services or next generation 

24 broadband services, but only if such packet 

25 switching is the last in a series of such func-
42 

•S 14 IS 

1 tions performed in the transmission of a signal 

2 to a subscriber or the first in a series of such 

3 functions performed in the transmission of a 

4 signal from a subscriber. 

5 ‘‘(D) MULTIPLEXING AND

6 DEMULTIPLEXING EQUIPMENT.—Multiplexing 

7 and demultiplexing equipment shall be taken 

8 into account under subparagraph (A) only to 

9 the extent it is deployed in connection with 

10 equipment described in subparagraph (B) and 

11 is uniquely designed to perform the function of 

12 multiplexing and demultiplexing packets or cells 

13 of data and making associated application 

14 adaptions, but only if such multiplexing or 

15 demultiplexing equipment is located between 

16 packet switching equipment described in sub17 paragraph (C) and the subscriber’s premises. 

18 ‘‘(14) QUALIFIED SUBSCRIBER.—The term 

19 ‘qualified subscriber’ means— 

20 ‘‘(A) with respect to the provision of cur21 rent generation broadband services— 

22 ‘‘(i) any nonresidential subscriber 

23 maintaining a permanent place of business 

24 in a rural area or underserved area, or 
43 

•S 14 IS 

1 ‘‘(ii) any residential subscriber resid2 ing in a dwelling located in a rural area or 

3 underserved area which is not a saturated 

4 market, and 

5 ‘‘(B) with respect to the provision of next 

6 generation broadband services— 

7 ‘‘(i) any nonresidential subscriber 

8 maintaining a permanent place of business 

9 in a rural area or underserved area, or 

10 ‘‘(ii) any residential subscriber. 

11 ‘‘(15) RESIDENTIAL SUBSCRIBER.—The term 

12 ‘residential subscriber’ means any individual who 

13 purchases broadband services which are delivered to 

14 such individual’s dwelling. 

15 ‘‘(16) RURAL AREA.—The term ‘rural area’ 

16 means any census tract which— 

17 ‘‘(A) is not within 10 miles of any incor18 porated or census designated place containing 

19 more than 25,000 people, and 

20 ‘‘(B) is not within a county or county 

21 equivalent which has an overall population den22 sity of more than 500 people per square mile of 

23 land. 

24 ‘‘(17) RURAL SUBSCRIBER.—The term ‘rural 

25 subscriber’ means any residential subscriber residing 
44 

•S 14 IS 

1 in a dwelling located in a rural area or nonresiden2 tial subscriber maintaining a permanent place of 

3 business located in a rural area. 

4 ‘‘(18) SATELLITE CARRIER.—The term ‘sat5 ellite carrier’ means any person using the facilities 

6 of a satellite or satellite service licensed by the Fed7 eral Communications Commission and operating in 

8 the Fixed-Satellite Service under part 25 of title 47 

9 of the Code of Federal Regulations or the Direct 

10 Broadcast Satellite Service under part 100 of title 

11 47 of such Code to establish and operate a channel 

12 of communications for distribution of signals, and 

13 owning or leasing a capacity or service on a satellite 

14 in order to provide such point-to-multipoint distribu15 tion. 

16 ‘‘(19) SATURATED MARKET.—The term ‘satu17 rated market’ means any census tract in which, as 

18 of the date of the enactment of this section— 

19 ‘‘(A) current generation broadband services 

20 have been provided by a single provider to 85 

21 percent or more of the total number of potential 

22 residential subscribers residing in dwellings lo23 cated within such census tract, and 

24 ‘‘(B) such services can be utilized— 
45 

•S 14 IS 

1 ‘‘(i) at least a majority of the time 

2 during periods of maximum demand by 

3 each such subscriber who is utilizing such 

4 services, and 

5 ‘‘(ii) in a manner substantially the 

6 same as such services are provided by the 

7 provider to subscribers through equipment 

8 with respect to which no deduction is al9 lowed under subsection (a)(1). 

10 ‘‘(20) SUBSCRIBER.—The term ‘subscriber’ 

11 means any person who purchases current generation 

12 broadband services or next generation broadband 

13 services. 

14 ‘‘(21) TELECOMMUNICATIONS CARRIER.—The 

15 term ‘telecommunications carrier’ has the meaning 

16 given such term by section 3(44) of the Communica17 tions Act of 1934 (47 U.S.C. 153(44)), but— 

18 ‘‘(A) includes all members of an affiliated 

19 group of which a telecommunications carrier is 

20 a member, and 

21 ‘‘(B) does not include a commercial mobile 

22 service carrier. 

23 ‘‘(22) TOTAL POTENTIAL SUBSCRIBER POPU24 LATION.—The term ‘total potential subscriber popu25 lation’ means, with respect to any area and based on 
46 

•S 14 IS 

1 the most recent census data, the total number of po2 tential residential subscribers residing in dwellings 

3 located in such area and potential nonresidential 

4 subscribers maintaining permanent places of busi5 ness located in such area. 

6 ‘‘(23) UNDERSERVED AREA.—The term ‘under7 served area’ means— 

8 ‘‘(A) any census tract which is located in— 

9 ‘‘(i) an empowerment zone or enter10 prise community designated under section 

11 1391, or 

12 ‘‘(ii) the District of Columbia Enter13 prise Zone established under section 1400, 

14 or 

15 ‘‘(B) any census tract— 

16 ‘‘(i) the poverty level of which is at 

17 least 30 percent (based on the most recent 

18 census data), and 

19 ‘‘(ii) the median family income of 

20 which does not exceed— 

21 ‘‘(I) in the case of a census tract 

22 located in a metropolitan statistical 

23 area, 70 percent of the greater of the 

24 metropolitan area median family in-
47 

•S 14 IS 

1 come or the statewide median family 

2 income, and 

3 ‘‘(II) in the case of a census tract 

4 located in a nonmetropolitan statis5 tical area, 70 percent of the non6 metropolitan statewide median family 

7 income. 

8 ‘‘(24) UNDERSERVED SUBSCRIBER.—The term 

9 ‘underserved subscriber’ means any residential sub10 scriber residing in a dwelling located in an under11 served area or nonresidential subscriber maintaining 

12 a permanent place of business located in an under13 served area. 

14 ‘‘(f) SPECIAL RULES.— 

15 ‘‘(1) PROPERTY USED OUTSIDE THE UNITED

16 STATES, ETC., NOT QUALIFIED.—No expenditures 

17 shall be taken into account under subsection (a)(1) 

18 with respect to the portion of the cost of any prop19 erty referred to in section 50(b) or with respect to 

20 the portion of the cost of any property specified in 

21 an election under section 179. 

22 ‘‘(2) BASIS REDUCTION.— 

23 ‘‘(A) IN GENERAL.—For purposes of this 

24 title, the basis of any property shall be reduced 
48 

•S 14 IS 

1 by the portion of the cost of such property 

2 taken into account under subsection (a)(1). 

3 ‘‘(B) ORDINARY INCOME RECAPTURE.— 

4 For purposes of section 1245, the amount of 

5 the deduction allowable under subsection (a)(1) 

6 with respect to any property which is of a char7 acter subject to the allowance for depreciation 

8 shall be treated as a deduction allowed for de9 preciation under section 167. 

10 ‘‘(3) COORDINATION WITH SECTION 38.—No 

11 credit shall be allowed under section 38 with respect 

12 to any amount for which a deduction is allowed 

13 under subsection (a)(1).’’. 

14 (b) SPECIAL RULE FOR MUTUAL OR COOPERATIVE

15 TELEPHONE COMPANIES.—Section 512(b) of the Internal 

16 Revenue Code of 1986 (relating to modifications) is 

17 amended— 

18 (1) by redesignating paragraph (18) as added 

19 by section 702(a) of the American Jobs Creation Act 

20 of 2004 as paragraph (19), and 

21 (2) by adding at the end the following new 

22 paragraph: 

23 ‘‘(20) SPECIAL RULE FOR MUTUAL OR COOPER24 ATIVE TELEPHONE COMPANIES.—A mutual or coop25 erative telephone company which for the taxable year 
49 

•S 14 IS 

1 satisfies the requirements of section 501(c)(12)(A) 

2 may elect to reduce its unrelated business taxable in3 come for such year, if any, by an amount that does 

4 not exceed the qualified broadband expenditures 

5 which would be taken into account under section 

6 191 for such year by such company if such company 

7 was not exempt from taxation. Any amount which is 

8 allowed as a deduction under this paragraph shall 

9 not be allowed as a deduction under section 191 and 

10 the basis of any property to which this paragraph 

11 applies shall be reduced under section 

12 1016(a)(32).’’. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1) Section 263(a)(1) of the Internal Revenue 

15 Code of 1986 (relating to capital expenditures) is 

16 amended by striking ‘‘or’’ at the end of subpara17 graph (H), by striking the period at the end of sub18 paragraph (I) and inserting ‘‘, or’’, and by adding 

19 at the end the following new subparagraph: 

20 ‘‘(J) expenditures for which a deduction is 

21 allowed under section 191.’’. 

22 (2) Section 1016(a) of such Code is amended 

23 by striking ‘‘and’’ at the end of paragraph (30), by 

24 striking the period at the end of paragraph (31) and 
50 

•S 14 IS 

1 inserting ‘‘, and’’, and by adding at the end the fol2 lowing new paragraph: 

3 ‘‘(32) to the extent provided in section 

4 191(f)(2).’’. 

5 (3) The table of sections for part VI of sub6 chapter A of chapter 1 of such Code is amended by 

7 inserting after the item relating to section 190 the 

8 following new item: 

‘‘Sec. 191. Broadband expenditures.’’. 

9 (d) DESIGNATION OF CENSUS TRACTS.— 

10 (1) IN GENERAL.—The Secretary of the Treas11 ury shall, not later than 90 days after the date of 

12 the enactment of this Act, designate and publish 

13 those census tracts meeting the criteria described in 

14 paragraphs (16), (22), and (23) of section 191(e) of 

15 the Internal Revenue Code of 1986 (as added by 

16 this section). In making such designations, the Sec17 retary of the Treasury shall consult with such other 

18 departments and agencies as the Secretary deter19 mines appropriate. 

20 (2) SATURATED MARKET.— 

21 (A) IN GENERAL.—For purposes of desig22 nating and publishing those census tracts meet23 ing the criteria described in subsection (e)(19) 

24 of such section 191— 
51 

•S 14 IS 

1 (i) the Secretary of the Treasury shall 

2 prescribe not later than 30 days after the 

3 date of the enactment of this Act the form 

4 upon which any provider which takes the 

5 position that it meets such criteria with re6 spect to any census tract shall submit a 

7 list of such census tracts (and any other 

8 information required by the Secretary) not 

9 later than 60 days after the date of the 

10 publication of such form, and 

11 (ii) the Secretary of the Treasury 

12 shall publish an aggregate list of such cen13 sus tracts and the applicable providers not 

14 later than 30 days after the last date such 

15 submissions are allowed under clause (i). 

16 (B) NO SUBSEQUENT LISTS REQUIRED.— 

17 The Secretary of the Treasury shall not be re18 quired to publish any list of census tracts meet19 ing such criteria subsequent to the list de20 scribed in subparagraph (A)(ii). 

21 (e) OTHER REGULATORY MATTERS.— 

22 (1) PROHIBITION.—No Federal or State agency 

23 or instrumentality shall adopt regulations or rate24 making procedures that would have the effect of 

25 eliminating or reducing any deduction or portion 
52 

•S 14 IS 

1 thereof allowed under section 191 of the Internal 

2 Revenue Code of 1986 (as added by this section) or 

3 otherwise subverting the purpose of this section. 

