II 

111TH CONGRESS 

1ST SESSION S. 1808 

To control Federal spending now. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 20, 2009 

Mr. FEINGOLD introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To control Federal spending now. 

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 ‘‘Control Spending Now Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REFORMING THE BUDGET AND SPENDING PROCESS 

Subtitle A—Targeting Congressional Earmarks 

Sec. 1101. Short title. 

Sec. 1102. Reform of consideration of appropriations bills in the Senate. 

Subtitle B—Giving the President the Power to Eliminate Wasteful Spending 


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Sec. 1201. Short title. 

Sec. 1202. Legislative line-item veto. 

Sec. 1203. Technical and conforming amendments. 

Sec. 1204. Sense of Congress on abuse of proposed repeals and cancellations. 

Subtitle C—Restoring Strong Pay-As-You-Go Requirements 

Sec. 1301. Definitions. 

Sec. 1302. PAYGO estimates and PAYGO scorecards. 

Sec. 1303. Annual report and sequestration order. 

Sec. 1304. Calculating a sequestration. 

Sec. 1305. Application of BBEDCA. 

Sec. 1306. Technical corrections. 

Sec. 1307. Conforming amendments. 

Sec. 1308. Exempt programs and activities. 

Sec. 1309. Expiration. 

Subtitle D—Reforming the Budget Process 

Sec. 1401. Short title. 

Sec. 1402. Revision of timetable. 

Sec. 1403. Amendments to the Congressional Budget and Impoundment Control Act of 1974. 

Sec. 1404. Amendments to title 31, United States Code. 

Sec. 1405. Two-year appropriations; title and style of appropriations Acts. 

Sec. 1406. Multiyear authorizations. 

Sec. 1407. Government plans on a biennial basis. 

Sec. 1408. Biennial appropriations bills. 

Sec. 1409. Report on two-year fiscal period. 

Sec. 1410. Effective date. 

TITLE II—MAKING CONGRESS TIGHTEN ITS BELT 

Sec. 2001. Ending automatic pay raises for Members of Congress. 

Sec. 2002. Cutting spending on congressional offices. 

Sec. 2003. Improving Senate efficiency and transparency. 

TITLE III—ENDING CORPORATE WELFARE 

Sec. 3001. Ending the Wall Street bail-out. 

Sec. 3002. Ending subsidies for private student loan companies. 

Sec. 3003. Bringing down prices for prescription drugs by permitting drug reimportation. 

Sec. 3004. Bringing down prices for prescription drugs by extending 340B discounted drug pricing to managed care organizations. 

Sec. 3005. Bringing down prices for prescription drugs by increasing the Medicaid drug rebate. 

Sec. 3006. Ending taxpayer subsidies for exporters. 

Sec. 3007. Reducing taxpayer subsidies for exporters of agriculture commodities. 

Sec. 3008. Making companies pay when they fail FDA quality inspections. 

TITLE IV—ENDING TAXPAYER SUBSIDIES FOR BIG 

AGRIBUSINESSES 

Sec. 4001. Reforming irrigation subsidies. 

Sec. 4002. Reforming crop insurance subsidies. 


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Sec. 4003. Reducing direct payments to large landowners. 

Sec. 4004. Cutting farm subsidies for high-income individuals. 

Sec. 4005. Eliminating the cotton storage subsidy. 

Sec. 4006. Ending subsidized grazing fees. 

TITLE V—ENDING TAXPAYER SUBSIDIES FOR THE USE OF 

PUBLIC RESOURCES AND GOVERNMENT SERVICES 

Sec. 5001. Preventing giveaways of the public spectrum. 

Sec. 5002. Eliminating double subsidies for hardrock mining by repealing percentage depletion allowances. 

Sec. 5003. Ending subsidies for hardrock mining on public lands by imposing 

mining royalties and claim fees. 

Sec. 5004. Reducing State subsidies for onshore oil, gas, coal, and mineral 

leases on public lands. 

Sec. 5005. Reducing subsidies for oil, gas, and geothermal energy production 

on public lands. 

Sec. 5006. Reducing aviation subsidies. 

Sec. 5007. Targeting Medicare prescription drug assistance to those who need 

it most. 

TITLE VI—TARGETING WASTEFUL OR UNNECESSARY 

GOVERNMENT SPENDING 

Sec. 6001. Delaying a lunar mission. 

Sec. 6002. Eliminating the V–22 Osprey. 

Sec. 6003. Cutting C–17s. 

Sec. 6004. Ending spending for high-risk satellites. 

Sec. 6005. Reducing cost overruns and delays on major weapons systems. 

Sec. 6006. Reducing spending on unneeded defense spare parts. 

Sec. 6007. Reducing overpayments to defense contractors. 

Sec. 6008. Ending wasteful intelligence spending. 

Sec. 6009. Ending the IRS slush fund. 

Sec. 6010. Rescinding unspent earmarks. 

Sec. 6011. Repealing the rail-line relocation program. 

Sec. 6012. Eliminating Radio/TV marti at the Office of Cuba Broadcasting. 

Sec. 6013. Ending support for the Colombian military. 

1 TITLE I—REFORMING THE 

2 BUDGET AND SPENDING 

3 PROCESS 

4 Subtitle A—Targeting 

5 Congressional Earmarks 

6 SEC. 1101. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Fiscal Discipline, 

8 Earmark Reform, and Accountability Act’’. 


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1 SEC. 1102. REFORM OF CONSIDERATION OF APPROPRIA2 TIONS BILLS IN THE SENATE. 

3 (a) IN GENERAL.—Rule XVI of the Standing Rules 

4 of the Senate is amended by adding at the end the fol5 lowing: 

6 ‘‘9.(a) On a point of order made by any Senator: 

7 ‘‘(1) No new or general legislation nor any un8 authorized appropriation may be included in any 

9 general appropriation bill. 

10 ‘‘(2) No amendment may be received to any 

11 general appropriation bill the effect of which will be 

12 to add an unauthorized appropriation to the bill. 

13 ‘‘(3) No unauthorized appropriation may be in14 cluded in any amendment between the Houses, or 

15 any amendment thereto, in relation to a general ap16 propriation bill. 

17 ‘‘(b)(1) If a point of order under subparagraph (a)(1) 

18 against a Senate bill or amendment is sustained— 

19 ‘‘(A) the new or general legislation or unauthor20 ized appropriation shall be struck from the bill or 

21 amendment; and 

22 ‘‘(B) any modification of total amounts appro23 priated necessary to reflect the deletion of the mat24 ter struck from the bill or amendment shall be 

25 made. 


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1 ‘‘(2) If a point of order under subparagraph (a)(1) 

2 against an Act of the House of Representatives is sus3 tained when the Senate is not considering an amendment 

4 in the nature of a substitute, an amendment to the House 

5 bill is deemed to have been adopted that— 

6 ‘‘(A) strikes the new or general legislation or 

7 unauthorized appropriation from the bill; and 

8 ‘‘(B) modifies, if necessary, the total amounts 

9 appropriated by the bill to reflect the deletion of the 

10 matter struck from the bill. 

11 ‘‘(c) If the point of order against an amendment 

12 under subparagraph (a)(2) is sustained, the amendment 

13 shall be out of order and may not be considered. 

14 ‘‘(d)(1) If a point of order under subparagraph (a)(3) 

15 against a Senate amendment is sustained— 

16 ‘‘(A) the unauthorized appropriation shall be 

17 struck from the amendment; 

18 ‘‘(B) any modification of total amounts appro19 priated necessary to reflect the deletion of the mat20 ter struck from the amendment shall be made; and 

21 ‘‘(C) after all other points of order under this 

22 paragraph have been disposed of, the Senate shall 

23 proceed to consider the amendment as so modified. 


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1 ‘‘(2) If a point of order under subparagraph (a)(3) 

2 against a House of Representatives amendment is sus3 tained— 

4 ‘‘(A) an amendment to the House amendment 

5 is deemed to have been adopted that— 

6 ‘‘(i) strikes the new or general legislation 

7 or unauthorized appropriation from the House 

8 amendment; and 

9 ‘‘(ii) modifies, if necessary, the total 

10 amounts appropriated by the bill to reflect the 

11 deletion of the matter struck from the House 

12 amendment; and 

13 ‘‘(B) after all other points of order under this 

14 paragraph have been disposed of, the Senate shall 

15 proceed to consider the question of whether to con16 cur with further amendment. 

17 ‘‘(e) The disposition of a point of order made under 

18 any other paragraph of this rule, or under any other 

19 Standing Rule of the Senate, that is not sustained, or is 

20 waived, does not preclude, or affect, a point of order made 

21 under subparagraph (a) with respect to the same matter. 

22 ‘‘(f) A point of order under subparagraph (a) may 

23 be waived only by a motion agreed to by the affirmative 

24 vote of three-fifths of the Senators duly chosen and sworn. 

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1 cer with respect to such a point of order, the ruling of 

2 the Presiding Officer shall be sustained absent an affirma3 tive vote of three-fifths of the Senators duly chosen and 

4 sworn. 

5 ‘‘(g) Notwithstanding any other rule of the Senate, 

6 it shall be in order for a Senator to raise a single point 

7 of order that several provisions of a general appropriation 

8 bill or an amendment between the Houses on a general 

9 appropriation bill violate subparagraph (a). The Presiding 

10 Officer may sustain the point of order as to some or all 

11 of the provisions against which the Senator raised the 

12 point of order. If the Presiding Officer so sustains the 

13 point of order as to some or all of the provisions against 

14 which the Senator raised the point of order, then only 

15 those provisions against which the Presiding Officer sus16 tains the point of order shall be deemed stricken pursuant 

17 to this paragraph. Before the Presiding Officer rules on 

18 such a point of order, any Senator may move to waive 

19 such a point of order, in accordance with subparagraph 

20 (f), as it applies to some or all of the provisions against 

21 which the point of order was raised. Such a motion to 

22 waive is amendable in accordance with the rules and prece23 dents of the Senate. After the Presiding Officer rules on 

24 such a point of order, any Senator may appeal the ruling 

25 of the Presiding Officer on such a point of order as it 


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1 applies to some or all of the provisions on which the Pre2 siding Officer ruled. 

3 ‘‘(h) For purposes of this paragraph: 

4 ‘‘(1) The term ‘new or general legislation’ has 

5 the meaning given that term when it is used in para6 graph 2 of this rule. 

7 ‘‘(2) The term ‘new matter’ means matter not 

8 committed to conference by either House of Con9 gress. 

10 ‘‘(3)(A) The term ‘unauthorized appropriation’ 

11 means a ‘congressionally directed spending item’ as 

12 defined in rule XLIV— 

13 ‘‘(i) that is not specifically authorized by 

14 law or Treaty stipulation (unless the appropria15 tion has been specifically authorized by an Act 

16 or resolution previously passed by the Senate 

17 during the same session or proposed in pursu18 ance of an estimate submitted in accordance 

19 with law); or 

20 ‘‘(ii) the amount of which exceeds the 

21 amount specifically authorized by law or Treaty 

22 stipulation (or specifically authorized by an Act 

23 or resolution previously passed by the Senate 

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1 ance of an estimate submitted in accordance 

2 with law) to be appropriated. 

3 ‘‘(B) An appropriation is not specifically au4 thorized if it is restricted or directed to, or author5 ized to be obligated or expended for the benefit of, 

6 an identifiable person, program, project, entity, or 

7 jurisdiction by earmarking or other specification, 

8 whether by name or description, in a manner that is 

9 so restricted, directed, or authorized that it applies 

10 only to a single identifiable person, program, project, 

11 entity, or jurisdiction, unless the identifiable person, 

12 program, project, entity, or jurisdiction to which the 

13 restriction, direction, or authorization applies is de14 scribed or otherwise clearly identified in a law or 

15 Treaty stipulation (or an Act or resolution pre16 viously passed by the Senate during the same ses17 sion or in the estimate submitted in accordance with 

18 law) that specifically provides for the restriction, di19 rection, or authorization of appropriation for such 

20 person, program, project, entity, or jurisdiction. 

21 ‘‘10. (a) On a point of order made by any Senator, 

22 no new or general legislation, nor any unauthorized appro23 priation, new matter, or nongermane matter may be in24 cluded in any conference report on a general appropriation 

25 bill. 


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1 ‘‘(b) If the point of order against a conference report 

2 under subparagraph (a) is sustained— 

3 ‘‘(1) the new or general legislation, unauthor4 ized appropriation, new matter, or nongermane mat5 ter in such conference report shall be deemed to 

6 have been struck; 

7 ‘‘(2) any modification of total amounts appro8 priated necessary to reflect the deletion of the mat9 ter struck shall be deemed to have been made; 

10 ‘‘(3) when all other points of order under this 

11 paragraph have been disposed of— 

12 ‘‘(A) the Senate shall proceed to consider 

13 the question of whether the Senate should re14 cede from its amendment to the House bill, or 

15 its disagreement to the amendment of the 

16 House, and concur with a further amendment, 

17 which further amendment shall consist of only 

18 that portion of the conference report not 

19 deemed to have been struck (together with any 

20 modification of total amounts appropriated); 

21 ‘‘(B) the question shall be debatable; and 

22 ‘‘(C) no further amendment shall be in 

23 order; and 

24 ‘‘(4) if the Senate agrees to the amendment, 

25 then the bill and the Senate amendment thereto 


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1 shall be returned to the House for its concurrence 

2 in the amendment of the Senate. 

3 ‘‘(c) The disposition of a point of order made under 

4 any other paragraph of this rule, or under any other 

5 Standing Rule of the Senate, that is not sustained, or is 

6 waived, does not preclude, or affect, a point of order made 

7 under subparagraph (a) with respect to the same matter. 

8 ‘‘(d) A point of order under subparagraph (a) may 

9 be waived only by a motion agreed to by the affirmative 

10 vote of three-fifths of the Senators duly chosen and sworn. 

11 If an appeal is taken from the ruling of the Presiding Offi12 cer with respect to such a point of order, the ruling of 

13 the Presiding Officer shall be sustained absent an affirma14 tive vote of three-fifths of the Senators duly chosen and 

15 sworn. 

16 ‘‘(e) Notwithstanding any other rule of the Senate, 

17 it shall be in order for a Senator to raise a single point 

18 of order that several provisions of a conference report on 

19 a general appropriation bill violate subparagraph (a). The 

20 Presiding Officer may sustain the point of order as to 

21 some or all of the provisions against which the Senator 

22 raised the point of order. If the Presiding Officer so sus23 tains the point of order as to some or all of the provisions 

24 against which the Senator raised the point of order, then 

25 only those provisions against which the Presiding Officer 


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1 sustains the point of order shall be deemed stricken pursu2 ant to this paragraph. Before the Presiding Officer rules 

3 on such a point of order, any Senator may move to waive 

4 such a point of order, in accordance with subparagraph 

5 (d), as it applies to some or all of the provisions against 

6 which the point of order was raised. Such a motion to 

7 waive is amendable in accordance with the rules and prece8 dents of the Senate. After the Presiding Officer rules on 

9 such a point of order, any Senator may appeal the ruling 

10 of the Presiding Officer on such a point of order as it 

11 applies to some or all of the provisions on which the Pre12 siding Officer ruled. 

13 ‘‘(f) For purposes of this paragraph: 

14 ‘‘(1) The terms ‘new or general legislation’, 

15 ‘new matter’, and ‘unauthorized appropriation’ have 

16 the same meaning as in paragraph 9. 

17 ‘‘(2) The term ‘nongermane matter’ has the 

18 same meaning as in rule XXII and under the prece19 dents attendant thereto, as of the beginning of the 

20 110th Congress.’’. 

21 (b) REQUIRING CONFERENCE REPORTS TO BE

22 SEARCHABLE ONLINE.—Paragraph 3(a)(2) of rule XLIV 

23 of the Standing Rules of the Senate is amended by insert24 ing ‘‘in an searchable format’’ after ‘‘available’’. 


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1 Subtitle B—Giving the President 

2 the Power to Eliminate Wasteful 

3 Spending 

4 SEC. 1201. SHORT TITLE. 

5 This subtitle may be cited as the ‘‘Congressional Ac6 countability and Line-Item Veto Act of 2009’’. 

7 SEC. 1202. LEGISLATIVE LINE-ITEM VETO. 

8 Title X of the Congressional Budget and Impound9 ment Control Act of 1974 (2 U.S.C. 621 et seq.) is amend10 ed by striking all of part B (except for sections 1016 and 

11 1013, which are redesignated as sections 1019 and 1020, 

12 respectively) and part C and inserting the following: 

13 ‘‘PART B—LEGISLATIVE LINE-ITEM VETO

14 ‘‘LINE-ITEM VETO AUTHORITY

15 ‘‘SEC. 1011. (a) PROPOSED CANCELLATIONS.—With16 in 30 calendar days after the enactment of any bill or joint 

17 resolution containing any congressional earmark or pro18 viding any limited tariff benefit or targeted tax benefit, 

19 the President may propose, in the manner provided in sub20 section (b), the repeal of the congressional earmark or the 

21 cancellation of any limited tariff benefit or targeted tax 

22 benefit. If the 30 calendar-day period expires during a pe23 riod where either House of Congress stands adjourned sine 

24 die at the end of Congress or for a period greater than 

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1 tion under this section and transmit a special message 

2 under subsection (b) on the first calendar day of session 

3 following such a period of adjournment. 

4 ‘‘(b) TRANSMITTAL OF SPECIAL MESSAGE.— 

5 ‘‘(1) SPECIAL MESSAGE.— 

6 ‘‘(A) IN GENERAL.—The President may 

7 transmit to the Congress a special message pro8 posing to repeal any congressional earmarks or 

9 to cancel any limited tariff benefits or targeted 

10 tax benefits. 

11 ‘‘(B) CONTENTS OF SPECIAL MESSAGE.— 

12 Each special message shall specify, with respect 

13 to the congressional earmarks, limited tariff 

14 benefits, or targeted tax benefits to be repealed 

15 or canceled— 

16 ‘‘(i) the congressional earmark that 

17 the President proposes to repeal or the 

18 limited tariff benefit or the targeted tax 

19 benefit that the President proposes be can20 celed; 

21 ‘‘(ii) the specific project or govern22 mental functions involved; 

23 ‘‘(iii) the reasons why such congres24 sional earmark should be repealed or such 


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1 limited tariff benefit or targeted tax ben2 efit should be canceled; 

3 ‘‘(iv) to the maximum extent prac4 ticable, the estimated fiscal, economic, and 

5 budgetary effect (including the effect on 

6 outlays and receipts in each fiscal year) of 

7 the proposed repeal or cancellation; 

8 ‘‘(v) to the maximum extent prac9 ticable, all facts, circumstances, and con10 siderations relating to or bearing upon the 

11 proposed repeal or cancellation and the de12 cision to propose the repeal or cancellation, 

13 and the estimated effect of the proposed 

14 repeal or cancellation upon the objects, 

15 purposes, or programs for which the con16 gressional earmark, limited tariff benefit, 

17 or the targeted tax benefit is provided; 

18 ‘‘(vi) a numbered list of repeals and 

19 cancellations to be included in an approval 

20 bill that, if enacted, would repeal congres21 sional earmarks and cancel limited tariff 

22 benefits or targeted tax benefits proposed 

23 in that special message; and 

24 ‘‘(vii) if the special message is trans25 mitted subsequent to or at the same time 


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1 as another special message, a detailed ex2 planation why the proposed repeals or can3 cellations are not substantially similar to 

4 any other proposed repeal or cancellation 

5 in such other message. 

6 ‘‘(C) DUPLICATIVE PROPOSALS PROHIB7 ITED.—The President may not propose to re8 peal or cancel the same or substantially similar 

9 congressional earmark, limited tariff benefit, or 

10 targeted tax benefit more than one time under 

11 this Act. 

12 ‘‘(D) MAXIMUM NUMBER OF SPECIAL MES13 SAGES.—The President may not transmit to the 

14 Congress more than one special message under 

15 this subsection related to any bill or joint reso16 lution described in subsection (a), but may 

17 transmit not more than 2 special messages for 

18 any omnibus budget reconciliation or appropria19 tion measure. 

20 ‘‘(2) ENACTMENT OF APPROVAL BILL.— 

21 ‘‘(A) DEFICIT REDUCTION.—Congressional 

22 earmarks, limited tariff benefits, or targeted tax 

23 benefits which are repealed or canceled pursu24 ant to enactment of a bill as provided under 


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1 this section shall be dedicated only to reducing 

2 the deficit or increasing the surplus. 

3 ‘‘(B) ADJUSTMENT OF LEVELS IN THE

4 CONCURRENT RESOLUTION ON THE BUDGET.— 

5 Not later than 5 days after the date of enact6 ment of an approval bill as provided under this 

7 section, the chairs of the Committees on the 

8 Budget of the Senate and the House of Rep9 resentatives shall revise allocations and aggre10 gates and other appropriate levels under the ap11 propriate concurrent resolution on the budget to 

12 reflect the repeal or cancellation, and the appli13 cable committees shall report revised suballoca14 tions pursuant to section 302(b), as appro15 priate. 

16 ‘‘(C) ADJUSTMENTS TO STATUTORY LIM17 ITS.—After enactment of an approval bill as 

18 provided under this section, the Office of Man19 agement and Budget shall revise applicable lim20 its under the Balanced Budget and Emergency 

21 Deficit Control Act of 1985, as appropriate. 

22 ‘‘(D) TRUST FUNDS AND SPECIAL

23 FUNDS.—Notwithstanding subparagraph (A), 

24 nothing in this part shall be construed to re25 quire or allow the deposit of amounts derived 


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1 from a trust fund or special fund which are 

2 canceled pursuant to enactment of a bill as pro3 vided under this section to any other fund. 

4 ‘‘PROCEDURES FOR EXPEDITED CONSIDERATION

5 ‘‘SEC. 1012. (a) EXPEDITED CONSIDERATION.— 

6 ‘‘(1) IN GENERAL.—The majority leader or mi7 nority leader of each House or his designee shall (by 

8 request) introduce an approval bill as defined in sec9 tion 1017 not later than the third day of session of 

10 that House after the date of receipt of a special mes11 sage transmitted to the Congress under section 

12 1011(b). If the bill is not introduced as provided in 

13 the preceding sentence in either House, then, on the 

14 fourth day of session of that House after the date 

15 of receipt of the special message, any Member of 

16 that House may introduce the bill. 

17 ‘‘(2) CONSIDERATION IN THE HOUSE OF REP18 RESENTATIVES.— 

19 ‘‘(A) REFERRAL AND REPORTING.—Any 

20 committee of the House of Representatives to 

21 which an approval bill is referred shall report it 

22 to the House without amendment not later than 

23 the seventh legislative day after the date of its 

24 introduction. If a committee fails to report the 

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1 journment sine die at the end of a Congress, 

2 such committee shall be automatically dis3 charged from further consideration of the bill 

4 and it shall be placed on the appropriate cal5 endar. 

6 ‘‘(B) PROCEEDING TO CONSIDERATION.— 

7 After an approval bill is reported by or dis8 charged from committee or the House has 

9 adopted a concurrent resolution providing for 

10 adjournment sine die at the end of a Congress, 

11 it shall be in order to move to proceed to con12 sider the approval bill in the House. Such a mo13 tion shall be in order only at a time designated 

14 by the Speaker in the legislative schedule within 

15 two legislative days after the day on which the 

16 proponent announces his intention to offer the 

17 motion. Such a motion shall not be in order 

18 after the House has disposed of a motion to 

19 proceed with respect to that special message. 

20 The previous question shall be considered as or21 dered on the motion to its adoption without in22 tervening motion. A motion to reconsider the 

23 vote by which the motion is disposed of shall 

24 not be in order. 


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1 ‘‘(C) CONSIDERATION.—The approval bill 

2 shall be considered as read. All points of order 

3 against an approval bill and against its consid4 eration are waived. The previous question shall 

5 be considered as ordered on an approval bill to 

6 its passage without intervening motion except 

7 five hours of debate equally divided and con8 trolled by the proponent and an opponent and 

9 one motion to limit debate on the bill. A motion 

10 to reconsider the vote on passage of the bill 

11 shall not be in order. 

12 ‘‘(D) SENATE BILL.—An approval bill re13 ceived from the Senate shall not be referred to 

14 committee. 

15 ‘‘(3) CONSIDERATION IN THE SENATE.— 

16 ‘‘(A) REFERRAL AND REPORTING.—Any 

17 committee of the Senate to which an approval 

18 bill is referred shall report it to the Senate 

19 without amendment not later than the seventh 

20 legislative day after the date of its introduction. 

21 If a committee fails to report the bill within 

22 that period or the Senate has adopted a concur23 rent resolution providing for adjournment sine 

24 die at the end of a Congress, such committee 

25 shall be automatically discharged from further 


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1 consideration of the bill and it shall be placed 

2 on the appropriate calendar. 

3 ‘‘(B) MOTION TO PROCEED TO CONSIDER4 ATION.—After an approval bill is reported by or 

5 discharged from committee or the Senate has 

6 adopted a concurrent resolution providing for 

7 adjournment sine die at the end of a Congress, 

8 it shall be in order to move to proceed to con9 sider the approval bill in the Senate. A motion 

10 to proceed to the consideration of a bill under 

11 this subsection in the Senate shall not be debat12 able. It shall not be in order to move to recon13 sider the vote by which the motion to proceed 

14 is agreed to or disagreed to. 

15 ‘‘(C) LIMITS ON DEBATE.—Debate in the 

16 Senate on a bill under this subsection, and all 

17 debatable motions and appeals in connection 

18 therewith (including debate pursuant to sub19 paragraph (D)), shall not exceed 10 hours, 

20 equally divided and controlled in the usual 

21 form. 

22 ‘‘(D) APPEALS.—Debate in the Senate on 

23 any debatable motion or appeal in connection 

24 with a bill under this subsection shall be limited 


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1 to not more than 1 hour, to be equally divided 

2 and controlled in the usual form. 

3 ‘‘(E) MOTION TO LIMIT DEBATE.—A mo4 tion in the Senate to further limit debate on a 

5 bill under this subsection is not debatable. 

6 ‘‘(F) MOTION TO RECOMMIT.—A motion to 

7 recommit a bill under this subsection is not in 

8 order. 

9 ‘‘(G) CONSIDERATION OF THE HOUSE

10 BILL.— 

11 ‘‘(i) IN GENERAL.—If the Senate has 

12 received the House companion bill to the 

13 bill introduced in the Senate prior to a 

14 vote under subparagraph (C), then the 

15 Senate may consider, and the vote under 

16 subparagraph (C) may occur on, the House 

17 companion bill. 

18 ‘‘(ii) PROCEDURE AFTER VOTE ON

19 SENATE BILL.—If the Senate votes, pursu20 ant to subparagraph (C), on the bill intro21 duced in the Senate, then immediately fol22 lowing that vote, or upon receipt of the 

23 House companion bill, the House bill shall 

24 be deemed to be considered, read the third 

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1 ate bill shall be considered to be the vote 

2 on the bill received from the House. 

3 ‘‘(b) AMENDMENTS PROHIBITED.—No amendment 

4 to, or motion to strike a provision from, a bill considered 

5 under this section shall be in order in either the Senate 

6 or the House of Representatives. 

7 ‘‘PRESIDENTIAL DEFERRAL AUTHORITY

8 ‘‘SEC. 1013. (a) TEMPORARY PRESIDENTIAL AU9 THORITY TO WITHHOLD CONGRESSIONAL EARMARKS.— 

10 ‘‘(1) IN GENERAL.—At the same time as the 

11 President transmits to the Congress a special mes12 sage pursuant to section 1011(b), the President may 

13 direct that any congressional earmark to be repealed 

14 in that special message shall not be made available 

15 for obligation for a period of 45 calendar days of 

16 continuous session of the Congress after the date on 

17 which the President transmits the special message to 

18 the Congress. 

19 ‘‘(2) EARLY AVAILABILITY.—The President 

20 shall make any congressional earmark deferred pur21 suant to paragraph (1) available at a time earlier 

22 than the time specified by the President if the Presi23 dent determines that continuation of the deferral 

24 would not further the purposes of this Act. 

25 ‘‘(b) TEMPORARY PRESIDENTIAL AUTHORITY TO

26 SUSPEND A LIMITED TARIFF BENEFIT.— 


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1 ‘‘(1) IN GENERAL.—At the same time as the 

2 President transmits to the Congress a special mes3 sage pursuant to section 1011(b), the President may 

4 suspend the implementation of any limited tariff 

5 benefit proposed to be canceled in that special mes6 sage for a period of 45 calendar days of continuous 

7 session of the Congress after the date on which the 

8 President transmits the special message to the Con9 gress. 

10 ‘‘(2) EARLY AVAILABILITY.—The President 

11 shall terminate the suspension of any limited tariff 

12 benefit at a time earlier than the time specified by 

13 the President if the President determines that con14 tinuation of the suspension would not further the 

15 purposes of this Act. 

16 ‘‘(c) TEMPORARY PRESIDENTIAL AUTHORITY TO

17 SUSPEND A TARGETED TAX BENEFIT.— 

18 ‘‘(1) IN GENERAL.—At the same time as the 

19 President transmits to the Congress a special mes20 sage pursuant to section 1011(b), the President may 

21 suspend the implementation of any targeted tax ben22 efit proposed to be repealed in that special message 

23 for a period of 45 calendar days of continuous ses24 sion of the Congress after the date on which the 


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1 President transmits the special message to the Con2 gress. 

3 ‘‘(2) EARLY AVAILABILITY.—The President 

4 shall terminate the suspension of any targeted tax 

5 benefit at a time earlier than the time specified by 

6 the President if the President determines that con7 tinuation of the suspension would not further the 

8 purposes of this Act. 

9 ‘‘IDENTIFICATION OF TARGETED TAX BENEFITS

10 ‘‘SEC. 1014. (a) STATEMENT.—The chairman of the 

11 Committee on Ways and Means of the House of Rep12 resentatives and the chairman of the Committee on Fi13 nance of the Senate acting jointly (hereafter in this sub14 section referred to as the ‘chairmen’) shall review any rev15 enue or reconciliation bill or joint resolution which in16 cludes any amendment to the Internal Revenue Code of 

17 1986 that is being prepared for filing by a committee of 

18 conference of the two Houses, and shall identify whether 

19 such bill or joint resolution contains any targeted tax ben20 efits. The chairmen shall provide to the committee of con21 ference a statement identifying any such targeted tax ben22 efits or declaring that the bill or joint resolution does not 

23 contain any targeted tax benefits. Any such statement 

24 shall be made available to any Member of Congress by 

25 the chairmen immediately upon request. 

26 ‘‘(b) STATEMENT INCLUDED IN LEGISLATION.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding any other 

2 rule of the House of Representatives or any rule or 

3 precedent of the Senate, any revenue or reconcili4 ation bill or joint resolution which includes any 

5 amendment to the Internal Revenue Code of 1986 

6 reported by a committee of conference of the two 

7 Houses may include, as a separate section of such 

8 bill or joint resolution, the information contained in 

9 the statement of the chairmen, but only in the man10 ner set forth in paragraph (2). 

11 ‘‘(2) APPLICABILITY.—The separate section 

12 permitted under subparagraph (A) shall read as fol13 lows: ‘Section 1021 of the Congressional Budget and 

14 Impoundment Control Act of 1974 shall 

15 llllll apply to llllllll.’, with 

16 the blank spaces being filled in with— 

17 ‘‘(A) in any case in which the chairmen 

18 identify targeted tax benefits in the statement 

19 required under subsection (a), the word ‘only’ 

20 in the first blank space and a list of all of the 

21 specific provisions of the bill or joint resolution 

22 in the second blank space; or 

23 ‘‘(B) in any case in which the chairmen de24 clare that there are no targeted tax benefits in 

25 the statement required under subsection (a), 


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1 the word ‘not’ in the first blank space and the 

2 phrase ‘any provision of this Act’ in the second 

3 blank space. 

4 ‘‘(c) IDENTIFICATION IN REVENUE ESTIMATE.— 

5 With respect to any revenue or reconciliation bill or joint 

6 resolution with respect to which the chairmen provide a 

7 statement under subsection (a), the Joint Committee on 

8 Taxation shall— 

9 ‘‘(1) in the case of a statement described in 

10 subsection (b)(2)(A), list the targeted tax benefits in 

11 any revenue estimate prepared by the Joint Com12 mittee on Taxation for any conference report which 

13 accompanies such bill or joint resolution, or 

14 ‘‘(2) in the case of a statement described in 13 

15 subsection (b)(2)(B), indicate in such revenue esti16 mate that no provision in such bill or joint resolution 

17 has been identified as a targeted tax benefit. 

18 ‘‘(d) PRESIDENT’S AUTHORITY.—If any revenue or 

19 reconciliation bill or joint resolution is signed into law— 

20 ‘‘(1) with a separate section described in sub21 section (b)(2), then the President may use the au22 thority granted in this section only with respect to 

23 any targeted tax benefit in that law, if any, identi24 fied in such separate section; or 


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1 ‘‘(2) without a separate section described in 

2 subsection (b)(2), then the President may use the 

3 authority granted in this section with respect to any 

4 targeted tax benefit in that law. 

5 ‘‘TREATMENT OF CANCELLATIONS

6 ‘‘SEC. 1015. The repeal of any congressional earmark 

7 or cancellation of any limited tariff benefit or targeted tax 

8 benefit shall take effect only upon enactment of the appli9 cable approval bill. If an approval bill is not enacted into 

10 law before the end of the applicable period under section 

11 1013, then all proposed repeals and cancellations con12 tained in that bill shall be null and void and any such 

13 congressional earmark, limited tariff benefit, or targeted 

14 tax benefit shall be effective as of the original date pro15 vided in the law to which the proposed repeals or cancella16 tions applied. 

17 ‘‘REPORTS BY COMPTROLLER GENERAL

18 ‘‘SEC. 1016. With respect to each special message 

19 under this part, the Comptroller General shall issue to the 

20 Congress a report determining whether any congressional 

21 earmark is not repealed or limited tariff benefit or tar22 geted tax benefit continues to be suspended after the de23 ferral authority set forth in section 1013 of the President 

24 has expired. 