4 (2) TREASURY REGULATORY AUTHORITY.—It is 

5 the intent of Congress in providing the election to 

6 deduct qualified broadband expenditures under sec7 tion 191 of the Internal Revenue Code of 1986 (as 

8 added by this section) to provide incentives for the 

9 purchase, installation, and connection of equipment 

10 and facilities offering expanded broadband access to 

11 the Internet for users in certain low income and 

12 rural areas of the United States, as well as to resi13 dential users nationwide, in a manner that main14 tains competitive neutrality among the various class15 es of providers of broadband services. Accordingly, 

16 the Secretary of the Treasury shall prescribe such 

17 regulations as may be necessary or appropriate to 

18 carry out the purposes of section 191 of such Code, 

19 including— 

20 (A) regulations to determine how and when 

21 a taxpayer that incurs qualified broadband ex22 penditures satisfies the requirements of section 

23 191 of such Code to provide broadband serv24 ices, and 
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1 (B) regulations describing the information, 

2 records, and data taxpayers are required to pro3 vide the Secretary to substantiate compliance 

4 with the requirements of section 191 of such 

5 Code. 

6 (f) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to expenditures incurred after the 

8 date of the enactment of this Act and before the date 

9 which is 60 months after the date of the enactment of 

10 this Act. 

11 CHAPTER 7—RESEARCH AND 

12 DEVELOPMENT TAX CREDIT 

13 SEC. 281. FINDINGS. 

14 Congress finds the following: 

15 (1) Research and development performed in the 

16 United States results in quality jobs, better and 

17 safer products, increased ownership of technology18 based intellectual property, and higher productivity 

19 in the United States. 

20 (2) Since 1994, private sector research and de21 velopment employment has grown at a faster rate 

22 than overall private sector employment in the United 

23 States. From 1994 to 2000, there was an average 

24 annual growth rate of 5.4 percent in research and 
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1 development employment, compared with 2.7 percent 

2 in total employment. 

3 (3) The extent to which companies perform and 

4 increase research and development activities in the 

5 United States is in part dependent on Federal tax 

6 policy. 

7 (4) The private sector performed most of the 

8 Nation’s research and development and accounted 

9 for more than two-thirds of total research and devel10 opment performance in 2003. Of the 

11 $194,000,000,000 in industrial research and devel12 opment performed in 2003, more than 90 percent 

13 was funded by industry. 

14 (5) Many of the countries with which the 

15 United States competes have introduced new or re16 vised national plans for science, technology, and in17 novation policy, and a growing number of countries 

18 have established targets for increased research and 

19 development spending. Virtually all countries are 

20 seeking ways to enhance the quality and efficiency of 

21 public research, stimulate business investments in 

22 research and development, and strengthen linkages 

23 between the public and private sectors. 

24 (6) Direct government support to business re25 search and development has declined, both in abso-
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1 lute terms and as a share of business research and 

2 development, and greater emphasis is being placed 

3 on indirect measures, such as tax incentives for re4 search and development. 

5 (7) Congress should make permanent a re6 search and development credit that provides a mean7 ingful incentive to all types of taxpayers. 

8 SEC. 282. PERMANENT EXTENSION OF RESEARCH CREDIT. 

9 (a) IN GENERAL.—Section 41 of the Internal Rev10 enue Code of 1986 (relating to credit for increasing re11 search activities) is amended by striking subsection (h). 

12 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

13 section 45C(b) of such Code is amended by striking sub14 paragraph (D). 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to amounts paid or incurred after 

17 the date of the enactment of this Act, in taxable years 

18 ending after such date. 

19 SEC. 283. INCREASE IN RATES OF ALTERNATIVE INCRE20 MENTAL CREDIT. 

21 (a) IN GENERAL.—Subparagraph (A) of section 

22 41(c)(4) of the Internal Revenue Code of 1986 (relating 

23 to election of alternative incremental credit) is amended— 

24 (1) by striking ‘‘2.65 percent’’ and inserting ‘‘3 

25 percent’’, 
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1 (2) by striking ‘‘3.2 percent’’ and inserting ‘‘4 

2 percent’’, and 

3 (3) by striking ‘‘3.75 percent’’ and inserting ‘‘5 

4 percent’’. 

5 (b) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years ending after the 

7 date of the enactment of this Act. 

8 SEC. 284. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALI9 FIED RESEARCH EXPENSES. 

10 (a) IN GENERAL.—Subsection (c) of section 41 of the 

11 Internal Revenue Code of 1986 (relating to base amount) 

12 is amended by redesignating paragraphs (5) and (6) as 

13 paragraphs (6) and (7), respectively, and by inserting 

14 after paragraph (4) the following new paragraph: 

15 ‘‘(5) ELECTION OF ALTERNATIVE SIMPLIFIED

16 CREDIT.— 

17 ‘‘(A) IN GENERAL.—At the election of the 

18 taxpayer, the credit determined under sub19 section (a)(1) shall be equal to 12 percent of so 

20 much of the qualified research expenses for the 

21 taxable year as exceeds 50 percent of the aver22 age qualified research expenses for the 3 tax23 able years preceding the taxable year for which 

24 the credit is being determined. 
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1 ‘‘(B) SPECIAL RULE IN CASE OF NO

2 QUALIFIED RESEARCH EXPENSES IN ANY OF 3

3 PRECEDING TAXABLE YEARS.— 

4 ‘‘(i) TAXPAYERS TO WHICH SUBPARA5 GRAPH APPLIES.—The credit under this 

6 paragraph shall be determined under this 

7 subparagraph if the taxpayer has no quali8 fied research expenses in any 1 of the 3 

9 taxable years preceding the taxable year 

10 for which the credit is being determined. 

11 ‘‘(ii) CREDIT RATE.—The credit de12 termined under this subparagraph shall be 

13 equal to 6 percent of the qualified research 

14 expenses for the taxable year. 

15 ‘‘(C) ELECTION.—An election under this 

16 paragraph shall apply to the taxable year for 

17 which made and all succeeding taxable years 

18 unless revoked with the consent of the Sec19 retary. An election under this paragraph may 

20 not be made for any taxable year to which an 

21 election under paragraph (4) applies.’’. 

22 (b) COORDINATION WITH ELECTION OF ALTER23 NATIVE INCREMENTAL CREDIT.— 

24 (1) IN GENERAL.—Section 41(c)(4)(B) of the 

25 Internal Revenue Code of 1986 (relating to election) 
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1 is amended by adding at the end the following: ‘‘An 

2 election under this paragraph may not be made for 

3 any taxable year to which an election under para4 graph (5) applies.’’. 

5 (2) TRANSITION RULE.—In the case of an elec6 tion under section 41(c)(4) of the Internal Revenue 

7 Code of 1986 which applies to the taxable year 

8 which includes the date of the enactment of this Act, 

9 such election shall be treated as revoked with the 

10 consent of the Secretary of the Treasury if the tax11 payer makes an election under section 41(c)(5) of 

12 such Code (as added by subsection (a)) for such 

13 year. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to taxable years ending after the 

16 date of the enactment of this Act. 

17 SEC. 285. EXPANSION OF RESEARCH CREDIT. 

18 (a) CREDIT FOR EXPENSES ATTRIBUTABLE TO CER19 TAIN COLLABORATIVE RESEARCH CONSORTIA.— 

20 (1) IN GENERAL.—Section 41(a) of the Internal 

21 Revenue Code of 1986 (relating to credit for increas22 ing research activities) is amended by striking ‘‘and’’ 

23 at the end of paragraph (1), by striking the period 

24 at the end of paragraph (2) and inserting ‘‘, and’’, 
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1 and by adding at the end the following new para2 graph: 

3 ‘‘(3) 20 percent of the amounts paid or in4 curred by the taxpayer in carrying on any trade or 

5 business of the taxpayer during the taxable year (in6 cluding as contributions) to a research consortium.’’. 

7 (2) RESEARCH CONSORTIUM DEFINED.—Sec8 tion 41(f) of such Code (relating to special rules) is 

9 amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(6) RESEARCH CONSORTIUM.— 

12 ‘‘(A) IN GENERAL.—The term ‘research 

13 consortium’ means any organization— 

14 ‘‘(i) which is— 

15 ‘‘(I) described in section 

16 501(c)(3) or 501(c)(6) and is exempt 

17 from tax under section 501(a) and is 

18 organized and operated primarily to 

19 conduct research, or 

20 ‘‘(II) organized and operated pri21 marily to conduct research in the pub22 lic interest (within the meaning of sec23 tion 501(c)(3)), 

24 ‘‘(ii) which is not a private founda25 tion, 
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1 ‘‘(iii) to which at least 5 unrelated 

2 persons paid or incurred during the cal3 endar year in which the taxable year of the 

4 organization begins amounts (including as 

5 contributions) to such organization for re6 search, and 

7 ‘‘(iv) to which no single person paid 

8 or incurred (including as contributions) 

9 during such calendar year an amount 

10 equal to more than 50 percent of the total 

11 amounts received by such organization 

12 during such calendar year for research. 

13 ‘‘(B) TREATMENT OF PERSONS.—All per14 sons treated as a single employer under sub15 section (a) or (b) of section 52 shall be treated 

16 as related persons for purposes of subparagraph 

17 (A)(iii) and as a single person for purposes of 

18 subparagraph (A)(iv).’’. 

19 (3) CONFORMING AMENDMENT.—Section 

20 41(b)(3)(C)(ii) of such Code is amended by inserting 

21 ‘‘(other than a research consortium)’’ after ‘‘organi22 zation’’. 

23 (b) REPEAL OF LIMITATION ON CONTRACT RE24 SEARCH EXPENSES PAID TO SMALL BUSINESSES, UNI25 VERSITIES, AND FEDERAL LABORATORIES.—Section 
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1 41(b)(3) of the Internal Revenue Code of 1986 (relating 

2 to contract research expenses) is amended by adding at 

3 the end the following new subparagraph: 

4 ‘‘(D) AMOUNTS PAID TO ELIGIBLE SMALL

5 BUSINESSES, UNIVERSITIES, AND FEDERAL

6 LABORATORIES.— 

7 ‘‘(i) IN GENERAL.—In the case of 

8 amounts paid by the taxpayer to— 

9 ‘‘(I) an eligible small business, 

10 ‘‘(II) an institution of higher 

11 education (as defined in section 

12 3304(f)), or 

13 ‘‘(III) an organization which is a 

14 Federal laboratory, 

15 for qualified research, subparagraph (A) 

16 shall be applied by substituting ‘100 per17 cent’ for ‘65 percent’. 

18 ‘‘(ii) ELIGIBLE SMALL BUSINESS.— 

19 For purposes of this subparagraph, the 

20 term ‘eligible small business’ means a 

21 small business with respect to which the 

22 taxpayer does not own (within the meaning 

23 of section 318) 50 percent or more of— 
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1 ‘‘(I) in the case of a corporation, 

2 the outstanding stock of the corpora3 tion (either by vote or value), and 

4 ‘‘(II) in the case of a small busi5 ness which is not a corporation, the 

6 capital and profits interests of the 

7 small business. 

8 ‘‘(iii) SMALL BUSINESS.—For pur9 poses of this subparagraph— 

10 ‘‘(I) IN GENERAL.—The term 

11 ‘small business’ means, with respect 

12 to any calendar year, any person if 

13 the annual average number of employ14 ees employed by such person during 

15 either of the 2 preceding calendar 

16 years was 500 or fewer. For purposes 

17 of the preceding sentence, a preceding 

18 calendar year may be taken into ac19 count only if the person was in exist20 ence throughout the year. 

21 ‘‘(II) STARTUPS, CONTROLLED

22 GROUPS, AND PREDECESSORS.—Rules 

23 similar to the rules of subparagraphs 

24 (B) and (D) of section 220(c)(4) shall 

25 apply for purposes of this clause. 
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1 ‘‘(iv) FEDERAL LABORATORY.—For 

2 purposes of this subparagraph, the term 

3 ‘Federal laboratory’ has the meaning given 

4 such term by section 4(6) of the Steven5 son-Wydler Technology Innovation Act of 

6 1980 (15 U.S.C. 3703(6)), as in effect on 

7 the date of the enactment of this subpara8 graph.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to amounts paid or incurred after 

11 the date of the enactment of this Act, in taxable years 

12 ending after such date. 

13 Subtitle C—Technology Programs 

14 SEC. 291. AUTHORIZATIONS OF APPROPRIATIONS FOR THE 

15 ADVANCED TECHNOLOGY PROGRAM AND 

16 THE MANUFACTURING EXTENSION PARTNER17 SHIP PROGRAM. 

18 (a) ADVANCED TECHNOLOGY PROGRAM.— 

19 (1) FINDINGS.—Congress makes the following 

20 findings: 

21 (A) The Advanced Technology Program 

22 (ATP) has played an important role in helping 

23 United States companies develop new, break24 through technologies. ATP has funded research 

25 ranging from cancer vaccines, to hi-tech flexible 
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1 displays, to composite materials, to fuel cells, 

2 all of which are the kinds of technological ad3 vances that give the United States a competi4 tive advantage globally. 

5 (B) The National Academy of Science has 

6 found it to be an effective program that could 

7 use more funding wisely, and the National As8 sociation of Manufacturers (NAM), the Bio9 technology Industry Organization (BIO), the 

10 Industrial Research Institute, the Alliance for 

11 Science and Technology Research in America, 

12 and the American Chemical Society support 

13 ATP. 

14 (C) Businesses need this type of program 

15 more than ever as venture capital funds have 

16 become more scarce in the current economy. 

17 ATP bridges this gap between the research lab 

18 and market capital, facilitating the critical 

19 transfer of technology to the private sector that 

20 leads to the development of products and serv21 ices that make use of new, technological break22 throughs. 

23 (D) Not only does ATP promote economic 

24 security and global competitiveness for the na25 tion as a whole, it is an important program for 
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1 generating jobs domestically. Last year nearly 

2 80 percent of ATP awards went to small busi3 nesses, an essential job-creating sector in the 

4 United States economy. 

5 (E) ATP is also vital to the homeland se6 curity of the United States. ATP has funded 

7 many projects in detection, preparedness, pre8 vention and response with significant applica9 tions for homeland security. With continued fi10 nancial support through ATP to develop these 

11 projects and their security applications, the 

12 United States will become more secure. 

13 (F) Despite the importance and success of 

14 ATP, current funding levels do not meet the de15 mand. Over 1,000 proposals for ATP funding 

16 that were submitted in 2002 yielded enough 

17 high quality projects for the ATP funding that 

18 was available in both fiscal years 2002 and 

19 2003. The 870 applications for ATP funding 

20 received in fiscal year 2004 made the second 

21 highest number of applications for ATP funding 

22 that were received in any fiscal year, but fund23 ing was only available for 59 awards. No fund24 ing for new awards is available in fiscal year 

25 2005. 
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1 (G) According to the 2004 annual report 

2 on the ATP, returns from just 41 of the 736 

3 ATP projects have exceeded $17,000,000,000 

4 in economic benefits, more than 8 times the 

5 amount of money spent on all 736 projects. 

6 (2) AUTHORIZATION OF APPROPRIATIONS.— 

7 There are authorized to be appropriated to the Sec8 retary of Commerce for the Advanced Technology 

9 Program of the National Institute of Standards and 

10 Technology— 

11 (A) $247,200,000 for fiscal year 2005; 

12 (B) $254,616,000 for fiscal year 2006; 

13 (C) $262,254,000 for fiscal year 2007; and 

14 (D) $270,122,000 for fiscal year 2008. 

15 (b) MANUFACTURING EXTENSION PARTNERSHIP

16 PROGRAM.— 

17 (1) FINDINGS.—Congress makes the following 

18 findings: 

19 (A) Small- and medium-sized manufactur20 ers in the United States employ 7,000,000 peo21 ple and contribute $711,000,000,000, or 7 per22 cent of the Gross Domestic Product to the 

23 United States economy. The Hollings Manufac24 turing Extension Partnership (MEP) Program 

25 supports a network of locally run centers that 
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1 provide technical advice and consulting to these 

2 firms in all fifty States and Puerto Rico. Since 

3 its inception, the Hollings MEP Program has 

4 assisted 149,000 of the 380,000 small and me5 dium-sized manufacturers in the United States. 

6 (B) The Hollings MEP Program is a prov7 en program. Studies show that Hollings MEP 

8 Program manufacturers have four times more 

9 productivity growth than non-MEP firms, and 

10 the program has proven to lead to increased 

11 sales, increased capital investment, cost savings 

12 and the creation or retention of jobs in the 

13 United States. 

14 (C) The Hollings MEP Program is more 

15 important today than ever as the Nation faces 

16 a looming current account deficit. The United 

17 States has lost over 880,000 manufacturing 

18 jobs during 2003 and 2004. Such manufac19 turing jobs pay on average 19 percent higher 

20 wages than the industry average. 

21 (D) The Hollings MEP Program is not 

22 just about economic security. Manufacturers 

23 with fewer than 500 employees comprise more 

24 than 80 percent of the suppliers in key defense 
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1 sectors. Helping such manufacturers helps the 

2 national security of the United States. 

3 (2) AUTHORIZATION OF APPROPRIATIONS.— 

4 There are authorized to be appropriated to the Sec5 retary of Commerce for the Hollings Manufacturing 

6 Extension Partnership Program of the National In7 stitute of Standards and Technology— 

8 (A) $110,210,000 for fiscal year 2005; 

9 (B) $113,516,000 for fiscal year 2006; 

10 (C) $116,921,000 for fiscal year 2007; and 

11 (D) $120,429,000 for fiscal year 2008. 

12 (3) MANUFACTURING EXTENSION PARTNERSHIP

13 PROGRAM DEFINED.—In this subsection, the term 

14 ‘‘Hollings Manufacturing Extension Partnership 

15 Program’’ means the program of Hollings Manufac16 turing Extension Partnership carried out by the Na17 tional Institute of Standards and Technology under 

18 section 26 of the National Institute of Standards 

19 and Technology Act (15 U.S.C. 278l), as provided in 

20 part 292 of title 15, Code of Federal Regulations. 

21 SEC. 292. SENSE OF THE SENATE PROMOTING SCIENCE 

22 AND TECHNOLOGY FUNDING FOR A STRONG23 ER ECONOMIC FUTURE. 

24 (a) FINDINGS.—The Senate makes the following 

25 findings: 
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1 (1) Leading economists have consistently attrib2 uted more than 50 percent of the growth in the 

3 economy of the United States to scientific and tech4 nological innovation. The economic future of the 

5 United States, thus, depends on the United States 

6 remaining the world leader in science and tech7 nology. 

8 (2) If the United States loses its leadership in 

9 science and technology, its capacity for economic 

10 growth and high-wage job creation will soon atrophy, 

11 with deleterious effects on the national security of 

12 the United States. In 2001, the Hart-Rudman Com13 mission on National Security for the 21st Century 

14 characterized the failure of the United States to in15 vest in science and to reform science and mathe16 matics education as the second biggest threat to na17 tional security, stating that ‘‘[s]econd only to a 

18 weapon of mass destruction detonating in an Amer19 ican city, we can think of nothing more dangerous 

20 than a failure to manage properly science, tech21 nology, and education for the common good over the 

22 next quarter century’’. 

23 (3) The United States has reaped enormous 

24 economic benefits from being the first country to 

25 lead in the development of the Internet and the har-
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1 nessing of biotechnology. These developments, 

2 though, are far from being the last technological rev3 olutions to influence the economy of the United 

4 States. Technological changes that promise major 

5 economic effects are now being made in areas such 

6 as— 

7 (A) microelectronics, including the contin8 ued miniaturization of electronic devices and 

9 the increasingly widespread diffusion of data 

10 processing power; 

11 (B) high-end supercomputing; 

12 (C) telecommunications technologies; 

13 (C) artificial materials, including materials 

14 in which the structure has been designed and 

15 built at the atomic or molecular level, the es16 sence of nanotechnology; 

17 (D) robotics; and 

18 (E) new energy technologies, particular in19 cluding renewable energy technologies that are 

20 as inexpensive as traditional fossil sources of 

21 energy, technologies using hydrogen as an en22 ergy carrier, and technologies for energy effi23 ciencies. 

24 (4) Because of the interconnected nature of 

25 modern science and technology, advances in one field 
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1 depend on research results in other, seemingly unre2 lated fields. Biomedical science has been consistently 

3 shown to rely on advances in fields such as chem4 istry, materials science, mathematics, computer 

5 science, and physics. Without basic advances in 

6 chemistry, computer science, and mathematics, the 

7 sequencing of the human genome could not have 

8 been successfully undertaken. 

9 (5) In the 60 years since World War II, other 

10 countries and regions of the world have built science 

11 and technology capabilities that rival those of the 

12 United States today, or that could rival such capa13 bilities of the United States in the future. The gov14 ernments of China, India, Japan, and the countries 

15 of the European Union have all targeted significant 

16 advancements in research and innovation as central 

17 elements of the plans for future national and re18 gional economic prosperity. 

19 (6) President George W. Bush has largely ig20 nored this challenge, proposing budgets that have 

21 under-funded or terminated key programs promoting 

22 United States scientific and technological strength, 

23 including cuts to— 

24 (A) basic and applied research in the De25 partment of Defense; 
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1 (B) agricultural research; 

2 (C) transportation research; and 

3 (D) fundamental research in the physical 

4 sciences and engineering at the Department of 

5 Energy and elsewhere. 

6 (7) For other programs that have been pro7 posed for small increases, such as the National 

8 Science Foundation, the amount of funding provided 

9 to individual grantees is well below the amounts that 

10 would lead to optimal scientific productivity and con11 tinued United States leadership in science and tech12 nology. In fiscal year 2004, the National Science 

13 Foundation’s stringent peer review evaluation proc14 ess judged approximately 12,000 out of some 40,000 

15 proposals as ‘‘very good to excellent’’ or ‘‘excellent,’’ 

16 yet, due to budget constraints, only 56 percent of 

17 such proposals were funded. 

18 (8) The National Science Foundation and the 

19 Office of Science in the Department of Energy are 

20 among the greatest assets of the United States for 

21 the advancement of science, mathematical, engineer22 ing, and technology research and education. Al23 though the National Science Foundation accounts 

24 for only 4 percent of Federal research and develop25 ment spending, it provides nearly 50 percent of all 
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1 Federal support for non-medical basic research con2 ducted in United States colleges and universities. 

3 Similarly, the Office of Science of the Department of 

4 Energy funds over half of all university research in 

5 disciplines such as physics and materials science, 

6 and has played a crucial role in national science and 

7 technology initiatives such as advancing high-per8 formance computing and the sequencing of the 

9 human genome. Both the National Science Founda10 tion and the Office of Science fund research in new 

11 frontiers of scientific inquiry and contribute to cre12 ating a highly skilled, competitive workforce in 

13 science and engineering. 

14 (9) President Bush has also consistently pro15 posed terminating the Advanced Technology Pro16 gram at the Department of Commerce, which helps 

17 stimulate companies to participate in high-risk, high18 payoff research and development and is perhaps one 

19 of the most successful programs in directly stimu20 lating industrial innovation in the United States. 

21 Projects supported by the Advanced Technology Pro22 gram span a broad range of key technology areas, 

23 such as oil exploration, automobile manufacturing, 

24 and new medical diagnostic and therapeutic tech25 nologies and investments made by the program ac-
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1 celerate the development process for innovative tech2 nologies that promise significant commercial payoff 

3 and widespread benefits. 

4 (10) The continual cycle of basic research, ap5 plied research, and development gives rise to new 

6 products and processes, new ideas and under7 standing, and new researchers and educators. Each 

8 link in this chain depends on the others. Basic re9 search produces the fundamental understandings 

10 that underpin applications and the development 

11 process. The resulting technologies and innovations 

12 create economic growth through new products and 

13 job creation and stimulate new thinking and ad14 vances in scientific instrumentation, which in turn 

15 stimulate new inquiries that lead to new funda16 mental research. All of this activity improves the 

17 quality of life in the United States, and when ade18 quately supported, contributes to the continued lead19 ership of the United States in science and tech20 nology. 

21 (11) A revitalized science and technology policy 

22 focused on advancing all of the links of this chain, 

23 from basic research through technology deployment, 

24 is necessary if the United States is to maintain its 

25 technological preeminence over the next decade and 
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1 beyond. Applications stemming from basic research 

2 can take over 20 years to evolve into next generation 

3 technologies. Inadequate funding of basic research 

4 may not seem acute today, but 20 years from now, 

5 it will be extremely difficult to correct an inability of 

6 the United States to compete scientifically and tech7 nologically, which could be caused by inadequate 

8 funding now. 