25 ‘‘DEFINITIONS

26 ‘‘SEC. 1017. As used in this part: 


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1 ‘‘(1) APPROPRIATION LAW.—The term ‘appro2 priation law’ means an Act referred to in section 

3 105 of title 1, United States Code, including any 

4 general or special appropriation Act, or any Act 

5 making supplemental, deficiency, or continuing ap6 propriations, that has been signed into law pursuant 

7 to Article I, section 7, of the Constitution of the 

8 United States. 

9 ‘‘(2) APPROVAL BILL.—The term ‘approval bill’ 

10 means a bill or joint resolution which only approves 

11 proposed repeals of congressional earmarks or can12 cellations of limited tariff benefits or targeted tax 

13 benefits in a special message transmitted by the 

14 President under this part and— 

15 ‘‘(A) the title of which is as follows: ‘A bill 

16 approving the proposed repeals and cancella17 tions transmitted by the President on lll’, 

18 the blank space being filled in with the date of 

19 transmission of the relevant special message 

20 and the public law number to which the mes21 sage relates; 

22 ‘‘(B) which does not have a preamble; 

23 ‘‘(C) which provides only the following 

24 after the enacting clause: ‘That the Congress 

25 approves of proposed repeals and cancellations 


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1 lll’, the blank space being filled in with a 

2 list of the repeals and cancellations contained in 

3 the President’s special message, ‘as transmitted 

4 by the President in a special message on 

5 llll’, the blank space being filled in with 

6 the appropriate date, ‘regarding llll.’, the 

7 blank space being filled in with the public law 

8 number to which the special message relates; 

9 ‘‘(D) which only includes proposed repeals 

10 and cancellations that are estimated by CBO to 

11 meet the definition of congressional earmark or 

12 limited tariff benefits, or that are identified as 

13 targeted tax benefits pursuant to section 1014; 

14 and 

15 ‘‘(E) if no CBO estimate is available, then 

16 the entire list of legislative provisions proposed 

17 by the President is inserted in the second blank 

18 space in subparagraph (C). 

19 ‘‘(3) CALENDAR DAY.—The term ‘calendar day’ 

20 means a standard 24-hour period beginning at mid21 night. 

22 ‘‘(4) CANCEL OR CANCELLATION.—The terms 

23 ‘cancel’ or ‘cancellation’ means to prevent— 

24 ‘‘(A) a limited tariff benefit from having 

25 legal force or effect, and to make any necessary, 


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1 conforming statutory change to ensure that 

2 such limited tariff benefit is not implemented; 

3 or 

4 ‘‘(B) a targeted tax benefit from having 

5 legal force or effect, and to make any necessary, 

6 conforming statutory change to ensure that 

7 such targeted tax benefit is not implemented 

8 and that any budgetary resources are appro9 priately canceled. 

10 ‘‘(5) CBO.—The term ‘CBO’ means the Direc11 tor of the Congressional Budget Office. 

12 ‘‘(6) CONGRESSIONAL EARMARK.—The term 

13 ‘congressional earmark’ means a provision or report 

14 language included primarily at the request of a 

15 Member, Delegate, Resident Commissioner, or Sen16 ator providing, authorizing or recommending a spe17 cific amount of discretionary budget authority, credit 

18 authority, or other spending authority for a contract, 

19 loan, loan guarantee, grant, loan authority, or other 

20 expenditure with or to an entity, or targeted to a 

21 specific State, locality or Congressional district, 

22 other than through a statutory or administrative for23 mula-driven or competitive award process. 


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1 ‘‘(7) ENTITY.—As used in paragraph (6), the 

2 term ‘entity’ includes a private business, State, terri3 tory or locality, or Federal entity. 

4 ‘‘(8) LIMITED TARIFF BENEFIT.—The term 

5 ‘limited tariff benefit’ means any provision of law 

6 that modifies the Harmonized Tariff Schedule of the 

7 United States in a manner that benefits 10 or fewer 

8 entities (as defined in paragraph (12)(B)). 

9 ‘‘(9) OMB.—The term ‘OMB’ means the Direc10 tor of the Office of Management and Budget. 

11 ‘‘(10) OMNIBUS RECONCILIATION OR APPRO12 PRIATION MEASURE.—The term ‘omnibus reconcili13 ation or appropriation measure’ means— 

14 ‘‘(A) in the case of a reconciliation bill, any 

15 such bill that is reported to its House by the 

16 Committee on the Budget; or 

17 ‘‘(B) in the case of an appropriation meas18 ure, any such measure that provides appropria19 tions for programs, projects, or activities falling 

20 within 2 or more section 302(b) suballocations. 

21 ‘‘(11) TARGETED TAX BENEFIT.—The term 

22 ‘targeted tax benefit’ means— 

23 ‘‘(A) any revenue provision that— 

24 ‘‘(i) provides a Federal tax deduction, 

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1 ticular beneficiary or limited group of 

2 beneficiaries under the Internal Revenue 

3 Code of 1986; and 

4 ‘‘(ii) contains eligibility criteria that 

5 are not uniform in application with respect 

6 to potential beneficiaries of such provision; 

7 or 

8 ‘‘(B) any Federal tax provision which pro9 vides one beneficiary temporary or permanent 

10 transition relief from a change to the Internal 

11 Revenue Code of 1986. 

12 ‘‘EXPIRATION

13 ‘‘SEC. 1018. This title shall have no force or effect 

14 on or after December 31, 2014’’. 

15 SEC. 1203. TECHNICAL AND CONFORMING AMENDMENTS. 

16 (a) EXERCISE OF RULEMAKING POWERS.—Section 

17 904 of the Congressional Budget Act of 1974 (2 U.S.C. 

18 621 note) is amended— 

19 (1) in subsection (a), by striking ‘‘1017’’ and 

20 inserting ‘‘1012’’; and 

21 (2) in subsection (d), by striking ‘‘section 

22 1017’’ and inserting ‘‘section 1012’’. 

23 (b) ANALYSIS BY CONGRESSIONAL BUDGET OF24 FICE.—Section 402 of the Congressional Budget Act of 

25 1974 is amended by inserting ‘‘(a)’’ after ‘‘402.’’ and by 

26 adding at the end the following new subsection: 


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1 ‘‘(b) Upon the receipt of a special message under sec2 tion 1011 proposing to repeal any congressional earmark, 

3 the Director of the Congressional Budget Office shall pre4 pare an estimate of the savings in budget authority or out5 lays resulting from such proposed repeal relative to the 

6 most recent levels calculated consistent with the method7 ology used to calculate a baseline under section 257 of 

8 the Balanced Budget and Emergency Deficit Control Act 

9 of 1985 and included with a budget submission under sec10 tion 1105(a) of title 31, United States Code, and transmit 

11 such estimate to the chairmen of the Committees on the 

12 Budget of the House of Representatives and Senate.’’. 

13 (c) CLERICAL AMENDMENTS.—(1) Section 1(a) of 

14 the Congressional Budget and Impoundment Control Act 

15 of 1974 is amended by striking the last sentence. 

16 (2) Section 1022(c) of such Act (as redesignated) is 

17 amended is amended by striking ‘‘rescinded or that is to 

18 be reserved’’ and insert ‘‘canceled’’ and by striking 

19 ‘‘1012’’ and inserting ‘‘1011’’. 

20 (3) TABLE OF CONTENTS.—The table of contents set 

21 forth in section 1(b) of the Congressional Budget and Im22 poundment Control Act of 1974 is amended by deleting 

23 the contents for parts B and C of title X and inserting 

24 the following: 

‘‘PART B—LEGISLATIVE LINE-ITEM VETO

‘‘Sec. 1011. Line-item veto authority. 


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‘‘Sec. 1012. Procedures for expedited consideration. 

‘‘Sec. 1013. Presidential deferral authority. 

‘‘Sec. 1014. Identification of targeted tax benefits. 

‘‘Sec. 1015. Treatment of cancellations. 

‘‘Sec. 1016. Reports by Comptroller General. 

‘‘Sec. 1017. Definitions. 

‘‘Sec. 1018. Expiration. 

‘‘Sec. 1019. Suits by Comptroller General. 

‘‘Sec. 1020. Proposed Deferrals of budget authority.’’. 

1 (d) EFFECTIVE DATE.—The amendments made by 

2 this subtitle shall take effect on the date of its enactment 

3 and apply only to any congressional earmark, limited tariff 

4 benefit, or targeted tax benefit provided in an Act enacted 

5 on or after the date of enactment of this Act. 

6 SEC. 1204. SENSE OF CONGRESS ON ABUSE OF PROPOSED 

7 REPEALS AND CANCELLATIONS. 

8 It is the sense of Congress no President or any execu9 tive branch official should condition the inclusion or exclu10 sion or threaten to condition the inclusion or exclusion of 

11 any proposed repeal or cancellation in any special message 

12 under this section upon any vote cast or to be cast 

13 Subtitle C—Restoring Strong Pay14 As-You-Go Requirements 

15 SEC. 1301. DEFINITIONS. 

16 As used in this subtitle— 

17 (1) The term ‘‘BBEDCA’’ means the Balanced 

18 Budget and Emergency Deficit Control Act of 1985. 

19 (2) The definitions set forth in section 3 of the 

20 Congressional Budget and Impoundment Control 

21 Act of 1974 and in section 250 of BBEDCA shall 


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1 apply to this subtitle, except to the extent that they 

2 are specifically modified as follows: 

3 (A) The term ‘‘outyear’’ means a fiscal 

4 year that occurs one or more years after the 

5 budget year. 

6 (B) In section 250(c)(8)(C), the reference 

7 to the food stamp program shall be deemed to 

8 be a reference to the Supplemental Nutrition 

9 Assistance Program. 

10 (3)(A) The term ‘‘budgetary effects’’ means the 

11 amounts by which PAYGO legislation changes direct 

12 spending or revenues relative to the baseline and 

13 shall be determined on the basis of estimates in14 cluded by reference in the PAYGO Act or prepared 

15 under section 4(d)(3), as applicable. Budgetary ef16 fects that increase direct spending or decrease reve17 nues are termed ‘‘costs’’ and budgetary effects that 

18 increase revenues or decrease direct spending are 

19 termed ‘‘savings’’. 

20 (B) For purposes of these definitions, off-budg21 et effects shall be counted as budgetary effects un22 less such changes flow directly from amendments to 

23 title II of the Social Security Act and related provi24 sions of the Internal Revenue Code of 1986 and debt 


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1 service effects shall not be counted as budgetary ef2 fects. 

3 (C) Solely for purposes of recording entries on 

4 a PAYGO scorecard, provisions in appropriations 

5 Acts are also considered to be budgetary effects for 

6 purposes of this subtitle if such provisions make out7 year modifications to substantive law, except that 

8 provisions for which the outlay effects net to zero 

9 over a period consisting of the current year, the 

10 budget year, and the 4 subsequent years shall not be 

11 considered budgetary effects. For purposes of this 

12 paragraph, the term, ‘‘modifications to substantive 

13 law’’ refers to changes to or restrictions on entitle14 ment law or other mandatory spending contained in 

15 appropriations Acts, notwithstanding section 

16 250(c)(8) of BBEDCA. Provisions in appropriations 

17 Acts that are neither outyear modifications to sub18 stantive law nor changes in revenues have no budg19 etary effects for purposes of this subtitle. 

20 (D) If a provision is designated as an emer21 gency requirement under this subtitle and is also 

22 designated as an emergency requirement under the 

23 applicable rules of the House of Representatives, 

24 CBO shall not include the cost of such a provision 


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1 in its estimate of the PAYGO legislation’s budgetary 

2 effects. 

3 (4) The term ‘‘debit’’ refers to the net total 

4 amount, when positive, by which costs recorded on 

5 the PAYGO scorecards for a fiscal year exceed sav6 ings recorded on those scorecards for that year. 

7 (5) The term ‘‘entitlement law’’ refers to a sec8 tion of law which provides entitlement authority. 

9 (6) The term ‘‘PAYGO legislation’’ or a 

10 ‘‘PAYGO Act’’ refers to a bill or joint resolution 

11 that affects direct spending or revenue relative to 

12 the baseline. The budgetary effects of changes in 

13 revenues and outyear modifications to substantive 

14 law included in appropriation Acts as defined in 

15 paragraph (4) shall be treated as if they were con16 tained in PAYGO legislation. 

17 (7) The term ‘‘timing shift’’ refers to a delay of 

18 the date on which direct spending would otherwise 

19 occur from the ninth outyear to the tenth outyear or 

20 an acceleration of the date on which revenues would 

21 otherwise occur from the tenth outyear to the ninth 

22 outyear. 

23 SEC. 1302. PAYGO ESTIMATES AND PAYGO SCORECARDS. 

24 (a) PAYGO ESTIMATES.—(1) A PAYGO Act shall 

25 include by reference an estimate of its budgetary effects 


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1 determined under section 308(a)(3) of the Congressional 

2 Budget Act of 1974, if timely submitted for printing in 

3 the Congressional Record by the chairs of the Committees 

4 on the Budget of the House of Representatives and the 

5 Senate, as applicable, before the vote on the PAYGO legis6 lation. The Clerk of the House or the Secretary of the 

7 Senate, as applicable, shall also incorporate by reference 

8 such estimate printed in the relevant portion of the Con9 gressional Record under section 308(a)(3) of the Congres10 sional Budget Act of 1974 into the enrollment of a 

11 PAYGO Act. Budgetary effects that are not so included 

12 shall be determined under section 1304(d)(3). 

13 (2)(A) Section 308(a) of the Congressional Budget 

14 Act of 1974 is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(3) CBO PAYGO ESTIMATES.—Before a vote in 

17 either House on a PAYGO Act that, if determined 

18 in the affirmative, would clear such Act for enroll19 ment, the chairs of the Committees on the Budget 

20 of the House and Senate, as applicable, shall request 

21 from the Director of the Congressional Budget Of22 fice an estimate of the budgetary effects of such Act 

23 under the Control Spending Now Act. If such an es24 timate is timely provided, the chairs of the Commit25 tees on the Budget of the House of Representatives 


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1 and the Senate shall post such estimate on their re2 spective committee websites and cause it to be print3 ed in the Congressional Record under the heading 

4 ‘PAYGO ESTIMATE’. For purposes of this section, 

5 the Director of the Congressional Budget Office 

6 shall not count timing shifts in his estimates of the 

7 budgetary effects of PAYGO legislation (as defined 

8 in section 1301 of the Control Spending Now Act).’’. 

9 (B) The side heading of section 308(a) of the Con10 gressional Budget Act of 1974 is amended by striking 

11 ‘‘REPORTS ON’’. 

12 (b) Section 308 of the Congressional Budget Act of 

13 1974 is amended by adding at the end the following new 

14 subsection: 

15 ‘‘(d) SCOREKEEPING GUIDELINES.—The Director of 

16 the Congressional Budget Office shall provide estimates 

17 under this section in accordance with the scorekeeping 

18 guidelines determined under section 252(d)(5) of the Bal19 anced Budget and Emergency Deficit Control Act of 1985. 

20 Upon agreement, the chairs of the Committees on the 

21 Budget of the House of Representatives and the Senate 

22 shall submit updates to such guidelines for printing in the 

23 Congressional Record.’’. 

24 (c) OMB PAYGO SCORECARDS.— 


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1 (1) IN GENERAL.—OMB shall maintain and 

2 make publicly available a continuously updated docu3 ment containing two PAYGO scorecards displaying 

4 the budgetary effects of PAYGO legislation as deter5 mined under section 308 of the Congressional Budg6 et Act of 1974, applying the look-back requirement 

7 in subsection (e) and the averaging requirement in 

8 subsection (f), and a separate addendum displaying 

9 the estimates of the costs of provisions designated in 

10 statute as emergency requirements. 

11 (2) ESTIMATES IN LEGISLATION.—Except as 

12 provided in paragraph (3), in making the calcula13 tions for the PAYGO scorecards, OMB shall use the 

14 budgetary effects included by reference in the appli15 cable legislation. 

16 (3) OMB ESTIMATES.—If legislation does not 

17 contain the estimate of budgetary effects under 

18 paragraph (2), then OMB shall score the budgetary 

19 effects of that legislation upon its enactment, based 

20 on the approaches to scorekeeping set forth in this 

21 subtitle. 

22 (4) 5-YEAR SCORECARD.—The first scorecard 

23 shall display the budgetary effects of PAYGO legis24 lation in each year over the 5-year period beginning 

25 in the budget year. 


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1 (5) 10-YEAR SCORECARD.—The second score2 card shall display the budgetary effects of PAYGO 

3 legislation in each year over the 10-year period be4 ginning in the budget year. 

5 (d) LOOK-BACK TO CAPTURE CURRENT-YEAR EF6 FECTS.—For purposes of this section, OMB shall treat the 

7 budgetary effects of PAYGO legislation enacted during a 

8 session of Congress that occur during the current year as 

9 though they occurred in the budget year. 

10 (e) AVERAGING USED TO MEASURE COMPLIANCE

11 OVER 5-YEAR AND 10-YEAR PERIODS.—OMB shall cu12 mulate the budgetary effects of a PAYGO Act over the 

13 budget year (which includes any look-back effects under 

14 subsection (d)) and— 

15 (1) for purposes of the 5-year scorecard re16 ferred to in subsection (c)(4), the four subsequent 

17 outyears, divide that cumulative total by five, and 

18 enter the quotient in the budget-year column and in 

19 each subsequent column of the 5-year PAYGO score20 card; and 

21 (2) for purposes of the 10-year scorecard re22 ferred to in subsection (c)(5), the nine subsequent 

23 outyears, divide that cumulative total by ten, and 

24 enter the quotient in the budget-year column and in 


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1 each subsequent column of the 10-year PAYGO 

2 scorecard. 

3 SEC. 1303. ANNUAL REPORT AND SEQUESTRATION ORDER. 

4 (a) ANNUAL REPORT.—Not later than 14 days (ex5 cluding weekends and holidays) after Congress adjourns 

6 to end a session, OMB shall make publicly available and 

7 cause to be printed in the Federal Register an annual 

8 PAYGO report. The report shall include an up-to-date 

9 document containing the PAYGO scorecards, information 

10 about emergency legislation (if any) designated under this 

11 subtitle, information about any sequestration if required 

12 by subsection (b), and other data and explanations that 

13 enhance public understanding of this subtitle and actions 

14 taken under it. 

15 (b) SEQUESTRATION ORDER.—If the annual report 

16 issued at the end of a session of Congress under sub17 section (a) shows a debit on either PAYGO scorecard for 

18 the budget year, OMB shall prepare and the President 

19 shall issue and include in that report a sequestration order 

20 that, upon issuance, shall reduce budgetary resources of 

21 direct spending programs by enough to offset that debit 

22 as prescribed in section 1306. If there is a debit on both 

23 scorecards, the order shall fully offset the larger of the 

24 two debits. OMB shall include that order in the annual 

25 report and transmit it to the House of Representatives 


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1 and the Senate. If the President issues a sequestration 

2 order, the annual report shall contain, for each budget ac3 count to be sequestered, estimates of the baseline level of 

4 budgetary resources subject to sequestration, the amount 

5 of budgetary resources to be sequestered, and the outlay 

6 reductions that will occur in the budget year and the sub7 sequent fiscal year because of that sequestration. 

8 SEC. 1304. CALCULATING A SEQUESTRATION. 

9 (a) REDUCING NONEXEMPT BUDGETARY RE10 SOURCES BY A UNIFORM PERCENTAGE.—OMB shall cal11 culate the uniform percentage by which the budgetary re12 sources of nonexempt direct spending programs are to be 

13 sequestered such that the outlay savings resulting from 

14 that sequestration, as calculated under subsection (b), 

15 shall offset the budget-year debit, if any on the applicable 

16 PAYGO scorecard. If the uniform percentage calculated 

17 under the prior sentence exceeds 4 percent, the Medicare 

18 programs described in section 256(d) of BBEDCA shall 

19 be reduced by 4 percent and the uniform percentage by 

20 which the budgetary resources of all other nonexempt di21 rect spending programs are to be sequestered shall be in22 creased, as necessary, so that the sequestration of Medi23 care and of all other nonexempt direct spending programs 

24 together produce the required outlay savings. 


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•S 1808 IS

1 (b) OUTLAY SAVINGS.—In determining the amount 

2 by which a sequestration offsets a budget-year debit, OMB 

3 shall count— 

4 (1) the amount by which the sequestration in a 

5 crop year of crop support payments, pursuant to 

6 section 256(j) of BBEDCA, reduces outlays in the 

7 budget year and the subsequent fiscal year; 

8 (2) the amount by which the sequestration of 

9 Medicare payments in the 12-month period following 

10 the sequestration order, pursuant to section 256(d) 

11 of BBEDCA, reduces outlays in the budget year and 

12 the subsequent fiscal year; and 

13 (3) the amount by which the sequestration in 

14 the budget year of the budgetary resources of other 

15 nonexempt mandatory programs reduces outlays in 

16 the budget year and in the subsequent fiscal year. 

17 SEC. 1305. APPLICATION OF BBEDCA. 

18 For purposes of this subtitle— 

19 (1) notwithstanding section 275 of BBEDCA, 

20 the provisions of sections 255, 256, 257, and 274 of 

21 BBEDCA, as amended by this subtitle, shall apply 

22 to the provisions of this subtitle; 

23 (2) references in sections 255, 256, 257, and 

24 274 to ‘‘this part’’ or ‘‘this title’’ shall be interpreted 

25 as applying to this subtitle; 


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•S 1808 IS

1 (3) references in sections 255, 256, 257, and 

2 274 of BBEDCA to ‘‘section 254’’ shall be inter3 preted as referencing section 1303 of this subtitle; 

4 (4) the reference in section 256(b) of BBEDCA 

5 to ‘‘section 252 or 253’’ shall be interpreted as ref6 erencing section 1303 of this subtitle; 

7 (5) the reference in section 256(d)(1) of 

8 BBEDCA to ‘‘section 252 or 253’’ shall be inter9 preted as referencing section 1304 of this subtitle; 

10 (6) the reference in section 256(d)(4) of 

11 BBEDCA to ‘‘section 252 or 253’’ shall be inter12 preted as referencing section 1303 of this subtitle; 

13 (7) section 256(k) of BBEDCA shall apply to 

14 a sequestration, if any, under this subtitle; and 

15 (8) references in section 257(e) of BBEDCA to 

16 ‘‘section 251, 252, or 253’’ shall be interpreted as 

17 referencing section 1302 of this subtitle. 

18 SEC. 1306. TECHNICAL CORRECTIONS. 

19 (a) Section 250(c)(18) of BBEDCA is amended by 

20 striking ‘‘the expenses the Federal deposit insurance agen21 cies’’ and inserting ‘‘the expenses of the Federal deposit 

22 insurance agencies’’. 

23 (b) Section 256(k)(1) of BBEDCA is amended by 

24 striking ‘‘in paragraph (5)’’ and inserting ‘‘in paragraph 

25 (6)’’. 


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•S 1808 IS

1 SEC. 1307. CONFORMING AMENDMENTS. 

2 (a) Section 256(a) of BBEDCA is repealed. 

3 (b) Section 256(b) of BBEDCA is amended by strik4 ing ‘‘origination fees under sections 438(c)(2) and 455(c) 

5 of that Act shall each be increased by 0.50 percentage 

6 point.’’ and inserting in lieu thereof ‘‘origination fees 

7 under sections 438(c) (2) and (6) and 455(c) and loan 

8 processing and issuance fees under section 

9 428(f)(1)(A)(ii) of that Act shall each be increased by the 

10 uniform percentage specified in that sequestration order, 

11 and, for student loans originated during the period of the 

12 sequestration, special allowance payments under section 

13 438(b) of that Act accruing during the period of the se14 questration shall be reduced by the uniform percentage 

15 specified in that sequestration order.’’. 

16 (c) Section 256(c) of BBEDCA is repealed. 

17 (d) Section 256(d) of BBEDCA is amended— 

18 (1) by redesignating paragraphs (2), (3), and 

19 (4) as paragraphs (3), (5), and (6); 

20 (2) by amending paragraph (1) to read as fol21 lows: 

22 ‘‘(1) CALCULATION OF REDUCTION IN PAYMENT

23 AMOUNTS.—To achieve the total percentage reduc24 tion in those programs required by section 252 or 

25 253, subject to paragraph (2), and notwithstanding 

26 section 710 of the Social Security Act, OMB shall 


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•S 1808 IS

1 determine, and the applicable Presidential order 

2 under section 254 shall implement, the percentage 

3 reduction that shall apply, with respect to the health 

4 insurance programs under title XVIII of the Social 

5 Security Act— 

6 ‘‘(A) in the case of parts A and B of such 

7 title, to individual payments for services fur8 nished during the one-year period beginning on 

9 the first day of the first month beginning after 

10 the date the order is issued (or, if later, the 

11 date specified in paragraph (4)); and 

12 ‘‘(B) in the case of parts C and D, to 

13 monthly payments under contracts under such 

14 parts for the same one-year period; 

15 such that the reduction made in payments under 

16 that order shall achieve the required total percentage 

17 reduction in those payments for that period.’’; 

18 (3) by inserting after paragraph (1) the fol19 lowing: 

20 ‘‘(2) UNIFORM REDUCTION RATE; MAXIMUM

21 PERMISSIBLE REDUCTION.—Reductions in payments 

22 for programs and activities under such title XVIII 

23 pursuant to a sequestration order under section 254 

24 shall be at a uniform rate, which shall not exceed 4 


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•S 1808 IS

1 percent, across all such programs and activities sub2 ject to such order.’’; 

3 (4) by inserting after paragraph (3), as redesig4 nated, the following: 

5 ‘‘(4) TIMING OF SUBSEQUENT SEQUESTRATION

6 ORDER.—A sequestration order required by section 

7 252 or 253 with respect to programs under such 

8 title XVIII shall not take effect until the first month 

9 beginning after the end of the effective period of any 

10 prior sequestration order with respect to such pro11 grams, as determined in accordance with paragraph 

12 (1).’’; 

13 (5) in paragraph (6), as redesignated, to read 

14 as follows: 

15 ‘‘(6) SEQUESTRATION DISREGARDED IN COM16 PUTING PAYMENT AMOUNTS.—The Secretary of 

17 Health and Human Services shall not take into ac18 count any reductions in payment amounts which 

19 have been or may be effected under this part, for 

20 purposes of computing any adjustments to payment 

21 rates under such title XVIII, specifically including— 

22 ‘‘(A) the part C growth percentage under 

23 section 1853(c)(6); 

24 ‘‘(B) the part D annual growth rate under 

25 section 1860D–2(b)(6); and 


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•S 1808 IS

1 ‘‘(C) application of risk corridors to part D 

2 payment rates under section 1860D–15(e).’’; 

3 and 

4 (6) by adding after paragraph (6), as redesig5 nated, the following: 

6 ‘‘(7) EXEMPTIONS FROM SEQUESTRATION.—In 

7 addition to the programs and activities specified in 

8 section 255, the following shall be exempt from se9 questration under this part: 

10 ‘‘(A) PART D LOW-INCOME SUBSIDIES.— 

11 Premium and cost-sharing subsidies under sec12 tion 1860D–14 of the Social Security Act. 

13 ‘‘(B) PART D CATASTROPHIC SUBSIDY.— 

14 Payments under section 1860D–15(b) and 

15 (e)(2)(B) of the Social Security Act. 

16 ‘‘(C) QUALIFIED INDIVIDUAL (QI) PRE17 MIUMS.—Payments to States for coverage of 

18 Medicare cost-sharing for certain low-income 

19 Medicare beneficiaries under section 1933 of 

20 the Social Security Act.’’. 

21 SEC. 1308. EXEMPT PROGRAMS AND ACTIVITIES. 

22 (a) DESIGNATIONS.—Section 255 of BBEDCA is 

23 amended by redesignating subsection (i) as (j) and strik24 ing ‘‘1998’’ and inserting in lieu thereof ‘‘2010’’. 


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•S 1808 IS

1 (b) SOCIAL SECURITY, VETERANS PROGRAMS, NET

2 INTEREST, AND TAX CREDITS.—Subsections (a) through 

3 (d) of section 255 of BBEDCA are amended to read as 

4 follows: 

5 ‘‘(a) SOCIAL SECURITY BENEFITS AND TIER I RAIL6 ROAD RETIREMENT BENEFITS.—Benefits payable under 

7 the old-age, survivors, and disability insurance program 

8 established under title II of the Social Security Act (42 

9 U.S.C. 401 et seq.), and benefits payable under section 

10 231b(a), 231b(f)(2), 231c(a), and 231c(f) of title 45 

11 United States Code, shall be exempt from reduction under 

12 any order issued under this part. 

13 ‘‘(b) VETERANS PROGRAMS.—The following program 

14 shall be exempt from reduction under any order issued 

15 under this part— 

16 ‘‘All programs administered by the Department 

17 of Veterans Affairs. 

18 ‘‘Special Benefits for Certain World War II 

19 Veterans (28–0401–0–1–701). 

20 ‘‘(c) NET INTEREST.—No reduction of payments for 

21 net interest (all of major functional category 900) shall 

22 be made under any order issued under this part. 

23 ‘‘(d) REFUNDABLE INCOME TAX CREDITS.—Pay24 ments to individuals made pursuant to provisions of the 

25 Internal Revenue Code of 1986 establishing refundable 


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•S 1808 IS

1 tax credits shall be exempt from reduction under any order 

2 issued under this part.’’. 

3 (c) OTHER PROGRAMS AND ACTIVITIES, LOW-IN4 COME PROGRAMS, AND ECONOMIC RECOVERY PRO5 GRAMS.—Subsections (g) and (h) of section 255 of 

6 BBEDCA are amended to read as follows: 

7 ‘‘(g) OTHER PROGRAMS AND ACTIVITIES.— 

8 ‘‘(1)(A) The following budget accounts and ac9 tivities shall be exempt from reduction under any 

10 order issued under this part: 

11 ‘‘Activities resulting from private dona12 tions, bequests, or voluntary contributions to 

13 the Government. 

14 ‘‘Activities financed by voluntary payments 

15 to the Government for goods or services to be 

16 provided for such payments. 

17 ‘‘Administration of Territories, Northern 

18 Mariana Islands Covenant grants (14–0412–0– 

19 1–808). 

20 ‘‘Advances to the Unemployment Trust 

21 Fund and Other Funds (16–0327–0–1–600). 

22 ‘‘Black Lung Disability Trust Fund Refi23 nancing (16–0329–0–1–601). 

24 ‘‘Bonneville Power Administration Fund 

25 and borrowing authority established pursuant 


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•S 1808 IS

1 to section 13 of Public Law 93–454 (1974), as 

2 amended (89–4045–0–3–271). 

3 ‘‘Claims, Judgments, and Relief Acts (20– 

4 1895–0–1–808). 

5 ‘‘Compact of Free Association (14–0415– 

6 0–1–808). 

7 ‘‘Compensation of the President (11– 

8 0209–01–1–802). 

9 ‘‘Comptroller of the Currency, Assessment 

10 Funds (20–8413–0–8–373). 

11 ‘‘Continuing Fund, Southeastern Power 

12 Administration (89–5653–0–2–271). 

13 ‘‘Continuing Fund, Southwestern Power 

14 Administration (89–5649–0–2–271). 

15 ‘‘Dual Benefits Payments Account (60– 

16 0111–0–1–601). 

17 ‘‘Emergency Fund, Western Area Power 

18 Administration (89–5069–0–2–271). 

19 ‘‘Exchange Stabilization Fund (20–4444– 

20 0–3–155). 

21 ‘‘Federal Deposit Insurance Corporation, 

22 Deposit Insurance Fund (51–4596–4–4–373). 

23 ‘‘Federal Deposit Insurance Corporation, 

24 FSLIC Resolution Fund (51–4065–0–3–373). 


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•S 1808 IS

1 ‘‘Federal Deposit Insurance Corporation, 

2 Noninterest Bearing Transaction Account 

3 Guarantee (51–4458–0–3–373). 

4 ‘‘Federal Deposit Insurance Corporation, 

5 Senior Unsecured Debt Guarantee (51–4457– 

6 0–3–373). 

7 ‘‘Federal Housing Finance Agency, Admin8 istrative Expenses (95–5532–0–2–371). 

9 ‘‘Federal Payment to the District of Co10 lumbia Judicial Retirement and Survivors An11 nuity Fund (20–1713–0–1–752). 

12 ‘‘Federal Payment to the District of Co13 lumbia Pension Fund (20–1714–0–1–601). 

14 ‘‘Federal Payments to the Railroad Retire15 ment Accounts (60–0113–0–1–601). 

16 ‘‘Federal Reserve Bank Reimbursement 

17 Fund (20–1884–0–1–803). 

18 ‘‘Financial Agent Services (20–1802–0–1– 

19 803). 

20 ‘‘Foreign Military Sales Trust Fund (11– 

21 8242–0–7–155). 

22 ‘‘Hazardous Waste Management, Con23 servation Reserve Program (12–4336–0–3– 

24 999). 


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•S 1808 IS

1 ‘‘Host Nation Support Fund for Relocation 

2 (97–8337–0–7–051). 

3 ‘‘Internal Revenue Collections for Puerto 

4 Rico (20–5737–0–2–806). 

5 ‘‘Intragovernmental funds, including those 

6 from which the outlays are derived primarily 

7 from resources paid in from other government 

8 accounts, except to the extent such funds are 

9 augmented by direct appropriations for the fis10 cal year during which an order is in effect. 

11 ‘‘Medical Facilities Guarantee and Loan 

12 Fund (75–9931–0–3–551). 

13 ‘‘National Credit Union Administration, 

14 Central Liquidity Facility (25–4470–0–3–373). 

15 ‘‘National Credit Union Administration, 

16 Corporate Credit Union Share Guarantee Pro17 gram (25–4476–0–3–376). 

18 ‘‘National Credit Union Administration, 

19 Credit Union Homeowners Affordability Relief 

20 Program (25–4473–0–3–371). 

21 ‘‘National Credit Union Administration, 

22 Credit Union Share Insurance Fund (25–4468– 

23 0–3–373). 


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•S 1808 IS

1 ‘‘National Credit Union Administration, 

2 Credit Union System Investment Program (25– 

3 4474–0–3–376). 

4 ‘‘National Credit Union Administration, 

5 Operating fund (25–4056–0–3–373). 

6 ‘‘National Credit Union Administration, 

7 Share Insurance Fund Corporate Debt Guar8 antee Program (25–4469–0–3–376). 

9 ‘‘National Credit Union Administration, 

10 U.S. Central Federal Credit Union Capital Pro11 gram (25–4475–0–3–376). 

12 ‘‘Office of Thrift Supervision (20–4108–0– 

13 3–373). 

14 ‘‘Panama Canal Commission Compensation 

15 Fund (16–5155–0–2–602). 

16 ‘‘Payment of Vietnam and USS Pueblo 

17 prisoner-of-war claims within the Salaries and 

18 Expenses, Foreign Claims Settlement account 

19 (15–0100–0–1–153). 