9 (12) In order to ensure strength in these areas, 

10 it is necessary for the United States Government to 

11 ensure that scientists and technology experts in the 

12 United States receive the best education possible. 

13 After the Russians launched Sputnik, Congress 

14 passed the National Defense Education Act of 1958 

15 (Public Law 85–864), which declared ‘‘an edu16 cational emergency’’ and led to the more than dou17 bling of Federal expenditures for education. The 

18 programs authorized under that Act helped the 

19 United States to improve rapidly in the areas of 

20 science and technology, and led to United States 

21 dominance in the arms race and the global economy. 

22 (13) The United States would be well served by 

23 the enactment of a new National Defense Education 

24 Act. Third in the world in 1975, America now ranks 

25 15th in the development of new scientists and engi-
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1 neers. Today, India and China annually produce 10 

2 times as many new engineers as the United States. 

3 Out of over 15,000,000 college students in the 

4 United States, fewer than 400,000 individuals grad5 uate with a bachelor’s degree in math, science, engi6 neering, or technology each year, and only 75,000 

7 postgraduate students go on to obtain a master’s de8 gree in math, science, engineering, or technology. 

9 (b) SENSE OF THE SENATE.—It is the sense of the 

10 Senate that— 

11 (1) Congress and the President should direct 

12 significant new investments in the National Science 

13 Foundation, the Office of Science at the Department 

14 of Energy, the National Institutes of Health, and 

15 the National Institute of Standards and Technology 

16 to increase federally funded research in basic science 

17 and technology so that the United States can better 

18 compete in the international economy; and 

19 (2) Congress and the President should direct 

20 significant new investments into the enhancement of 

21 elementary and secondary education programs re22 lated to math, science, and technology and substan23 tially expand access to postsecondary education for 

24 United States students seeking degrees in math, 

25 science, and technology. 
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1 TITLE III—FAIR TRADE AND 

2 COMPETITIVENESS 

3 Subtitle A—Trade Enforcement 

4 Enhancement 

5 SEC. 311. IDENTIFICATION OF TRADE EXPANSION PRIOR6 ITIES. 

7 Section 310 of the Trade Act of 1974 (19 U.S.C. 

8 2420) is amended to read as follows: 

9 ‘‘SEC. 310. IDENTIFICATION OF TRADE EXPANSION PRIOR10 ITIES. 

11 ‘‘(a) IDENTIFICATION.— 

12 ‘‘(1) IDENTIFICATION AND REPORT.—Within 30 

13 days after the submission in each of calendar year 

14 2005 through 2009 of the report required by section 

15 181(b), the Trade Representative shall— 

16 ‘‘(A) review United States trade expansion 

17 priorities; 

18 ‘‘(B) identify priority foreign country prac19 tices, the elimination of which is likely to have 

20 the most significant potential to increase 

21 United States exports, either directly or 

22 through the establishment of a beneficial prece23 dent; and 

24 ‘‘(C) submit to the Committee on Finance 

25 of the Senate and the Committee on Ways and 
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1 Means of the House of Representatives and 

2 publish in the Federal Register a report on the 

3 priority foreign country practices identified. 

4 ‘‘(2) FACTORS.—In identifying priority foreign 

5 country practices under paragraph (1), the Trade 

6 Representative shall take into account all relevant 

7 factors, including— 

8 ‘‘(A) the major barriers and trade dis9 torting practices described in the National 

10 Trade Estimate Report required under section 

11 181(b); 

12 ‘‘(B) the trade agreements to which a for13 eign country is a party and its compliance with 

14 those agreements; 

15 ‘‘(C) the medium- and long-term implica16 tions of foreign government procurement plans; 

17 and 

18 ‘‘(D) the international competitive position 

19 and export potential of United States products 

20 and services. 

21 ‘‘(3) CONTENTS OF REPORT.—The Trade Rep22 resentative may include in the report, if appro23 priate— 
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1 ‘‘(A) a description of foreign country prac2 tices that may in the future warrant identifica3 tion as priority foreign country practices; and 

4 ‘‘(B) a statement about other foreign coun5 try practices that were not identified because 

6 they are already being addressed by provisions 

7 of United States trade law, by existing bilateral 

8 trade agreements, or as part of trade negotia9 tions with other countries and progress is being 

10 made toward the elimination of such practices. 

11 ‘‘(b) INITIATION OF CONSULTATIONS.—By no later 

12 than the date that is 21 days after the date on which a 

13 report is submitted to the appropriate congressional com14 mittees under subsection (a)(1), the Trade Representative 

15 shall seek consultations with each foreign country identi16 fied in the report as engaging in priority foreign country 

17 practices for the purpose of reaching a satisfactory resolu18 tion of such priority practices. 

19 ‘‘(c) INITIATION OF INVESTIGATION.—If a satisfac20 tory resolution of priority foreign country practices has 

21 not been reached under subsection (b) within 90 days after 

22 the date on which a report is submitted to the appropriate 

23 congressional committees under subsection (a)(1), the 

24 Trade Representative shall initiate under section 
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1 302(b)(1) an investigation under this chapter with respect 

2 to such priority foreign country practices. 

3 ‘‘(d) AGREEMENTS FOR THE ELIMINATION OF BAR4 RIERS.—In the consultations with a foreign country that 

5 the Trade Representative is required to request under sec6 tion 303(a) with respect to an investigation initiated by 

7 reason of subsection (c), the Trade Representative shall 

8 seek to negotiate an agreement that provides for the elimi9 nation of the practices that are the subject of the inves10 tigation as quickly as possible or, if elimination of the 

11 practices is not feasible, an agreement that provides for 

12 compensatory trade benefits. 

13 ‘‘(e) REPORTS.—The Trade Representative shall in14 clude in the semiannual report required by section 309 

15 a report on the status of any investigations initiated pur16 suant to subsection (c) and, where appropriate, the extent 

17 to which such investigations have led to increased opportu18 nities for the export of products and services of the United 

19 States.’’. 

20 SEC. 312. CHIEF ENFORCEMENT NEGOTIATOR. 

21 (a) ESTABLISHMENT OF POSITION.—Section 

22 141(b)(2) of the Trade Act of 1974 (19 U.S.C. 

23 2171(b)(2)) is amended to read as follows: 

24 ‘‘(2) There shall be in the Office 3 Deputy United 

25 States Trade Representatives, 1 Chief Agricultural Nego-
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1 tiator, and 1 Chief Enforcement Negotiator. The 3 Deputy 

2 United States Trade Representatives and the 2 Chief Ne3 gotiators shall be appointed by the President, by and with 

4 the advice and consent of the Senate. As an exercise of 

5 the rulemaking power of the Senate, any nomination of 

6 a Deputy United States Trade Representative, the Chief 

7 Agricultural Negotiator, or the Chief Enforcement Nego8 tiator submitted to the Senate for its advice and consent, 

9 and referred to a committee, shall be referred to the Com10 mittee on Finance. Each Deputy United States Trade 

11 Representative, the Chief Agricultural Negotiator, and the 

12 Chief Enforcement Negotiator shall hold office at the 

13 pleasure of the President and shall have the rank of Am14 bassador.’’. 

15 (b) FUNCTIONS OF POSITION.—Section 141(c) of the 

16 Trade Act of 1974 (19 U.S.C. 2171(c)) is amended by 

17 adding at the end the following new paragraph: 

18 ‘‘(6) The principal function of the Chief Enforcement 

19 Negotiator shall be to conduct negotiations to ensure com20 pliance with trade agreements relating to United States 

21 manufactured goods and services. The Chief Enforcement 

22 Negotiator shall recommend investigating and prosecuting 

23 cases before the World Trade Organization and under 

24 trade agreements to which the United States is a party. 

25 The Chief Enforcement Negotiator shall recommend ad-
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1 ministering United States trade laws relating to foreign 

2 government barriers to United States goods and services. 

3 The Chief Enforcement Negotiator shall perform such 

4 other functions as the United States Trade Representative 

5 may direct.’’. 

6 SEC. 313. FOREIGN DEBT. 

7 (a) SHORT TITLE.—This section may be cited as the 

8 ‘‘Foreign Debt Ceiling Act of 2005’’. 

9 (b) FOREIGN DEBT CEILING.— 

10 (1) FINDINGS.—Congress makes the following 

11 findings: 

12 (A) The United States has become the 

13 world’s largest net debtor Nation, having run 

14 up massive trade deficits since the 1990s. 

15 (B) At the end of 2002, the net United 

16 States foreign debt stood at 

17 $2,553,000,000,000. 

18 (C) The United States foreign debt posi19 tion worsened in 2003, when the United States 

20 had a record trade deficit of $489,000,000,000, 

21 equivalent to 4.4 percent of the United States 

22 GDP that year. 

23 (D) The large and growing United States 

24 foreign debt represents claims on United States 

25 assets by foreign nationals, which will eventu-
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1 ally have to be repaid. If unchecked, the foreign 

2 debt could seriously undermine our children’s 

3 future standard of living. 

4 (E) Moreover, the growing accumulation of 

5 foreign claims on United States assets, includ6 ing over $1,200,000,000,000 in United States 

7 Treasury securities, makes the United States 

8 economy vulnerable to the whims of foreign in9 vestors. 

10 (F) Congress presently places a ceiling on 

11 United States public debt, but does not place a 

12 ceiling on United States foreign debt. 

13 (G) Just as Congress recognized the im14 portance of placing a ceiling on the United 

15 States public debt, it is appropriate that Con16 gress place a limit on the United States foreign 

17 debt. 

18 (2) ACTIONS TRIGGERED BY UNITED STATES

19 FOREIGN DEBT.— 

20 (A) IN GENERAL.—Not later than the 15th 

21 day of the second month after the date of en22 actment of this Act, and every 3 months there23 after, the United States Trade Representative 

24 shall determine if— 
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1 (i) the net United States foreign debt 

2 for the preceding 12-month period is more 

3 than 25 percent of United States GDP for 

4 the same period; or 

5 (ii) the United States trade deficit for 

6 the preceding 12-month period is more 

7 than 5 percent of United States GDP for 

8 the same period. 

9 (B) ACTION BY USTR.—Whenever an af10 firmative determination is made under subpara11 graph (A) (i) or (ii), the United States Trade 

12 Representative shall— 

13 (i) within 15 days of the determina14 tion, convene an emergency meeting of the 

15 Trade Policy Review Group to develop a 

16 plan of action to reduce the United States 

17 trade deficit; and 

18 (ii) within 45 days of the determina19 tion, present to Congress a report detailing 

20 the Trade Policy Review Group’s trade def21 icit reduction plan. 

22 (3) MEASUREMENT OF FOREIGN DEBT.— 

23 (A) STATISTICAL SOURCES.—For purposes 

24 of the calculations described in paragraph 

25 (2)(A), the United States Trade Representative 
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1 shall rely on the most recent period for which 

2 the following data, published by the Depart3 ment of Commerce, is available: 

4 (i) In the case of United States for5 eign debt, the United States Trade Rep6 resentative shall use the net international 

7 investment position of the United States, 

8 with direct investment positions deter9 mined at market value, as compiled by the 

10 Bureau of Economic Analysis. 

11 (ii) In the case of the United States 

12 trade deficit, the United States Trade Rep13 resentative shall use the goods and services 

14 trade deficit data compiled by the United 

15 States Census Bureau. 

16 (iii) In the case of the United States 

17 GDP, the United States Trade Represent18 ative shall use the nominal gross domestic 

19 product data compiled by the Bureau of 

20 Economic Analysis. 

21 (B) ADJUSTMENT.—The United States 

22 Trade Representative may adjust the data de23 scribed in subparagraph (A) to ensure that the 

24 determination is made for comparable time pe25 riod. 
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1 SEC. 314. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) AUTHORIZATION OF APPROPRIATIONS FOR THE

3 OFFICE OF THE GENERAL COUNSEL AND THE OFFICE OF

4 MONITORING AND ENFORCEMENT.—There are authorized 

5 to be appropriated to the Office of the United States 

6 Trade Representative for the appointment of additional 

7 staff in the Office of the General Counsel and the Office 

8 of Monitoring and Enforcement— 

9 (1) $2,000,000 for fiscal year 2005; and 

10 (2) $2,000,000 for fiscal year 2006. 

11 (b) RESPONSIBILITIES OF ADDITIONAL STAFF.—The 

12 responsibilities of the additional staff appointed under 

13 subsection (a) shall include— 

14 (1) investigating, prosecuting, and defending 

15 cases before the World Trade Organization and 

16 under trade agreements to which the United States 

17 is a party; 

18 (2) administering United States trade laws, in19 cluding title III of the Trade Act of 1974 (19 U.S.C. 

20 2411 et seq.) and other trade laws relating to for21 eign government barriers to United States goods and 

22 services, including barriers involving intellectual 

23 property rights, government procurement, and tele24 communications; and 

25 (3) monitoring compliance with the Uruguay 

26 Round Agreements (as defined in section 2 of the 
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1 Uruguay Round Agreements Act (19 U.S.C. 3501)) 

2 and other trade agreements, particularly by the Peo3 ple’s Republic of China. 

4 Subtitle B—Exchange Rate Policy 

5 and Currency Manipulation 

6 SEC. 321. NEGOTIATIONS REGARDING CURRENCY VALU7 ATION. 

8 (a) FINDINGS.—Congress makes the following find9 ings: 

10 (1) The currency of the People’s Republic of 

11 China, known as the yuan or renminbi, is artificially 

12 pegged at a level significantly below its market 

13 value. Economists estimate the yuan to be under14 valued by between 15 percent and 40 percent or an 

15 average of 27.5 percent. 

16 (2) The undervaluation of the yuan provides the 

17 People’s Republic of China with a significant trade 

18 advantage by making exports less expensive for for19 eign consumers and by making foreign products 

20 more expensive for Chinese consumers. The effective 

21 result is a significant subsidization of China’s ex22 ports and a virtual tariff on foreign imports. 

23 (3) The Government of the People’s Republic of 

24 China has intervened in the foreign exchange mar25 kets to hold the value of the yuan within an artificial 
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1 trading range. China’s foreign reserves are estimated 

2 to be over $609,900,000,000 as of January 12, 

3 2004, and have increased by over $206,700,000,000 

4 in the last 12 months. 

5 (4) China’s undervalued currency, China’s trade 

6 advantage from that undervaluation, and the Chi7 nese Government’s intervention in the value of its 

8 currency violates the spirit and letter of the world 

9 trading system of which the People’s Republic of 

10 China is now a member. 

11 (5) The Government of the People’s Republic of 

12 China has failed to promptly address concerns or to 

13 provide a definitive timetable for resolution of these 

14 concerns raised by the United States and the inter15 national community regarding the value of its cur16 rency. 

17 (6) Article XXI of the GATT 1994 (as defined 

18 in section 2(1)(B) of the Uruguay Round Agree19 ments Act (19 U.S.C. 3501(1)(B))) allows a member 

20 of the World Trade Organization to take any action 

21 which it considers necessary for the protection of its 

22 essential security interests. Protecting the United 

23 States manufacturing sector is essential to the inter24 ests of the United States. 
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1 (b) NEGOTIATIONS AND CERTIFICATION REGARDING

2 THE CURRENCY VALUATION POLICY OF THE PEOPLE’S

3 REPUBLIC OF CHINA.— 

4 (1) IN GENERAL.—Notwithstanding the provi5 sions of title I of Public Law 106–286 (19 U.S.C. 

6 2431 note), on and after the date that is 180 days 

7 after the date of enactment of this Act, unless a cer8 tification described in paragraph (2) has been made 

9 to Congress, in addition to any other duty, there 

10 shall be imposed a rate of duty of 27.5 percent ad 

11 valorem on any article that is the growth, product, 

12 or manufacture of the People’s Republic of China, 

13 imported directly or indirectly into the United 

14 States. 

15 (2) CERTIFICATION.—The certification de16 scribed in this paragraph means a certification by 

17 the President to Congress that the People’s Republic 

18 of China is no longer acquiring foreign exchange re19 serves to prevent the appreciation of the rate of ex20 change between its currency and the United States 

21 dollar for purposes of gaining an unfair competitive 

22 advantage in international trade. The certification 

23 shall also include a determination that the currency 

24 of the People’s Republic of China has undergone a 
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1 substantial upward revaluation placing it at or near 

2 its fair market value. 

3 (3) ALTERNATIVE CERTIFICATION.—If the 

4 President certifies to Congress 180 days after the 

5 date of enactment of this Act that the People’s Re6 public of China has made a good faith effort to re7 value its currency upward placing it at or near its 

8 fair market value, the President may delay the impo9 sition of the tariffs described in paragraph (1) for 

10 an additional 180 days. If at the end of the 180-day 

11 period the President determines that China has de12 veloped and started actual implementation of a plan 

13 to revalue its currency, the President may delay im14 position of the tariffs for an additional 12 months, 

15 so that the People’s Republic of China shall have 

16 time to implement the plan. 

17 (4) NEGOTIATIONS.—Beginning on the date of 

18 enactment of this Act, the Secretary of the Treas19 ury, in consultation with the United States Trade 

20 Representative, shall begin negotiations with the 

21 People’s Republic of China to ensure that the Peo22 ple’s Republic of China adopts a process that leads 

23 to a substantial upward currency revaluation within 

24 180 days after the date of enactment of this Act. 

25 Because various Asian governments have also been 
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1 acquiring substantial foreign exchange reserves in an 

2 effort to prevent appreciation of their currencies for 

3 purposes of gaining an unfair competitive advantage 

4 in international trade, and because the People’s Re5 public of China has concerns about the value of 

6 those currencies, the Secretary shall also seek to 

7 convene a multilateral summit to discuss exchange 

8 rates with representatives of various Asian govern9 ments and other interested parties, including rep10 resentatives of other G–7 nations. 

11 Subtitle C—Trade Adjustment 

12 Assistance 

13 CHAPTER 1—SERVICE WORKERS 

14 SEC. 331. SHORT TITLE. 

15 This chapter may be cited as the ‘‘Trade Adjustment 

16 Assistance Equity for Service Workers Act of 2005’’. 

17 SEC. 332. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE 

18 TO SERVICES SECTOR. 

19 (a) ADJUSTMENT ASSISTANCE FOR WORKERS.—Sec20 tion 221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C. 

21 2271(a)(1)(A)) is amended by striking ‘‘agricultural 

22 firm)’’ and inserting ‘‘agricultural firm, and workers in 

23 a service sector firm or subdivision of a service sector firm 

24 or public agency)’’. 
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1 (b) GROUP ELIGIBILITY REQUIREMENTS.—Section 

2 222 of the Trade Act of 1974 (19 U.S.C. 2272) is amend3 ed— 

4 (1) in subsection (a)— 

5 (A) in the matter preceding paragraph (1), 

6 by striking ‘‘agricultural firm)’’ and inserting 

7 ‘‘agricultural firm, and workers in a service sec8 tor firm or subdivision of a service sector firm 

9 or public agency)’’; 

10 (B) in paragraph (1), by inserting ‘‘or 

11 public agency’’ after ‘‘of the firm’’; and 

12 (C) in paragraph (2)— 

13 (i) in subparagraph (A)(ii), by strik14 ing ‘‘like or directly competitive with arti15 cles produced’’ and inserting ‘‘or services 

16 like or directly competitive with articles 

17 produced or services provided’’; and 

18 (ii) by striking subparagraph (B) and 

19 inserting the following: 

20 ‘‘(B)(i) there has been a shift, by such workers’ 

21 firm, subdivision, or public agency to a foreign coun22 try, of production of articles, or in provision of serv23 ices, like or directly competitive with articles which 

24 are produced, or services which are provided, by 

25 such firm, subdivision, or public agency; or 
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1 ‘‘(ii) such workers’ firm, subdivision, or public 

2 agency has obtained or is likely to obtain such serv3 ices from a foreign country.’’; 

4 (2) in subsection (b)— 

5 (A) in the matter preceding paragraph (1), 

6 by striking ‘‘agricultural firm)’’ and inserting 

7 ‘‘agricultural firm, and workers in a service sec8 tor firm or subdivision of a service sector firm 

9 or public agency)’’; 

10 (B) in paragraph (2), by inserting ‘‘or 

11 service’’ after ‘‘related to the article’’; and 

12 (C) in paragraph (3)(A), by inserting ‘‘or 

13 services’’ after ‘‘component parts’’; 

14 (3) in subsection (c)— 

15 (A) in paragraph (3)— 

16 (i) by inserting ‘‘or services’’ after 

17 ‘‘value-added production processes’’; 

18 (ii) by striking ‘‘assembly or fin19 ishing’’ and inserting ‘‘assembly, finishing, 

20 or testing’’; 

21 (iii) by inserting ‘‘or services’’ after 

22 ‘‘for articles’’; and 

23 (iv) by inserting ‘‘(or subdivision)’’ 

24 after ‘‘such other firm’’; and 

25 (B) in paragraph (4)— 
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1 (i) by striking ‘‘for articles’’ and in2 serting ‘‘, or services, used in the produc3 tion of articles or in the provision of serv4 ices’’; and 

5 (ii) by inserting ‘‘(or subdivision)’’ 

6 after ‘‘such other firm’’; and 

7 (4) by adding at the end the following new sub8 section: 

9 ‘‘(d) BASIS FOR SECRETARY’S DETERMINATIONS.— 

10 ‘‘(1) INCREASED IMPORTS.—For purposes of 

11 subsection (a)(2)(A)(ii), the Secretary may deter12 mine that increased imports of like or directly com13 petitive articles or services exist if the workers’ firm 

14 or subdivision or customers of the workers’ firm or 

15 subdivision accounting for not less than 20 percent 

16 of the sales of the workers’ firm or subdivision cer17 tify to the Secretary that they are obtaining such ar18 ticles or services from a foreign country. 

19 ‘‘(2) OBTAINING SERVICES ABROAD.—For pur20 poses of subsection (a)(2)(B)(ii), the Secretary may 

21 determine that the workers’ firm, subdivision, or 

22 public agency has obtained or is likely to obtain like 

23 or directly competitive services from a firm in a for24 eign country based on a certification thereof from 

25 the workers’ firm, subdivision, or public agency. 
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1 ‘‘(3) AUTHORITY OF THE SECRETARY.—The 

2 Secretary may obtain the certifications under para3 graphs (1) and (2) through questionnaires or in 

4 such other manner as the Secretary determines is 

5 appropriate.’’. 

6 (c) TRAINING.—Section 236(a)(2)(A) of the Trade 

7 Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is amended by 

8 striking ‘‘$220,000,000’’ and inserting ‘‘$440,000,000’’. 

9 (d) DEFINITIONS.—Section 247 of the Trade Act of 

10 1974 (19 U.S.C. 2319) is amended— 

11 (1) in paragraph (1)— 

12 (A) by inserting ‘‘or public agency’’ after 

13 ‘‘of a firm’’; and 

14 (B) by inserting ‘‘or public agency’’ after 

15 ‘‘or subdivision’’; 

16 (2) in paragraph (2)(B), by inserting ‘‘or public 

17 agency’’ after ‘‘the firm’’; 

18 (3) by redesignating paragraphs (8) through 

19 (17) as paragraphs (9) through (18), respectively; 

20 and 

21 (4) by inserting after paragraph (6) the fol22 lowing: 

23 ‘‘(7) The term ‘public agency’ means a depart24 ment or agency of a State or local government or of 

25 the Federal Government. 
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1 ‘‘(8) The term ‘service sector firm’ means an 

2 entity engaged in the business of providing serv3 ices.’’. 

4 (e) TECHNICAL AMENDMENT.—Section 245(a) of the 

5 Trade Act of 1974 (19 U.S.C. 2317(a)) is amended by 

6 striking ‘‘, other than subchapter D’’. 