20 ‘‘Payment to Civil Service Retirement and 

21 Disability Fund (24–0200–0–1–805). 

22 ‘‘Payment to Department of Defense Medi23 care-Eligible Retiree Health Care Fund (97– 

24 0850–0–1–054). 


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•S 1808 IS

1 ‘‘Payment to Judiciary Trust Funds (10– 

2 0941–0–1–752). 

3 ‘‘Payment to Military Retirement Fund 

4 (97–0040–0–1–054). 

5 ‘‘Payment to the Foreign Service Retire6 ment and Disability Fund (19–0540–0–1–153). 

7 ‘‘Payments to Copyright Owners (03– 

8 5175–0–2–376). 

9 ‘‘Payments to Health Care Trust Funds 

10 (75–0580–0–1–571). 

11 ‘‘Payment to Radiation Exposure Com12 pensation Trust Fund (15–0333–0–1–054). 

13 ‘‘Payments to Social Security Trust Funds 

14 (28–0404–0–1–651). 

15 ‘‘Payments to the United States Terri16 tories, Fiscal Assistance (14–0418–0–1–806). 

17 ‘‘Payments to trust funds from excise 

18 taxes or other receipts properly creditable to 

19 such trust funds. 

20 ‘‘Payments to widows and heirs of de21 ceased Members of Congress (00–0215–0–1– 

22 801). 

23 ‘‘Postal Service Fund (18–4020–0–3–372). 

24 ‘‘Radiation Exposure Compensation Trust 

25 Fund (15–8116–0–1–054). 


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•S 1808 IS

1 ‘‘Reimbursement to Federal Reserve Banks 

2 (20–0562–0–1–803). 

3 ‘‘Salaries of Article III judges. 

4 ‘‘Soldiers and Airmen’s Home, payment of 

5 claims (84–8930–0–7–705). 

6 ‘‘Tennessee Valley Authority Fund, except 

7 nonpower programs and activities (64–4110–0– 

8 3–999). 

9 ‘‘Tribal and Indian trust accounts within 

10 the Department of the Interior which fund 

11 prior legal obligations of the Government or 

12 which are established pursuant to Acts of Con13 gress regarding Federal management of tribal 

14 real property or other fiduciary responsibilities, 

15 including but not limited to Tribal Special 

16 Fund (14–5265–0–2–452), Tribal Trust Fund 

17 (14–8030–0–7–452), White Earth Settlement 

18 (14–2204–0–1–452), and Indian Water Rights 

19 and Habitat Acquisition (14–5505–0–2–303). 

20 ‘‘United Mine Workers of America 1992 

21 Benefit Plan (95–8260–0–7–551). 

22 ‘‘United Mine Workers of America 1993 

23 Benefit Plan (95–8535–0–7–551). 

24 ‘‘United Mine Workers of America Com25 bined Benefit Fund (95–8295–0–7–551). 


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•S 1808 IS

1 ‘‘United States Enrichment Corporation 

2 Fund (95–4054–0–3–271). 

3 ‘‘Universal Service Fund (27–5183–0–2– 

4 376). 

5 ‘‘Vaccine Injury Compensation (75–0320– 

6 0–1–551). 

7 ‘‘Vaccine Injury Compensation Program 

8 Trust Fund (20–8175–0–7–551). 

9 ‘‘(B) The following Federal retirement and dis10 ability accounts and activities shall be exempt from 

11 reduction under any order issued under this part: 

12 ‘‘Black Lung Disability Trust Fund (20– 

13 8144–0–7–601). 

14 ‘‘Central Intelligence Agency Retirement 

15 and Disability System Fund (56–3400–0–1– 

16 054). 

17 ‘‘Civil Service Retirement and Disability 

18 Fund (24–8135–0–7–602). 

19 ‘‘Comptrollers general retirement system 

20 (05–0107–0–1–801). 

21 ‘‘Contributions to U.S. Park Police annu22 ity benefits, Other Permanent Appropriations 

23 (14–9924–0–2–303). 

24 ‘‘Court of Appeals for Veterans Claims Re25 tirement Fund (95–8290–0–7–705). 


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•S 1808 IS

1 ‘‘Department of Defense Medicare-Eligible 

2 Retiree Health Care Fund (97–5472–0–2–551). 

3 ‘‘District of Columbia Federal Pension 

4 Fund (20–5511–0–2–601). 

5 ‘‘District of Columbia Judicial Retirement 

6 and Survivors Annuity Fund (20–8212–0–7– 

7 602). 

8 ‘‘Energy Employees Occupational Illness 

9 Compensation Fund (16–1523–0–1–053). 

10 ‘‘Foreign National Employees Separation 

11 Pay (97–8165–0–7–051). 

12 ‘‘Foreign Service National Defined Con13 tributions Retirement Fund (19–5497–0–2– 

14 602). 

15 ‘‘Foreign Service National Separation Li16 ability Trust Fund (19–8340–0–7–602). 

17 ‘‘Foreign Service Retirement and Dis18 ability Fund (19–8186–0–7–602). 

19 ‘‘Government Payment for Annuitants, 

20 Employees Health Benefits (24–0206–0–1– 

21 551). 

22 ‘‘Government Payment for Annuitants, 

23 Employee Life Insurance (24–0500–0–1–602). 

24 ‘‘Judicial Officers’ Retirement Fund (10– 

25 8122–0–7–602). 


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•S 1808 IS

1 ‘‘Judicial Survivors’ Annuities Fund (10– 

2 8110–0–7–602). 

3 ‘‘Military Retirement Fund (97–8097–0– 

4 7–602). 

5 ‘‘National Railroad Retirement Investment 

6 Trust (60–8118–0–7–601). 

7 ‘‘National Oceanic and Atmospheric Ad8 ministration retirement (13–1450–0–1–306). 

9 ‘‘Pensions for former Presidents (47– 

10 0105–0–1–802). 

11 ‘‘Postal Service Retiree Health Benefits 

12 Fund (24–5391–0–2–551). 

13 ‘‘Public Safety Officer Benefits (15–0403– 

14 0–1–754). 

15 ‘‘Rail Industry Pension Fund (60–8011– 

16 0–7–601). 

17 ‘‘Retired Pay, Coast Guard (70–0602–0– 

18 1–403). 

19 ‘‘Retirement Pay and Medical Benefits for 

20 Commissioned Officers, Public Health Service 

21 (75–0379–0–1–551). 

22 ‘‘Special Benefits for Disabled Coal Miners 

23 (16–0169–0–1–601). 

24 ‘‘Special Benefits, Federal Employees’ 

25 Compensation Act (16–1521–0–1–600). 


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•S 1808 IS

1 ‘‘Special Workers Compensation Expenses 

2 (16–9971–0–7–601). 

3 ‘‘Tax Court Judges Survivors Annuity 

4 Fund (23–8115–0–7–602). 

5 ‘‘United States Court of Federal Claims 

6 Judges’ Retirement Fund (10–8124–0–7–602). 

7 ‘‘United States Secret Service, DC Annuity 

8 (70–0400–0–1–751). 

9 ‘‘Voluntary Separation Incentive Fund 

10 (97–8335–0–7–051). 

11 ‘‘(2) Prior legal obligations of the Government 

12 in the following budget accounts and activities shall 

13 be exempt from any order issued under this part: 

14 ‘‘Biomass Energy Development (20–0114– 

15 0–1–271). 

16 ‘‘Check Forgery Insurance Fund (20– 

17 4109–0–3–803). 

18 ‘‘Credit liquidating accounts. 

19 ‘‘Credit reestimates. 

20 ‘‘Employees Life Insurance Fund (24– 

21 8424–0–8–602). 

22 ‘‘Federal Aviation Insurance Revolving 

23 Fund (69–4120–0–3–402). 

24 ‘‘Federal Crop Insurance Corporation 

25 Fund (12–4085–0–3–351). 


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•S 1808 IS

1 ‘‘Federal Emergency Management Agency, 

2 National Flood Insurance Fund (58–4236–0– 

3 3–453). 

4 ‘‘Federal Home Loan Mortgage Corpora5 tion (Freddie Mac). 

6 ‘‘Federal National Mortgage Corporation 

7 (Fannie Mae). 

8 ‘‘Geothermal resources development fund 

9 (89–0206–0–1–271). 

10 ‘‘Low-Rent Public Housing—Loans and 

11 Other Expenses (86–4098–0–3–604). 

12 ‘‘Maritime Administration, War Risk In13 surance Revolving Fund (69–4302–0–3–403). 

14 ‘‘Natural Resource Damage Assessment 

15 Fund (14–1618–0–1–302). 

16 ‘‘Overseas Private Investment Corporation, 

17 Noncredit Account (71–4184–0–3–151). 

18 ‘‘Pension Benefit Guaranty Corporation 

19 Fund (16–4204–0–3–601). 

20 ‘‘San Joaquin Restoration Fund (14– 

21 5537–0–2–301). 

22 ‘‘Servicemembers’ Group Life Insurance 

23 Fund (36–4009–0–3–701). 

24 ‘‘Terrorism Insurance Program (20–0123– 

25 0–1–376). 


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•S 1808 IS

1 ‘‘(h) LOW-INCOME PROGRAMS.—The following pro2 grams shall be exempt from reduction under any order 

3 issued under this part: 

4 ‘‘Academic Competitiveness/Smart Grant Pro5 gram (91–0205–0–1–502). 

6 ‘‘Child Care Entitlement to States (75–1550– 

7 0–1–609). 

8 ‘‘Child Enrollment Contingency Fund (75– 

9 5551–0–2–551). 

10 ‘‘Child Nutrition Programs (with the exception 

11 of special milk programs) (12–3539–0–1–605). 

12 ‘‘Children’s Health Insurance Fund (75–0515– 

13 0–1–551). 

14 ‘‘Commodity Supplemental Food Program (12– 

15 3507–0–1–605). 

16 ‘‘Contingency Fund (75–1522–0–1–609). 

17 ‘‘Family Support Programs (75–1501–0–1– 

18 609). 

19 ‘‘Federal Pell Grants under section 401 Title 

20 IV of the Higher Education Act. 

21 ‘‘Grants to States for Medicaid (75–0512–0–1– 

22 551). 

23 ‘‘Payments for Foster Care and Permanency 

24 (75–1545–0–1–609). 


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•S 1808 IS

1 ‘‘Supplemental Nutrition Assistance Program 

2 (12–3505–0–1–605). 

3 ‘‘Supplemental Security Income Program (28– 

4 0406–0–1–609). 

5 ‘‘Temporary Assistance for Needy Families 

6 (75–1552–0–1–609).’’. 

7 (d) ECONOMIC RECOVERY PROGRAMS.—Section 255 

8 of BBEDCA is amended by adding the following after 

9 subsection (h): 

10 ‘‘(i) ECONOMIC RECOVERY PROGRAMS.—The fol11 lowing programs shall be exempt from reduction under 

12 any order issued under this part: 

13 ‘‘All programs enacted in, or increases in pro14 grams provided by, the American Recovery and Re15 investment Act of 2009. 

16 ‘‘Exchange Stabilization Fund-Money Market 

17 Mutual Fund Guaranty Facility (20–4274–0–3– 

18 376). 

19 ‘‘Financial Stabilization Reserve (20–0131–4– 

20 1–376). 

21 ‘‘GSE Mortgage-Backed Securities Purchase 

22 Program Account (20–0126–0–1–371). 

23 ‘‘GSE Preferred Stock Purchase Agreements 

24 (20–0125–0–1–371). 


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•S 1808 IS

1 ‘‘Office of Financial Stability (20–0128–0–1– 

2 376). 

3 ‘‘Special Inspector General for the Troubled 

4 Asset Relief Program (20–0133–0–1–376). 

5 ‘‘Troubled Asset Relief Program Account (20– 

6 0132–0–1–376). 

7 ‘‘Troubled Asset Relief Program Equity Pur8 chase Program (20–0134–0–1–376). 

9 ‘‘Troubled Asset Relief Program, Home Afford10 able Modification Program (20–0136–0–1–604).’’. 

11 SEC. 1309. EXPIRATION. 

12 This subtitle and the amendments made by this sub13 title shall expire September 30, 2014. 

14 Subtitle D—Reforming the Budget 

15 Process 

16 SEC. 1401. SHORT TITLE. 

17 This subtitle may be cited as the ‘‘Biennial Budgeting 

18 and Appropriations Act’’. 

19 SEC. 1402. REVISION OF TIMETABLE. 

20 Section 300 of the Congressional Budget Act of 1974 

21 (2 U.S.C. 631) is amended to read as follows: 

22 ‘‘TIMETABLE

23 ‘‘SEC. 300. (a) IN GENERAL.—Except as provided by 

24 subsection (b), the timetable with respect to the congres25 sional budget process for any Congress (beginning with 

26 the One Hundred Eleventh Congress) is as follows: 


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•S 1808 IS

‘‘First Session 

On or before: Action to be completed: 

First Monday in February ........ President submits budget recommendations. 

February 15 ............................... Congressional Budget Office submits report 

to Budget Committees. 

Not later than 6 weeks after 

budget submission.

Committees submit views and estimates to 

Budget Committees. 

April 1 ....................................... Budget Committees report concurrent resolution on the biennial budget. 

May 15 ....................................... Congress completes action on concurrent resolution on the biennial budget. 

May 15 ....................................... Biennial appropriation bills may be considered in the House. 

June 10 ...................................... House Appropriations Committee reports last 

biennial appropriation bill. 

June 30 ...................................... House completes action on biennial appropriation bills. 

August 1 .................................... Congress completes action on reconciliation 

legislation. 

October 1 ................................... Biennium begins. 

‘‘Second Session 

On or before: Action to be completed: 

February 15 ............................... President submits budget review. 

Not later than 6 weeks after 

President submits budget review.

Congressional Budget Office submits report 

to Budget Committees. 

The last day of the session ........ Congress completes action on bills and resolutions authorizing new budget authority 

for the succeeding biennium. 

1 ‘‘(b) SPECIAL RULE.—In the case of any first session 

2 of Congress that begins in any year immediately following 

3 a leap year and during which the term of a President (ex4 cept a President who succeeds himself or herself) begins, 

5 the following dates shall supersede those set forth in sub6 section (a): 

‘‘First Session 

On or before: Action to be completed: 

First Monday in April ............... President submits budget recommendations. 

April 20 ..................................... Committees submit views and estimates to 

Budget Committees. 

May 15 ....................................... Budget Committees report concurrent resolution on the biennial budget. 

June 1 ........................................ Congress completes action on concurrent resolution on the biennial budget. 


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‘‘First Session—Continued 

July 1 ......................................... Biennial appropriation bills may be considered in the House. 

July 20 ....................................... House completes action on biennial appropriation bills. 

August 1 .................................... Congress completes action on reconciliation 

legislation. 

October 1 ................................... Biennium begins.’’. 

1 SEC. 1403. AMENDMENTS TO THE CONGRESSIONAL BUDGET 

2 AND IMPOUNDMENT CONTROL ACT OF 1974. 

3 (a) DECLARATION OF PURPOSE.—Section 2(2) of the 

4 Congressional Budget and Impoundment Control Act of 

5 1974 (2 U.S.C. 621(2)) is amended by striking ‘‘each 

6 year’’ and inserting ‘‘biennially’’. 

7 (b) DEFINITIONS.— 

8 (1) BUDGET RESOLUTION.—Section 3(4) of 

9 such Act (2 U.S.C. 622(4)) is amended by striking 

10 ‘‘fiscal year’’ each place it appears and inserting ‘‘bi11 ennium’’. 

12 (2) BIENNIUM.—Section 3 of such Act (2 

13 U.S.C. 622) is further amended by adding at the 

14 end the following new paragraph: 

15 ‘‘(11) The term ‘biennium’ means the period of 

16 2 consecutive fiscal years beginning on October 1 of 

17 any odd-numbered year.’’. 

18 (c) BIENNIAL CONCURRENT RESOLUTION ON THE

19 BUDGET.— 


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1 (1) SECTION HEADING.—The section heading of 

2 section 301 of such Act is amended by striking ‘‘AN3 NUAL’’ and inserting ‘‘BIENNIAL’’. 

4 (2) CONTENTS OF RESOLUTION.—Section 

5 301(a) of such Act (2 U.S.C. 632(a)) is amended— 

6 (A) in the matter preceding paragraph (1) 

7 by— 

8 (i) striking ‘‘April 15 of each year’’ 

9 and inserting ‘‘May 15 of each odd-num10 bered year’’; 

11 (ii) striking ‘‘the fiscal year beginning 

12 on October 1 of such year’’ the first place 

13 it appears and inserting ‘‘the biennium be14 ginning on October 1 of such year’’; and 

15 (iii) striking ‘‘the fiscal year beginning 

16 on October 1 of such year’’ the second 

17 place it appears and inserting ‘‘each fiscal 

18 year in such period’’; 

19 (B) in paragraph (6), by striking ‘‘for the 

20 fiscal year’’ and inserting ‘‘for each fiscal year 

21 in the biennium’’; and 

22 (C) in paragraph (7), by striking ‘‘for the 

23 fiscal year’’ and inserting ‘‘for each fiscal year 

24 in the biennium’’. 


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1 (3) ADDITIONAL MATTERS.—Section 301(b)(3) 

2 of such Act (2 U.S.C. 632(b)) is amended by strik3 ing ‘‘for such fiscal year’’ and inserting ‘‘for either 

4 fiscal year in such biennium’’. 

5 (4) VIEWS OF OTHER COMMITTEES.—Section 

6 301(d) of such Act (2 U.S.C. 632(d)) is amended by 

7 inserting ‘‘(or, if applicable, as provided by section 

8 300(b))’’ after ‘‘United States Code’’. 

9 (5) HEARINGS.—Section 301(e)(1) of such Act 

10 (2 U.S.C. 632(e)) is amended by— 

11 (A) striking ‘‘fiscal year’’ and inserting 

12 ‘‘biennium’’; and 

13 (B) inserting after the second sentence the 

14 following: ‘‘On or before April 1 of each odd15 numbered year (or, if applicable, as provided by 

16 section 300(b)), the Committee on the Budget 

17 of each House shall report to its House the con18 current resolution on the budget referred to in 

19 subsection (a) for the biennium beginning on 

20 October 1 of that year.’’. 

21 (6) GOALS FOR REDUCING UNEMPLOYMENT.— 

22 Section 301(f) of such Act (2 U.S.C. 632(f)) is 

23 amended by striking ‘‘fiscal year’’ each place it ap24 pears and inserting ‘‘biennium’’. 


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1 (7) ECONOMIC ASSUMPTIONS.—Section 

2 301(g)(1) of such Act (2 U.S.C. 632(g)(1)) is 

3 amended by striking ‘‘for a fiscal year’’ and insert4 ing ‘‘for a biennium’’. 

5 (8) TABLE OF CONTENTS.—The item relating 

6 to section 301 in the table of contents set forth in 

7 section 1(b) of such Act is amended by striking ‘‘An8 nual’’ and inserting ‘‘Biennial’’. 

9 (d) COMMITTEE ALLOCATIONS.—Section 302 of such 

10 Act (2 U.S.C. 633) is amended— 

11 (1) in subsection (a)— 

12 (A) in paragraph (1), by— 

13 (i) striking ‘‘for the first fiscal year of 

14 the resolution,’’ and inserting ‘‘for each 

15 fiscal year in the biennium,’’; 

16 (ii) striking ‘‘for that period of fiscal 

17 years’’ and inserting ‘‘for all fiscal years 

18 covered by the resolution’’; and 

19 (iii) striking ‘‘for the fiscal year of 

20 that resolution’’ and inserting ‘‘for each 

21 fiscal year in the biennium’’; and 

22 (B) in paragraph (5), by striking ‘‘April 

23 15’’ and inserting ‘‘May 15 or June 1 (under 

24 section 300(b))’’; 


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1 (2) in subsection (b), by striking ‘‘budget year’’ 

2 and inserting ‘‘biennium’’; 

3 (3) in subsection (c) by striking ‘‘for a fiscal 

4 year’’ each place it appears and inserting ‘‘for each 

5 fiscal year in the biennium’’; 

6 (4) in subsection (f)(1), by striking ‘‘for a fiscal 

7 year’’ and inserting ‘‘for a biennium’’; 

8 (5) in subsection (f)(1), by striking ‘‘the first 

9 fiscal year’’ and inserting ‘‘each fiscal year of the bi10 ennium’’; 

11 (6) in subsection (f)(2)(A), by— 

12 (A) striking ‘‘the first fiscal year’’ and in13 serting ‘‘each fiscal year of the biennium’’; and 

14 (B) striking ‘‘the total of fiscal years’’ and 

15 inserting ‘‘the total of all fiscal years covered by 

16 the resolution’’; and 

17 (7) in subsection (g)(1)(A), by striking ‘‘April’’ 

18 and inserting ‘‘May’’. 

19 (e) SECTION 303 POINT OF ORDER.— 

20 (1) IN GENERAL.—Section 303(a) of such Act 

21 (2 U.S.C. 634(a)) is amended by— 

22 (A) striking ‘‘the first fiscal year’’ and in23 serting ‘‘each fiscal year of the biennium’’; and 

24 (B) striking ‘‘that fiscal year’’ each place 

25 it appears and inserting ‘‘that biennium’’. 


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1 (2) EXCEPTIONS IN THE HOUSE.—Section 

2 303(b)(1) of such Act (2 U.S.C. 634(b)) is amend3 ed— 

4 (A) in subparagraph (A), by striking ‘‘the 

5 budget year’’ and inserting ‘‘the biennium’’; 

6 and 

7 (B) in subparagraph (B), by striking ‘‘the 

8 fiscal year’’ and inserting ‘‘the biennium’’. 

9 (3) APPLICATION TO THE SENATE.—Section 

10 303(c)(1) of such Act (2 U.S.C. 634(c)) is amended 

11 by— 

12 (A) striking ‘‘fiscal year’’ and inserting 

13 ‘‘biennium’’; and 

14 (B) striking ‘‘that year’’ and inserting 

15 ‘‘each fiscal year of that biennium’’. 

16 (f) PERMISSIBLE REVISIONS OF CONCURRENT RESO17 LUTIONS ON THE BUDGET.—Section 304(a) of such Act 

18 (2 U.S.C. 635) is amended— 

19 (1) by striking ‘‘fiscal year’’ the first two places 

20 it appears and inserting ‘‘biennium’’; and 

21 (2) by striking ‘‘for such fiscal year’’ and in22 serting ‘‘for such biennium’’. 

23 (g) PROCEDURES FOR CONSIDERATION OF BUDGET

24 RESOLUTIONS.—Section 305 of such Act (2 U.S.C. 

25 636(3)) is amended— 


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1 (1) in subsection (a)(3), by striking ‘‘fiscal 

2 year’’ and inserting ‘‘biennium’’; and 

3 (2) in subsection (b)(3), by striking ‘‘fiscal 

4 year’’ and inserting ‘‘biennium’’. 

5 (h) COMPLETION OF HOUSE ACTION ON APPROPRIA6 TION BILLS.—Section 307 of such Act (2 U.S.C. 638) is 

7 amended— 

8 (1) by striking ‘‘each year’’ and inserting ‘‘each 

9 odd-numbered year’’; 

10 (2) by striking ‘‘annual’’ and inserting ‘‘bien11 nial’’; 

12 (3) by striking ‘‘fiscal year’’ and inserting ‘‘bi13 ennium’’; and 

14 (4) by striking ‘‘that year’’ and inserting ‘‘each 

15 odd-numbered year’’. 

16 (i) COMPLETION OF ACTION ON REGULAR APPRO17 PRIATION BILLS.—Section 309 of such Act (2 U.S.C. 

18 640) is amended— 

19 (1) by inserting ‘‘of any odd-numbered calendar 

20 year’’ after ‘‘July’’; 

21 (2) by striking ‘‘annual’’ and inserting ‘‘bien22 nial’’; and 

23 (3) by striking ‘‘fiscal year’’ and inserting ‘‘bi24 ennium’’. 


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1 (j) RECONCILIATION PROCESS.—Section 310(a) of 

2 such Act (2 U.S.C. 641(a)) is amended— 

3 (1) in the matter preceding paragraph (1), by 

4 striking ‘‘any fiscal year’’ and inserting ‘‘any bien5 nium’’; and 

6 (2) in paragraph (1) by striking ‘‘such fiscal 

7 year’’ each place it appears and inserting ‘‘any fiscal 

8 year covered by such resolution’’. 

9 (k) SECTION 311 POINT OF ORDER.— 

10 (1) IN THE HOUSE.—Section 311(a)(1) of such 

11 Act (2 U.S.C. 642(a)) is amended— 

12 (A) by striking ‘‘for a fiscal year’’ and in13 serting ‘‘for a biennium’’; 

14 (B) by striking ‘‘the first fiscal year’’ each 

15 place it appears and inserting ‘‘either fiscal 

16 year of the biennium’’; and 

17 (C) by striking ‘‘that first fiscal year’’ and 

18 inserting ‘‘each fiscal year in the biennium’’. 

19 (2) IN THE SENATE.—Section 311(a)(2) of 

20 such Act is amended— 

21 (A) in subparagraph (A), by striking ‘‘for 

22 the first fiscal year’’ and inserting ‘‘for either 

23 fiscal year of the biennium’’; and 

24 (B) in subparagraph (B)— 


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1 (i) by striking ‘‘that first fiscal year’’ 

2 the first place it appears and inserting 

3 ‘‘each fiscal year in the biennium’’; and 

4 (ii) by striking ‘‘that first fiscal year 

5 and the ensuing fiscal years’’ and inserting 

6 ‘‘all fiscal years’’. 

7 (3) SOCIAL SECURITY LEVELS.—Section 

8 311(a)(3) of such Act is amended by— 

9 (A) striking ‘‘for the first fiscal year’’ and 

10 inserting ‘‘each fiscal year in the biennium’’; 

11 and 

12 (B) striking ‘‘that fiscal year and the ensu13 ing fiscal years’’ and inserting ‘‘all fiscal 

14 years’’. 

15 (l) MDA POINT OF ORDER.—Section 312(c) of the 

16 Congressional Budget Act of 1974 (2 U.S.C. 643) is 

17 amended— 

18 (1) by striking ‘‘for a fiscal year’’ and inserting 

19 ‘‘for a biennium’’; 

20 (2) in paragraph (1), by striking ‘‘the first fis21 cal year’’ and inserting ‘‘either fiscal year in the bi22 ennium’’; 

23 (3) in paragraph (2), by striking ‘‘that fiscal 

24 year’’ and inserting ‘‘either fiscal year in the bien25 nium’’; and 


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1 (4) in the matter following paragraph (2), by 

2 striking ‘‘that fiscal year’’ and inserting ‘‘the appli3 cable fiscal year’’. 

4 SEC. 1404. AMENDMENTS TO TITLE 31, UNITED STATES 

5 CODE. 

6 (a) DEFINITION.—Section 1101 of title 31, United 

7 States Code, is amended by adding at the end thereof the 

8 following new paragraph: 

9 ‘‘(3) ‘biennium’ has the meaning given to such 

10 term in paragraph (11) of section 3 of the Congres11 sional Budget and Impoundment Control Act of 

12 1974 (2 U.S.C. 622(11)).’’. 

13 (b) BUDGET CONTENTS AND SUBMISSION TO THE

14 CONGRESS.— 

15 (1) SCHEDULE.—The matter preceding para16 graph (1) in section 1105(a) of title 31, United 

17 States Code, is amended to read as follows: 

18 ‘‘(a) On or before the first Monday in February of 

19 each odd-numbered year (or, if applicable, as provided by 

20 section 300(b) of the Congressional Budget Act of 1974), 

21 beginning with the One Hundred Twelfth Congress, the 

22 President shall transmit to the Congress, the budget for 

23 the biennium beginning on October 1 of such calendar 

24 year. The budget of the United States Government trans25 mitted under this subsection shall include a budget mesVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 sage and summary and supporting information. The 

2 President shall include in each budget the following:’’. 

3 (2) EXPENDITURES.—Section 1105(a)(5) of 

4 title 31, United States Code, is amended by striking 

5 ‘‘the fiscal year for which the budget is submitted 

6 and the 4 fiscal years after that year’’ and inserting 

7 ‘‘each fiscal year in the biennium for which the 

8 budget is submitted and in the succeeding 4 fiscal 

9 years’’. 

10 (3) RECEIPTS.—Section 1105(a)(6) of title 31, 

11 United States Code, is amended by striking ‘‘the fis12 cal year for which the budget is submitted and the 

13 4 fiscal years after that year’’ and inserting ‘‘each 

14 fiscal year in the biennium for which the budget is 

15 submitted and in the succeeding 4 years’’. 

16 (4) BALANCE STATEMENTS.—Section 

17 1105(a)(9)(C) of title 31, United States Code, is 

18 amended by striking ‘‘the fiscal year’’ and inserting 

19 ‘‘each fiscal year in the biennium’’. 

20 (5) FUNCTIONS AND ACTIVITIES.—Section 

21 1105(a)(12) of title 31, United States Code, is 

22 amended in subparagraph (A), by striking ‘‘the fis23 cal year’’ and inserting ‘‘each fiscal year in the bien24 nium’’. 


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1 (6) ALLOWANCES.—Section 1105(a)(13) of title 

2 31, United States Code, is amended by striking ‘‘the 

3 fiscal year’’ and inserting ‘‘each fiscal year in the bi4 ennium’’. 

5 (7) ALLOWANCES FOR UNCONTROLLED EX6 PENDITURES.—Section 1105(a)(14) of title 31, 

7 United States Code, is amended by striking ‘‘that 

8 year’’ and inserting ‘‘each fiscal year in the bien9 nium for which the budget is submitted’’. 

10 (8) TAX EXPENDITURES.—Section 1105(a)(16) 

11 of title 31, United States Code, is amended by strik12 ing ‘‘the fiscal year’’ and inserting ‘‘each fiscal year 

13 in the biennium’’. 

14 (9) FUTURE YEARS.—Section 1105(a)(17) of 

15 title 31, United States Code, is amended— 

16 (A) by striking ‘‘the fiscal year following 

17 the fiscal year’’ and inserting ‘‘each fiscal year 

18 in the biennium following the biennium’’; 

19 (B) by striking ‘‘that following fiscal year’’ 

20 and inserting ‘‘each such fiscal year’’; and 

21 (C) by striking ‘‘fiscal year before the fis22 cal year’’ and inserting ‘‘biennium before the bi23 ennium’’. 


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1 (10) PRIOR YEAR OUTLAYS.—Section 

2 1105(a)(18) of title 31, United States Code, is 

3 amended— 

4 (A) by striking ‘‘the prior fiscal year’’ and 

5 inserting ‘‘each of the 2 most recently com6 pleted fiscal years,’’; 

7 (B) by striking ‘‘for that year’’ and insert8 ing ‘‘with respect to those fiscal years’’; and 

9 (C) by striking ‘‘in that year’’ and insert10 ing ‘‘in those fiscal years’’. 

11 (11) PRIOR YEAR RECEIPTS.—Section 

12 1105(a)(19) of title 31, United States Code, is 

13 amended— 

14 (A) by striking ‘‘the prior fiscal year’’ and 

15 inserting ‘‘each of the 2 most recently com16 pleted fiscal years’’; 

17 (B) by striking ‘‘for that year’’ and insert18 ing ‘‘with respect to those fiscal years’’; and 

19 (C) by striking ‘‘in that year’’ each place 

20 it appears and inserting ‘‘in those fiscal years’’. 

21 (c) ESTIMATED EXPENDITURES OF LEGISLATIVE

22 AND JUDICIAL BRANCHES.—Section 1105(b) of title 31, 

23 United States Code, is amended by striking ‘‘each year’’ 

24 and inserting ‘‘each even-numbered year’’. 


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1 (d) RECOMMENDATIONS TO MEET ESTIMATED DE2 FICIENCIES.—Section 1105(c) of title 31, United States 

3 Code, is amended— 

4 (1) by striking ‘‘the fiscal year for’’ the first 

5 place it appears and inserting ‘‘each fiscal year in 

6 the biennium for’’; 

7 (2) by striking ‘‘the fiscal year for’’ the second 

8 place it appears and inserting ‘‘each fiscal year of 

9 the biennium, as the case may be, for’’; and 

10 (3) by striking ‘‘for that year’’ and inserting 

11 ‘‘for each fiscal year of the biennium’’. 

12 (e) CAPITAL INVESTMENT ANALYSIS.—Section 

13 1105(e)(1) of title 31, United States Code, is amended 

14 by striking ‘‘ensuing fiscal year’’ and inserting ‘‘biennium 

15 to which such budget relates’’. 

16 (f) SUPPLEMENTAL BUDGET ESTIMATES AND

17 CHANGES.— 

18 (1) IN GENERAL.—Section 1106(a) of title 31, 

19 United States Code, is amended— 

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

21 by— 

22 (i) inserting after ‘‘Before July 16 of 

23 each year’’ the following: ‘‘and February 

24 15 of each even-numbered year’’; and 


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1 (ii) striking ‘‘fiscal year’’ and insert2 ing ‘‘biennium’’; 

3 (B) in paragraph (1), by striking ‘‘that fis4 cal year’’ and inserting ‘‘each fiscal year in 

5 such biennium’’; 

6 (C) in paragraph (2), by striking ‘‘fiscal 

7 year’’ and inserting ‘‘biennium’’; and 

8 (D) in paragraph (3), by striking ‘‘fiscal 

9 year’’ and inserting ‘‘biennium’’. 

10 (2) CHANGES.—Section 1106(b) of title 31, 

11 United States Code, is amended by— 

12 (A) striking ‘‘the fiscal year’’ and inserting 

13 ‘‘each fiscal year in the biennium’’; 

14 (B) inserting after ‘‘Before July 16 of each 

15 year’’ the following: ‘‘and February 15 of each 

16 even-numbered year’’; and 

17 (C) striking ‘‘submitted before July 16’’ 

18 and inserting ‘‘required by this subsection’’. 

19 (g) CURRENT PROGRAMS AND ACTIVITIES ESTI20 MATES.— 

21 (1) IN GENERAL.—Section 1109(a) of title 31, 

22 United States Code, is amended— 

23 (A) by striking ‘‘On or before the first 

24 Monday after January 3 of each year (on or be25 fore February 5 in 1986)’’ and inserting ‘‘At 


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1 the same time the budget required by section 

2 1105 is submitted for a biennium’’; and 

3 (B) by striking ‘‘the following fiscal year’’ 

4 and inserting ‘‘each fiscal year of such period’’. 