7 SEC. 333. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS 

8 AND INDUSTRIES. 

9 (a) FIRMS.— 

10 (1) ASSISTANCE.—Section 251 of the Trade 

11 Act of 1974 (19 U.S.C. 2341) is amended— 

12 (A) in subsection (a), by inserting ‘‘or 

13 service sector firm’’ after ‘‘(including any agri14 cultural firm’’; 

15 (B) in subsection (c)(1)— 

16 (i) in the matter preceding subpara17 graph (A), by inserting ‘‘or service sector 

18 firm’’ after ‘‘(including any agricultural 

19 firm’’; 

20 (ii) in subparagraph (B)(ii), by insert21 ing ‘‘or service’’ after ‘‘of an article’’; and 

22 (iii) in subparagraph (C), by striking 

23 ‘‘articles like or directly competitive with 

24 articles which are produced’’ and inserting 

25 ‘‘articles or services like or directly com-
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1 petitive with articles or services which are 

2 produced or provided’’; and 

3 (C) by adding at the end the following: 

4 ‘‘(e) BASIS FOR SECRETARY DETERMINATION.— 

5 ‘‘(1) INCREASED IMPORTS.—For purposes of 

6 subsection (c)(1)(C), the Secretary may determine 

7 that increases of imports of like or directly competi8 tive articles or services exist if customers accounting 

9 for not less than 20 percent of the sales of the work10 ers’ firm certify to the Secretary that they are ob11 taining such articles or services from a foreign coun12 try. 

13 ‘‘(2) AUTHORITY OF THE SECRETARY.—The 

14 Secretary may obtain the certifications under para15 graph (1) through questionnaires or in such other 

16 manner as the Secretary determines is appropriate. 

17 The Secretary may exercise the authority under sec18 tion 249 in carrying out this subsection.’’. 

19 (2) AUTHORIZATION OF APPROPRIATIONS.— 

20 Section 256(b) of the Trade Act of 1974 (19 U.S.C. 

21 2346(b)) is amended by striking ‘‘$16,000,000’’ and 

22 inserting ‘‘$32,000,000’’. 

23 (3) DEFINITIONS.—Section 261 of the Trade 

24 Act of 1974 (19 U.S.C. 2351) is amended to read 

25 as follows: 
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1 ‘‘SEC. 261. DEFINITIONS. 

2 ‘‘For purposes of this chapter: 

3 ‘‘(1) FIRM.—The term ‘firm’ includes an indi4 vidual proprietorship, partnership, joint venture, as5 sociation, corporation (including a development cor6 poration), business trust, cooperative, trustee in 

7 bankruptcy, and receiver under decree of any court. 

8 A firm, together with any predecessor or successor 

9 firm, or any affiliated firm controlled or substan10 tially beneficially owned by substantially the same 

11 persons, may be considered a single firm where nec12 essary to prevent unjustifiable benefits. 

13 ‘‘(2) SERVICE SECTOR FIRM.—The term ‘service 

14 sector firm’ means a firm engaged in the business 

15 of providing services.’’. 

16 (b) INDUSTRIES.—Section 265(a) of the Trade Act 

17 of 1974 (19 U.S.C. 2355(a)) is amended by inserting ‘‘or 

18 service’’ after ‘‘new product’’. 

19 SEC. 334. MONITORING AND REPORTING. 

20 Section 282 of the Trade Act of 1974 (19 U.S.C. 

21 2393) is amended— 

22 (1) in the first sentence— 

23 (A) by striking ‘‘The Secretary’’ and in24 serting ‘‘(a) MONITORING PROGRAMS.—The 

25 Secretary’’; 
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1 (B) by inserting ‘‘and services’’ after ‘‘im2 ports of articles’’; 

3 (C) by inserting ‘‘and domestic provision of 

4 services’’ after ‘‘domestic production’’; 

5 (D) by inserting ‘‘or providing services’’ 

6 after ‘‘producing articles’’; and 

7 (E) by inserting ‘‘, or provision of serv8 ices,’’ after ‘‘changes in production’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(b) COLLECTION OF DATA AND REPORTS ON SERV11 ICES SECTOR.— 

12 ‘‘(1) SECRETARY OF LABOR.—Not later than 3 

13 months after the date of the enactment of the Trade 

14 Adjustment Assistance Equity for Service Workers 

15 Act of 2005, the Secretary of Labor shall implement 

16 a system to collect data on adversely affected service 

17 workers that includes the number of workers by 

18 State, industry, and cause of dislocation of each 

19 worker. 

20 ‘‘(2) SECRETARY OF COMMERCE.—Not later 

21 than 6 months after such date of enactment, the 

22 Secretary of Commerce shall, in consultation with 

23 the Secretary of Labor, conduct a study and report 

24 to the Congress on ways to improve the timeliness 

25 and coverage of data on trade in services, including 
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1 methods to identify increased imports due to the re2 location of United States firms to foreign countries, 

3 and increased imports due to United States firms 

4 obtaining services from firms in foreign countries.’’. 

5 SEC. 335. ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE. 

6 (a) IN GENERAL.—Section 246(a)(3) of the Trade 

7 Act of 1974 (19 U.S.C. 2318(a)(3)) is amended to read 

8 as follows: 

9 ‘‘(3) ELIGIBILITY.—A worker in the group that 

10 the Secretary has certified as eligible for the alter11 native trade adjustment assistance program may 

12 elect to receive benefits under the alternative trade 

13 adjustment assistance program if the worker— 

14 ‘‘(A) is covered by a certification under 

15 subchapter A of this chapter; 

16 ‘‘(B) obtains reemployment not more than 

17 26 weeks after the date of separation from the 

18 adversely affected employment; 

19 ‘‘(C) is at least 40 years of age; 

20 ‘‘(D) earns not more than $50,000 a year 

21 in wages from reemployment; 

22 ‘‘(E) is employed on a full-time basis as 

23 defined by State law in the State in which the 

24 worker is employed; and 
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1 ‘‘(F) does not return to the employment 

2 from which the worker was separated.’’. 

3 (b) CONFORMING AMENDMENTS.—Section 246 of the 

4 Trade Act of 1974 (19 U.S.C. 2318) is amended— 

5 (1) in subsection (a)(2)(A), by striking ‘‘para6 graph (3)(B)’’ and inserting ‘‘paragraph (3)’’; 

7 (2) in subsection (a)(2)(B), by striking ‘‘para8 graph (3)(B)’’ and inserting ‘‘paragraph (3)’’; and 

9 (3) in subsection (b)(2), by striking ‘‘subsection 

10 (a)(3)(B)’’ and inserting ‘‘subsection (a)(3)’’. 

11 SEC. 336. EFFECTIVE DATE. 

12 (a) IN GENERAL.—Except as provided in subsection 

13 (b), the amendments made by this chapter shall take effect 

14 on the date of enactment of this Act. 

15 (b) SPECIAL RULE FOR CERTAIN SERVICE WORK16 ERS.—A group of workers in a service sector firm, or sub17 division of a service sector firm, or public agency (as de18 fined in section 247 (7) and (8) of the Trade Act of 1974, 

19 as added by section 332(d) of this Act) who— 

20 (1) would have been certified eligible to apply 

21 for adjustment assistance under chapter 2 of title II 

22 of the Trade Act of 1974 if the amendments made 

23 by this Act had been in effect on November 4, 2002; 

24 and 
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1 (2) file a petition pursuant to section 221 of the 

2 Trade Act of 1974 (19 U.S.C. 2271) not later than 

3 6 months after the date of enactment of this Act, 

4 shall be eligible for certification under section 223 of 

5 the Trade Act of 1974 (19 U.S.C. 2273) if the 

6 workers’ last total or partial separation from the 

7 firm or subdivision of the firm or public agency oc8 curred on or after November 4, 2002 and before the 

9 date of enactment of this Act. 

10 CHAPTER 2—TRADE ADJUSTMENT 

11 ASSISTANCE FOR COMMUNITIES 

12 SEC. 341. SHORT TITLE. 

13 This chapter may be cited as the ‘‘Trade Adjustment 

14 Assistance for Communities Act of 2005’’. 

15 SEC. 342. PURPOSE. 

16 The purpose of this chapter is to assist communities 

17 negatively impacted by trade with economic adjustment 

18 through the integration of political and economic organiza19 tions, the coordination of Federal, State, and local re20 sources, the creation of community-based development 

21 strategies, and the provision of economic transition assist22 ance. 
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1 SEC. 343. TRADE ADJUSTMENT ASSISTANCE FOR COMMU2 NITIES. 

3 (a) REPEAL OF TERMINATED PROVISIONS.—Chapter 

4 4 of the Trade Act of 1974 (19 U.S.C. 2371 et seq.) is 

5 repealed. 

6 (b) TRADE ADJUSTMENT ASSISTANCE FOR COMMU7 NITIES.—Title II of the Trade Act of 1974 (19 U.S.C. 

8 2251 et seq.) is amended by inserting after chapter 3 the 

9 following new chapter: 

10 ‘‘CHAPTER 4—TRADE ADJUSTMENT 

11 ASSISTANCE FOR COMMUNITIES 

12 ‘‘SEC. 271. DEFINITIONS. 

13 ‘‘In this chapter: 

14 ‘‘(1) AFFECTED DOMESTIC PRODUCER.—The 

15 term ‘affected domestic producer’ means any manu16 facturer, producer, service provider, farmer, rancher, 

17 fisherman or worker representative (including asso18 ciations of such persons) that was affected by a find19 ing under the Antidumping Act, 1921 (title II of the 

20 Act of May 27, 1921; 42 Stat. 11, chapter 14), or 

21 by an antidumping or countervailing duty order 

22 issued under title VII of the Tariff Act of 1930 (19 

23 U.S.C. 1671 et seq.). 

24 ‘‘(2) AGRICULTURAL COMMODITY PRODUCER.— 

25 The term ‘agricultural commodity producer’ has the 

26 same meaning as the term ‘person’ as prescribed by 
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1 regulations promulgated under section 1001(e) of 

2 the Food Security Act of 1985 (7 U.S.C. 1308(e)). 

3 ‘‘(3) COMMUNITY.—The term ‘community’ 

4 means a city, county, or other political subdivision of 

5 a State or a consortium of political subdivisions of 

6 a State that the Secretary certifies as being nega7 tively impacted by trade. 

8 ‘‘(4) COMMUNITY NEGATIVELY IMPACTED BY

9 TRADE.—A community negatively impacted by trade 

10 means a community with respect to which a deter11 mination has been made under section 273. 

12 ‘‘(5) ELIGIBLE COMMUNITY.—The term ‘eligible 

13 community’ means a community certified under sec14 tion 273 for assistance under this chapter. 

15 ‘‘(6) FISHERMAN.— 

16 ‘‘(A) IN GENERAL.—The term ‘fisherman’ 

17 means any person who— 

18 ‘‘(i) is engaged in commercial fishing; 

19 or 

20 ‘‘(ii) is a United States fish processor. 

21 ‘‘(B) COMMERCIAL FISHING, FISH, FISH22 ERY, FISHING, FISHING VESSEL, PERSON, AND

23 UNITED STATES FISH PROCESSOR.—The terms 

24 ‘commercial fishing’, ‘fish’, ‘fishery’, ‘fishing’, 

25 ‘fishing vessel’, ‘person’, and ‘United States fish 
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1 processor’ have the same meanings as given 

2 such terms in section 3 of the Magnuson-Ste3 vens Fishery Conservation and Management 

4 Act (16 U.S.C. 1802). 

5 ‘‘(7) JOB LOSS.—The term ‘job loss’ means the 

6 total separation or partial separation of an indi7 vidual, as those terms are defined in section 247. 

8 ‘‘(8) SECRETARY.—Except as otherwise pro9 vided, the term ‘Secretary’ means the Secretary of 

10 Commerce. 

11 ‘‘SEC. 272. COMMUNITY TRADE ADJUSTMENT ASSISTANCE 

12 PROGRAM. 

13 ‘‘(a) ESTABLISHMENT.—Not later than 6 months 

14 after the date of enactment of the Trade Adjustment As15 sistance for Communities Act of 2005, the Secretary shall 

16 establish a Trade Adjustment Assistance for Communities 

17 Program at the Department of Commerce. 

18 ‘‘(b) PERSONNEL.—The Secretary shall designate 

19 such staff as may be necessary to carry out the respon20 sibilities described in this chapter. 