5 (2) JOINT ECONOMIC COMMITTEE.—Section 

6 1109(b) of title 31, United States Code, is amended 

7 by striking ‘‘March 1 of each year’’ and inserting 

8 ‘‘within 6 weeks of the President’s budget submis9 sion for each odd-numbered year (or, if applicable, 

10 as provided by section 300(b) of the Congressional 

11 Budget Act of 1974)’’. 

12 (h) YEAR-AHEAD REQUESTS FOR AUTHORIZING

13 LEGISLATION.—Section 1110 of title 31, United States 

14 Code, is amended by— 

15 (1) striking ‘‘May 16’’ and inserting ‘‘March 

16 31’’; and 

17 (2) striking ‘‘year before the year in which the 

18 fiscal year begins’’ and inserting ‘‘calendar year pre19 ceding the calendar year in which the biennium be20 gins’’. 

21 SEC. 1405. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE 

22 OF APPROPRIATIONS ACTS. 

23 Section 105 of title 1, United States Code, is amend24 ed to read as follows: 


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1 ‘‘§ 105. Title and style of appropriations Acts 

2 ‘‘(a) The style and title of all Acts making appropria3 tions for the support of the Government shall be as fol4 lows: ‘An Act making appropriations (here insert the ob5 ject) for each fiscal year in the biennium of fiscal years 

6 (here insert the fiscal years of the biennium).’. 

7 ‘‘(b) All Acts making regular appropriations for the 

8 support of the Government shall be enacted for a biennium 

9 and shall specify the amount of appropriations provided 

10 for each fiscal year in such period. 

11 ‘‘(c) For purposes of this section, the term ‘biennium’ 

12 has the same meaning as in section 3(11) of the Congres13 sional Budget and Impoundment Control Act of 1974 (2 

14 U.S.C. 622(11)).’’. 

15 SEC. 1406. MULTIYEAR AUTHORIZATIONS. 

16 (a) IN GENERAL.—Title III of the Congressional 

17 Budget Act of 1974 is amended by adding at the end the 

18 following new section: 

19 ‘‘AUTHORIZATIONS OF APPROPRIATIONS

20 ‘‘SEC. 316. (a) POINT OF ORDER.—It shall not be 

21 in order in the House of Representatives or the Senate 

22 to consider— 

23 ‘‘(1) any bill, joint resolution, amendment, mo24 tion, or conference report that authorizes appropria25 tions for a period of less than 2 fiscal years, unless 

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1 propriations are authorized will require no further 

2 appropriations and will be completed or terminated 

3 after the appropriations have been expended; and 

4 ‘‘(2) in any odd-numbered year, any authoriza5 tion or revenue bill or joint resolution until Congress 

6 completes action on the biennial budget resolution, 

7 all regular biennial appropriations bills, and all rec8 onciliation bills. 

9 ‘‘(b) APPLICABILITY.—In the Senate, subsection (a) 

10 shall not apply to— 

11 ‘‘(1) any measure that is privileged for consid12 eration pursuant to a rule or statute; 

13 ‘‘(2) any matter considered in Executive Ses14 sion; or 

15 ‘‘(3) an appropriations measure or reconcili16 ation bill.’’. 

17 (b) AMENDMENT TO TABLE OF CONTENTS.—The 

18 table of contents set forth in section 1(b) of the Congres19 sional Budget and Impoundment Control Act of 1974 is 

20 amended by adding after the item relating to section 315 

21 the following new item: 

‘‘Sec. 316. Authorizations of appropriations.’’. 

22 SEC. 1407. GOVERNMENT PLANS ON A BIENNIAL BASIS. 

23 (a) STRATEGIC PLANS.—Section 306 of title 5, 

24 United States Code, is amended— 


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1 (1) in subsection (a), by striking ‘‘September 

2 30, 1997’’ and inserting ‘‘September 30, 2011’’; 

3 (2) in subsection (b)— 

4 (A) by striking ‘‘five years forward’’ and 

5 inserting ‘‘6 years forward’’; 

6 (B) by striking ‘‘at least every three years’’ 

7 and inserting ‘‘at least every 4 years’’; and 

8 (C) by striking beginning with ‘‘, except 

9 that’’ through ‘‘four years’’; and 

10 (3) in subsection (c), by inserting a comma 

11 after ‘‘section’’ the second place it appears and add12 ing ‘‘including a strategic plan submitted by Sep13 tember 30, 2011 meeting the requirements of sub14 section (a)’’. 

15 (b) BUDGET CONTENTS AND SUBMISSION TO CON16 GRESS.—Paragraph (28) of section 1105(a) of title 31, 

17 United States Code, is amended by striking ‘‘beginning 

18 with fiscal year 1999, a’’ and inserting ‘‘beginning with 

19 fiscal year 2010, a biennial’’. 

20 (c) PERFORMANCE PLANS.—Section 1115 of title 31, 

21 United States Code, is amended— 

22 (1) in subsection (a)— 

23 (A) in the matter before paragraph (1)— 

24 (i) by striking ‘‘section 1105(a)(29)’’ 

25 and inserting ‘‘section 1105(a)(28)’’; and 


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1 (ii) by striking ‘‘an annual’’ and in2 serting ‘‘a biennial’’; 

3 (B) in paragraph (1) by inserting after 

4 ‘‘program activity’’ the following: ‘‘for both 

5 years 1 and 2 of the biennial plan’’; 

6 (C) in paragraph (5) by striking ‘‘and’’ 

7 after the semicolon; 

8 (D) in paragraph (6) by striking the period 

9 and inserting a semicolon; and inserting ‘‘and’’ 

10 after the inserted semicolon; and 

11 (E) by adding after paragraph (6) the fol12 lowing: 

13 ‘‘(7) cover a 2-year period beginning with the 

14 first fiscal year of the next biennial budget cycle.’’; 

15 (2) in subsection (d) by striking ‘‘annual’’ and 

16 inserting ‘‘biennial’’; and 

17 (3) in paragraph (6) of subsection (f) by strik18 ing ‘‘annual’’ and inserting ‘‘biennial’’. 

19 (d) MANAGERIAL ACCOUNTABILITY AND FLEXI20 BILITY.—Section 9703 of title 31, United States Code, re21 lating to managerial accountability, is amended— 

22 (1) in subsection (a)— 

23 (A) in the first sentence by striking ‘‘an24 nual’’; and 


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1 (B) by striking ‘‘section 1105(a)(29)’’ and 

2 inserting ‘‘section 1105(a)(28)’’; 

3 (2) in subsection (e)— 

4 (A) in the first sentence by striking ‘‘one 

5 or’’ before ‘‘years’’; 

6 (B) in the second sentence by striking ‘‘a 

7 subsequent year’’ and inserting ‘‘a subsequent 

8 2-year period’’; and 

9 (C) in the third sentence by striking 

10 ‘‘three’’ and inserting ‘‘4’’. 

11 (e) PILOT PROJECTS FOR PERFORMANCE BUDG12 ETING.—Section 1119 of title 31, United States Code, is 

13 amended— 

14 (1) in paragraph (1) of subsection (d), by strik15 ing ‘‘annual’’ and inserting ‘‘biennial’’; and 

16 (2) in subsection (e), by striking ‘‘annual’’ and 

17 inserting ‘‘biennial’’. 

18 (f) STRATEGIC PLANS.—Section 2802 of title 39, 

19 United States Code, is amended— 

20 (1) is subsection (a), by striking ‘‘September 

21 30, 1997’’ and inserting ‘‘September 30, 2011’’; 

22 (2) by striking ‘‘five years forward’’ and insert23 ing ‘‘6 years forward’’; 


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1 (3) in subsection (b), by striking ‘‘at least every 

2 three years’’ and inserting ‘‘at least every 4 years’’; 

3 and 

4 (4) in subsection (c), by inserting a comma 

5 after ‘‘section’’ the second place it appears and in6 serting ‘‘including a strategic plan submitted by 

7 September 30, 2011 meeting the requirements of 

8 subsection (a)’’. 

9 (g) PERFORMANCE PLANS.—Section 2803(a) of title 

10 39, United States Code, is amended— 

11 (1) in the matter before paragraph (1), by 

12 striking ‘‘an annual’’ and inserting ‘‘a biennial’’; 

13 (2) in paragraph (1), by inserting after ‘‘pro14 gram activity’’ the following: ‘‘for both years 1 and 

15 2 of the biennial plan’’; 

16 (3) in paragraph (5), by striking ‘‘and’’ after 

17 the semicolon; 

18 (4) in paragraph (6), by striking the period and 

19 inserting ‘‘; and’’; and 

20 (5) by adding after paragraph (6) the following: 

21 ‘‘(7) cover a 2-year period beginning with the 

22 first fiscal year of the next biennial budget cycle.’’. 

23 (h) COMMITTEE VIEWS OF PLANS AND REPORTS.— 

24 Section 301(d) of the Congressional Budget Act (2 U.S.C. 

25 632(d)) is amended by adding at the end ‘‘Each committee 


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1 of the Senate or the House of Representatives shall review 

2 the strategic plans, performance plans, and performance 

3 reports, required under section 306 of title 5, United 

4 States Code, and sections 1115 and 1116 of title 31, 

5 United States Code, of all agencies under the jurisdiction 

6 of the committee. Each committee may provide its views 

7 on such plans or reports to the Committee on the Budget 

8 of the applicable House.’’. 

9 (i) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—The amendments made by 

11 this section shall take effect on March 1, 2011. 

12 (2) AGENCY ACTIONS.—Effective on and after 

13 the date of enactment of this Act, each agency shall 

14 take such actions as necessary to prepare and sub15 mit any plan or report in accordance with the 

16 amendments made by this Act. 

17 SEC. 1408. BIENNIAL APPROPRIATIONS BILLS. 

18 (a) IN GENERAL.—Title III of the Congressional 

19 Budget Act of 1974 (2 U.S.C. 631 et seq.) is amended 

20 by adding at the end the following: 

21 ‘‘CONSIDERATION OF BIENNIAL APPROPRIATIONS BILLS

22 ‘‘SEC. 317. It shall not be in order in the House of 

23 Representatives or the Senate in any odd-numbered year 

24 to consider any regular bill providing new budget authority 

25 or a limitation on obligations under the jurisdiction of any 

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1 tions for only the first fiscal year of a biennium, unless 

2 the program, project, or activity for which the new budget 

3 authority or obligation limitation is provided will require 

4 no additional authority beyond 1 year and will be com5 pleted or terminated after the amount provided has been 

6 expended.’’. 

7 (b) AMENDMENT TO TABLE OF CONTENTS.—The 

8 table of contents set forth in section 1(b) of the Congres9 sional Budget and Impoundment Control Act of 1974 is 

10 amended by adding after the item relating to section 316 

11 the following new item: 

‘‘Sec. 317. Consideration of biennial appropriations bills.’’. 

12 SEC. 1409. REPORT ON TWO-YEAR FISCAL PERIOD. 

13 Not later than 180 days after the date of enactment 

14 of this Act, the Director of OMB shall— 

15 (1) determine the impact and feasibility of 

16 changing the definition of a fiscal year and the 

17 budget process based on that definition to a 2-year 

18 fiscal period with a biennial budget process based on 

19 the 2-year period; and 

20 (2) report the findings of the study to the Com21 mittees on the Budget of the House of Representa22 tives and the Senate. 

23 SEC. 1410. EFFECTIVE DATE. 

24 Except as provided in section 1407, this subtitle and 

25 the amendments made by this subtitle shall take effect on 


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1 January 1, 2011, and shall apply to budget resolutions 

2 and appropriations for the biennium beginning with fiscal 

3 year 2012. 

4 TITLE II—MAKING CONGRESS 

5 TIGHTEN ITS BELT 

6 SEC. 2001. ENDING AUTOMATIC PAY RAISES FOR MEMBERS 

7 OF CONGRESS. 

8 (a) IN GENERAL.—Paragraph (2) of section 601(a) 

9 of the Legislative Reorganization Act of 1946 (2 U.S.C. 

10 31) is repealed. 

11 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

12 Section 601(a)(1) of such Act is amended— 

13 (1) by striking ‘‘(a)(1)’’ and inserting ‘‘(a)’’; 

14 (2) by redesignating subparagraphs (A), (B), 

15 and (C) as paragraphs (1), (2), and (3), respectively; 

16 and 

17 (3) by striking ‘‘as adjusted by paragraph (2) 

18 of this subsection’’ and inserting ‘‘adjusted as pro19 vided by law’’. 

20 SEC. 2002. CUTTING SPENDING ON CONGRESSIONAL OF21 FICES. 

22 (a) SENATORS’ OFFICIAL PERSONNEL AND OFFICE

23 EXPENSE ACCOUNT.—Of the amounts appropriated under 

24 the heading ‘‘SENATORS’ OFFICIAL PERSONNEL AND OF25 FICE EXPENSE ACCOUNT’’ under the heading ‘‘CONTINVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 GENT EXPENSES OF THE SENATE’’ under title I of the 

2 Legislative Branch Appropriations Act, 2010, 

3 $21,100,000 are rescinded. 

4 (b) MEMBERS’ CLERK HIRE, OFFICIAL EXPENSES

5 OF MEMBERS, AND OFFICIAL MAIL.—Of the amounts ap6 propriated under the heading ‘‘INCLUDING MEMBERS’ 

7 CLERK HIRE, OFFICIAL EXPENSES OF MEMBERS, AND OF8 FICIAL MAIL’’ under the heading ‘‘MEMBERS’ REPRESEN9 TATIONAL ALLOWANCES’’ under title I of the Legislative 

10 Branch Appropriations Act, 2010, $33,000,000 are re11 scinded. 

12 SEC. 2003. IMPROVING SENATE EFFICIENCY AND TRANS13 PARENCY. 

14 Section 302(g) of the Federal Election Campaign Act 

15 of 1971 (2 U.S.C. 432(g)) is amended to read as follows: 

16 ‘‘(g) FILING WITH THE COMMISSION.—All des17 ignations, statements, and reports required to be 

18 filed under this Act shall be filed with the Commis19 sion.’’. 

20 TITLE III—ENDING CORPORATE 

21 WELFARE 

22 SEC. 3001. ENDING THE WALL STREET BAIL-OUT. 

23 Notwithstanding paragraph (3) of section 115(a) of 

24 the Emergency Economic Stabilization Act of 2008 (12 

25 U.S.C. 5225(a)(3)), no amount may be obligated by the 


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1 Secretary of the Treasury under that paragraph (3), or 

2 any other provision of the Emergency Economic Stabiliza3 tion Act of 2008, on or after the date of enactment of 

4 this Act. 

5 SEC. 3002. ENDING SUBSIDIES FOR PRIVATE STUDENT 

6 LOAN COMPANIES. 

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

8 ‘‘Student Loan Reform Act’’. 

9 (b) REFERENCES.—Except as otherwise expressly 

10 provided, whenever in this section an amendment or repeal 

11 is expressed in terms of an amendment to, or repeal of, 

12 a section or other provision, the reference shall be consid13 ered to be made to a section or other provision of the 

14 Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 

15 (c) FEDERAL FAMILY EDUCATION LOAN APPROPRIA16 TIONS.—Section 421 (20 U.S.C. 1071) is amended— 

17 (1) in subsection (b), in the matter following 

18 paragraph (6), by inserting ‘‘, except that no sums 

19 may be expended after June 30, 2010, with respect 

20 to loans under this part for which the first disburse21 ment would be made after such date’’ after ‘‘ex22 pended’’; and 

23 (2) by adding at the end the following new sub24 section: 


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1 ‘‘(d) TERMINATION OF AUTHORITY TO MAKE OR IN2 SURE NEW LOANS.—Notwithstanding paragraphs (1) 

3 through (6) of subsection (b) or any other provision of 

4 law— 

5 ‘‘(1) no new loans (including consolidation 

6 loans) may be made or insured under this part after 

7 June 30, 2010; and 

8 ‘‘(2) no funds are authorized to be appro9 priated, or may be expended, under this Act or any 

10 other Act to make or insure loans under this part 

11 (including consolidation loans) for which the first 

12 disbursement would be made after June 30, 2010, 

13 except as expressly authorized by an Act of Congress en14 acted after the date of enactment of the Student Loan 

15 Reform Act.’’. 

16 (d) SCOPE AND DURATION OF FEDERAL LOAN IN17 SURANCE PROGRAM.—Section 424(a) (20 U.S.C. 1074(a)) 

18 is amended by striking ‘‘September 30, 1976,’’ and all 

19 that follows and inserting ‘‘September 30, 1976, for each 

20 of the succeeding fiscal years ending prior to October 1, 

21 2009, and for the period from October 1, 2009, to June 

22 30, 2010, for loans first disbursed on or before June 30, 

23 2010.’’. 

24 (e) APPLICABLE INTEREST RATES.—Section 427A(l) 

25 (20 U.S.C. 1077a(l)) is amended— 


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1 (1) in paragraph (1), by inserting ‘‘and before 

2 July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

3 (2) in paragraph (2), by inserting ‘‘and before 

4 July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

5 (3) in paragraph (3), by inserting ‘‘and that 

6 was disbursed before July 1, 2010,’’ after ‘‘July 1, 

7 2006,’’; and 

8 (4) in paragraph (4)— 

9 (A) in the matter preceding subparagraph 

10 (A), by striking ‘‘July 1, 2012’’ and inserting 

11 ‘‘July 1, 2010’’; and 

12 (B) by repealing subparagraphs (D) and 

13 (E). 

14 (f) FEDERAL PAYMENTS TO REDUCE STUDENT IN15 TEREST COSTS.— 

16 (1) HIGHER EDUCATION ACT OF 1965.—Section 

17 428 (20 U.S.C. 1078) is amended— 

18 (A) in subsection (a)— 

19 (i) in paragraph (1), in the matter 

20 preceding subparagraph (A), by inserting 

21 ‘‘for which the first disbursement is made 

22 before July 1, 2010, and’’ after ‘‘eligible 

23 institution’’; and 

24 (ii) in paragraph (5), by striking 

25 ‘‘September 30, 2014,’’ and all that follows 


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1 through the period and inserting ‘‘June 

2 30, 2010.’’; 

3 (B) in subsection (b)(1)— 

4 (i) in subparagraph (G)(ii), by insert5 ing ‘‘and before July 1, 2010,’’ after ‘‘July 

6 1, 2006,’’; and 

7 (ii) in subparagraph (H)(ii), by insert8 ing ‘‘and that are first disbursed before 

9 July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

10 (C) in subsection (f)(1)(A)(ii)— 

11 (i) by striking ‘‘during fiscal years be12 ginning’’; and 

13 (ii) by inserting ‘‘and first disbursed 

14 before July 1, 2010,’’ after ‘‘October 1, 

15 2003,’’; and 

16 (D) in subsection (j)(1), by inserting ‘‘, be17 fore July 1, 2010,’’ after ‘‘section 435(d)(1)(D) 

18 of this Act shall’’. 

19 (2) COLLEGE COST REDUCTION AND ACCESS

20 ACT.—Section 303 of the College Cost Reduction 

21 and Access Act (Public Law 110–84) is repealed. 

22 (g) FEDERAL PLUS LOANS.—Section 428B(a)(1) 

23 (20 U.S.C. 1078–2(a)(1)) is amended by striking ‘‘A grad24 uate’’ and inserting ‘‘Prior to July 1, 2010, a graduate’’. 

25 (h) FEDERAL CONSOLIDATION LOAN.— 


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1 (1) AMENDMENTS.—Section 428C (20 U.S.C. 

2 1078–3) is amended— 

3 (A) in subsection (a)(4)(A), by inserting ‘‘, 

4 and first disbursed before July 1, 2010’’ after 

5 ‘‘under this part’’; 

6 (B) in subsection (b)— 

7 (i) in paragraph (1)(E), by inserting 

8 before the semicolon ‘‘, and before July 1, 

9 2010’’; and 

10 (ii) in paragraph (5), by striking ‘‘In 

11 the event that’’ and inserting ‘‘If, before 

12 July 1, 2010,’’; 

13 (C) in subsection (c)(1)— 

14 (i) in subparagraph (A)(ii), by insert15 ing ‘‘and that is disbursed before July 1, 

16 2010,’’ after ‘‘2006,’’; and 

17 (ii) in subparagraph (C), by inserting 

18 ‘‘and first disbursed before July 1, 2010,’’ 

19 after ‘‘1994,’’; and 

20 (D) in subsection (e), by striking ‘‘Sep21 tember 30, 2014.’’ and inserting ‘‘June 30, 

22 2010. No loan may be made under this section 

23 for which the first disbursement would be on or 

24 after July 1, 2010.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by paragraph (1)(A) shall be effective at the close of 

3 June 30, 2010. 

4 (i) UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE5 INCOME BORROWERS.—Section 428H (20 U.S.C. 1078– 

6 8) is amended— 

7 (1) in subsection (a), by inserting ‘‘that are 

8 first disbursed before July 1, 2010,’’ after ‘‘under 

9 this part’’; 

10 (2) in subsection (b)— 

11 (A) by striking ‘‘Any student’’ and insert12 ing ‘‘Prior to July 1, 2010, any student’’; and 

13 (B) by inserting ‘‘for which the first dis14 bursement is made before such date’’ after ‘‘un15 subsidized Federal Stafford Loan’’; and 

16 (3) in subsection (h), by inserting ‘‘and that are 

17 first disbursed before July 1, 2010,’’ after ‘‘July 1, 

18 2006,’’. 

19 (j) LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE

20 ATTORNEYS.—Section 428L(b)(2)(A) (20 U.S.C. 1078– 

21 12(b)(2)(A)) is amended— 

22 (1) by amending clause (i) to read as follows: 

23 ‘‘(i) subject to clause (ii)— 

24 ‘‘(I) a loan made, insured, or 

25 guaranteed under this part, and that 


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1 is first disbursed before July 1, 2010; 

2 or 

3 ‘‘(II) a loan made under part D 

4 or part E; and’’; and 

5 (2) in clause (ii)— 

6 (A) by striking ‘‘428C or 455(g)’’ and in7 serting ‘‘428C that is disbursed before July 1, 

8 2010, or section 455(g)’’; and 

9 (B) in subclause (II), by inserting ‘‘for 

10 which the first disbursement is made before 

11 July 1, 2010’’ after ‘‘or 428H’’. 

12 (k) SPECIAL ALLOWANCES.—Section 438 (20 U.S.C. 

13 1087–1) is amended— 

14 (1) in subsection (b)(2)(I)— 

15 (A) in the header, by inserting ‘‘, AND BE16 FORE JULY 1, 2010’’ after ‘‘2000’’; 

17 (B) in clause (i), by inserting ‘‘and before 

18 July 1, 2010,’’ after ‘‘2000,’’; 

19 (C) in clause (ii)(II), by inserting ‘‘and be20 fore July 1, 2010,’’ after ‘‘2006,’’; 

21 (D) in clause (iii), by inserting ‘‘and before 

22 July 1, 2010,’’ after ‘‘2000,’’; 

23 (E) in clause (iv), by inserting ‘‘and that 

24 is disbursed before July 1, 2010,’’ after 

25 ‘‘2000,’’; 


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1 (F) in clause (v)(I), by inserting ‘‘and be2 fore July 1, 2010,’’ after ‘‘2006,’’; and 

3 (G) in clause (vi)— 

4 (i) in the header, by inserting ‘‘, AND

5 BEFORE JULY 1, 2010’’ after ‘‘2007’’; and 

6 (ii) in the matter preceding subclause 

7 (I), by inserting ‘‘and before July 1, 

8 2010,’’ after ‘‘2007,’’; 

9 (2) in subsection (c)— 

10 (A) in paragraph (2)(B)— 

11 (i) in clause (iii), by inserting ‘‘and’’ 

12 after the semicolon; 

13 (ii) in clause (iv), by striking ‘‘; and’’ 

14 and inserting a period; and 

15 (iii) by striking clause (v); and 

16 (B) in paragraph (6), by inserting ‘‘and 

17 first disbursed before July 1, 2010,’’ after 

18 ‘‘1992,’’; and 

19 (3) in subsection (d)(2)(B), by inserting ‘‘, and 

20 before July 1, 2010’’ after ‘‘2007’’. 

21 (l) REVISED SPECIAL ALLOWANCE CALCULATION.— 

22 (1) REVISED CALCULATION RULE.—Section 

23 438(b)(2)(I) of the Higher Education Act of 1965 

24 (20 U.S.C. 1087–1(b)(2)(I)) is amended by adding 

25 at the end the following new clause: 


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1 ‘‘(vii) REVISED CALCULATION RULE

2 TO REFLECT FINANCIAL MARKET CONDI3 TIONS.— 

4 ‘‘(I) CALCULATION BASED ON

5 LIBOR.—For the calendar quarter be6 ginning on October 1, 2009, and each 

7 subsequent calendar quarter, in com8 puting the special allowance paid pur9 suant to this subsection with respect 

10 to loans described in subclause (II), 

11 clause (i)(I) of this subparagraph 

12 shall be applied by substituting ‘of the 

13 1-month London Inter Bank Offered 

14 Rate (LIBOR) for United States dol15 lars in effect for each of the days in 

16 such quarter as compiled and released 

17 by the British Bankers Association’ 

18 for ‘of the quotes of the 3-month com19 mercial paper (financial) rates in ef20 fect for each of the days in such quar21 ter as reported by the Federal Reserve 

22 in Publication H–15 (or its successor) 

23 for such 3-month period’. 

24 ‘‘(II) LOANS ELIGIBLE FOR

25 LIBOR-BASED CALCULATION.—The 


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1 special allowance paid pursuant to 

2 this subsection shall be calculated as 

3 described in subclause (I) with respect 

4 to special allowance payments for the 

5 3-month period ending December 31, 

6 2009, and each succeeding 3-month 

7 period, on loans for which the first 

8 disbursement is made— 

9 ‘‘(aa) on or after the date of 

10 enactment of the Student Loan 

11 Reform Act, and before July 1, 

12 2010; or 

13 ‘‘(bb) on or after January 1, 

14 2000, and before the date of en15 actment of the Student Loan Re16 form Act, if, not later than the 

17 last day of the second full fiscal 

18 quarter after the date of enact19 ment of such Act, the holder of 

20 the loan (or, if the holder acts as 

21 eligible lender trustee for the 

22 beneficial owner of the loan, the 

23 beneficial owner of the loan), af24 firmatively and permanently 

25 waives all contractual, statutory 


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1 or other legal rights to a special 

2 allowance paid pursuant to this 

3 subsection that is calculated 

4 using the formula in effect at the 

5 time the loans were first dis6 bursed. 

7 ‘‘(III) TERMS OF WAIVER.— 

8 ‘‘(aa) IN GENERAL.—A 

9 waiver pursuant to subclause 

10 (II)(bb) shall be in a form (print11 ed or electronic) prescribed by 

12 the Secretary, and shall be appli13 cable to— 

14 ‘‘(AA) all loans de15 scribed in such subclause 

16 that the lender holds solely 

17 in its own right under any 

18 lender identification number 

19 associated with the holder 

20 (pursuant to section 487B); 

21 ‘‘(BB) all loans de22 scribed in such subclause for 

23 which the beneficial owner 

24 has the authority to make 

25 an election of a waiver under 


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1 such subclause, regardless of 

2 the lender identification 

3 number associated with the 

4 loan or the lender that holds 

5 the loan as eligible lender 

6 trustee on behalf of such 

7 beneficial owner; and 

8 ‘‘(CC) all future cal9 culations of the special al10 lowance on loans that, on 

11 the date of such waiver, are 

12 loans described in subitem 

13 (AA) or (BB), or that, after 

14 such date, become loans de15 scribed in subitem (AA) or 

16 (BB). 

17 ‘‘(bb) EXCEPTIONS.—Any 

18 waiver pursuant to subclause 

19 (II)(bb) that is elected for loans 

20 described in subitem (AA) or 

21 (BB) of item (aa) shall not apply 

22 to any loan described in such 

23 subitem for which the lender or 

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1 onstrates to the satisfaction of 

2 the Secretary that— 

3 ‘‘(AA) in accordance 

4 with an agreement entered 

5 into before the date of en6 actment of the Student 

7 Loan Reform Act by which 

8 such lender or owner is gov9 erned and that applies to 

10 such loans, such lender or 

11 owner is not legally per12 mitted to make an election 

13 of such waiver with respect 

14 to such loans without the 

15 approval of one or more 

16 third parties with an inter17 est in the loans, and that 

18 the lender or owner followed 

19 all available options under 

20 such agreement to obtain 

21 such approval, and was un22 able to do so; or 

23 ‘‘(BB) such lender or 

24 beneficial owner presented 

25 the proposal of electing such 


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1 a waiver applicable to such 

2 loans associated with an ob3 ligation rated by a nationally 

4 recognized statistical rating 

5 organization (as defined in 

6 section 3(a)(62) of the Secu7 rities Exchange Act of 

8 1934), and such rating orga9 nization provided a written 

10 opinion that the agency 

11 would downgrade the rating 

12 applicable to such obligation 

13 if the lender or owner elect14 ed such a waiver. 

15 ‘‘(IV) PARTICIPANT’S YIELD.— 

16 For the calendar quarter beginning on 

17 October 1, 2009, and each subsequent 

18 calendar quarter, the Secretary’s par19 ticipant yield in any loan in which the 

20 Secretary has purchased a participa21 tion interest and for which the first 

22 disbursement is made on or after Jan23 uary 1, 2000, and before October 1, 

24 2009, shall be determined by using 

25 the LIBOR-based rate described in 


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1 subclause (I) as the substitute rate 

2 (for the commercial paper rate) re3 ferred to in the participation agree4 ment between the Secretary and such 

5 lender.’’. 

6 (2) CONFORMING AMENDMENT.—Section 

7 438(b)(2)(I) (20 U.S.C. 1087–1(b)(2)(I)) is further 

8 amended— 

9 (A) in clause (i)(II), by striking ‘‘such av10 erage bond equivalent rate’’ and inserting ‘‘the 

11 rate determined under subclause (I)’’; and 

12 (B) in clause (v)(III) by striking ‘‘(iv), and 

13 (vi)’’ and inserting ‘‘(iv), (vi), and (vii)’’. 

14 (m) ORIGINATION OF DIRECT LOANS AT INSTITU15 TIONS LOCATED OUTSIDE THE UNITED STATES.— 

16 (1) LOANS FOR STUDENTS ATTENDING INSTI17 TUTIONS LOCATED OUTSIDE THE UNITED STATES.— 

18 Section 452 (20 U.S.C. 1087b) is amended by add19 ing at the end the following: 

20 ‘‘(d) INSTITUTIONS LOCATED OUTSIDE THE UNITED

21 STATES.—Loan funds for students (and parents of stu22 dents) attending institutions located outside the United 

23 States shall be disbursed through a financial institution 

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1 spect to the receipt of the disbursements of such loan 

2 funds and the transfer of such funds to such institutions. 

3 To be eligible to receive funds under this part, an other4 wise eligible institution located outside the United States 

5 shall make arrangements, subject to regulations by the 

6 Secretary, with the agent designated by the Secretary 

7 under this subsection to receive funds under this part.’’. 

8 (2) CONFORMING AMENDMENTS.— 

9 (A) AMENDMENTS.—Section 102 (20 

10 U.S.C. 1002), as amended by section 102 of the 

11 Higher Education Opportunity Act (Public Law 

12 110–315) and section 101 of Public Law 111– 

13 39, is amended— 

14 (i) by striking ‘‘part B’’ each place it 

15 appears and inserting ‘‘part D’’; 

16 (ii) in subsection (a)(1)(C), by insert17 ing ‘‘, consistent with the requirements of 

18 section 452(d)’’ before the period at the 

19 end; and 

20 (iii) in subsection (a)(2)(A)— 

21 (I) in the matter preceding clause 

22 (i), by striking ‘‘made, insured, or 

23 guaranteed’’ and inserting ‘‘made’’; 

24 and 

25 (II) in clause (iii)— 


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1 (aa) in subclause (III), by 

2 striking ‘‘only Federal Stafford’’ 

3 and all that follows through ‘‘sec4 tion 428B’’ and inserting ‘‘only 

5 Federal Direct Stafford Loans 

6 under section 455(a)(2)(A), Fed7 eral Direct Unsubsidized Stafford 

8 Loans under section 

9 455(a)(2)(D), or Federal Direct 

10 PLUS Loans under section 

11 455(a)(2)(B)’’; and 

12 (bb) in subclause (V), by 

13 striking ‘‘a Federal Stafford’’ 

14 and all that follows through ‘‘sec15 tion 428B’’ and inserting ‘‘a 

16 Federal Direct Stafford Loan 

17 under section 455(a)(2)(A), a 

18 Federal Direct Unsubsidized 

19 Stafford Loan under section 

20 455(a)(2)(D), or a Federal Di21 rect PLUS Loan under section 

22 455(a)(2)(B)’’. 

23 (B) EFFECTIVE DATE.—The amendments 

24 made by subparagraph (A)(iii) shall be effective 

25 as if enacted as part of section 102(a)(1) of the 


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1 Higher Education Opportunity Act, in accord2 ance with section 102(e) of such Act, as amend3 ed by section 101(a)(2) of Public Law 111–39. 

4 (n) AGREEMENTS WITH INSTITUTIONS.—Section 

5 454 (20 U.S.C. 1087d) is amended— 

6 (1) in subsection (a), by striking paragraph (4) 

7 and redesignating the succeeding paragraphs accord8 ingly; and 

9 (2) in subsection (b)(2), by striking ‘‘(5), (6), 

10 and (7)’’ and inserting ‘‘(5), and (6)’’. 

11 (o) TERMS AND CONDITIONS OF LOANS.— 

12 (1) AMENDMENTS.—Section 455 (20 U.S.C. 

13 1087e) is amended— 

14 (A) in subsection (a)(1), by inserting ‘‘, 

15 and first disbursed on June 30, 2010,’’ before 

16 ‘‘under sections 428’’; and 

17 (B) in subsection (g)— 

18 (i) by inserting ‘‘, including any loan 

19 made under part B and first disbursed be20 fore July 1, 2010’’ after ‘‘section 

21 428C(a)(4)’’; and 

22 (ii) by striking the third sentence. 

23 (2) EFFECTIVE DATE.—The amendment made 

24 by subsection (a)(1) shall apply with respect to loans 

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1 er Education Act of 1965 (20 U.S.C. 1087a et seq.) 

2 on or after July 1, 2010. 

3 (p) TECHNICAL ASSISTANCE TO INSTITUTIONS OF

4 HIGHER EDUCATION.—Section 458(a) (20 U.S.C. 

5 1087h(a)) is amended— 

6 (1) by redesignating paragraph (5) as para7 graph (6); and 

8 (2) by inserting after paragraph (4) the fol9 lowing new paragraph: 

10 ‘‘(5) TECHNICAL ASSISTANCE TO INSTITUTIONS

11 OF HIGHER EDUCATION.— 

12 ‘‘(A) PROVISION OF ASSISTANCE.—The 

13 Secretary shall provide institutions of higher 

14 education participating, or seeking to partici15 pate, in the loan programs under this part with 

16 technical assistance in establishing and admin17 istering such programs, including assistance for 

18 an institution of higher education during such 

19 institution’s transition into such programs. 

20 Such assistance may include technical support, 

21 training for personnel, customized assistance to 

22 individual institutions of higher education, de23 velopment of informational materials, and other 

24 services the Secretary determines to be appro25 priate. 


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1 ‘‘(B) FUNDS.—There are authorized to be 

2 appropriated, and there are appropriated, to 

3 carry out this paragraph (in addition to any 

4 other amounts appropriated to carry out this 

5 subparagraph and out of any money in the 

6 Treasury not otherwise appropriated), 

7 $50,000,000 for fiscal year 2010.’’. 

8 (q) OUTREACH EFFORTS.— 

9 (1) OUTREACH ACTIVITIES REQUIRED.—The 

10 Secretary of Education shall conduct outreach activi11 ties in accordance with this section to inform and 

12 educate students and their families about the transi13 tion to Federal Direct lending under the amend14 ments made by this section to title IV of the Higher 

15 Education Act of 1965. 

16 (2) REQUIRED COMPONENTS OF OUTREACH.— 

17 The Secretary shall provide for the broad dissemina18 tion of information on such amendments and shall— 

19 (A) operate and maintain an Internet 

20 website through which individuals may obtain 

21 information on changes made to the Federal 

22 Family Education Loan programs and the Fed23 eral Direct Loan programs; 


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1 (B) develop and disseminate information to 

2 high school seniors and their parents con3 cerning student loans and student aid; 

4 (C) provide assistance to institutions of 

5 higher education to educate students on the re6 payment of Federal Direct loans; and 

7 (D) ensure that all outreach efforts are de8 veloped using plain language and are culturally9 and language-appropriate. 

10 (3) USE OF OTHER ENTITIES.—In carrying out 

11 this subsection, the Secretary may work with other 

12 appropriate entities to facilitate the dissemination of 

13 information under this section and to provide assist14 ance as described in this section. 

15 SEC. 3003. BRINGING DOWN PRICES FOR PRESCRIPTION 

16 DRUGS BY PERMITTING DRUG REIMPORTA17 TION. 

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

19 ‘‘Pharmaceutical Market Access and Drug Safety Act of 

20 2009’’. 

21 (b) FINDINGS.—Congress finds that— 

22 (1) Americans unjustly pay up to 5 times more 

23 to fill their prescriptions than consumers in other 

24 countries; 


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1 (2) the United States is the largest market for 

2 pharmaceuticals in the world, yet American con3 sumers pay the highest prices for brand pharma4 ceuticals in the world; 

5 (3) a prescription drug is neither safe nor effec6 tive to an individual who cannot afford it; 

7 (4) allowing and structuring the importation of 

8 prescription drugs to ensure access to safe and af9 fordable drugs approved by the Food and Drug Ad10 ministration will provide a level of safety to Amer11 ican consumers that they do not currently enjoy; 

12 (5) American spend more than 

13 $200,000,000,000 on prescription drugs every year; 

14 (6) the Congressional Budget Office has found 

15 that the cost of prescription drugs are between 35 

16 to 55 percent less in other highly developed coun17 tries than in the United States; and 

18 (7) promoting competitive market pricing would 

19 both contribute to health care savings and allow 

20 greater access to therapy, improving health and sav21 ing lives. 

22 (c) REPEAL OF CERTAIN SECTION REGARDING IM23 PORTATION OF PRESCRIPTION DRUGS.—Chapter VIII of 

24 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 

25 et seq.) is amended by striking section 804. 


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1 (d) IMPORTATION OF PRESCRIPTION DRUGS; WAIV2 ER OF CERTAIN IMPORT RESTRICTIONS.— 

3 (1) IN GENERAL.—Chapter VIII of the Federal 

4 Food, Drug, and Cosmetic Act (21 U.S.C. 381 et 

5 seq.), as amended by section 3, is further amended 

6 by inserting after section 803 the following: 

7 ‘‘SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF 

8 PRESCRIPTION DRUGS. 

9 ‘‘(a) IMPORTATION OF PRESCRIPTION DRUGS.— 

10 ‘‘(1) IN GENERAL.—In the case of qualifying 

11 drugs imported or offered for import into the United 

12 States from registered exporters or by registered im13 porters— 

14 ‘‘(A) the limitation on importation that is 

15 established in section 801(d)(1) is waived; and 

16 ‘‘(B) the standards referred to in section 

17 801(a) regarding admission of the drugs are 

18 subject to subsection (g) of this section (includ19 ing with respect to qualifying drugs to which 

20 section 801(d)(1) does not apply). 

21 ‘‘(2) IMPORTERS.—A qualifying drug may not 

22 be imported under paragraph (1) unless— 

23 ‘‘(A) the drug is imported by a pharmacy, 

24 group of pharmacies, or a wholesaler that is a 

25 registered importer; or 


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1 ‘‘(B) the drug is imported by an individual 

2 for personal use or for the use of a family mem3 ber of the individual (not for resale) from a reg4 istered exporter. 

5 ‘‘(3) RULE OF CONSTRUCTION.—This section 

6 shall apply only with respect to a drug that is im7 ported or offered for import into the United 

8 States— 

9 ‘‘(A) by a registered importer; or 

10 ‘‘(B) from a registered exporter to an indi11 vidual. 

12 ‘‘(4) DEFINITIONS.— 

13 ‘‘(A) REGISTERED EXPORTER; REG14 ISTERED IMPORTER.—For purposes of this sec15 tion: 

16 ‘‘(i) The term ‘registered exporter’ 

17 means an exporter for which a registration 

18 under subsection (b) has been approved 

19 and is in effect. 

20 ‘‘(ii) The term ‘registered importer’ 

21 means a pharmacy, group of pharmacies, 

22 or a wholesaler for which a registration 

23 under subsection (b) has been approved 

24 and is in effect. 


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1 ‘‘(iii) The term ‘registration condition’ 

2 means a condition that must exist for a 

3 registration under subsection (b) to be ap4 proved. 

5 ‘‘(B) QUALIFYING DRUG.—For purposes of 

6 this section, the term ‘qualifying drug’ means a 

7 drug for which there is a corresponding U.S. 

8 label drug. 

9 ‘‘(C) U.S. LABEL DRUG.—For purposes of 

10 this section, the term ‘U.S. label drug’ means 

11 a prescription drug that— 

12 ‘‘(i) with respect to a qualifying drug, 

13 has the same active ingredient or ingredi14 ents, route of administration, dosage form, 

15 and strength as the qualifying drug; 

16 ‘‘(ii) with respect to the qualifying 

17 drug, is manufactured by or for the person 

18 that manufactures the qualifying drug; 

19 ‘‘(iii) is approved under section 

20 505(c); and 

21 ‘‘(iv) is not— 

22 ‘‘(I) a controlled substance, as 

23 defined in section 102 of the Con24 trolled Substances Act (21 U.S.C. 

25 802); 


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1 ‘‘(II) a biological product, as de2 fined in section 351 of the Public 

3 Health Service Act (42 U.S.C. 262), 

4 including— 

5 ‘‘(aa) a therapeutic DNA 

6 plasmid product; 

7 ‘‘(bb) a therapeutic synthetic 

8 peptide product; 

9 ‘‘(cc) a monoclonal antibody 

10 product for in vivo use; and 

11 ‘‘(dd) a therapeutic recom12 binant DNA-derived product; 

13 ‘‘(III) an infused drug, including 

14 a peritoneal dialysis solution; 

15 ‘‘(IV) an injected drug; 

16 ‘‘(V) a drug that is inhaled dur17 ing surgery; 

18 ‘‘(VI) a drug that is the listed 

19 drug referred to in 2 or more abbre20 viated new drug applications under 

21 which the drug is commercially mar22 keted; or 

23 ‘‘(VII) a sterile opthlamic drug 

24 intended for topical use on or in the 

25 eye. 


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1 ‘‘(D) OTHER DEFINITIONS.—For purposes 

2 of this section: 

3 ‘‘(i)(I) The term ‘exporter’ means a 

4 person that is in the business of exporting 

5 a drug to individuals in the United States 

6 from Canada or from a permitted country 

7 designated by the Secretary under sub8 clause (II), or that, pursuant to submitting 

9 a registration under subsection (b), seeks 

10 to be in such business. 

11 ‘‘(II) The Secretary shall designate a 

12 permitted country under subparagraph (E) 

13 (other than Canada) as a country from 

14 which an exporter may export a drug to in15 dividuals in the United States if the Sec16 retary determines that— 

17 ‘‘(aa) the country has statutory 

18 or regulatory standards that are 

19 equivalent to the standards in the 

20 United States and Canada with re21 spect to— 

22 ‘‘(AA) the training of phar23 macists; 

24 ‘‘(BB) the practice of phar25 macy; and 


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1 ‘‘(CC) the protection of the 

2 privacy of personal medical infor3 mation; and 

4 ‘‘(bb) the importation of drugs to 

5 individuals in the United States from 

6 the country will not adversely affect 

7 public health. 

8 ‘‘(ii) The term ‘importer’ means a 

9 pharmacy, a group of pharmacies, or a 

10 wholesaler that is in the business of im11 porting a drug into the United States or 

12 that, pursuant to submitting a registration 

13 under subsection (b), seeks to be in such 

14 business. 

15 ‘‘(iii) The term ‘pharmacist’ means a 

16 person licensed by a State to practice 

17 pharmacy, including the dispensing and 

18 selling of prescription drugs. 

19 ‘‘(iv) The term ‘pharmacy’ means a 

20 person that— 

21 ‘‘(I) is licensed by a State to en22 gage in the business of selling pre23 scription drugs at retail; and 

24 ‘‘(II) employs 1 or more phar25 macists. 


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1 ‘‘(v) The term ‘prescription drug’ 

2 means a drug that is described in section 

3 503(b)(1). 

4 ‘‘(vi) The term ‘wholesaler’— 

5 ‘‘(I) means a person licensed as a 

6 wholesaler or distributor of prescrip7 tion drugs in the United States under 

8 section 503(e)(2)(A); and 

9 ‘‘(II) does not include a person 

10 authorized to import drugs under sec11 tion 801(d)(1). 

12 ‘‘(E) PERMITTED COUNTRY.—The term 

13 ‘permitted country’ means— 

14 ‘‘(i) Australia; 

15 ‘‘(ii) Canada; 

16 ‘‘(iii) a member country of the Euro17 pean Union, but does not include a mem18 ber country with respect to which— 

19 ‘‘(I) the country’s Annex to the 

20 Treaty of Accession to the European 

21 Union 2003 includes a transitional 

22 measure for the regulation of human 

23 pharmaceutical products that has not 

24 expired; or 


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1 ‘‘(II) the Secretary determines 

2 that the requirements described in 

3 subclauses (I) and (II) of clause (vii) 

4 will not be met by the date on which 

5 such transitional measure for the reg6 ulation of human pharmaceutical 

7 products expires; 

8 ‘‘(iv) Japan; 

9 ‘‘(v) New Zealand; 

10 ‘‘(vi) Switzerland; and 

11 ‘‘(vii) a country in which the Sec12 retary determines the following require13 ments are met: 

14 ‘‘(I) The country has statutory or 

15 regulatory requirements— 

16 ‘‘(aa) that require the review 

17 of drugs for safety and effective18 ness by an entity of the govern19 ment of the country; 

20 ‘‘(bb) that authorize the ap21 proval of only those drugs that 

22 have been determined to be safe 

23 and effective by experts employed 

24 by or acting on behalf of such en25 tity and qualified by scientific 


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1 training and experience to evalu2 ate the safety and effectiveness of 

3 drugs on the basis of adequate 

4 and well-controlled investigations, 

5 including clinical investigations, 

6 conducted by experts qualified by 

7 scientific training and experience 

8 to evaluate the safety and effec9 tiveness of drugs; 

10 ‘‘(cc) that require the meth11 ods used in, and the facilities and 

12 controls used for the manufac13 ture, processing, and packing of 

14 drugs in the country to be ade15 quate to preserve their identity, 

16 quality, purity, and strength; 

17 ‘‘(dd) for the reporting of 

18 adverse reactions to drugs and 

19 procedures to withdraw approval 

20 and remove drugs found not to 

21 be safe or effective; and 

22 ‘‘(ee) that require the label23 ing and promotion of drugs to be 

24 in accordance with the approval 

25 of the drug. 


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1 ‘‘(II) The valid marketing au2 thorization system in the country is 

3 equivalent to the systems in the coun4 tries described in clauses (i) through 

5 (vi). 

6 ‘‘(III) The importation of drugs 

7 to the United States from the country 

8 will not adversely affect public health. 

9 ‘‘(b) REGISTRATION OF IMPORTERS AND EXPORT10 ERS.— 

11 ‘‘(1) REGISTRATION OF IMPORTERS AND EX12 PORTERS.—A registration condition is that the im13 porter or exporter involved (referred to in this sub14 section as a ‘registrant’) submits to the Secretary a 

15 registration containing the following: 

16 ‘‘(A)(i) In the case of an exporter, the 

17 name of the exporter and an identification of all 

18 places of business of the exporter that relate to 

19 qualifying drugs, including each warehouse or 

20 other facility owned or controlled by, or oper21 ated for, the exporter. 

22 ‘‘(ii) In the case of an importer, the name 

23 of the importer and an identification of the 

24 places of business of the importer at which the 

25 importer initially receives a qualifying drug 


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1 after importation (which shall not exceed 3 

2 places of business except by permission of the 

3 Secretary). 

4 ‘‘(B) Such information as the Secretary 

5 determines to be necessary to demonstrate that 

6 the registrant is in compliance with registration 

7 conditions under— 

8 ‘‘(i) in the case of an importer, sub9 sections (c), (d), (e), (g), and (j) (relating 

10 to the sources of imported qualifying 

11 drugs; the inspection of facilities of the im12 porter; the payment of fees; compliance 

13 with the standards referred to in section 

14 801(a); and maintenance of records and 

15 samples); or 

16 ‘‘(ii) in the case of an exporter, sub17 sections (c), (d), (f), (g), (h), (i), and (j) 

18 (relating to the sources of exported quali19 fying drugs; the inspection of facilities of 

20 the exporter and the marking of compliant 

21 shipments; the payment of fees; and com22 pliance with the standards referred to in 

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1 tion; and maintenance of records and sam2 ples). 

3 ‘‘(C) An agreement by the registrant that 

4 the registrant will not under subsection (a) im5 port or export any drug that is not a qualifying 

6 drug. 

7 ‘‘(D) An agreement by the registrant to— 

8 ‘‘(i) notify the Secretary of a recall or 

9 withdrawal of a qualifying drug distributed 

10 in a permitted country that the registrant 

11 has exported or imported, or intends to ex12 port or import, to the United States under 

13 subsection (a); 

14 ‘‘(ii) provide for the return to the reg15 istrant of such drug; and 

16 ‘‘(iii) cease, or not begin, the expor17 tation or importation of such drug unless 

18 the Secretary has notified the registrant 

19 that exportation or importation of such 

20 drug may proceed. 

21 ‘‘(E) An agreement by the registrant to 

22 ensure and monitor compliance with each reg23 istration condition, to promptly correct any 

24 noncompliance with such a condition, and to 


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1 promptly report to the Secretary any such non2 compliance. 

3 ‘‘(F) A plan describing the manner in 

4 which the registrant will comply with the agree5 ment under subparagraph (E). 

6 ‘‘(G) An agreement by the registrant to 

7 enforce a contract under subsection (c)(3)(B) 

8 against a party in the chain of custody of a 

9 qualifying drug with respect to the authority of 

10 the Secretary under clauses (ii) and (iii) of that 

11 subsection. 

12 ‘‘(H) An agreement by the registrant to 

13 notify the Secretary not more than 30 days be14 fore the registrant intends to make the change, 

15 of— 

16 ‘‘(i) any change that the registrant in17 tends to make regarding information pro18 vided under subparagraph (A) or (B); and 

19 ‘‘(ii) any change that the registrant 

20 intends to make in the compliance plan 

21 under subparagraph (F). 

22 ‘‘(I) In the case of an exporter: 

23 ‘‘(i) An agreement by the exporter 

24 that a qualifying drug will not under sub25 section (a) be exported to any individual 


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1 not authorized pursuant to subsection 

2 (a)(2)(B) to be an importer of such drug. 

3 ‘‘(ii) An agreement to post a bond, 

4 payable to the Treasury of the United 

5 States that is equal in value to the lesser 

6 of— 

7 ‘‘(I) the value of drugs exported 

8 by the exporter to the United States 

9 in a typical 4-week period over the 

10 course of a year under this section; or 

11 ‘‘(II) $1,000,000. 

12 ‘‘(iii) An agreement by the exporter to 

13 comply with applicable provisions of Cana14 dian law, or the law of the permitted coun15 try designated under subsection 

16 (a)(4)(D)(i)(II) in which the exporter is lo17 cated, that protect the privacy of personal 

18 information with respect to each individual 

19 importing a prescription drug from the ex20 porter under subsection (a)(2)(B). 

21 ‘‘(iv) An agreement by the exporter to 

22 report to the Secretary— 

23 ‘‘(I) not later than August 1 of 

24 each fiscal year, the total price and 

25 the total volume of drugs exported to 


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1 the United States by the exporter dur2 ing the 6-month period from January 

3 1 through June 30 of that year; and 

4 ‘‘(II) not later than January 1 of 

5 each fiscal year, the total price and 

6 the total volume of drugs exported to 

7 the United States by the exporter dur8 ing the previous fiscal year. 

9 ‘‘(J) In the case of an importer, an agree10 ment by the importer to report to the Sec11 retary— 

12 ‘‘(i) not later than August 1 of each 

13 fiscal year, the total price and the total 

14 volume of drugs imported to the United 

15 States by the importer during the 6-month 

16 period from January 1 through June 30 of 

17 that fiscal year; and 

18 ‘‘(ii) not later than January 1 of each 

19 fiscal year, the total price and the total 

20 volume of drugs imported to the United 

21 States by the importer during the previous 

22 fiscal year. 

23 ‘‘(K) Such other provisions as the Sec24 retary may require by regulation to protect the 

25 public health while permitting— 


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1 ‘‘(i) the importation by pharmacies, 

2 groups of pharmacies, and wholesalers as 

3 registered importers of qualifying drugs 

4 under subsection (a); and 

5 ‘‘(ii) importation by individuals of 

6 qualifying drugs under subsection (a). 

7 ‘‘(2) APPROVAL OR DISAPPROVAL OF REGISTRA8 TION.— 

9 ‘‘(A) IN GENERAL.—Not later than 90 

10 days after the date on which a registrant sub11 mits to the Secretary a registration under para12 graph (1), the Secretary shall notify the reg13 istrant whether the registration is approved or 

14 is disapproved. The Secretary shall disapprove 

15 a registration if there is reason to believe that 

16 the registrant is not in compliance with one or 

17 more registration conditions, and shall notify 

18 the registrant of such reason. In the case of a 

19 disapproved registration, the Secretary shall 

20 subsequently notify the registrant that the reg21 istration is approved if the Secretary deter22 mines that the registrant is in compliance with 

23 such conditions. 

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1 ing a notice under paragraph (1)(H) from a 

2 registrant, the Secretary shall determine wheth3 er the change involved affects the approval of 

4 the registration of the registrant under para5 graph (1), and shall inform the registrant of 

6 the determination. 

7 ‘‘(3) PUBLICATION OF CONTACT INFORMATION

8 FOR REGISTERED EXPORTERS.—Through the Inter9 net website of the Food and Drug Administration 

10 and a toll-free telephone number, the Secretary shall 

11 make readily available to the public a list of reg12 istered exporters, including contact information for 

13 the exporters. Promptly after the approval of a reg14 istration submitted under paragraph (1), the Sec15 retary shall update the Internet website and the in16 formation provided through the toll-free telephone 

17 number accordingly. 

18 ‘‘(4) SUSPENSION AND TERMINATION.— 

19 ‘‘(A) SUSPENSION.—With respect to the 

20 effectiveness of a registration submitted under 

21 paragraph (1): 

22 ‘‘(i) Subject to clause (ii), the Sec23 retary may suspend the registration if the 

24 Secretary determines, after notice and op25 portunity for a hearing, that the registrant 


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1 has failed to maintain substantial compli2 ance with a registration condition. 

3 ‘‘(ii) If the Secretary determines that, 

4 under color of the registration, the ex5 porter has exported a drug or the importer 

6 has imported a drug that is not a quali7 fying drug, or a drug that does not comply 

8 with subsection (g)(2)(A) or (g)(4), or has 

9 exported a qualifying drug to an individual 

10 in violation of subsection (i)(2)(F), the 

11 Secretary shall immediately suspend the 

12 registration. A suspension under the pre13 ceding sentence is not subject to the provi14 sion by the Secretary of prior notice, and 

15 the Secretary shall provide to the reg16 istrant an opportunity for a hearing not 

17 later than 10 days after the date on which 

18 the registration is suspended. 

19 ‘‘(iii) The Secretary may reinstate the 

20 registration, whether suspended under 

21 clause (i) or (ii), if the Secretary deter22 mines that the registrant has demonstrated 

23 that further violations of registration con24 ditions will not occur. 


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1 ‘‘(B) TERMINATION.—The Secretary, after 

2 notice and opportunity for a hearing, may ter3 minate the registration under paragraph (1) of 

4 a registrant if the Secretary determines that 

5 the registrant has engaged in a pattern or prac6 tice of violating 1 or more registration condi7 tions, or if on 1 or more occasions the Secretary 

8 has under subparagraph (A)(ii) suspended the 

9 registration of the registrant. The Secretary 

10 may make the termination permanent, or for a 

11 fixed period of not less than 1 year. During the 

12 period in which the registration is terminated, 

13 any registration submitted under paragraph (1) 

14 by the registrant, or a person that is a partner 

15 in the export or import enterprise, or a prin16 cipal officer in such enterprise, and any reg17 istration prepared with the assistance of the 

18 registrant or such a person, has no legal effect 

19 under this section. 

20 ‘‘(5) DEFAULT OF BOND.—A bond required to 

21 be posted by an exporter under paragraph (1)(I)(ii) 

22 shall be defaulted and paid to the Treasury of the 

23 United States if, after opportunity for an informal 

24 hearing, the Secretary determines that the exporter 

25 has— 


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1 ‘‘(A) exported a drug to the United States 

2 that is not a qualifying drug or that is not in 

3 compliance with subsection (g)(2)(A), (g)(4), or 

4 (i); or 

5 ‘‘(B) failed to permit the Secretary to con6 duct an inspection described under subsection 

7 (d). 

8 ‘‘(c) SOURCES OF QUALIFYING DRUGS.—A registra9 tion condition is that the exporter or importer involved 

10 agrees that a qualifying drug will under subsection (a) be 

11 exported or imported into the United States only if there 

12 is compliance with the following: 

13 ‘‘(1) The drug was manufactured in an estab14 lishment— 

15 ‘‘(A) required to register under subsection 

16 (h) or (i) of section 510; and 

17 ‘‘(B)(i) inspected by the Secretary; or 

18 ‘‘(ii) for which the Secretary has elected to 

19 rely on a satisfactory report of a good manufac20 turing practice inspection of the establishment 

21 from a permitted country whose regulatory sys22 tem the Secretary recognizes as equivalent 

23 under a mutual recognition agreement, as pro24 vided for under section 510(i)(3), section 803, 

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1 tions (or any corresponding successor rule or 

2 regulation). 

3 ‘‘(2) The establishment is located in any coun4 try, and the establishment manufactured the drug 

5 for distribution in the United States or for distribu6 tion in 1 or more of the permitted countries (without 

7 regard to whether in addition the drug is manufac8 tured for distribution in a foreign country that is 

9 not a permitted country). 

10 ‘‘(3) The exporter or importer obtained the 

11 drug— 

12 ‘‘(A) directly from the establishment; or 

13 ‘‘(B) directly from an entity that, by con14 tract with the exporter or importer— 

15 ‘‘(i) provides to the exporter or im16 porter a statement (in such form and con17 taining such information as the Secretary 

18 may require) that, for the chain of custody 

19 from the establishment, identifies each 

20 prior sale, purchase, or trade of the drug 

21 (including the date of the transaction and 

22 the names and addresses of all parties to 

23 the transaction); 


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1 ‘‘(ii) agrees to permit the Secretary to 

2 inspect such statements and related 

3 records to determine their accuracy; 

4 ‘‘(iii) agrees, with respect to the quali5 fying drugs involved, to permit the Sec6 retary to inspect warehouses and other fa7 cilities, including records, of the entity for 

8 purposes of determining whether the facili9 ties are in compliance with any standards 

10 under this Act that are applicable to facili11 ties of that type in the United States; and 

12 ‘‘(iv) has ensured, through such con13 tractual relationships as may be necessary, 

14 that the Secretary has the same authority 

15 regarding other parties in the chain of cus16 tody from the establishment that the Sec17 retary has under clauses (ii) and (iii) re18 garding such entity. 

19 ‘‘(4)(A) The foreign country from which the im20 porter will import the drug is a permitted country; 

21 or 

22 ‘‘(B) The foreign country from which the ex23 porter will export the drug is the permitted country 

24 in which the exporter is located. 


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1 ‘‘(5) During any period in which the drug was 

2 not in the control of the manufacturer of the drug, 

3 the drug did not enter any country that is not a per4 mitted country. 

5 ‘‘(6) The exporter or importer retains a sample 

6 of each lot of the drug for testing by the Secretary. 

7 ‘‘(d) INSPECTION OF FACILITIES; MARKING OF SHIP8 MENTS.— 

9 ‘‘(1) INSPECTION OF FACILITIES.—A registra10 tion condition is that, for the purpose of assisting 

11 the Secretary in determining whether the exporter 

12 involved is in compliance with all other registration 

13 conditions— 

14 ‘‘(A) the exporter agrees to permit the Sec15 retary— 

16 ‘‘(i) to conduct onsite inspections, in17 cluding monitoring on a day-to-day basis, 

18 of places of business of the exporter that 

19 relate to qualifying drugs, including each 

20 warehouse or other facility owned or con21 trolled by, or operated for, the exporter; 

22 ‘‘(ii) to have access, including on a 

23 day-to-day basis, to— 


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1 ‘‘(I) records of the exporter that 

2 relate to the export of such drugs, in3 cluding financial records; and 

4 ‘‘(II) samples of such drugs; 

5 ‘‘(iii) to carry out the duties described 

6 in paragraph (3); and 

7 ‘‘(iv) to carry out any other functions 

8 determined by the Secretary to be nec9 essary regarding the compliance of the ex10 porter; and 

11 ‘‘(B) the Secretary has assigned 1 or more 

12 employees of the Secretary to carry out the 

13 functions described in this subsection for the 

14 Secretary randomly, but not less than 12 times 

15 annually, on the premises of places of busi16 nesses referred to in subparagraph (A)(i), and 

17 such an assignment remains in effect on a con18 tinuous basis. 

19 ‘‘(2) MARKING OF COMPLIANT SHIPMENTS.—A 

20 registration condition is that the exporter involved 

21 agrees to affix to each shipping container of quali22 fying drugs exported under subsection (a) such 

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1 ance with all registration conditions. Markings under 

2 the preceding sentence shall— 

3 ‘‘(A) be designed to prevent affixation of 

4 the markings to any shipping container that is 

5 not authorized to bear the markings; and 

6 ‘‘(B) include anticounterfeiting or track7 and-trace technologies, taking into account the 

8 economic and technical feasibility of those tech9 nologies. 

10 ‘‘(3) CERTAIN DUTIES RELATING TO EXPORT11 ERS.—Duties of the Secretary with respect to an ex12 porter include the following: 

13 ‘‘(A) Inspecting, randomly, but not less 

14 than 12 times annually, the places of business 

15 of the exporter at which qualifying drugs are 

16 stored and from which qualifying drugs are 

17 shipped. 

18 ‘‘(B) During the inspections under sub19 paragraph (A), verifying the chain of custody of 

20 a statistically significant sample of qualifying 

21 drugs from the establishment in which the drug 

22 was manufactured to the exporter, which shall 

23 be accomplished or supplemented by the use of 

24 anticounterfeiting or track-and-trace tech25 nologies, taking into account the economic and 


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1 technical feasibility of those technologies, except 

2 that a drug that lacks such technologies from 

3 the point of manufacture shall not for that rea4 son be excluded from importation by an ex5 porter. 

6 ‘‘(C) Randomly reviewing records of ex7 ports to individuals for the purpose of deter8 mining whether the drugs are being imported 

9 by the individuals in accordance with the condi10 tions under subsection (i). Such reviews shall be 

11 conducted in a manner that will result in a sta12 tistically significant determination of compli13 ance with all such conditions. 

14 ‘‘(D) Monitoring the affixing of markings 

15 under paragraph (2). 

16 ‘‘(E) Inspecting as the Secretary deter17 mines is necessary the warehouses and other fa18 cilities, including records, of other parties in the 

19 chain of custody of qualifying drugs. 

20 ‘‘(F) Determining whether the exporter is 

21 in compliance with all other registration condi22 tions. 

23 ‘‘(4) PRIOR NOTICE OF SHIPMENTS.—A reg24 istration condition is that, not less than 8 hours and 

25 not more than 5 days in advance of the time of the 


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1 importation of a shipment of qualifying drugs, the 

2 importer involved agrees to submit to the Secretary 

3 a notice with respect to the shipment of drugs to be 

4 imported or offered for import into the United 

5 States under subsection (a). A notice under the pre6 ceding sentence shall include— 

7 ‘‘(A) the name and complete contact infor8 mation of the person submitting the notice; 

9 ‘‘(B) the name and complete contact infor10 mation of the importer involved; 

11 ‘‘(C) the identity of the drug, including the 

12 established name of the drug, the quantity of 

13 the drug, and the lot number assigned by the 

14 manufacturer; 

15 ‘‘(D) the identity of the manufacturer of 

16 the drug, including the identity of the establish17 ment at which the drug was manufactured; 

18 ‘‘(E) the country from which the drug is 

19 shipped; 

20 ‘‘(F) the name and complete contact infor21 mation for the shipper of the drug; 

22 ‘‘(G) anticipated arrival information, in23 cluding the port of arrival and crossing location 

24 within that port, and the date and time; 


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1 ‘‘(H) a summary of the chain of custody of 

2 the drug from the establishment in which the 

3 drug was manufactured to the importer; 

4 ‘‘(I) a declaration as to whether the Sec5 retary has ordered that importation of the drug 

6 from the permitted country cease under sub7 section (g)(2)(C) or (D); and 

8 ‘‘(J) such other information as the Sec9 retary may require by regulation. 

10 ‘‘(5) MARKING OF COMPLIANT SHIPMENTS.—A 

11 registration condition is that the importer involved 

12 agrees, before wholesale distribution (as defined in 

13 section 503(e)) of a qualifying drug that has been 

14 imported under subsection (a), to affix to each con15 tainer of such drug such markings or other tech16 nology as the Secretary determines necessary to 

17 identify the shipment as being in compliance with all 

18 registration conditions, except that the markings or 

19 other technology shall not be required on a drug 

20 that bears comparable, compatible markings or tech21 nology from the manufacturer of the drug. Markings 

22 or other technology under the preceding sentence 

23 shall— 

24 ‘‘(A) be designed to prevent affixation of 

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1 tainer that is not authorized to bear the mark2 ings; and 

3 ‘‘(B) shall include anticounterfeiting or 

4 track-and-trace technologies, taking into ac5 count the economic and technical feasibility of 

6 such technologies. 

7 ‘‘(6) CERTAIN DUTIES RELATING TO IMPORT8 ERS.—Duties of the Secretary with respect to an im9 porter include the following: 

10 ‘‘(A) Inspecting, randomly, but not less 

11 than 12 times annually, the places of business 

12 of the importer at which a qualifying drug is 

13 initially received after importation. 

14 ‘‘(B) During the inspections under sub15 paragraph (A), verifying the chain of custody of 

16 a statistically significant sample of qualifying 

17 drugs from the establishment in which the drug 

18 was manufactured to the importer, which shall 

19 be accomplished or supplemented by the use of 

20 anticounterfeiting or track-and-trace tech21 nologies, taking into account the economic and 

22 technical feasibility of those technologies, except 

23 that a drug that lacks such technologies from 

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1 son be excluded from importation by an im2 porter. 

3 ‘‘(C) Reviewing notices under paragraph 

4 (4). 

5 ‘‘(D) Inspecting as the Secretary deter6 mines is necessary the warehouses and other fa7 cilities, including records of other parties in the 

8 chain of custody of qualifying drugs. 

9 ‘‘(E) Determining whether the importer is 

10 in compliance with all other registration condi11 tions. 

12 ‘‘(e) IMPORTER FEES.— 

13 ‘‘(1) REGISTRATION FEE.—A registration con14 dition is that the importer involved pays to the Sec15 retary a fee of $10,000 due on the date on which 

16 the importer first submits the registration to the 

17 Secretary under subsection (b). 

18 ‘‘(2) INSPECTION FEE.—A registration condi19 tion is that the importer involved pays a fee to the 

20 Secretary in accordance with this subsection. Such 

21 fee shall be paid not later than October 1 and April 

22 1 of each fiscal year in the amount provided for 

23 under paragraph (3). 

24 ‘‘(3) AMOUNT OF INSPECTION FEE.— 


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1 ‘‘(A) AGGREGATE TOTAL OF FEES.—Not 

2 later than 30 days before the start of each fis3 cal year, the Secretary, in consultation with the 

4 Secretary of Homeland Security and the Sec5 retary of the Treasury, shall establish an aggre6 gate total of fees to be collected under para7 graph (2) for importers for that fiscal year that 

8 is sufficient, and not more than necessary, to 

9 pay the costs for that fiscal year of admin10 istering this section with respect to registered 

11 importers, including the costs associated with— 

12 ‘‘(i) inspecting the facilities of reg13 istered importers, and of other entities in 

14 the chain of custody of a qualifying drug 

15 as necessary, under subsection (d)(6); 

16 ‘‘(ii) developing, implementing, and 

17 operating under such subsection an elec18 tronic system for submission and review of 

19 the notices required under subsection 

20 (d)(4) with respect to shipments of quali21 fying drugs under subsection (a) to assess 

22 compliance with all registration conditions 

23 when such shipments are offered for im24 port into the United States; and 


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1 ‘‘(iii) inspecting such shipments as 

2 necessary, when offered for import into the 

3 United States to determine if such a ship4 ment should be refused admission under 

5 subsection (g)(5). 