21 ‘‘(c) COORDINATION OF FEDERAL RESPONSE.—The 

22 Secretary shall— 

23 ‘‘(1) provide leadership, support, and coordina24 tion for a comprehensive management program to 

25 address economic dislocation in eligible communities; 
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1 ‘‘(2) coordinate the Federal response to an eli2 gible community— 

3 ‘‘(A) by identifying all Federal, State, and 

4 local resources that are available to assist the 

5 eligible community in recovering from economic 

6 distress; 

7 ‘‘(B) by ensuring that all Federal agencies 

8 offering assistance to an eligible community do 

9 so in a targeted, integrated manner that en10 sures that an eligible community has access to 

11 all available Federal assistance; 

12 ‘‘(C) by assuring timely consultation and 

13 cooperation between Federal, State, and re14 gional officials concerning economic adjustment 

15 for an eligible community; and 

16 ‘‘(D) by identifying and strengthening ex17 isting agency mechanisms designed to assist eli18 gible communities in their efforts to achieve 

19 economic adjustment and workforce reemploy20 ment; 

21 ‘‘(3) provide comprehensive technical assistance 

22 to any eligible community in the efforts of that com23 munity to— 
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1 ‘‘(A) identify serious economic problems in 

2 the community that are the result of negative 

3 impacts from trade; 

4 ‘‘(B) integrate the major groups and orga5 nizations significantly affected by the economic 

6 adjustment; 

7 ‘‘(C) access Federal, State, and local re8 sources designed to assist in economic develop9 ment and trade adjustment assistance; 

10 ‘‘(D) diversify and strengthen the commu11 nity economy; and 

12 ‘‘(E) develop a community-based strategic 

13 plan to address economic development and 

14 workforce dislocation, including unemployment 

15 among agricultural commodity producers, and 

16 fishermen; 

17 ‘‘(4) establish specific criteria for submission 

18 and evaluation of a strategic plan submitted under 

19 section 274(d); 

20 ‘‘(5) establish specific criteria for submitting 

21 and evaluating applications for grants under section 

22 275; 

23 ‘‘(6) administer the grant programs established 

24 under sections 274 and 275; and 
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1 ‘‘(7) establish an interagency Trade Adjustment 

2 Assistance for Communities Working Group, con3 sisting of the representatives of any Federal depart4 ment or agency with responsibility for economic ad5 justment assistance, including the Department of 

6 Agriculture, the Department of Education, the De7 partment of Labor, the Department of Housing and 

8 Urban Development, the Department of Health and 

9 Human Services, the Small Business Administra10 tion, the Department of the Treasury, the Depart11 ment of Commerce, and any other Federal, State, or 

12 regional department or agency the Secretary deter13 mines necessary or appropriate. 

14 ‘‘SEC. 273. CERTIFICATION AND NOTIFICATION. 

15 ‘‘(a) CERTIFICATION.—Not later than 45 days after 

16 an event described in subsection (c)(1), the Secretary shall 

17 determine if a community described in subsection (b)(1) 

18 is negatively impacted by trade, and if a positive deter19 mination is made, shall certify the community for assist20 ance under this chapter. 

21 ‘‘(b) DETERMINATION THAT COMMUNITY IS ELIGI22 BLE.— 

23 ‘‘(1) COMMUNITY DESCRIBED.—A community 

24 described in this paragraph means a community 

25 with respect to which on or after October 1, 2005— 
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1 ‘‘(A) the Secretary of Labor certifies a 

2 group of workers (or their authorized represent3 ative) in the community as eligible for assist4 ance pursuant to section 223; 

5 ‘‘(B) the Secretary of Commerce certifies a 

6 firm located in the community as eligible for 

7 adjustment assistance under section 251; 

8 ‘‘(C) the Secretary of Agriculture certifies 

9 a group of agricultural commodity producers 

10 (or their authorized representative) in the com11 munity as eligible for adjustment assistance 

12 under section 293; 

13 ‘‘(D) an affected domestic producer is lo14 cated in the community; or 

15 ‘‘(E) the Secretary determines that a sig16 nificant number of fishermen in the community 

17 is negatively impacted by trade. 

18 ‘‘(2) NEGATIVELY IMPACTED BY TRADE.—The 

19 Secretary shall determine that a community is nega20 tively impacted by trade, after taking into consider21 ation— 

22 ‘‘(A) the number of jobs affected compared 

23 to the size of the workforce in the community; 
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1 ‘‘(B) the severity of the rates of unemploy2 ment in the community and the duration of the 

3 unemployment in the community; 

4 ‘‘(C) the income levels and the extent of 

5 underemployment in the community; 

6 ‘‘(D) the outmigration of population from 

7 the community and the extent to which the out8 migration is causing economic injury in the 

9 community; and 

10 ‘‘(E) the unique problems and needs of the 

11 community. 

12 ‘‘(c) EVENTS DESCRIBED.— 

13 ‘‘(1) IN GENERAL.—An event described in this 

14 paragraph means one of the following: 

15 ‘‘(A) A notification described in paragraph 

16 (2). 

17 ‘‘(B) A certification of a firm under section 

18 251. 

19 ‘‘(C) A finding under the Antidumping 

20 Act, 1921, or an antidumping or countervailing 

21 duty order issued under title VII of the Tariff 

22 Act of 1930. 

23 ‘‘(D) A determination by the Secretary 

24 that a significant number of fishermen in a 
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1 community have been negatively impacted by 

2 trade. 

3 ‘‘(2) NOTIFICATION.—The Secretary of Labor, 

4 immediately upon making a determination that a 

5 group of workers is eligible for trade adjustment as6 sistance under section 223, (or the Secretary of Ag7 riculture, immediately upon making a determination 

8 that a group of agricultural commodity producers is 

9 eligible for adjustment assistance under section 293, 

10 as the case may be) shall notify the Secretary of the 

11 determination. 

12 ‘‘(d) NOTIFICATION TO ELIGIBLE COMMUNITIES.— 

13 Immediately upon certification by the Secretary that a 

14 community is eligible for assistance under subsection (b), 

15 the Secretary shall notify the community— 

16 ‘‘(1) of the determination under subsection (b); 

17 ‘‘(2) of the provisions of this chapter; 

18 ‘‘(3) how to access the clearinghouse established 

19 by the Department of Commerce regarding available 

20 economic assistance; 

21 ‘‘(4) how to obtain technical assistance provided 

22 under section 272(c)(3); and 

23 ‘‘(5) how to obtain grants, tax credits, low in24 come loans, and other appropriate economic assist25 ance. 
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1 ‘‘SEC. 274. STRATEGIC PLANS. 

2 ‘‘(a) IN GENERAL.—An eligible community may de3 velop a strategic plan for community economic adjustment 

4 and diversification. 

5 ‘‘(b) REQUIREMENTS FOR STRATEGIC PLAN.—A 

6 strategic plan shall contain, at a minimum, the following: 

7 ‘‘(1) A description and justification of the ca8 pacity for economic adjustment, including the meth9 od of financing to be used. 

10 ‘‘(2) A description of the commitment of the 

11 community to the strategic plan over the long term 

12 and the participation and input of groups affected 

13 by economic dislocation. 

14 ‘‘(3) A description of the projects to be under15 taken by the eligible community. 

16 ‘‘(4) A description of how the plan and the 

17 projects to be undertaken by the eligible community 

18 will lead to job creation and job retention in the 

19 community. 

20 ‘‘(5) A description of how the plan will achieve 

21 economic adjustment and diversification. 

22 ‘‘(6) A description of how the plan and the 

23 projects will contribute to establishing or maintain24 ing a level of public services necessary to attract and 

25 retain economic investment. 
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1 ‘‘(7) A description and justification for the cost 

2 and timing of proposed basic and advanced infra3 structure improvements in the eligible community. 

4 ‘‘(8) A description of how the plan will address 

5 the occupational and workforce conditions in the eli6 gible community. 

7 ‘‘(9) A description of the educational programs 

8 available for workforce training and future employ9 ment needs. 

10 ‘‘(10) A description of how the plan will adapt 

11 to changing markets and business cycles. 

12 ‘‘(11) A description and justification for the 

13 cost and timing of the total funds required by the 

14 community for economic assistance. 

15 ‘‘(12) A graduation strategy through which the 

16 eligible community demonstrates that the community 

17 will terminate the need for Federal assistance. 

18 ‘‘(c) GRANTS TO DEVELOP STRATEGIC PLANS.—The 

19 Secretary, upon receipt of an application from an eligible 

20 community, may award a grant to that community to be 

21 used to develop the strategic plan. 

22 ‘‘(d) SUBMISSION OF PLAN.—A strategic plan devel23 oped under subsection (a) shall be submitted to the Sec24 retary for evaluation and approval. 
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1 ‘‘SEC. 275. GRANTS FOR ECONOMIC DEVELOPMENT. 

2 ‘‘(a) IN GENERAL.—The Secretary, upon approval of 

3 a strategic plan from an eligible community, may award 

4 a grant to that community to carry out any project or 

5 program that is certified by the Secretary to be included 

6 in the strategic plan approved under section 274(d), or 

7 consistent with that plan. 

8 ‘‘(b) ADDITIONAL GRANTS.— 

9 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

10 in order to assist eligible communities to obtain 

11 funds under Federal grant programs, other than the 

12 grants provided for in section 274(c) or subsection 

13 (a), the Secretary may, on the application of an eli14 gible community, make a supplemental grant to the 

15 community if— 

16 ‘‘(A) the purpose of the grant program 

17 from which the grant is made is to provide 

18 technical or other assistance for planning, con19 structing, or equipping public works facilities or 

20 to provide assistance for public service projects; 

21 and 

22 ‘‘(B) the grant is one for which the com23 munity is eligible except for the community’s in24 ability to meet the non-Federal share require25 ments of the grant program. 
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1 ‘‘(2) USE AS NON-FEDERAL SHARE.—A supple2 mental grant made under this subsection may be 

3 used to provide the non-Federal share of a project, 

4 unless the total Federal contribution to the project 

5 for which the grant is being made exceeds 80 per6 cent and that excess is not permitted by law. 

7 ‘‘(c) RURAL COMMUNITY PREFERENCE.—The Sec8 retary shall develop guidelines to ensure that rural com9 munities receive preference in the allocation of resources. 

10 ‘‘SEC. 276. GENERAL PROVISIONS. 

11 ‘‘(a) REGULATIONS.—The Secretary shall prescribe 

12 such regulations as are necessary to carry out the provi13 sions of this chapter. Before implementing any regulation 

14 or guideline proposed by the Secretary with respect to this 

15 chapter, the Secretary shall submit the regulation or 

16 guideline to the Committee on Finance of the Senate and 

17 the Committee on Ways and Means of the House of Rep18 resentatives for approval. 

19 ‘‘(b) SUPPLEMENT NOT SUPPLANT.—Funds appro20 priated under this chapter shall be used to supplement and 

21 not supplant other Federal, State, and local public funds 

22 expended to provide economic development assistance for 

23 communities. 

24 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

25 are authorized to be appropriated to the Secretary 
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1 $100,000,000 for each of fiscal years 2005 through 2008, 

2 to carry out this chapter. Amounts appropriated pursuant 

3 to this subsection shall remain available until expended.’’. 

4 SEC. 344. CONFORMING AMENDMENTS. 

5 (a) TERMINATION.—Section 285(b) of the Trade Act 

6 of 1974 (19 U.S.C. 2271 note) is amended by adding at 

7 the end the following new paragraph: 

8 ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech9 nical assistance and other payments may not be pro10 vided under chapter 4 after September 30, 2008.’’. 

11 (b) TABLE OF CONTENTS.—The table of contents for 

12 title II of the Trade Act of 1974 is amended by striking 

13 the items relating to chapter 4 of title II and inserting 

14 after the items relating to chapter 3 the following new 

15 items: 

‘‘CHAPTER 4—TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

‘‘Sec. 271. Definitions. 

‘‘Sec. 272. Community Trade Adjustment Assistance Program. 

‘‘Sec. 273. Certification and notification. 

‘‘Sec. 274. Strategic plans. 

‘‘Sec. 275. Grants for economic development. 