6 ‘‘(B) LIMITATION.—Subject to subpara7 graph (C), the aggregate total of fees collected 

8 under paragraph (2) for a fiscal year shall not 

9 exceed 2.5 percent of the total price of quali10 fying drugs imported during that fiscal year 

11 into the United States by registered importers 

12 under subsection (a). 

13 ‘‘(C) TOTAL PRICE OF DRUGS.— 

14 ‘‘(i) ESTIMATE.—For the purposes of 

15 complying with the limitation described in 

16 subparagraph (B) when establishing under 

17 subparagraph (A) the aggregate total of 

18 fees to be collected under paragraph (2) 

19 for a fiscal year, the Secretary shall esti20 mate the total price of qualifying drugs im21 ported into the United States by registered 

22 importers during that fiscal year by adding 

23 the total price of qualifying drugs imported 

24 by each registered importer during the 6- 

25 month period from January 1 through 


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1 June 30 of the previous fiscal year, as re2 ported to the Secretary by each registered 

3 importer under subsection (b)(1)(J). 

4 ‘‘(ii) CALCULATION.—Not later than 

5 March 1 of the fiscal year that follows the 

6 fiscal year for which the estimate under 

7 clause (i) is made, the Secretary shall cal8 culate the total price of qualifying drugs 

9 imported into the United States by reg10 istered importers during that fiscal year by 

11 adding the total price of qualifying drugs 

12 imported by each registered importer dur13 ing that fiscal year, as reported to the Sec14 retary by each registered importer under 

15 subsection (b)(1)(J). 

16 ‘‘(iii) ADJUSTMENT.—If the total 

17 price of qualifying drugs imported into the 

18 United States by registered importers dur19 ing a fiscal year as calculated under clause 

20 (ii) is less than the aggregate total of fees 

21 collected under paragraph (2) for that fis22 cal year, the Secretary shall provide for a 

23 pro-rata reduction in the fee due from each 

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1 sequent fiscal year so that the limitation 

2 described in subparagraph (B) is observed. 

3 ‘‘(D) INDIVIDUAL IMPORTER FEE.—Sub4 ject to the limitation described in subparagraph 

5 (B), the fee under paragraph (2) to be paid on 

6 October 1 and April 1 by an importer shall be 

7 an amount that is proportional to a reasonable 

8 estimate by the Secretary of the semiannual 

9 share of the importer of the volume of quali10 fying drugs imported by importers under sub11 section (a). 

12 ‘‘(4) USE OF FEES.— 

13 ‘‘(A) IN GENERAL.—Subject to appropria14 tions Acts, fees collected by the Secretary under 

15 paragraphs (1) and (2) shall be credited to the 

16 appropriation account for salaries and expenses 

17 of the Food and Drug Administration until ex18 pended (without fiscal year limitation), and the 

19 Secretary may, in consultation with the Sec20 retary of Homeland Security and the Secretary 

21 of the Treasury, transfer some proportion of 

22 such fees to the appropriation account for sala23 ries and expenses of the Bureau of Customs 

24 and Border Protection until expended (without 

25 fiscal year limitation). 


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1 ‘‘(B) SOLE PURPOSE.—Fees collected by 

2 the Secretary under paragraphs (1) and (2) are 

3 only available to the Secretary and, if trans4 ferred, to the Secretary of Homeland Security, 

5 and are for the sole purpose of paying the costs 

6 referred to in paragraph (3)(A). 

7 ‘‘(5) COLLECTION OF FEES.—In any case where 

8 the Secretary does not receive payment of a fee as9 sessed under paragraph (1) or (2) within 30 days 

10 after it is due, such fee shall be treated as a claim 

11 of the United States Government subject to sub12 chapter II of chapter 37 of title 31, United States 

13 Code. 

14 ‘‘(f) EXPORTER FEES.— 

15 ‘‘(1) REGISTRATION FEE.—A registration con16 dition is that the exporter involved pays to the Sec17 retary a fee of $10,000 due on the date on which 

18 the exporter first submits that registration to the 

19 Secretary under subsection (b). 

20 ‘‘(2) INSPECTION FEE.—A registration condi21 tion is that the exporter involved pays a fee to the 

22 Secretary in accordance with this subsection. Such 

23 fee shall be paid not later than October 1 and April 

24 1 of each fiscal year in the amount provided for 

25 under paragraph (3). 


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1 ‘‘(3) AMOUNT OF INSPECTION FEE.— 

2 ‘‘(A) AGGREGATE TOTAL OF FEES.—Not 

3 later than 30 days before the start of each fis4 cal year, the Secretary, in consultation with the 

5 Secretary of Homeland Security and the Sec6 retary of the Treasury, shall establish an aggre7 gate total of fees to be collected under para8 graph (2) for exporters for that fiscal year that 

9 is sufficient, and not more than necessary, to 

10 pay the costs for that fiscal year of admin11 istering this section with respect to registered 

12 exporters, including the costs associated with— 

13 ‘‘(i) inspecting the facilities of reg14 istered exporters, and of other entities in 

15 the chain of custody of a qualifying drug 

16 as necessary, under subsection (d)(3); 

17 ‘‘(ii) developing, implementing, and 

18 operating under such subsection a system 

19 to screen marks on shipments of qualifying 

20 drugs under subsection (a) that indicate 

21 compliance with all registration conditions, 

22 when such shipments are offered for im23 port into the United States; and 

24 ‘‘(iii) screening such markings, and 

25 inspecting such shipments as necessary, 


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1 when offered for import into the United 

2 States to determine if such a shipment 

3 should be refused admission under sub4 section (g)(5). 

5 ‘‘(B) LIMITATION.—Subject to subpara6 graph (C), the aggregate total of fees collected 

7 under paragraph (2) for a fiscal year shall not 

8 exceed 2.5 percent of the total price of quali9 fying drugs imported during that fiscal year 

10 into the United States by registered exporters 

11 under subsection (a). 

12 ‘‘(C) TOTAL PRICE OF DRUGS.— 

13 ‘‘(i) ESTIMATE.—For the purposes of 

14 complying with the limitation described in 

15 subparagraph (B) when establishing under 

16 subparagraph (A) the aggregate total of 

17 fees to be collected under paragraph (2) 

18 for a fiscal year, the Secretary shall esti19 mate the total price of qualifying drugs im20 ported into the United States by registered 

21 exporters during that fiscal year by adding 

22 the total price of qualifying drugs exported 

23 by each registered exporter during the 6- 

24 month period from January 1 through 

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1 ported to the Secretary by each registered 

2 exporter under subsection (b)(1)(I)(iv). 

3 ‘‘(ii) CALCULATION.—Not later than 

4 March 1 of the fiscal year that follows the 

5 fiscal year for which the estimate under 

6 clause (i) is made, the Secretary shall cal7 culate the total price of qualifying drugs 

8 imported into the United States by reg9 istered exporters during that fiscal year by 

10 adding the total price of qualifying drugs 

11 exported by each registered exporter dur12 ing that fiscal year, as reported to the Sec13 retary by each registered exporter under 

14 subsection (b)(1)(I)(iv). 

15 ‘‘(iii) ADJUSTMENT.—If the total 

16 price of qualifying drugs imported into the 

17 United States by registered exporters dur18 ing a fiscal year as calculated under clause 

19 (ii) is less than the aggregate total of fees 

20 collected under paragraph (2) for that fis21 cal year, the Secretary shall provide for a 

22 pro-rata reduction in the fee due from each 

23 registered exporter on April 1 of the subse24 quent fiscal year so that the limitation de25 scribed in subparagraph (B) is observed. 


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1 ‘‘(D) INDIVIDUAL EXPORTER FEE.—Sub2 ject to the limitation described in subparagraph 

3 (B), the fee under paragraph (2) to be paid on 

4 October 1 and April 1 by an exporter shall be 

5 an amount that is proportional to a reasonable 

6 estimate by the Secretary of the semiannual 

7 share of the exporter of the volume of quali8 fying drugs exported by exporters under sub9 section (a). 

10 ‘‘(4) USE OF FEES.— 

11 ‘‘(A) IN GENERAL.—Subject to appropria12 tions Acts, fees collected by the Secretary under 

13 paragraphs (1) and (2) shall be credited to the 

14 appropriation account for salaries and expenses 

15 of the Food and Drug Administration until ex16 pended (without fiscal year limitation), and the 

17 Secretary may, in consultation with the Sec18 retary of Homeland Security and the Secretary 

19 of the Treasury, transfer some proportion of 

20 such fees to the appropriation account for sala21 ries and expenses of the Bureau of Customs 

22 and Border Protection until expended (without 

23 fiscal year limitation). 

24 ‘‘(B) SOLE PURPOSE.—Fees collected by 

25 the Secretary under paragraphs (1) and (2) are 


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1 only available to the Secretary and, if trans2 ferred, to the Secretary of Homeland Security, 

3 and are for the sole purpose of paying the costs 

4 referred to in paragraph (3)(A). 

5 ‘‘(5) COLLECTION OF FEES.—In any case where 

6 the Secretary does not receive payment of a fee as7 sessed under paragraph (1) or (2) within 30 days 

8 after it is due, such fee shall be treated as a claim 

9 of the United States Government subject to sub10 chapter II of chapter 37 of title 31, United States 

11 Code. 

12 ‘‘(g) COMPLIANCE WITH SECTION 801(a).— 

13 ‘‘(1) IN GENERAL.—A registration condition is 

14 that each qualifying drug exported under subsection 

15 (a) by the registered exporter involved or imported 

16 under subsection (a) by the registered importer in17 volved is in compliance with the standards referred 

18 to in section 801(a) regarding admission of the drug 

19 into the United States, subject to paragraphs (2), 

20 (3), and (4). 

21 ‘‘(2) SECTION 505; APPROVAL STATUS.— 

22 ‘‘(A) IN GENERAL.—A qualifying drug that 

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1 tion 505(b) for the U.S. label drug as described 

2 under this subsection. 

3 ‘‘(B) NOTICE BY MANUFACTURER; GEN4 ERAL PROVISIONS.— 

5 ‘‘(i) IN GENERAL.—The person that 

6 manufactures a qualifying drug that is, or 

7 will be, introduced for commercial distribu8 tion in a permitted country shall in accord9 ance with this paragraph submit to the 

10 Secretary a notice that— 

11 ‘‘(I) includes each difference in 

12 the qualifying drug from a condition 

13 established in the approved applica14 tion for the U.S. label drug beyond— 

15 ‘‘(aa) the variations provided 

16 for in the application; and 

17 ‘‘(bb) any difference in label18 ing (except ingredient labeling); 

19 or 

20 ‘‘(II) States that there is no dif21 ference in the qualifying drug from a 

22 condition established in the approved 

23 application for the U.S. label drug be24 yond— 


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1 ‘‘(aa) the variations provided 

2 for in the application; and 

3 ‘‘(bb) any difference in label4 ing (except ingredient labeling). 

5 ‘‘(ii) INFORMATION IN NOTICE.—A 

6 notice under clause (i)(I) shall include the 

7 information that the Secretary may require 

8 under section 506A, any additional infor9 mation the Secretary may require (which 

10 may include data on bioequivalence if such 

11 data are not required under section 506A), 

12 and, with respect to the permitted country 

13 that approved the qualifying drug for com14 mercial distribution, or with respect to 

15 which such approval is sought, include the 

16 following: 

17 ‘‘(I) The date on which the quali18 fying drug with such difference was, 

19 or will be, introduced for commercial 

20 distribution in the permitted country. 

21 ‘‘(II) Information demonstrating 

22 that the person submitting the notice 

23 has also notified the government of 

24 the permitted country in writing that 

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1 retary a notice under clause (i)(I), 

2 which notice describes the difference 

3 in the qualifying drug from a condi4 tion established in the approved appli5 cation for the U.S. label drug. 

6 ‘‘(III) The information that the 

7 person submitted or will submit to the 

8 government of the permitted country 

9 for purposes of obtaining approval for 

10 commercial distribution of the drug in 

11 the country which, if in a language 

12 other than English, shall be accom13 panied by an English translation 

14 verified to be complete and accurate, 

15 with the name, address, and a brief 

16 statement of the qualifications of the 

17 person that made the translation. 

18 ‘‘(iii) CERTIFICATIONS.—The chief ex19 ecutive officer and the chief medical officer 

20 of the manufacturer involved shall each 

21 certify in the notice under clause (i) that— 

22 ‘‘(I) the information provided in 

23 the notice is complete and true; and 

24 ‘‘(II) a copy of the notice has 

25 been provided to the Federal Trade 


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1 Commission and to the State attor2 neys general. 

3 ‘‘(iv) FEE.—If a notice submitted 

4 under clause (i) includes a difference that 

5 would, under section 506A, require the 

6 submission of a supplemental application if 

7 made as a change to the U.S. label drug, 

8 the person that submits the notice shall 

9 pay to the Secretary a fee in the same 

10 amount as would apply if the person were 

11 paying a fee pursuant to section 

12 736(a)(1)(A)(ii). Subject to appropriations 

13 Acts, fees collected by the Secretary under 

14 the preceding sentence are available only to 

15 the Secretary and are for the sole purpose 

16 of paying the costs of reviewing notices 

17 submitted under clause (i). 

18 ‘‘(v) TIMING OF SUBMISSION OF NO19 TICES.— 

20 ‘‘(I) PRIOR APPROVAL NO21 TICES.—A notice under clause (i) to 

22 which subparagraph (C) applies shall 

23 be submitted to the Secretary not 

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1 duced for commercial distribution in a 

2 permitted country, unless the country 

3 requires that distribution of the quali4 fying drug with the difference begin 

5 less than 120 days after the country 

6 requires the difference. 

7 ‘‘(II) OTHER APPROVAL NO8 TICES.—A notice under clause (i) to 

9 which subparagraph (D) applies shall 

10 be submitted to the Secretary not 

11 later than the day on which the quali12 fying drug with the difference is intro13 duced for commercial distribution in a 

14 permitted country. 

15 ‘‘(III) OTHER NOTICES.—A no16 tice under clause (i) to which subpara17 graph (E) applies shall be submitted 

18 to the Secretary on the date that the 

19 qualifying drug is first introduced for 

20 commercial distribution in a permitted 

21 country and annually thereafter. 

22 ‘‘(vi) REVIEW BY SECRETARY.— 

23 ‘‘(I) IN GENERAL.—In this para24 graph, the difference in a qualifying 

25 drug that is submitted in a notice 


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1 under clause (i) from the U.S. label 

2 drug shall be treated by the Secretary 

3 as if it were a manufacturing change 

4 to the U.S. label drug under section 

5 506A. 

6 ‘‘(II) STANDARD OF REVIEW.— 

7 Except as provided in subclause (III), 

8 the Secretary shall review and approve 

9 or disapprove the difference in a no10 tice submitted under clause (i), if re11 quired under section 506A, using the 

12 safe and effective standard for ap13 proving or disapproving a manufac14 turing change under section 506A. 

15 ‘‘(III) BIOEQUIVALENCE.—If the 

16 Secretary would approve the dif17 ference in a notice submitted under 

18 clause (i) using the safe and effective 

19 standard under section 506A and if 

20 the Secretary determines that the 

21 qualifying drug is not bioequivalent to 

22 the U.S. label drug, the Secretary 

23 shall— 

24 ‘‘(aa) include in the labeling 

25 provided under paragraph (3) a 


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1 prominent advisory that the 

2 qualifying drug is safe and effec3 tive but is not bioequivalent to 

4 the U.S. label drug if the Sec5 retary determines that such an 

6 advisory is necessary for health 

7 care practitioners and patients to 

8 use the qualifying drug safely 

9 and effectively; or 

10 ‘‘(bb) decline to approve the 

11 difference if the Secretary deter12 mines that the availability of 

13 both the qualifying drug and the 

14 U.S. label drug would pose a 

15 threat to the public health. 

16 ‘‘(IV) REVIEW BY THE SEC17 RETARY.—The Secretary shall review 

18 and approve or disapprove the dif19 ference in a notice submitted under 

20 clause (i), if required under section 

21 506A, not later than 120 days after 

22 the date on which the notice is sub23 mitted. 

24 ‘‘(V) ESTABLISHMENT INSPEC25 TION.—If review of such difference 


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1 would require an inspection of the es2 tablishment in which the qualifying 

3 drug is manufactured— 

4 ‘‘(aa) such inspection by the 

5 Secretary shall be authorized; 

6 and 

7 ‘‘(bb) the Secretary may rely 

8 on a satisfactory report of a good 

9 manufacturing practice inspec10 tion of the establishment from a 

11 permitted country whose regu12 latory system the Secretary rec13 ognizes as equivalent under a 

14 mutual recognition agreement, as 

15 provided under section 510(i)(3), 

16 section 803, or part 26 of title 

17 21, Code of Federal Regulations 

18 (or any corresponding successor 

19 rule or regulation). 

20 ‘‘(vii) PUBLICATION OF INFORMATION

21 ON NOTICES.— 

22 ‘‘(I) IN GENERAL.—Through the 

23 Internet website of the Food and 

24 Drug Administration and a toll-free 

25 telephone number, the Secretary shall 


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1 readily make available to the public a 

2 list of notices submitted under clause 

3 (i). 

4 ‘‘(II) CONTENTS.—The list under 

5 subclause (I) shall include the date on 

6 which a notice is submitted and 

7 whether— 

8 ‘‘(aa) a notice is under re9 view; 

10 ‘‘(bb) the Secretary has or11 dered that importation of the 

12 qualifying drug from a permitted 

13 country cease; or 

14 ‘‘(cc) the importation of the 

15 drug is permitted under sub16 section (a). 

17 ‘‘(III) UPDATE.—The Secretary 

18 shall promptly update the Internet 

19 website with any changes to the list. 

20 ‘‘(C) NOTICE; DRUG DIFFERENCE REQUIR21 ING PRIOR APPROVAL.—In the case of a notice 

22 under subparagraph (B)(i) that includes a dif23 ference that would, under section 506A(c) or 

24 (d)(3)(B)(i), require the approval of a supple25 mental application before the difference could 


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1 be made to the U.S. label drug the following 

2 shall occur: 

3 ‘‘(i) Promptly after the notice is sub4 mitted, the Secretary shall notify reg5 istered exporters, registered importers, the 

6 Federal Trade Commission, and the State 

7 attorneys general that the notice has been 

8 submitted with respect to the qualifying 

9 drug involved. 

10 ‘‘(ii) If the Secretary has not made a 

11 determination whether such a supple12 mental application regarding the U.S. label 

13 drug would be approved or disapproved by 

14 the date on which the qualifying drug in15 volved is to be introduced for commercial 

16 distribution in a permitted country, the 

17 Secretary shall— 

18 ‘‘(I) order that the importation of 

19 the qualifying drug involved from the 

20 permitted country not begin until the 

21 Secretary completes review of the no22 tice; and 

23 ‘‘(II) promptly notify registered 

24 exporters, registered importers, the 


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1 Federal Trade Commission, and the 

2 State attorneys general of the order. 

3 ‘‘(iii) If the Secretary determines that 

4 such a supplemental application regarding 

5 the U.S. label drug would not be approved, 

6 the Secretary shall— 

7 ‘‘(I) order that the importation of 

8 the qualifying drug involved from the 

9 permitted country cease, or provide 

10 that an order under clause (ii), if any, 

11 remains in effect; 

12 ‘‘(II) notify the permitted coun13 try that approved the qualifying drug 

14 for commercial distribution of the de15 termination; and 

16 ‘‘(III) promptly notify registered 

17 exporters, registered importers, the 

18 Federal Trade Commission, and the 

19 State attorneys general of the deter20 mination. 

21 ‘‘(iv) If the Secretary determines that 

22 such a supplemental application regarding 

23 the U.S. label drug would be approved, the 

24 Secretary shall— 


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1 ‘‘(I) vacate the order under 

2 clause (ii), if any; 

3 ‘‘(II) consider the difference to 

4 be a variation provided for in the ap5 proved application for the U.S. label 

6 drug; 

7 ‘‘(III) permit importation of the 

8 qualifying drug under subsection (a); 

9 and 

10 ‘‘(IV) promptly notify registered 

11 exporters, registered importers, the 

12 Federal Trade Commission, and the 

13 State attorneys general of the deter14 mination. 

15 ‘‘(D) NOTICE; DRUG DIFFERENCE NOT RE16 QUIRING PRIOR APPROVAL.—In the case of a 

17 notice under subparagraph (B)(i) that includes 

18 a difference that would, under section 

19 506A(d)(3)(B)(ii), not require the approval of a 

20 supplemental application before the difference 

21 could be made to the U.S. label drug the fol22 lowing shall occur: 

23 ‘‘(i) During the period in which the 

24 notice is being reviewed by the Secretary, 

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1 port the qualifying drug involved continues 

2 in effect. 

3 ‘‘(ii) If the Secretary determines that 

4 such a supplemental application regarding 

5 the U.S. label drug would not be approved, 

6 the Secretary shall— 

7 ‘‘(I) order that the importation of 

8 the qualifying drug involved from the 

9 permitted country cease; 

10 ‘‘(II) notify the permitted coun11 try that approved the qualifying drug 

12 for commercial distribution of the de13 termination; and 

14 ‘‘(III) promptly notify registered 

15 exporters, registered importers, the 

16 Federal Trade Commission, and the 

17 State attorneys general of the deter18 mination. 

19 ‘‘(iii) If the Secretary determines that 

20 such a supplemental application regarding 

21 the U.S. label drug would be approved, the 

22 difference shall be considered to be a vari23 ation provided for in the approved applica24 tion for the U.S. label drug. 


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1 ‘‘(E) NOTICE; DRUG DIFFERENCE NOT RE2 QUIRING APPROVAL; NO DIFFERENCE.—In the 

3 case of a notice under subparagraph (B)(i) that 

4 includes a difference for which, under section 

5 506A(d)(1)(A), a supplemental application 

6 would not be required for the difference to be 

7 made to the U.S. label drug, or that States that 

8 there is no difference, the Secretary— 

9 ‘‘(i) shall consider such difference to 

10 be a variation provided for in the approved 

11 application for the U.S. label drug; 

12 ‘‘(ii) may not order that the importa13 tion of the qualifying drug involved cease; 

14 and 

15 ‘‘(iii) shall promptly notify registered 

16 exporters and registered importers. 

17 ‘‘(F) DIFFERENCES IN ACTIVE INGRE18 DIENT, ROUTE OF ADMINISTRATION, DOSAGE

19 FORM, OR STRENGTH.— 

20 ‘‘(i) IN GENERAL.—A person who 

21 manufactures a drug approved under sec22 tion 505(b) shall submit an application 

23 under section 505(b) for approval of an24 other drug that is manufactured for dis25 tribution in a permitted country by or for 


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1 the person that manufactures the drug ap2 proved under section 505(b) if— 

3 ‘‘(I) there is no qualifying drug 

4 in commercial distribution in per5 mitted countries whose combined pop6 ulation represents at least 50 percent 

7 of the total population of all permitted 

8 countries with the same active ingre9 dient or ingredients, route of adminis10 tration, dosage form, and strength as 

11 the drug approved under section 

12 505(b); and 

13 ‘‘(II) each active ingredient of 

14 the other drug is related to an active 

15 ingredient of the drug approved under 

16 section 505(b), as defined in clause 

17 (v). 

18 ‘‘(ii) APPLICATION UNDER SECTION

19 505(b).—The application under section 

20 505(b) required under clause (i) shall— 

21 ‘‘(I) request approval of the other 

22 drug for the indication or indications 

23 for which the drug approved under 

24 section 505(b) is labeled; 


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1 ‘‘(II) include the information that 

2 the person submitted to the govern3 ment of the permitted country for 

4 purposes of obtaining approval for 

5 commercial distribution of the other 

6 drug in that country, which if in a 

7 language other than English, shall be 

8 accompanied by an English trans9 lation verified to be complete and ac10 curate, with the name, address, and a 

11 brief statement of the qualifications of 

12 the person that made the translation; 

13 ‘‘(III) include a right of reference 

14 to the application for the drug ap15 proved under section 505(b); and 

16 ‘‘(IV) include such additional in17 formation as the Secretary may re18 quire. 

19 ‘‘(iii) TIMING OF SUBMISSION OF AP20 PLICATION.—An application under section 

21 505(b) required under clause (i) shall be 

22 submitted to the Secretary not later than 

23 the day on which the information referred 

24 to in clause (ii)(II) is submitted to the gov25 ernment of the permitted country. 


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1 ‘‘(iv) NOTICE OF DECISION ON APPLI2 CATION.—The Secretary shall promptly no3 tify registered exporters, registered import4 ers, the Federal Trade Commission, and 

5 the State attorneys general of a determina6 tion to approve or to disapprove an appli7 cation under section 505(b) required under 

8 clause (i). 

9 ‘‘(v) RELATED ACTIVE INGREDI10 ENTS.—For purposes of clause (i)(II), 2 

11 active ingredients are related if they are— 

12 ‘‘(I) the same; or 

13 ‘‘(II) different salts, esters, or 

14 complexes of the same moiety. 

15 ‘‘(3) SECTION 502; LABELING.— 

16 ‘‘(A) IMPORTATION BY REGISTERED IM17 PORTER.— 

18 ‘‘(i) IN GENERAL.—In the case of a 

19 qualifying drug that is imported or offered 

20 for import by a registered importer, such 

21 drug shall be considered to be in compli22 ance with section 502 and the labeling re23 quirements under the approved application 

24 for the U.S. label drug if the qualifying 

25 drug bears— 


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1 ‘‘(I) a copy of the labeling ap2 proved for the U.S. label drug under 

3 section 505, without regard to wheth4 er the copy bears any trademark in5 volved; 

6 ‘‘(II) the name of the manufac7 turer and location of the manufac8 turer; 

9 ‘‘(III) the lot number assigned by 

10 the manufacturer; 

11 ‘‘(IV) the name, location, and 

12 registration number of the importer; 

13 and 

14 ‘‘(V) the National Drug Code 

15 number assigned to the qualifying 

16 drug by the Secretary. 

17 ‘‘(ii) REQUEST FOR COPY OF THE LA18 BELING.—The Secretary shall provide such 

19 copy to the registered importer involved, 

20 upon request of the importer. 

21 ‘‘(iii) REQUESTED LABELING.—The 

22 labeling provided by the Secretary under 

23 clause (ii) shall— 

24 ‘‘(I) include the established 

25 name, as defined in section 502(e)(3), 


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1 for each active ingredient in the quali2 fying drug; 

3 ‘‘(II) not include the proprietary 

4 name of the U.S. label drug or any 

5 active ingredient thereof; 

6 ‘‘(III) if required under para7 graph (2)(B)(vi)(III), a prominent ad8 visory that the qualifying drug is safe 

9 and effective but not bioequivalent to 

10 the U.S. label drug; and 

11 ‘‘(IV) if the inactive ingredients 

12 of the qualifying drug are different 

13 from the inactive ingredients for the 

14 U.S. label drug, include— 

15 ‘‘(aa) a prominent notice 

16 that the ingredients of the quali17 fying drug differ from the ingre18 dients of the U.S. label drug and 

19 that the qualifying drug must be 

20 dispensed with an advisory to 

21 people with allergies about this 

22 difference and a list of ingredi23 ents; and 

24 ‘‘(bb) a list of the ingredi25 ents of the qualifying drug as 


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1 would be required under section 

2 502(e). 

3 ‘‘(B) IMPORTATION BY INDIVIDUAL.— 

4 ‘‘(i) IN GENERAL.—In the case of a 

5 qualifying drug that is imported or offered 

6 for import by a registered exporter to an 

7 individual, such drug shall be considered to 

8 be in compliance with section 502 and the 

9 labeling requirements under the approved 

10 application for the U.S. label drug if the 

11 packaging and labeling of the qualifying 

12 drug complies with all applicable regula13 tions promulgated under sections 3 and 4 

14 of the Poison Prevention Packaging Act of 

15 1970 (15 U.S.C. 1471 et seq.) and the la16 beling of the qualifying drug includes— 

17 ‘‘(I) directions for use by the 

18 consumer; 

19 ‘‘(II) the lot number assigned by 

20 the manufacturer; 

21 ‘‘(III) the name and registration 

22 number of the exporter; 

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1 tive but not bioequivalent to the U.S. 

2 label drug; 

3 ‘‘(V) if the inactive ingredients of 

4 the drug are different from the inac5 tive ingredients for the U.S. label 

6 drug— 

7 ‘‘(aa) a prominent advisory 

8 that persons with an allergy 

9 should check the ingredient list 

10 of the drug because the ingredi11 ents of the drug differ from the 

12 ingredients of the U.S. label 

13 drug; and 

14 ‘‘(bb) a list of the ingredi15 ents of the drug as would be re16 quired under section 502(e); and 

17 ‘‘(VI) a copy of any special label18 ing that would be required by the Sec19 retary had the U.S. label drug been 

20 dispensed by a pharmacist in the 

21 United States, without regard to 

22 whether the special labeling bears any 

23 trademark involved. 

24 ‘‘(ii) PACKAGING.—A qualifying drug 

25 offered for import to an individual by an 


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1 exporter under this section that is pack2 aged in a unit-of-use container (as those 

3 items are defined in the United States 

4 Pharmacopeia and National Formulary) 

5 shall not be repackaged, provided that— 

6 ‘‘(I) the packaging complies with 

7 all applicable regulations under sec8 tions 3 and 4 of the Poison Preven9 tion Packaging Act of 1970 (15 

10 U.S.C. 1471 et seq.); or 

11 ‘‘(II) the consumer consents to 

12 waive the requirements of such Act, 

13 after being informed that the pack14 aging does not comply with such Act 

15 and that the exporter will provide the 

16 drug in packaging that is compliant at 

17 no additional cost. 

18 ‘‘(iii) REQUEST FOR COPY OF SPECIAL

19 LABELING AND INGREDIENT LIST.—The 

20 Secretary shall provide to the registered 

21 exporter involved a copy of the special la22 beling, the advisory, and the ingredient list 

23 described under clause (i), upon request of 

24 the exporter. 


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1 ‘‘(iv) REQUESTED LABELING AND IN2 GREDIENT LIST.—The labeling and ingre3 dient list provided by the Secretary under 

4 clause (iii) shall— 

5 ‘‘(I) include the established 

6 name, as defined in section 502(e)(3), 

7 for each active ingredient in the drug; 

8 and 

9 ‘‘(II) not include the proprietary 

10 name of the U.S. label drug or any 

11 active ingredient thereof. 

12 ‘‘(4) SECTION 501; ADULTERATION.—A quali13 fying drug that is imported or offered for import 

14 under subsection (a) shall be considered to be in 

15 compliance with section 501 if the drug is in compli16 ance with subsection (c). 

17 ‘‘(5) STANDARDS FOR REFUSING ADMISSION.— 

18 A drug exported under subsection (a) from a reg19 istered exporter or imported by a registered importer 

20 may be refused admission into the United States if 

21 1 or more of the following applies: 

22 ‘‘(A) The drug is not a qualifying drug. 

23 ‘‘(B) A notice for the drug required under 

24 paragraph (2)(B) has not been submitted to the 

25 Secretary. 


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1 ‘‘(C) The Secretary has ordered that im2 portation of the drug from the permitted coun3 try cease under paragraph (2) (C) or (D). 

4 ‘‘(D) The drug does not comply with para5 graph (3) or (4). 

6 ‘‘(E) The shipping container appears dam7 aged in a way that may affect the strength, 

8 quality, or purity of the drug. 

9 ‘‘(F) The Secretary becomes aware that— 

10 ‘‘(i) the drug may be counterfeit; 

11 ‘‘(ii) the drug may have been pre12 pared, packed, or held under insanitary 

13 conditions; or 

14 ‘‘(iii) the methods used in, or the fa15 cilities or controls used for, the manufac16 turing, processing, packing, or holding of 

17 the drug do not conform to good manufac18 turing practice. 

19 ‘‘(G) The Secretary has obtained an in20 junction under section 302 that prohibits the 

21 distribution of the drug in interstate commerce. 

22 ‘‘(H) The Secretary has under section 

23 505(e) withdrawn approval of the drug. 

24 ‘‘(I) The manufacturer of the drug has in25 stituted a recall of the drug. 


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1 ‘‘(J) If the drug is imported or offered for 

2 import by a registered importer without submis3 sion of a notice in accordance with subsection 

4 (d)(4). 

5 ‘‘(K) If the drug is imported or offered for 

6 import from a registered exporter to an indi7 vidual and 1 or more of the following applies: 

8 ‘‘(i) The shipping container for such 

9 drug does not bear the markings required 

10 under subsection (d)(2). 

11 ‘‘(ii) The markings on the shipping 

12 container appear to be counterfeit. 

13 ‘‘(iii) The shipping container or mark14 ings appear to have been tampered with. 

15 ‘‘(h) EXPORTER LICENSURE IN PERMITTED COUN16 TRY.—A registration condition is that the exporter in17 volved agrees that a qualifying drug will be exported to 

18 an individual only if the Secretary has verified that— 

19 ‘‘(1) the exporter is authorized under the law of 

20 the permitted country in which the exporter is lo21 cated to dispense prescription drugs; and 

22 ‘‘(2) the exporter employs persons that are li23 censed under the law of the permitted country in 

24 which the exporter is located to dispense prescription 

25 drugs in sufficient number to dispense safely the 


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1 drugs exported by the exporter to individuals, and 

2 the exporter assigns to those persons responsibility 

3 for dispensing such drugs to individuals. 

4 ‘‘(i) INDIVIDUALS; CONDITIONS FOR IMPORTA5 TION.— 

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

7 (a)(2)(B), the importation of a qualifying drug by 

8 an individual is in accordance with this subsection if 

9 the following conditions are met: 

10 ‘‘(A) The drug is accompanied by a copy of 

11 a prescription for the drug, which prescrip12 tion— 

13 ‘‘(i) is valid under applicable Federal 

14 and State laws; and 

15 ‘‘(ii) was issued by a practitioner who, 

16 under the law of a State of which the indi17 vidual is a resident, or in which the indi18 vidual receives care from the practitioner 

19 who issues the prescription, is authorized 

20 to administer prescription drugs. 