‘‘Sec. 276. General provisions.’’. 

16 (c) JUDICIAL REVIEW.—Section 284(a) of the Trade 

17 Act of 1974 (19 U.S.C. 2395(a)) is amended by striking 

18 ‘‘section 271’’ and inserting ‘‘section 273’’. 

19 SEC. 345. EFFECTIVE DATE. 

20 The amendments made by this chapter shall take ef21 fect on the date of enactment of this Act. 
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1 CHAPTER 3—OFFICE OF TRADE 

2 ADJUSTMENT ASSISTANCE 

3 SEC. 351. SHORT TITLE. 

4 This chapter may be cited as the ‘‘Trade Adjustment 

5 Assistance for Firms Reorganization Act’’. 

6 SEC. 352. OFFICE OF TRADE ADJUSTMENT ASSISTANCE. 

7 (a) IN GENERAL.—Chapter 3 of title II of the Trade 

8 Act of 1974 (19 U.S.C. 2341 et seq.) is amended by in9 serting after section 255 the following new section: 

10 ‘‘SEC. 255A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE. 

11 ‘‘(a) ESTABLISHMENT.—Not later than 90 days after 

12 the date of enactment of the Trade Adjustment Assistance 

13 for Firms Reorganization Act, there shall be established 

14 in the International Trade Administration of the Depart15 ment of Commerce an Office of Trade Adjustment Assist16 ance. 

17 ‘‘(b) PERSONNEL.—The Office shall be headed by a 

18 Director, and shall have such staff as may be necessary 

19 to carry out the responsibilities of the Secretary of Com20 merce described in this chapter. 

21 ‘‘(c) FUNCTIONS.—The Office shall assist the Sec22 retary of Commerce in carrying out the Secretary’s re23 sponsibilities under this chapter.’’. 

24 (b) CONFORMING AMENDMENT.—The table of con25 tents for the Trade Act of 1974 is amended by inserting 
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1 after the item relating to section 255, the following new 

2 item: 

‘‘Sec. 255A. Office of Trade Adjustment Assistance.’’. 

3 SEC. 353. EFFECTIVE DATE. 

4 The amendments made by this chapter shall take ef5 fect on the date of enactment of this Act. 

6 CHAPTER 4—IMPROVEMENT OF CREDIT 

7 FOR HEALTH INSURANCE COSTS OF 

8 ELIGIBLE INDIVIDUALS 

9 SEC. 361. IMPROVEMENT OF THE AFFORDABILITY OF THE 

10 CREDIT. 

11 (a) IMPROVEMENT OF AFFORDABILITY.— 

12 (1) IN GENERAL.—Section 35(a) of the Inter13 nal Revenue Code of 1986 (relating to credit for 

14 health insurance costs of eligible individuals) is 

15 amended to read as follows: 

16 ‘‘(a) AMOUNT OF CREDIT.— 

17 ‘‘(1) IN GENERAL.—In the case of an indi18 vidual, there shall be allowed as a credit against the 

19 tax imposed by subtitle A an amount equal to the 

20 excess of— 

21 ‘‘(A) the amount paid by the taxpayer for 

22 coverage of the taxpayer and qualifying family 

23 members under qualified health insurance for 

24 eligible coverage months beginning in the tax25 able year, over 
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1 ‘‘(B) the amount described in paragraph 

2 (2). 

3 ‘‘(2) AMOUNT DESCRIBED.—For purposes of 

4 paragraph (1), the amount described in this para5 graph is the lesser of— 

6 ‘‘(A) the amount equal to 20 percent of the 

7 amount determined under paragraph (1)(A) for 

8 the taxable year, or 

9 ‘‘(B) the amount equal to 5 percent of the 

10 taxpayer’s certified income (as determined 

11 under subsection (g)(9)) for such taxable 

12 year.’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 7527(b) of such Code (relating to advance payment 

15 of credit for health insurance costs of eligible indi16 viduals) is amended by striking ‘‘65 percent of the 

17 amount’’ and all that follows through the period at 

18 the end and inserting ‘‘the amount determined 

19 under section 35(a)(1) for such taxable year.’’. 

20 (b) DETERMINATION OF CERTIFIED INCOME.—Sec21 tion 35(g) of such Code (relating to special rules), is 

22 amended— 

23 (1) by redesignating paragraph (9) as para24 graph (10), and 
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1 (2) by inserting after paragraph (8) the fol2 lowing new paragraph: 

3 ‘‘(9) CERTIFIED INCOME.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 enter into agreements with States to determine 

6 an individual’s certified income for purposes of 

7 subsection (a)(2)(B) for any taxable year. 

8 ‘‘(B) REQUIREMENTS.—An agreement 

9 under subparagraph (A) with a State shall— 

10 ‘‘(i) permit an individual to complete 

11 an application for certification of income 

12 for a taxable year (in such form and man13 ner as the Secretary shall determine) and 

14 to submit the application to the State, 

15 ‘‘(ii) require the State to determine 

16 the individual’s income for the taxable year 

17 on the basis of the individual’s monthly 

18 family income as of the month preceding 

19 the month in which the application is sub20 mitted, and 

21 ‘‘(iii) require the State to issue a cer22 tification of income to the individual upon 

23 receipt of an application under clause (i), 

24 which shall apply for purposes of deter25 mining the taxpayer’s certified income for 
121 

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1 purposes of subsection (a)(2)(B) for the 

2 taxable year unless the State determines 

3 upon completion of the processing of the 

4 application that the certification is erro5 neous. 

6 ‘‘(C) NOTIFICATION OF CHANGE IN IN7 COME.—An individual issued a certification of 

8 income shall notify the State of any substantial 

9 change in income that applies for at least 60 

10 days and the taxpayer’s certified income for the 

11 taxable year shall be adjusted accordingly. An 

12 individual who fails to so notify the State shall 

13 remit the difference (if any) between the 

14 amount described in subsection (a)(2) for the 

15 taxable year and such amount which would 

16 have been described under such subsection for 

17 such taxable year if the notification had been 

18 made as an addition to tax, plus interest at the 

19 underpayment rate established under section 

20 6621.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section apply to taxable years beginning after Decem23 ber 31, 2004. 

24 SEC. 362. OFFERING OF FEDERAL FALLBACK COVERAGE. 

25 (a) PROVISION OF FALLBACK COVERAGE.— 
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1 (1) IN GENERAL.—The Director of the Office of 

2 Personnel Management jointly with the Secretary of 

3 the Treasury shall establish a program under which 

4 eligible individuals (as defined in section 35(c) of the 

5 Internal Revenue Code of 1986) are offered enroll6 ment under health benefit plans that are made avail7 able under FEHBP. 

8 (2) TERMS AND CONDITIONS.—The terms and 

9 conditions of health benefits plans offered under 

10 paragraph (1) shall be the same as the terms and 

11 coverage offered under FEHBP, except that the per12 centage of the premium charged to eligible individ13 uals (as so defined) for such health benefit plans 

14 shall be equal to the percentage that an employee 

15 would be required to contribute for coverage under 

16 FEHBP. 

17 (3) STUDY.—The Director of the Office of Per18 sonnel Management jointly with the Secretary of the 

19 Treasury shall conduct a study of the impact of the 

20 offering of health benefit plans under this subsection 

21 on the terms and conditions, including premiums, 

22 for health benefit plans offered under FEHBP and 

23 shall submit to Congress, not later than 2 years 

24 after the date of the enactment of this Act, a report 

25 on such study. Such report may contain such rec-
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1 ommendations regarding the establishment of sepa2 rate risk pools for individuals covered under 

3 FEHBP and eligible individuals covered under 

4 health benefit plans offered under paragraph (1) as 

5 may be appropriate to protect the interests of indi6 viduals covered under FEHBP and alleviate any ad7 verse impact on FEHBP that may result from the 

8 offering of such health benefit plans. 

9 (4) FEHBP DEFINED.—In this section, the 

10 term ‘‘FEHBP’’ means the Federal Employees 

11 Health Benefits Program offered under chapter 89 

12 of title 5, United States Code. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Paragraph (1) of section 35(e) of the Inter15 nal Revenue Code of 1986 is amended by adding at 

16 the end the following new subparagraph: 

17 ‘‘(K) Coverage under a health benefits plan 

18 offered under section 362(a)(1) of the Fair 

19 Wage, Competition, and Investment Act of 

20 2005.’’. 

21 (2) Section 173(f)(2)(A) of the Workforce In22 vestment Act of 1998 (29 U.S.C. 2918(f)(2)(A)) is 

23 amended by adding at the end the following new 

24 clause: 
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1 ‘‘(xi) Coverage under a health benefits 

2 plan offered under section 362(a)(1) of the 

3 Fair Wage, Competition, and Investment 

4 Act of 2005.’’. 

5 SEC. 363. CLARIFICATION OF ELIGIBILITY OF SPOUSE OF 

6 CERTAIN INDIVIDUALS ENTITLED TO MEDI7 CARE. 

8 (a) IN GENERAL.—Subsection (b) of section 35 of the 

9 Internal Revenue Code of 1986 (defining eligible coverage 

10 month) is amended by adding at the end the following: 

11 ‘‘(3) SPECIAL RULE FOR SPOUSE OF INDI12 VIDUAL ENTITLED TO MEDICARE.—Any month 

13 which would be an eligible coverage month with re14 spect to a taxpayer (determined without regard to 

15 subsection (f)(2)(A)) shall be an eligible coverage 

16 month for any spouse of such taxpayer.’’. 

17 (b) CONFORMING AMENDMENT.—Section 

18 173(f)(5)(A)(i) of the Workforce Investment Act of 1998 

19 (29 U.S.C. 2918(f)(5)(A)(i)) is amended by inserting ‘‘(in20 cluding with respect to any month for which the eligible 

21 individual would have been treated as such but for the ap22 plication of paragraph (7)(B)(i))’’ before the comma. 
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1 Subtitle D—Sense of the Senate on 

2 Free Trade Agreements 

3 SEC. 371. SENSE OF THE SENATE ON FREE TRADE AGREE4 MENTS. 

5 (a) FINDINGS.—The Senate makes the following 

6 findings: 

7 (1) The United States is participating in the 

8 Doha Round of World Trade Organization (‘‘WTO’’) 

9 negotiations, which seeks to lower trade barriers for 

10 all members of the WTO. 

11 (2) In addition to participating in the Doha 

12 Round of WTO negotiations, the United States is 

13 negotiating bilateral free trade agreements with 20 

14 countries. 

15 (3) Only 1 of those 20 countries is among the 

16 top 30 trading partners of the United States. 

17 (4) During the debate on the legislation that 

18 was enacted as the Trade Act of 2002 (Public Law 

19 107–210; 116 Stat. 933), a representative of the 

20 President argued that ‘‘[i]ncreased trade will help 

21 our workers, farmers, businesses, and economy by 

22 enhancing employment opportunities, opening more 

23 markets to American goods and services, and in24 creasing choices and lowering costs for consumers’’. 
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1 (5) During that debate and on other occasions, 

2 the President and individuals in the Executive 

3 Branch of the United States have repeatedly argued 

4 that increased trade means an increase in the num5 ber of jobs in the United States and a higher stand6 ard of living for people in the United States. 

7 (6) The President and individuals in the Execu8 tive Branch of the United States have also argued 

9 that trade expands markets for United States goods 

10 and services, creates higher-paying jobs in the 

11 United States, and invigorates local communities 

12 and their economies. 

13 (7) Trade agreements between the United 

14 States and countries with small economies have little 

15 impact on creating jobs in the United States or a 

16 higher standard of living for people in the United 

17 States. 

18 (b) SENSE OF THE SENATE.—It is the sense of the 

19 Senate that— 

20 (1) the trade policy of the United States should 

21 focus on creating more jobs in the United States 

22 and a higher standard of living for people in the 

23 United States; and 

24 (2) to best accomplish these goals, the United 

25 States should focus its efforts on trade negotiations 
127 

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1 occurring at the WTO and, when negotiating trade 

2 agreements on a bilateral basis, focus on agreements 

3 with countries that have large economies that will 

4 provide meaningful export opportunities for United 

5 States farmers, workers, and businesses. 

Æ