21 ‘‘(B) The drug is accompanied by a copy 

22 of the documentation that was required under 

23 the law or regulations of the permitted country 

24 in which the exporter is located, as a condition 

25 of dispensing the drug to the individual. 


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1 ‘‘(C) The copies referred to in subpara2 graphs (A)(i) and (B) are marked in a manner 

3 sufficient— 

4 ‘‘(i) to indicate that the prescription, 

5 and the equivalent document in the per6 mitted country in which the exporter is lo7 cated, have been filled; and 

8 ‘‘(ii) to prevent a duplicative filling by 

9 another pharmacist. 

10 ‘‘(D) The individual has provided to the 

11 registered exporter a complete list of all drugs 

12 used by the individual for review by the individ13 uals who dispense the drug. 

14 ‘‘(E) The quantity of the drug does not ex15 ceed a 90-day supply. 

16 ‘‘(F) The drug is not an ineligible subpart 

17 H drug. For purposes of this section, a pre18 scription drug is an ‘ineligible subpart H drug’ 

19 if the drug was approved by the Secretary 

20 under subpart H of part 314 of title 21, Code 

21 of Federal Regulations (relating to accelerated 

22 approval), with restrictions under section 520 of 

23 such part to assure safe use, and the Secretary 

24 has published in the Federal Register a notice 

25 that the Secretary has determined that good 


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1 cause exists to prohibit the drug from being im2 ported pursuant to this subsection. 

3 ‘‘(2) NOTICE REGARDING DRUG REFUSED AD4 MISSION.—If a registered exporter ships a drug to 

5 an individual pursuant to subsection (a)(2)(B) and 

6 the drug is refused admission to the United States, 

7 a written notice shall be sent to the individual and 

8 to the exporter that informs the individual and the 

9 exporter of such refusal and the reason for the re10 fusal. 

11 ‘‘(j) MAINTENANCE OF RECORDS AND SAMPLES.— 

12 ‘‘(1) IN GENERAL.—A registration condition is 

13 that the importer or exporter involved shall— 

14 ‘‘(A) maintain records required under this 

15 section for not less than 2 years; and 

16 ‘‘(B) maintain samples of each lot of a 

17 qualifying drug required under this section for 

18 not more than 2 years. 

19 ‘‘(2) PLACE OF RECORD MAINTENANCE.—The 

20 records described under paragraph (1) shall be 

21 maintained— 

22 ‘‘(A) in the case of an importer, at the 

23 place of business of the importer at which the 

24 importer initially receives the qualifying drug 

25 after importation; or 


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1 ‘‘(B) in the case of an exporter, at the fa2 cility from which the exporter ships the quali3 fying drug to the United States. 

4 ‘‘(k) DRUG RECALLS.— 

5 ‘‘(1) MANUFACTURERS.—A person that manu6 factures a qualifying drug imported from a per7 mitted country under this section shall promptly in8 form the Secretary— 

9 ‘‘(A) if the drug is recalled or withdrawn 

10 from the market in a permitted country; 

11 ‘‘(B) how the drug may be identified, in12 cluding lot number; and 

13 ‘‘(C) the reason for the recall or with14 drawal. 

15 ‘‘(2) SECRETARY.—With respect to each per16 mitted country, the Secretary shall— 

17 ‘‘(A) enter into an agreement with the gov18 ernment of the country to receive information 

19 about recalls and withdrawals of qualifying 

20 drugs in the country; or 

21 ‘‘(B) monitor recalls and withdrawals of 

22 qualifying drugs in the country using any infor23 mation that is available to the public in any 

24 media. 


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1 ‘‘(3) NOTICE.—The Secretary may notify, as 

2 appropriate, registered exporters, registered import3 ers, wholesalers, pharmacies, or the public of a recall 

4 or withdrawal of a qualifying drug in a permitted 

5 country. 

6 ‘‘(l) DRUG LABELING AND PACKAGING.— 

7 ‘‘(1) IN GENERAL.—When a qualifying drug 

8 that is imported into the United States by an im9 porter under subsection (a) is dispensed by a phar10 macist to an individual, the pharmacist shall provide 

11 that the packaging and labeling of the drug complies 

12 with all applicable regulations promulgated under 

13 sections 3 and 4 of the Poison Prevention Packaging 

14 Act of 1970 (15 U.S.C. 1471 et seq.) and shall in15 clude with any other labeling provided to the indi16 vidual the following: 

17 ‘‘(A) The lot number assigned by the man18 ufacturer. 

19 ‘‘(B) The name and registration number of 

20 the importer. 

21 ‘‘(C) If required under paragraph 

22 (2)(B)(vi)(III) of subsection (g), a prominent 

23 advisory that the drug is safe and effective but 

24 not bioequivalent to the U.S. label drug. 


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1 ‘‘(D) If the inactive ingredients of the drug 

2 are different from the inactive ingredients for 

3 the U.S. label drug— 

4 ‘‘(i) a prominent advisory that persons 

5 with allergies should check the ingredient 

6 list of the drug because the ingredients of 

7 the drug differ from the ingredients of the 

8 U.S. label drug; and 

9 ‘‘(ii) a list of the ingredients of the 

10 drug as would be required under section 

11 502(e). 

12 ‘‘(2) PACKAGING.—A qualifying drug that is 

13 packaged in a unit-of-use container (as those terms 

14 are defined in the United States Pharmacopeia and 

15 National Formulary) shall not be repackaged, pro16 vided that— 

17 ‘‘(A) the packaging complies with all appli18 cable regulations under sections 3 and 4 of the 

19 Poison Prevention Packaging Act of 1970 (15 

20 U.S.C. 1471 et seq.); or 

21 ‘‘(B) the consumer consents to waive the 

22 requirements of such Act, after being informed 

23 that the packaging does not comply with such 

24 Act and that the pharmacist will provide the 


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1 drug in packaging that is compliant at no addi2 tional cost. 

3 ‘‘(m) CHARITABLE CONTRIBUTIONS.—Notwith4 standing any other provision of this section, this section 

5 does not authorize the importation into the United States 

6 of a qualifying drug donated or otherwise supplied for free 

7 or at nominal cost by the manufacturer of the drug to 

8 a charitable or humanitarian organization, including the 

9 United Nations and affiliates, or to a government of a for10 eign country. 

11 ‘‘(n) UNFAIR AND DISCRIMINATORY ACTS AND PRAC12 TICES.— 

13 ‘‘(1) IN GENERAL.—It is unlawful for a manu14 facturer, directly or indirectly (including by being a 

15 party to a licensing agreement or other agreement), 

16 to— 

17 ‘‘(A) discriminate by charging a higher 

18 price for a prescription drug sold to a registered 

19 exporter or other person in a permitted country 

20 that exports a qualifying drug to the United 

21 States under this section than the price that is 

22 charged, inclusive of rebates or other incentives 

23 to the permitted country or other person, to an24 other person that is in the same country and 


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1 that does not export a qualifying drug into the 

2 United States under this section; 

3 ‘‘(B) discriminate by charging a higher 

4 price for a prescription drug sold to a registered 

5 importer or other person that distributes, sells, 

6 or uses a qualifying drug imported into the 

7 United States under this section than the price 

8 that is charged to another person in the United 

9 States that does not import a qualifying drug 

10 under this section, or that does not distribute, 

11 sell, or use such a drug; 

12 ‘‘(C) discriminate by denying, restricting, 

13 or delaying supplies of a prescription drug to a 

14 registered exporter or other person in a per15 mitted country that exports a qualifying drug to 

16 the United States under this section or to a 

17 registered importer or other person that distrib18 utes, sells, or uses a qualifying drug imported 

19 into the United States under this section; 

20 ‘‘(D) discriminate by publicly, privately, or 

21 otherwise refusing to do business with a reg22 istered exporter or other person in a permitted 

23 country that exports a qualifying drug to the 

24 United States under this section or with a reg25 istered importer or other person that distribVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00188 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 utes, sells, or uses a qualifying drug imported 

2 into the United States under this section; 

3 ‘‘(E) knowingly fail to submit a notice 

4 under subsection (g)(2)(B)(i), knowingly fail to 

5 submit such a notice on or before the date spec6 ified in subsection (g)(2)(B)(v) or as otherwise 

7 required under subsection (e) (3), (4), and (5) 

8 of section 4 of the Pharmaceutical Market Ac9 cess and Drug Safety Act of 2009, knowingly 

10 submit such a notice that makes a materially 

11 false, fictitious, or fraudulent statement, or 

12 knowingly fail to provide promptly any informa13 tion requested by the Secretary to review such 

14 a notice; 

15 ‘‘(F) knowingly fail to submit an applica16 tion required under subsection (g)(2)(F), know17 ingly fail to submit such an application on or 

18 before the date specified in subsection 

19 (g)(2)(F)(ii), knowingly submit such an applica20 tion that makes a materially false, fictitious, or 

21 fraudulent statement, or knowingly fail to pro22 vide promptly any information requested by the 

23 Secretary to review such an application; 

24 ‘‘(G) cause there to be a difference (includ25 ing a difference in active ingredient, route of 


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1 administration, dosage form, strength, formula2 tion, manufacturing establishment, manufac3 turing process, or person that manufactures the 

4 drug) between a prescription drug for distribu5 tion in the United States and the drug for dis6 tribution in a permitted country; 

7 ‘‘(H) refuse to allow an inspection author8 ized under this section of an establishment that 

9 manufactures a qualifying drug that is, or will 

10 be, introduced for commercial distribution in a 

11 permitted country; 

12 ‘‘(I) fail to conform to the methods used 

13 in, or the facilities used for, the manufacturing, 

14 processing, packing, or holding of a qualifying 

15 drug that is, or will be, introduced for commer16 cial distribution in a permitted country to good 

17 manufacturing practice under this Act; 

18 ‘‘(J) become a party to a licensing agree19 ment or other agreement related to a qualifying 

20 drug that fails to provide for compliance with 

21 all requirements of this section with respect to 

22 such drug; 

23 ‘‘(K) enter into a contract that restricts, 

24 prohibits, or delays the importation of a quali25 fying drug under this section; 


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1 ‘‘(L) engage in any other action to restrict, 

2 prohibit, or delay the importation of a quali3 fying drug under this section; or 

4 ‘‘(M) engage in any other action that the 

5 Federal Trade Commission determines to dis6 criminate against a person that engages or at7 tempts to engage in the importation of a quali8 fying drug under this section. 

9 ‘‘(2) REFERRAL OF POTENTIAL VIOLATIONS.— 

10 The Secretary shall promptly refer to the Federal 

11 Trade Commission each potential violation of sub12 paragraph (E), (F), (G), (H), or (I) of paragraph 

13 (1) that becomes known to the Secretary. 

14 ‘‘(3) AFFIRMATIVE DEFENSE.— 

15 ‘‘(A) DISCRIMINATION.—It shall be an af16 firmative defense to a charge that a manufac17 turer has discriminated under subparagraph 

18 (A), (B), (C), (D), or (M) of paragraph (1) that 

19 the higher price charged for a prescription drug 

20 sold to a person, the denial, restriction, or delay 

21 of supplies of a prescription drug to a person, 

22 the refusal to do business with a person, or 

23 other discriminatory activity against a person, 

24 is not based, in whole or in part, on— 


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1 ‘‘(i) the person exporting or importing 

2 a qualifying drug into the United States 

3 under this section; or 

4 ‘‘(ii) the person distributing, selling, 

5 or using a qualifying drug imported into 

6 the United States under this section. 

7 ‘‘(B) DRUG DIFFERENCES.—It shall be an 

8 affirmative defense to a charge that a manufac9 turer has caused there to be a difference de10 scribed in subparagraph (G) of paragraph (1) 

11 that— 

12 ‘‘(i) the difference was required by the 

13 country in which the drug is distributed; 

14 ‘‘(ii) the Secretary has determined 

15 that the difference was necessary to im16 prove the safety or effectiveness of the 

17 drug; 

18 ‘‘(iii) the person manufacturing the 

19 drug for distribution in the United States 

20 has given notice to the Secretary under 

21 subsection (g)(2)(B)(i) that the drug for 

22 distribution in the United States is not dif23 ferent from a drug for distribution in per24 mitted countries whose combined popu25 lation represents at least 50 percent of the 


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1 total population of all permitted countries; 

2 or 

3 ‘‘(iv) the difference was not caused, in 

4 whole or in part, for the purpose of re5 stricting importation of the drug into the 

6 United States under this section. 

7 ‘‘(4) EFFECT OF SUBSECTION.— 

8 ‘‘(A) SALES IN OTHER COUNTRIES.—This 

9 subsection applies only to the sale or distribu10 tion of a prescription drug in a country if the 

11 manufacturer of the drug chooses to sell or dis12 tribute the drug in the country. Nothing in this 

13 subsection shall be construed to compel the 

14 manufacturer of a drug to distribute or sell the 

15 drug in a country. 

16 ‘‘(B) DISCOUNTS TO INSURERS, HEALTH

17 PLANS, PHARMACY BENEFIT MANAGERS, AND

18 COVERED ENTITIES.—Nothing in this sub19 section shall be construed to— 

20 ‘‘(i) prevent or restrict a manufac21 turer of a prescription drug from providing 

22 discounts to an insurer, health plan, phar23 macy benefit manager in the United 

24 States, or covered entity in the drug dis25 count program under section 340B of the 


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1 Public Health Service Act (42 U.S.C. 

2 256b) in return for inclusion of the drug 

3 on a formulary; 

4 ‘‘(ii) require that such discounts be 

5 made available to other purchasers of the 

6 prescription drug; or 

7 ‘‘(iii) prevent or restrict any other 

8 measures taken by an insurer, health plan, 

9 or pharmacy benefit manager to encourage 

10 consumption of such prescription drug. 

11 ‘‘(C) CHARITABLE CONTRIBUTIONS.— 

12 Nothing in this subsection shall be construed 

13 to— 

14 ‘‘(i) prevent a manufacturer from do15 nating a prescription drug, or supplying a 

16 prescription drug at nominal cost, to a 

17 charitable or humanitarian organization, 

18 including the United Nations and affili19 ates, or to a government of a foreign coun20 try; or 

21 ‘‘(ii) apply to such donations or sup22 plying of a prescription drug. 

23 ‘‘(5) ENFORCEMENT.— 

24 ‘‘(A) UNFAIR OR DECEPTIVE ACT OR PRAC25 TICE.—A violation of this subsection shall be 


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1 treated as a violation of a rule defining an un2 fair or deceptive act or practice prescribed 

3 under section 18(a)(1)(B) of the Federal Trade 

4 Commission Act (15 U.S.C. 57a(a)(1)(B)). 

5 ‘‘(B) ACTIONS BY THE COMMISSION.—The 

6 Federal Trade Commission— 

7 ‘‘(i) shall enforce this subsection in 

8 the same manner, by the same means, and 

9 with the same jurisdiction, powers, and du10 ties as though all applicable terms and pro11 visions of the Federal Trade Commission 

12 Act (15 U.S.C. 41 et seq.) were incor13 porated into and made a part of this sec14 tion; and 

15 ‘‘(ii) may seek monetary relief three16 fold the damages sustained, in addition to 

17 any other remedy available to the Federal 

18 Trade Commission under the Federal 

19 Trade Commission Act (15 U.S.C. 41 et 

20 seq.). 

21 ‘‘(6) ACTIONS BY STATES.— 

22 ‘‘(A) IN GENERAL.— 

23 ‘‘(i) CIVIL ACTIONS.—In any case in 

24 which the attorney general of a State has 

25 reason to believe that an interest of the 


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1 residents of that State have been adversely 

2 affected by any manufacturer that violates 

3 paragraph (1), the attorney general of a 

4 State may bring a civil action on behalf of 

5 the residents of the State, and persons 

6 doing business in the State, in a district 

7 court of the United States of appropriate 

8 jurisdiction to— 

9 ‘‘(I) enjoin that practice; 

10 ‘‘(II) enforce compliance with 

11 this subsection; 

12 ‘‘(III) obtain damages, restitu13 tion, or other compensation on behalf 

14 of residents of the State and persons 

15 doing business in the State, including 

16 threefold the damages; or 

17 ‘‘(IV) obtain such other relief as 

18 the court may consider to be appro19 priate. 

20 ‘‘(ii) NOTICE.— 

21 ‘‘(I) IN GENERAL.—Before filing 

22 an action under clause (i), the attor23 ney general of the State involved shall 

24 provide to the Federal Trade Commis25 sion— 


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1 ‘‘(aa) written notice of that 

2 action; and 

3 ‘‘(bb) a copy of the com4 plaint for that action. 

5 ‘‘(II) EXEMPTION.—Subclause 

6 (I) shall not apply with respect to the 

7 filing of an action by an attorney gen8 eral of a State under this paragraph, 

9 if the attorney general determines 

10 that it is not feasible to provide the 

11 notice described in that subclause be12 fore filing of the action. In such case, 

13 the attorney general of a State shall 

14 provide notice and a copy of the com15 plaint to the Federal Trade Commis16 sion at the same time as the attorney 

17 general files the action. 

18 ‘‘(B) INTERVENTION.— 

19 ‘‘(i) IN GENERAL.—On receiving no20 tice under subparagraph (A)(ii), the Fed21 eral Trade Commission shall have the right 

22 to intervene in the action that is the sub23 ject of the notice. 

24 ‘‘(ii) EFFECT OF INTERVENTION.—If 

25 the Federal Trade Commission intervenes 


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1 in an action under subparagraph (A), it 

2 shall have the right— 

3 ‘‘(I) to be heard with respect to 

4 any matter that arises in that action; 

5 and 

6 ‘‘(II) to file a petition for appeal. 

7 ‘‘(C) CONSTRUCTION.—For purposes of 

8 bringing any civil action under subparagraph 

9 (A), nothing in this subsection shall be con10 strued to prevent an attorney general of a State 

11 from exercising the powers conferred on the at12 torney general by the laws of that State to— 

13 ‘‘(i) conduct investigations; 

14 ‘‘(ii) administer oaths or affirmations; 

15 or 

16 ‘‘(iii) compel the attendance of wit17 nesses or the production of documentary 

18 and other evidence. 

19 ‘‘(D) ACTIONS BY THE COMMISSION.—In 

20 any case in which an action is instituted by or 

21 on behalf of the Federal Trade Commission for 

22 a violation of paragraph (1), a State may not, 

23 during the pendency of that action, institute an 

24 action under subparagraph (A) for the same 


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1 violation against any defendant named in the 

2 complaint in that action. 

3 ‘‘(E) VENUE.—Any action brought under 

4 subparagraph (A) may be brought in the dis5 trict court of the United States that meets ap6 plicable requirements relating to venue under 

7 section 1391 of title 28, United States Code. 

8 ‘‘(F) SERVICE OF PROCESS.—In an action 

9 brought under subparagraph (A), process may 

10 be served in any district in which the defend11 ant— 

12 ‘‘(i) is an inhabitant; or 

13 ‘‘(ii) may be found. 

14 ‘‘(G) MEASUREMENT OF DAMAGES.—In 

15 any action under this paragraph to enforce a 

16 cause of action under this subsection in which 

17 there has been a determination that a defend18 ant has violated a provision of this subsection, 

19 damages may be proved and assessed in the ag20 gregate by statistical or sampling methods, by 

21 the computation of illegal overcharges or by 

22 such other reasonable system of estimating ag23 gregate damages as the court in its discretion 

24 may permit without the necessity of separately 

25 proving the individual claim of, or amount of 


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1 damage to, persons on whose behalf the suit 

2 was brought. 

3 ‘‘(H) EXCLUSION ON DUPLICATIVE RE4 LIEF.—The district court shall exclude from the 

5 amount of monetary relief awarded in an action 

6 under this paragraph brought by the attorney 

7 general of a State any amount of monetary re8 lief which duplicates amounts which have been 

9 awarded for the same injury. 

10 ‘‘(7) EFFECT ON ANTITRUST LAWS.—Nothing 

11 in this subsection shall be construed to modify, im12 pair, or supersede the operation of the antitrust 

13 laws. For the purpose of this subsection, the term 

14 ‘antitrust laws’ has the meaning given it in the first 

15 section of the Clayton Act, except that it includes 

16 section 5 of the Federal Trade Commission Act to 

17 the extent that such section 5 applies to unfair 

18 methods of competition. 

19 ‘‘(8) MANUFACTURER.—In this subsection, the 

20 term ‘manufacturer’ means any entity, including any 

21 affiliate or licensee of that entity, that is engaged 

22 in— 

23 ‘‘(A) the production, preparation, propaga24 tion, compounding, conversion, or processing of 

25 a prescription drug, either directly or indirectly 


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1 by extraction from substances of natural origin, 

2 or independently by means of chemical syn3 thesis, or by a combination of extraction and 

4 chemical synthesis; or 

5 ‘‘(B) the packaging, repackaging, labeling, 

6 relabeling, or distribution of a prescription 

7 drug.’’. 

8 (2) PROHIBITED ACTS.—The Federal Food, 

9 Drug, and Cosmetic Act is amended— 

10 (A) in section 301 (21 U.S.C. 331), by 

11 striking paragraph (aa) and inserting the fol12 lowing: 

13 ‘‘(aa)(1) The sale or trade by a pharmacist, or by 

14 a business organization of which the pharmacist is a part, 

15 of a qualifying drug that under section 804(a)(2)(A) was 

16 imported by the pharmacist, other than— 

17 ‘‘(A) a sale at retail made pursuant to dis18 pensing the drug to a customer of the pharmacist or 

19 organization; or 

20 ‘‘(B) a sale or trade of the drug to a pharmacy 

21 or a wholesaler registered to import drugs under sec22 tion 804. 

23 ‘‘(2) The sale or trade by an individual of a qualifying 

24 drug that under section 804(a)(2)(B) was imported by the 

25 individual. 


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1 ‘‘(3) The making of a materially false, fictitious, or 

2 fraudulent statement or representation, or a material 

3 omission, in a notice under clause (i) of section 

4 804(g)(2)(B) or in an application required under section 

5 804(g)(2)(F), or the failure to submit such a notice or 

6 application. 

7 ‘‘(4) The importation of a drug in violation of a reg8 istration condition or other requirement under section 

9 804, the falsification of any record required to be main10 tained, or provided to the Secretary, under such section, 

11 or the violation of any registration condition or other re12 quirement under such section.’’; and 

13 (B) in section 303(a) (21 U.S.C. 333(a)), 

14 by striking paragraph (6) and inserting the fol15 lowing: 

16 ‘‘(6) Notwithstanding subsection (a), any person that 

17 knowingly violates section 301(i) (2) or (3) or section 

18 301(aa)(4) shall be imprisoned not more than 10 years, 

19 or fined in accordance with title 18, United States Code, 

20 or both.’’. 

21 (3) AMENDMENT OF CERTAIN PROVISIONS.— 

22 (A) IN GENERAL.—Section 801 of the Fed23 eral Food, Drug, and Cosmetic Act (21 U.S.C. 

24 381) is amended by striking subsection (g) and 

25 inserting the following: 


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1 ‘‘(g) With respect to a prescription drug that is im2 ported or offered for import into the United States by an 

3 individual who is not in the business of such importation, 

4 that is not shipped by a registered exporter under section 

5 804, and that is refused admission under subsection (a), 

6 the Secretary shall notify the individual that— 

7 ‘‘(1) the drug has been refused admission be8 cause the drug was not a lawful import under sec9 tion 804; 

10 ‘‘(2) the drug is not otherwise subject to a 

11 waiver of the requirements of subsection (a); 

12 ‘‘(3) the individual may under section 804 law13 fully import certain prescription drugs from export14 ers registered with the Secretary under section 804; 

15 and 

16 ‘‘(4) the individual can find information about 

17 such importation, including a list of registered ex18 porters, on the Internet website of the Food and 

19 Drug Administration or through a toll-free telephone 

20 number required under section 804.’’. 

21 (B) ESTABLISHMENT REGISTRATION.— 

22 Section 510(i) of the Federal Food, Drug, and 

23 Cosmetic Act (21 U.S.C. 360(i)) is amended in 

24 paragraph (1) by inserting after ‘‘import into 

25 the United States’’ the following: ‘‘, including a 


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1 drug that is, or may be, imported or offered for 

2 import into the United States under section 

3 804,’’. 

4 (C) EFFECTIVE DATE.—The amendments 

5 made by this subsection shall take effect on the 

6 date that is 90 days after the date of enactment 

7 of this Act. 

8 (4) EXHAUSTION.— 

9 (A) IN GENERAL.—Section 271 of title 35, 

10 United States Code, is amended— 

11 (i) by redesignating subsections (h) 

12 and (i) as (i) and (j), respectively; and 

13 (ii) by inserting after subsection (g) 

14 the following: 

15 ‘‘(h) It shall not be an act of infringement to use, 

16 offer to sell, or sell within the United States or to import 

17 into the United States any patented invention under sec18 tion 804 of the Federal Food, Drug, and Cosmetic Act 

19 that was first sold abroad by or under authority of the 

20 owner or licensee of such patent.’’. 

21 (B) RULE OF CONSTRUCTION.—Nothing in 

22 the amendment made by subparagraph (A) 

23 shall be construed to affect the ability of a pat24 ent owner or licensee to enforce their patent, 

25 subject to such amendment. 


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1 (5) EFFECT OF SECTION 804.— 

2 (A) IN GENERAL.—Section 804 of the Fed3 eral Food, Drug, and Cosmetic Act, as added 

4 by subsection (a), shall permit the importation 

5 of qualifying drugs (as defined in such section 

6 804) into the United States without regard to 

7 the status of the issuance of implementing reg8 ulations— 

9 (i) from exporters registered under 

10 such section 804 on the date that is 90 

11 days after the date of enactment of this 

12 Act; and 

13 (ii) from permitted countries, as de14 fined in such section 804, by importers 

15 registered under such section 804 on the 

16 date that is 1 year after the date of enact17 ment of this Act. 

18 (B) REVIEW OF REGISTRATION BY CER19 TAIN EXPORTERS.— 

20 (i) REVIEW PRIORITY.—In the review 

21 of registrations submitted under subsection 

22 (b) of such section 804, registrations sub23 mitted by entities in Canada that are sig24 nificant exporters of prescription drugs to 

25 individuals in the United States as of the 


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1 date of enactment of this Act will have pri2 ority during the 90-day period that begins 

3 on such date of enactment. 

4 (ii) PERIOD FOR REVIEW.—During 

5 such 90-day period, the reference in sub6 section (b)(2)(A) of such section 804 to 90 

7 days (relating to approval or disapproval of 

8 registrations) is, as applied to such enti9 ties, deemed to be 30 days. 

10 (iii) LIMITATION.—That an exporter 

11 in Canada exports, or has exported, pre12 scription drugs to individuals in the United 

13 States on or before the date that is 90 

14 days after the date of enactment of this 

15 Act shall not serve as a basis, in whole or 

16 in part, for disapproving a registration 

17 under such section 804 from the exporter. 

18 (iv) FIRST YEAR LIMIT ON NUMBER

19 OF EXPORTERS.—During the 1-year period 

20 beginning on the date of enactment of this 

21 Act, the Secretary of Health and Human 

22 Services (referred to in this section as the 

23 ‘‘Secretary’’) may limit the number of reg24 istered exporters under such section 804 to 

25 not less than 50, so long as the Secretary 


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1 gives priority to those exporters with dem2 onstrated ability to process a high volume 

3 of shipments of drugs to individuals in the 

4 United States. 

5 (v) SECOND YEAR LIMIT ON NUMBER

6 OF EXPORTERS.—During the 1-year period 

7 beginning on the date that is 1 year after 

8 the date of enactment of this Act, the Sec9 retary may limit the number of registered 

10 exporters under such section 804 to not 

11 less than 100, so long as the Secretary 

12 gives priority to those exporters with dem13 onstrated ability to process a high volume 

14 of shipments of drugs to individuals in the 

15 United States. 

16 (vi) FURTHER LIMIT ON NUMBER OF

17 EXPORTERS.—During any 1-year period 

18 beginning on a date that is 2 or more 

19 years after the date of enactment of this 

20 Act, the Secretary may limit the number of 

21 registered exporters under such section 

22 804 to not less than 25 more than the 

23 number of such exporters during the pre24 vious 1-year period, so long as the Sec25 retary gives priority to those exporters 


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1 with demonstrated ability to process a high 

2 volume of shipments of drugs to individ3 uals in the United States. 

4 (C) LIMITS ON NUMBER OF IMPORTERS.— 

5 (i) FIRST YEAR LIMIT ON NUMBER OF

6 IMPORTERS.—During the 1-year period be7 ginning on the date that is 1 year after the 

8 date of enactment of this Act, the Sec9 retary may limit the number of registered 

10 importers under such section 804 to not 

11 less than 100 (of which at least a signifi12 cant number shall be groups of phar13 macies, to the extent feasible given the ap14 plications submitted by such groups), so 

15 long as the Secretary gives priority to 

16 those importers with demonstrated ability 

17 to process a high volume of shipments of 

18 drugs imported into the United States. 

19 (ii) SECOND YEAR LIMIT ON NUMBER

20 OF IMPORTERS.—During the 1-year period 

21 beginning on the date that is 2 years after 

22 the date of enactment of this Act, the Sec23 retary may limit the number of registered 

24 importers under such section 804 to not 

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•S 1808 IS

1 cant number shall be groups of phar2 macies, to the extent feasible given the ap3 plications submitted by such groups), so 

4 long as the Secretary gives priority to 

5 those importers with demonstrated ability 

6 to process a high volume of shipments of 

7 drugs into the United States. 

8 (iii) FURTHER LIMIT ON NUMBER OF

9 IMPORTERS.—During any 1-year period 

10 beginning on a date that is 3 or more 

11 years after the date of enactment of this 

12 Act, the Secretary may limit the number of 

13 registered importers under such section 

14 804 to not less than 50 more (of which at 

15 least a significant number shall be groups 

16 of pharmacies, to the extent feasible given 

17 the applications submitted by such groups) 

18 than the number of such importers during 

19 the previous 1-year period, so long as the 

20 Secretary gives priority to those importers 

21 with demonstrated ability to process a high 

22 volume of shipments of drugs to the 

23 United States. 

24 (D) NOTICES FOR DRUGS FOR IMPORT

25 FROM CANADA.—The notice with respect to a 


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•S 1808 IS

1 qualifying drug introduced for commercial dis2 tribution in Canada as of the date of enactment 

3 of this Act that is required under subsection 

4 (g)(2)(B)(i) of such section 804 shall be sub5 mitted to the Secretary not later than 30 days 

6 after the date of enactment of this Act if— 

7 (i) the U.S. label drug (as defined in 

8 such section 804) for the qualifying drug is 

9 1 of the 100 prescription drugs with the 

10 highest dollar volume of sales in the 

11 United States based on the 12 calendar 

12 month period most recently completed be13 fore the date of enactment of this Act; or 

14 (ii) the notice is a notice under sub15 section (g)(2)(B)(i)(II) of such section 

16 804. 

17 (E) NOTICE FOR DRUGS FOR IMPORT

18 FROM OTHER COUNTRIES.—The notice with re19 spect to a qualifying drug introduced for com20 mercial distribution in a permitted country 

21 other than Canada as of the date of enactment 

22 of this Act that is required under subsection 

23 (g)(2)(B)(i) of such section 804 shall be sub24 mitted to the Secretary not later than 180 days 

25 after the date of enactment of this Act if— 


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1 (i) the U.S. label drug for the quali2 fying drug is 1 of the 100 prescription 

3 drugs with the highest dollar volume of 

4 sales in the United States based on the 12 

5 calendar month period that is first com6 pleted on the date that is 120 days after 

7 the date of enactment of this Act; or 

8 (ii) the notice is a notice under sub9 section (g)(2)(B)(i)(II) of such section 

10 804. 

11 (F) NOTICE FOR OTHER DRUGS FOR IM12 PORT.— 

13 (i) GUIDANCE ON SUBMISSION

14 DATES.—The Secretary shall by guidance 

15 establish a series of submission dates for 

16 the notices under subsection (g)(2)(B)(i) of 

17 such section 804 with respect to qualifying 

18 drugs introduced for commercial distribu19 tion as of the date of enactment of this Act 

20 and that are not required to be submitted 

21 under paragraph (4) or (5). 

22 (ii) CONSISTENT AND EFFICIENT USE

23 OF RESOURCES.—The Secretary shall es24 tablish the dates described under subpara25 graph (A) so that such notices described 


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1 under subparagraph (A) are submitted and 

2 reviewed at a rate that allows consistent 

3 and efficient use of the resources and staff 

4 available to the Secretary for such reviews. 

5 The Secretary may condition the require6 ment to submit such a notice, and the re7 view of such a notice, on the submission by 

8 a registered exporter or a registered im9 porter to the Secretary of a notice that 

10 such exporter or importer intends to im11 port such qualifying drug to the United 

12 States under such section 804. 

13 (iii) PRIORITY FOR DRUGS WITH

14 HIGHER SALES.—The Secretary shall es15 tablish the dates described under subpara16 graph (A) so that the Secretary reviews 

17 the notices described under such subpara18 graph with respect to qualifying drugs with 

19 higher dollar volume of sales in the United 

20 States before the notices with respect to 

21 drugs with lower sales in the United 

22 States. 

23 (G) NOTICES FOR DRUGS APPROVED

24 AFTER EFFECTIVE DATE.—The notice required 

25 under subsection (g)(2)(B)(i) of such section 


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1 804 for a qualifying drug first introduced for 

2 commercial distribution in a permitted country 

3 (as defined in such section 804) after the date 

4 of enactment of this Act shall be submitted to 

5 and reviewed by the Secretary as provided 

6 under subsection (g)(2)(B) of such section 804, 

7 without regard to paragraph (4), (5), or (6). 

8 (H) REPORT.—Beginning with the first 

9 full fiscal year after the date of enactment of 

10 this Act, not later than 90 days after the end 

11 of each fiscal year during which the Secretary 

12 reviews a notice referred to in subparagraph 

13 (D), (E), or (F), the Secretary shall submit a 

14 report to Congress concerning the progress of 

15 the Food and Drug Administration in reviewing 

16 the notices referred to in such subparagraphs. 

17 (I) USER FEES.— 

18 (i) EXPORTERS.—When establishing 

19 an aggregate total of fees to be collected 

20 from exporters under subsection (f)(2) of 

21 such section 804, the Secretary shall, 

22 under subsection (f)(3)(C)(i) of such sec23 tion 804, estimate the total price of drugs 

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1 istered exporters during the first fiscal 

2 year in which this Act takes effect to be an 

3 amount equal to the amount which bears 

4 the same ratio to $1,000,000,000 as the 

5 number of days in such fiscal year during 

6 which this Act is effective bears to 365. 

7 (ii) IMPORTERS.—When establishing 

8 an aggregate total of fees to be collected 

9 from importers under subsection (e)(2) of 

10 such section 804, the Secretary shall, 

11 under subsection (e)(3)(C)(i) of such sec12 tion 804, estimate the total price of drugs 

13 imported under subsection (a) of such sec14 tion 804 into the United States by reg15 istered importers during— 

16 (I) the first fiscal year in which 

17 this Act takes effect to be an amount 

18 equal to the amount which bears the 

19 same ratio to $1,000,000,000 as the 

20 number of days in such fiscal year 

21 during which this Act is effective 

22 bears to 365; and 

23 (II) the second fiscal year in 

24 which this Act is in effect to be 

25 $3,000,000,000. 


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1 (iii) SECOND YEAR ADJUSTMENT.— 

2 (I) REPORTS.—Not later than 

3 February 20 of the second fiscal year 

4 in which this Act is in effect, reg5 istered importers shall report to the 

6 Secretary the total price and the total 

7 volume of drugs imported to the 

8 United States by the importer during 

9 the 4-month period from October 1 

10 through January 31 of such fiscal 

11 year. 

12 (II) REESTIMATE.—Notwith13 standing subsection (e)(3)(C)(ii) of 

14 such section 804 or subparagraph 

15 (B), the Secretary shall reestimate the 

16 total price of qualifying drugs im17 ported under subsection (a) of such 

18 section 804 into the United States by 

19 registered importers during the second 

20 fiscal year in which this Act is in ef21 fect. Such reestimate shall be equal 

22 to— 

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1 porter as reported under clause 

2 (i); multiplied by 

3 (bb) 3. 

4 (III) ADJUSTMENT.—The Sec5 retary shall adjust the fee due on 

6 April 1 of the second fiscal year in 

7 which this Act is in effect, from each 

8 importer so that the aggregate total of 

9 fees collected under subsection (e)(2) 

10 for such fiscal year does not exceed 

11 the total price of qualifying drugs im12 ported under subsection (a) of such 

13 section 804 into the United States by 

14 registered importers during such fiscal 

15 year as reestimated under clause (ii). 

16 (iv) FAILURE TO PAY FEES.—Not17 withstanding any other provision of this 

18 subsection, the Secretary may prohibit a 

19 registered importer or exporter that is re20 quired to pay user fees under subsection 

21 (e) or (f) of such section 804 and that fails 

22 to pay such fees within 30 days after the 

23 date on which it is due, from importing or 

24 offering for importation a qualifying drug 


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1 under such section 804 until such fee is 

2 paid. 

3 (v) ANNUAL REPORT.— 

4 (I) FOOD AND DRUG ADMINIS5 TRATION.—Not later than 180 days 

6 after the end of each fiscal year dur7 ing which fees are collected under 

8 subsection (e), (f), or (g)(2)(B)(iv) of 

9 such section 804, the Secretary shall 

10 prepare and submit to the House of 

11 Representatives and the Senate a re12 port on the implementation of the au13 thority for such fees during such fis14 cal year and the use, by the Food and 

15 Drug Administration, of the fees col16 lected for the fiscal year for which the 

17 report is made and credited to the 

18 Food and Drug Administration. 

19 (II) CUSTOMS AND BORDER CON20 TROL.—Not later than 180 days after 

21 the end of each fiscal year during 

22 which fees are collected under sub23 section (e) or (f) of such section 804, 

24 the Secretary of Homeland Security, 

25 in consultation with the Secretary of 


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1 the Treasury, shall prepare and sub2 mit to the House of Representatives 

3 and the Senate a report on the use, 

4 by the Bureau of Customs and Border 

5 Protection, of the fees, if any, trans6 ferred by the Secretary to the Bureau 

7 of Customs and Border Protection for 

8 the fiscal year for which the report is 

9 made. 

10 (J) SPECIAL RULE REGARDING IMPORTA11 TION BY INDIVIDUALS.— 

12 (i) IN GENERAL.—Notwithstanding 

13 any provision of this Act (or an amend14 ment made by this Act), the Secretary 

15 shall expedite the designation of any addi16 tional countries from which an individual 

17 may import a qualifying drug into the 

18 United States under such section 804 if 

19 any action implemented by the Government 

20 of Canada has the effect of limiting or pro21 hibiting the importation of qualifying 

22 drugs into the United States from Canada. 

23 (ii) TIMING AND CRITERIA.—The Sec24 retary shall designate such additional 

25 countries under clause (i)— 


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1 (I) not later than 6 months after 

2 the date of the action by the Govern3 ment of Canada described under such 

4 subparagraph; and 

5 (II) using the criteria described 

6 under subsection (a)(4)(D)(i)(II) of 

7 such section 804. 

8 (6) IMPLEMENTATION OF SECTION 804.— 

9 (A) INTERIM RULE.—The Secretary may 

10 promulgate an interim rule for implementing 

11 section 804 of the Federal Food, Drug, and 

12 Cosmetic Act, as added by subsection (a) of this 

13 section. 

14 (B) NO NOTICE OF PROPOSED RULE15 MAKING.—The interim rule described under 

16 paragraph (1) may be developed and promul17 gated by the Secretary without providing gen18 eral notice of proposed rulemaking. 

19 (C) FINAL RULE.—Not later than 1 year 

20 after the date on which the Secretary promul21 gates an interim rule under subparagraph (A), 

22 the Secretary shall, in accordance with proce23 dures under section 553 of title 5, United 

24 States Code, promulgate a final rule for imple25 menting such section 804, which may incorVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00219 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 porate by reference provisions of the interim 

2 rule provided for under subparagraph (A), to 

3 the extent that such provisions are not modi4 fied. 

5 (7) CONSUMER EDUCATION.—The Secretary 

6 shall carry out activities that educate consumers— 

7 (A) with regard to the availability of quali8 fying drugs for import for personal use from an 

9 exporter registered with and approved by the 

10 Food and Drug Administration under section 

11 804 of the Federal Food, Drug, and Cosmetic 

12 Act, as added by this section, including infor13 mation on how to verify whether an exporter is 

14 registered and approved by use of the Internet 

15 website of the Food and Drug Administration 

16 and the toll-free telephone number required by 

17 this Act; 

18 (B) that drugs that consumers attempt to 

19 import from an exporter that is not registered 

20 with and approved by the Food and Drug Ad21 ministration can be seized by the United States 

22 Customs Service and destroyed, and that such 

23 drugs may be counterfeit, unapproved, unsafe, 

24 or ineffective; 


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1 (C) with regard to the suspension and ter2 mination of any registration of a registered im3 porter or exporter under such section 804; and 

4 (D) with regard to the availability at do5 mestic retail pharmacies of qualifying drugs im6 ported under such section 804 by domestic 

7 wholesalers and pharmacies registered with and 

8 approved by the Food and Drug Administra9 tion. 

10 (8) EFFECT ON ADMINISTRATION PRACTICES.— 

11 Notwithstanding any provision of this Act (and the 

12 amendments made by this Act), the practices and 

13 policies of the Food and Drug Administration and 

14 Bureau of Customs and Border Protection, in effect 

15 on January 1, 2004, with respect to the importation 

16 of prescription drugs into the United States by an 

17 individual, on the person of such individual, for per18 sonal use, shall remain in effect. 

19 (9) REPORT TO CONGRESS.—The Federal 

20 Trade Commission shall, on an annual basis, submit 

21 to Congress a report that describes any action taken 

22 during the period for which the report is being pre23 pared to enforce the provisions of section 804(n) of 

24 the Federal Food, Drug, and Cosmetic Act (as 


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1 added by this Act), including any pending investiga2 tions or civil actions under such section. 

3 (e) DISPOSITION OF CERTAIN DRUGS DENIED AD4 MISSION INTO UNITED STATES.— 

5 (1) IN GENERAL.—Chapter VIII of the Federal 

6 Food, Drug, and Cosmetic Act (21 U.S.C. 381 et 

7 seq.), as amended by section 4, is further amended 

8 by adding at the end the following section: 

9 ‘‘SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED AD10 MISSION. 

11 ‘‘(a) IN GENERAL.—The Secretary of Homeland Se12 curity shall deliver to the Secretary a shipment of drugs 

13 that is imported or offered for import into the United 

14 States if— 

15 ‘‘(1) the shipment has a declared value of less 

16 than $10,000; and 

17 ‘‘(2)(A) the shipping container for such drugs 

18 does not bear the markings required under section 

19 804(d)(2); or 

20 ‘‘(B) the Secretary has requested delivery of 

21 such shipment of drugs. 

22 ‘‘(b) NO BOND OR EXPORT.—Section 801(b) does 

23 not authorize the delivery to the owner or consignee of 

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1 suant to the execution of a bond, and such drugs may not 

2 be exported. 

3 ‘‘(c) DESTRUCTION OF VIOLATIVE SHIPMENT.—The 

4 Secretary shall destroy a shipment of drugs delivered by 

5 the Secretary of Homeland Security to the Secretary 

6 under subsection (a) if— 

7 ‘‘(1) in the case of drugs that are imported or 

8 offered for import from a registered exporter under 

9 section 804, the drugs are in violation of any stand10 ard described in section 804(g)(5); or 

11 ‘‘(2) in the case of drugs that are not imported 

12 or offered for import from a registered exporter 

13 under section 804, the drugs are in violation of a 

14 standard referred to in section 801(a) or 801(d)(1). 

15 ‘‘(d) CERTAIN PROCEDURES.— 

16 ‘‘(1) IN GENERAL.—The delivery and destruc17 tion of drugs under this section may be carried out 

18 without notice to the importer, owner, or consignee 

19 of the drugs except as required by section 801(g) or 

20 section 804(i)(2). The issuance of receipts for the 

21 drugs, and recordkeeping activities regarding the 

22 drugs, may be carried out on a summary basis. 

23 ‘‘(2) OBJECTIVE OF PROCEDURES.—Procedures 

24 promulgated under paragraph (1) shall be designed 

25 toward the objective of ensuring that, with respect to 


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1 efficiently utilizing Federal resources available for 

2 carrying out this section, a substantial majority of 

3 shipments of drugs subject to described in sub4 section (c) are identified and destroyed. 

5 ‘‘(e) EVIDENCE EXCEPTION.—Drugs may not be de6 stroyed under subsection (c) to the extent that the Attor7 ney General of the United States determines that the 

8 drugs should be preserved as evidence or potential evi9 dence with respect to an offense against the United States. 

10 ‘‘(f) RULE OF CONSTRUCTION.—This section may 

11 not be construed as having any legal effect on applicable 

12 law with respect to a shipment of drugs that is imported 

13 or offered for import into the United States and has a 

14 declared value equal to or greater than $10,000.’’. 

15 (2) PROCEDURES.—Procedures for carrying out 

16 section 805 of the Federal Food, Drug, and Cos17 metic Act, as added by subsection (a), shall be es18 tablished not later than 90 days after the date of the 

19 enactment of this Act. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by this section shall take effect on the date that is 

22 90 days after the date of enactment of this Act. 

23 (f) WHOLESALE DISTRIBUTION OF DRUGS; STATE24 MENTS REGARDING PRIOR SALE, PURCHASE, OR

25 TRADE.— 


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1 (1) STRIKING OF EXEMPTIONS; APPLICABILITY

2 TO REGISTERED EXPORTERS.—Section 503(e) of the 

3 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

4 353(e)) is amended— 

5 (A) in paragraph (1)— 

6 (i) by striking ‘‘and who is not the 

7 manufacturer or an authorized distributor 

8 of record of such drug’’; 

9 (ii) by striking ‘‘to an authorized dis10 tributor of record or’’; and 

11 (iii) by striking subparagraph (B) and 

12 inserting the following: 

13 ‘‘(B) The fact that a drug subject to subsection (b) 

14 is exported from the United States does not with respect 

15 to such drug exempt any person that is engaged in the 

16 business of the wholesale distribution of the drug from 

17 providing the statement described in subparagraph (A) to 

18 the person that receives the drug pursuant to the export 

19 of the drug. 

20 ‘‘(C)(i) The Secretary shall by regulation establish re21 quirements that supersede subparagraph (A) (referred to 

22 in this subparagraph as ‘alternative requirements’) to 

23 identify the chain of custody of a drug subject to sub24 section (b) from the manufacturer of the drug throughout 

25 the wholesale distribution of the drug to a pharmacist who 


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1 intends to sell the drug at retail if the Secretary deter2 mines that the alternative requirements, which may in3 clude standardized anti-counterfeiting or track-and-trace 

4 technologies, will identify such chain of custody or the 

5 identity of the discrete package of the drug from which 

6 the drug is dispensed with equal or greater certainty to 

7 the requirements of subparagraph (A), and that the alter8 native requirements are economically and technically fea9 sible. 

10 ‘‘(ii) When the Secretary promulgates a final rule to 

11 establish such alternative requirements, the final rule in 

12 addition shall, with respect to the registration condition 

13 established in clause (i) of section 804(c)(3)(B), establish 

14 a condition equivalent to the alternative requirements, and 

15 such equivalent condition may be met in lieu of the reg16 istration condition established in such clause (i).’’; 

17 (B) in paragraph (2)(A), by adding at the 

18 end the following: ‘‘The preceding sentence may 

19 not be construed as having any applicability 

20 with respect to a registered exporter under sec21 tion 804.’’; and 

22 (C) in paragraph (3), by striking ‘‘and 

23 subsection (d)—’’ in the matter preceding sub24 paragraph (A) and all that follows through ‘‘the 

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1 paragraph (B) and inserting the following: ‘‘and 

2 subsection (d), the term ‘wholesale distribution’ 

3 means’’. 

4 (2) CONFORMING AMENDMENT.—Section 

5 503(d) of the Federal Food, Drug, and Cosmetic 

6 Act (21 U.S.C. 353(d)) is amended by adding at the 

7 end the following: 

8 ‘‘(4) Each manufacturer of a drug subject to sub9 section (b) shall maintain at its corporate offices a current 

10 list of the authorized distributors of record of such drug. 

11 ‘‘(5) For purposes of this subsection, the term ‘au12 thorized distributors of record’ means those distributors 

13 with whom a manufacturer has established an ongoing re14 lationship to distribute such manufacturer’s products.’’. 

15 (3) EFFECTIVE DATE.— 

16 (A) IN GENERAL.—The amendments made 

17 by subparagraphs (A) and (C) of paragraph (1) 

18 and by paragraph (2) shall take effect on Janu19 ary 1, 2012. 

20 (B) DRUGS IMPORTED BY REGISTERED IM21 PORTERS UNDER SECTION 804.—Notwith22 standing subparagraph (A), the amendments 

23 made by subparagraphs (A) and (C) of para24 graph (1) and by paragraph (2) shall take ef25 fect on the date that is 90 days after the date 


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1 of enactment of this Act with respect to quali2 fying drugs imported under section 804 of the 

3 Federal Food, Drug, and Cosmetic Act, as 

4 added by subsection (d). 

5 (C) EFFECT WITH RESPECT TO REG6 ISTERED EXPORTERS.—The amendment made 

7 by paragraph (1)(B) shall take effect on the 

8 date that is 90 days after the date of enactment 

9 of this Act. 

10 (D) ALTERNATIVE REQUIREMENTS.—The 

11 Secretary shall issue regulations to establish the 

12 alternative requirements, referred to in the 

13 amendment made by paragraph (1)(A), that 

14 take effect not later than January 1, 2012. 

15 (E) INTERMEDIATE REQUIREMENTS.—The 

16 Secretary shall by regulation require the use of 

17 standardized anti-counterfeiting or track-and18 trace technologies on prescription drugs at the 

19 case and pallet level effective not later than 1 

20 year after the date of enactment of this Act. 

21 (F) ADDITIONAL REQUIREMENTS.— 

22 (i) IN GENERAL.—Notwithstanding 

23 any other provision of this subsection, the 

24 Secretary shall, not later than 18 months 

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1 quire that the packaging of any prescrip2 tion drug incorporates— 

3 (I) a standardized numerical 

4 identifier unique to each package of 

5 such drug, applied at the point of 

6 manufacturing and repackaging (in 

7 which case the numerical identifier 

8 shall be linked to the numerical iden9 tifier applied at the point of manufac10 turing); and 

11 (II)(aa) overt optically variable 

12 counterfeit-resistant technologies 

13 that— 

14 (AA) are visible to the 

15 naked eye, providing for visual 

16 identification of product authen17 ticity without the need for read18 ers, microscopes, lighting devices, 

19 or scanners; 

20 (BB) are similar to that 

21 used by the Bureau of Engraving 

22 and Printing to secure United 

23 States currency; 

24 (CC) are manufactured and 

25 distributed in a highly secure, 


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1 tightly controlled environment; 

2 and 

3 (DD) incorporate additional 

4 layers of nonvisible convert secu5 rity features up to and including 

6 forensic capability, as described 

7 in subparagraph (B); or 

8 (bb) technologies that have a 

9 function of security comparable to 

10 that described in item (aa), as deter11 mined by the Secretary. 

12 (ii) STANDARDS FOR PACKAGING.— 

13 For the purpose of making it more difficult 

14 to counterfeit the packaging of drugs sub15 ject to this paragraph, the manufacturers 

16 of such drugs shall incorporate the tech17 nologies described in clause (i) into at least 

18 1 additional element of the physical pack19 aging of the drugs, including blister packs, 

20 shrink wrap, package labels, package seals, 

21 bottles, and boxes. 

22 (g) INTERNET SALES OF PRESCRIPTION DRUGS.— 

23 (1) IN GENERAL.—Chapter V of the Federal 

24 Food, Drug, and Cosmetic Act (21 U.S.C. 351 et 


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1 seq.) is amended by inserting after section 503B the 

2 following: 

3 ‘‘SEC. 503C. INTERNET SALES OF PRESCRIPTION DRUGS. 

4 ‘‘(a) REQUIREMENTS REGARDING INFORMATION ON

5 INTERNET SITE.— 

6 ‘‘(1) IN GENERAL.—A person may not dispense 

7 a prescription drug pursuant to a sale of the drug 

8 by such person if— 

9 ‘‘(A) the purchaser of the drug submitted 

10 the purchase order for the drug, or conducted 

11 any other part of the sales transaction for the 

12 drug, through an Internet site; 

13 ‘‘(B) the person dispenses the drug to the 

14 purchaser by mailing or shipping the drug to 

15 the purchaser; and 

16 ‘‘(C) such site, or any other Internet site 

17 used by such person for purposes of sales of a 

18 prescription drug, fails to meet each of the re19 quirements specified in paragraph (2), other 

20 than a site or pages on a site that— 

21 ‘‘(i) are not intended to be accessed 

22 by purchasers or prospective purchasers; or 

23 ‘‘(ii) provide an Internet information 

24 location tool within the meaning of section 


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1 231(e)(5) of the Communications Act of 

2 1934 (47 U.S.C. 231(e)(5)). 

3 ‘‘(2) REQUIREMENTS.—With respect to an 

4 Internet site, the requirements referred to in sub5 paragraph (C) of paragraph (1) for a person to 

6 whom such paragraph applies are as follows: 

7 ‘‘(A) Each page of the site shall include ei8 ther the following information or a link to a 

9 page that provides the following information: 

10 ‘‘(i) The name of such person. 

11 ‘‘(ii) Each State in which the person 

12 is authorized by law to dispense prescrip13 tion drugs. 

14 ‘‘(iii) The address and telephone num15 ber of each place of business of the person 

16 with respect to sales of prescription drugs 

17 through the Internet, other than a place of 

18 business that does not mail or ship pre19 scription drugs to purchasers. 

20 ‘‘(iv) The name of each individual who 

21 serves as a pharmacist for prescription 

22 drugs that are mailed or shipped pursuant 

23 to the site, and each State in which the in24 dividual is authorized by law to dispense 

25 prescription drugs. 


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1 ‘‘(v) If the person provides for medical 

2 consultations through the site for purposes 

3 of providing prescriptions, the name of 

4 each individual who provides such con5 sultations; each State in which the indi6 vidual is licensed or otherwise authorized 

7 by law to provide such consultations or 

8 practice medicine; and the type or types of 

9 health professions for which the individual 

10 holds such licenses or other authorizations. 

11 ‘‘(B) A link to which paragraph (1) applies 

12 shall be displayed in a clear and prominent 

13 place and manner, and shall include in the cap14 tion for the link the words ‘licensing and con15 tact information’. 

16 ‘‘(b) INTERNET SALES WITHOUT APPROPRIATE

17 MEDICAL RELATIONSHIPS.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), a person may not dispense a prescription 

20 drug, or sell such a drug, if— 

21 ‘‘(A) for purposes of such dispensing or 

22 sale, the purchaser communicated with the per23 son through the Internet; 

24 ‘‘(B) the patient for whom the drug was 

25 dispensed or purchased did not, when such 


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1 communications began, have a prescription for 

2 the drug that is valid in the United States; 

3 ‘‘(C) pursuant to such communications, the 

4 person provided for the involvement of a practi5 tioner, or an individual represented by the per6 son as a practitioner, and the practitioner or 

7 such individual issued a prescription for the 

8 drug that was purchased; 

9 ‘‘(D) the person knew, or had reason to 

10 know, that the practitioner or the individual re11 ferred to in subparagraph (C) did not, when 

12 issuing the prescription, have a qualifying med13 ical relationship with the patient; and 

14 ‘‘(E) the person received payment for the 

15 dispensing or sale of the drug. 

16 For purposes of subparagraph (E), payment is re17 ceived if money or other valuable consideration is re18 ceived. 

19 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not 

20 apply to— 

21 ‘‘(A) the dispensing or selling of a pre22 scription drug pursuant to telemedicine prac23 tices sponsored by— 

24 ‘‘(i) a hospital that has in effect a 

25 provider agreement under title XVIII of 


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1 the Social Security Act (relating to the 

2 Medicare program); or 

3 ‘‘(ii) a group practice that has not 

4 fewer than 100 physicians who have in ef5 fect provider agreements under such title; 

6 or 

7 ‘‘(B) the dispensing or selling of a pre8 scription drug pursuant to practices that pro9 mote the public health, as determined by the 

10 Secretary by regulation. 

11 ‘‘(3) QUALIFYING MEDICAL RELATIONSHIP.— 

12 ‘‘(A) IN GENERAL.—With respect to 

13 issuing a prescription for a drug for a patient, 

14 a practitioner has a qualifying medical relation15 ship with the patient for purposes of this sec16 tion if— 

17 ‘‘(i) at least one in-person medical 

18 evaluation of the patient has been con19 ducted by the practitioner; or 

20 ‘‘(ii) the practitioner conducts a med21 ical evaluation of the patient as a covering 

22 practitioner. 

23 ‘‘(B) IN-PERSON MEDICAL EVALUATION.— 

24 A medical evaluation by a practitioner is an in25 person medical evaluation for purposes of this 


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1 section if the practitioner is in the physical 

2 presence of the patient as part of conducting 

3 the evaluation, without regard to whether por4 tions of the evaluation are conducted by other 

5 health professionals. 

6 ‘‘(C) COVERING PRACTITIONER.—With re7 spect to a patient, a practitioner is a covering 

8 practitioner for purposes of this section if the 

9 practitioner conducts a medical evaluation of 

10 the patient at the request of a practitioner who 

11 has conducted at least one in-person medical 

12 evaluation of the patient and is temporarily un13 available to conduct the evaluation of the pa14 tient. A practitioner is a covering practitioner 

15 without regard to whether the practitioner has 

16 conducted any in-person medical evaluation of 

17 the patient involved. 

18 ‘‘(4) RULES OF CONSTRUCTION.— 

19 ‘‘(A) INDIVIDUALS REPRESENTED AS

20 PRACTITIONERS.—A person who is not a practi21 tioner (as defined in subsection (e)(1)) lacks 

22 legal capacity under this section to have a 

23 qualifying medical relationship with any patient. 

24 ‘‘(B) STANDARD PRACTICE OF PHAR25 MACY.—Paragraph (1) may not be construed as 


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1 prohibiting any conduct that is a standard prac2 tice in the practice of pharmacy. 

3 ‘‘(C) APPLICABILITY OF REQUIRE4 MENTS.—Paragraph (3) may not be construed 

5 as having any applicability beyond this section, 

6 and does not affect any State law, or interpre7 tation of State law, concerning the practice of 

8 medicine. 

9 ‘‘(c) ACTIONS BY STATES.— 

10 ‘‘(1) IN GENERAL.—Whenever an attorney gen11 eral of any State has reason to believe that the in12 terests of the residents of that State have been or 

13 are being threatened or adversely affected because 

14 any person has engaged or is engaging in a pattern 

15 or practice that violates section 301(l), the State 

16 may bring a civil action on behalf of its residents in 

17 an appropriate district court of the United States to 

18 enjoin such practice, to enforce compliance with such 

19 section (including a nationwide injunction), to obtain 

20 damages, restitution, or other compensation on be21 half of residents of such State, to obtain reasonable 

22 attorneys fees and costs if the State prevails in the 

23 civil action, or to obtain such further and other relief 

24 as the court may deem appropriate. 


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1 ‘‘(2) NOTICE.—The State shall serve prior writ2 ten notice of any civil action under paragraph (1) or 

3 (5)(B) upon the Secretary and provide the Secretary 

4 with a copy of its complaint, except that if it is not 

5 feasible for the State to provide such prior notice, 

6 the State shall serve such notice immediately upon 

7 instituting such action. Upon receiving a notice re8 specting a civil action, the Secretary shall have the 

9 right— 

10 ‘‘(A) to intervene in such action; 

11 ‘‘(B) upon so intervening, to be heard on 

12 all matters arising therein; and 

13 ‘‘(C) to file petitions for appeal. 

14 ‘‘(3) CONSTRUCTION.—For purposes of bring15 ing any civil action under paragraph (1), nothing in 

16 this chapter shall prevent an attorney general of a 

17 State from exercising the powers conferred on the 

18 attorney general by the laws of such State to con19 duct investigations or to administer oaths or affir20 mations or to compel the attendance of witnesses or 

21 the production of documentary and other evidence. 

22 ‘‘(4) VENUE; SERVICE OF PROCESS.—Any civil 

23 action brought under paragraph (1) in a district 

24 court of the United States may be brought in the 

25 district in which the defendant is found, is an inhabVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00238 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 itant, or transacts business or wherever venue is 

2 proper under section 1391 of title 28, United States 

3 Code. Process in such an action may be served in 

4 any district in which the defendant is an inhabitant 

5 or in which the defendant may be found. 

6 ‘‘(5) ACTIONS BY OTHER STATE OFFICIALS.— 

7 ‘‘(A) Nothing contained in this section 

8 shall prohibit an authorized State official from 

9 proceeding in State court on the basis of an al10 leged violation of any civil or criminal statute of 

11 such State. 

12 ‘‘(B) In addition to actions brought by an 

13 attorney general of a State under paragraph 

14 (1), such an action may be brought by officers 

15 of such State who are authorized by the State 

16 to bring actions in such State on behalf of its 

17 residents. 

18 ‘‘(d) EFFECT OF SECTION.—This section shall not 

19 apply to a person that is a registered exporter under sec20 tion 804. 

21 ‘‘(e) GENERAL DEFINITIONS.—For purposes of this 

22 section: 

23 ‘‘(1) The term ‘practitioner’ means a practi24 tioner referred to in section 503(b)(1) with respect 

25 to issuing a written or oral prescription. 


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1 ‘‘(2) The term ‘prescription drug’ means a drug 

2 that is described in section 503(b)(1). 

3 ‘‘(3) The term ‘qualifying medical relationship’, 

4 with respect to a practitioner and a patient, has the 

5 meaning indicated for such term in subsection (b). 

6 ‘‘(f) INTERNET-RELATED DEFINITIONS.— 

7 ‘‘(1) IN GENERAL.—For purposes of this sec8 tion: 

9 ‘‘(A) The term ‘Internet’ means collectively 

10 the myriad of computer and telecommunications 

11 facilities, including equipment and operating 

12 software, which comprise the interconnected 

13 world-wide network of networks that employ the 

14 transmission control protocol/internet protocol, 

15 or any predecessor or successor protocols to 

16 such protocol, to communicate information of 

17 all kinds by wire or radio. 

18 ‘‘(B) The term ‘link’, with respect to the 

19 Internet, means one or more letters, words, 

20 numbers, symbols, or graphic items that appear 

21 on a page of an Internet site for the purpose 

22 of serving, when activated, as a method for exe23 cuting an electronic command— 


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1 ‘‘(i) to move from viewing one portion 

2 of a page on such site to another portion 

3 of the page; 

4 ‘‘(ii) to move from viewing one page 

5 on such site to another page on such site; 

6 or 

7 ‘‘(iii) to move from viewing a page on 

8 one Internet site to a page on another 

9 Internet site. 

10 ‘‘(C) The term ‘page’, with respect to the 

11 Internet, means a document or other file 

12 accessed at an Internet site. 

13 ‘‘(D)(i) The terms ‘site’ and ‘address’, with 

14 respect to the Internet, mean a specific location 

15 on the Internet that is determined by Internet 

16 Protocol numbers. Such term includes the do17 main name, if any. 

18 ‘‘(ii) The term ‘domain name’ means a 

19 method of representing an Internet address 

20 without direct reference to the Internet Protocol 

21 numbers for the address, including methods 

22 that use designations such as ‘.com’, ‘.edu’, 

23 ‘.gov’, ‘.net’, or ‘.org’. 


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1 ‘‘(iii) The term ‘Internet Protocol num2 bers’ includes any successor protocol for deter3 mining a specific location on the Internet. 

4 ‘‘(2) AUTHORITY OF SECRETARY.—The Sec5 retary may by regulation modify any definition 

6 under paragraph (1) to take into account changes in 

7 technology. 

8 ‘‘(g) INTERACTIVE COMPUTER SERVICE; ADVER9 TISING.—No provider of an interactive computer service, 

10 as defined in section 230(f)(2) of the Communications Act 

11 of 1934 (47 U.S.C. 230(f)(2)), or of advertising services 

12 shall be liable under this section for dispensing or selling 

13 prescription drugs in violation of this section on account 

14 of another person’s selling or dispensing such drugs, pro15 vided that the provider of the interactive computer service 

16 or of advertising services does not own or exercise cor17 porate control over such person.’’. 

18 (2) INCLUSION AS PROHIBITED ACT.—Section 

19 301 of the Federal Food, Drug, and Cosmetic Act 

20 (21 U.S.C. 331) is amended by inserting after para21 graph (k) the following: 

22 ‘‘(l) The dispensing or selling of a prescription drug 

23 in violation of section 503C.’’. 

24 (3) INTERNET SALES OF PRESCRIPTION DRUGS; 

25 CONSIDERATION BY SECRETARY OF PRACTICES AND


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1 PROCEDURES FOR CERTIFICATION OF LEGITIMATE

2 BUSINESSES.—In carrying out section 503C of the 

3 Federal Food, Drug, and Cosmetic Act (as added by 

4 paragraph (1)), the Secretary of Health and Human 

5 Services shall take into consideration the practices 

6 and procedures of public or private entities that cer7 tify that businesses selling prescription drugs 

8 through Internet sites are legitimate businesses, in9 cluding practices and procedures regarding disclo10 sure formats and verification programs. 

11 (4) REPORTS REGARDING INTERNET-RELATED

12 VIOLATIONS OF FEDERAL AND STATE LAWS ON DIS13 PENSING OF DRUGS.— 

14 (A) IN GENERAL.—The Secretary of 

15 Health and Human Services (referred to in this 

16 paragraph as the ‘‘Secretary’’) shall, pursuant 

17 to the submission of an application meeting the 

18 criteria of the Secretary, make an award of a 

19 grant or contract to the National Clearinghouse 

20 on Internet Prescribing (operated by the Fed21 eration of State Medical Boards) for the pur22 pose of— 

23 (i) identifying Internet sites that ap24 pear to be in violation of Federal or State 

25 laws concerning the dispensing of drugs; 


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1 (ii) reporting such sites to State med2 ical licensing boards and State pharmacy 

3 licensing boards, and to the Attorney Gen4 eral and the Secretary, for further inves5 tigation; and 

6 (iii) submitting, for each fiscal year 

7 for which the award under this subsection 

8 is made, a report to the Secretary describ9 ing investigations undertaken with respect 

10 to violations described in clause (i). 

11 (B) AUTHORIZATION OF APPROPRIA12 TIONS.—For the purpose of carrying out sub13 paragraph (A), there is authorized to be appro14 priated $100,000 for each of the first 3 fiscal 

15 years in which this section is in effect. 

16 (5) EFFECTIVE DATE.—The amendments made 

17 by paragraphs (1) and (2) take effect 90 days after 

18 the date of enactment of this Act, without regard to 

19 whether a final rule to implement such amendments 

20 has been promulgated by the Secretary of Health 

21 and Human Services under section 701(a) of the 

22 Federal Food, Drug, and Cosmetic Act. The pre23 ceding sentence may not be construed as affecting 

24 the authority of such Secretary to promulgate such 

25 a final rule. 


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1 (h) PROHIBITING PAYMENTS TO UNREGISTERED

2 FOREIGN PHARMACIES.— 

3 (1) IN GENERAL.—Section 303 of the Federal 

4 Food, Drug, and Cosmetic Act (21 U.S.C. 333) is 

5 amended by adding at the end the following: 

6 ‘‘(h) RESTRICTED TRANSACTIONS.— 

7 ‘‘(1) IN GENERAL.—The introduction of re8 stricted transactions into a payment system or the 

9 completion of restricted transactions using a pay10 ment system is prohibited. 

11 ‘‘(2) PAYMENT SYSTEM.— 

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

13 system’ means a system used by a person de14 scribed in subparagraph (B) to effect a credit 

15 transaction, electronic fund transfer, or money 

16 transmitting service that may be used in con17 nection with, or to facilitate, a restricted trans18 action, and includes— 

19 ‘‘(i) a credit card system; 

20 ‘‘(ii) an international, national, re21 gional, or local network used to effect a 

22 credit transaction, an electronic fund 

23 transfer, or a money transmitting service; 

24 and 


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1 ‘‘(iii) any other system that is cen2 trally managed and is primarily engaged in 

3 the transmission and settlement of credit 

4 transactions, electronic fund transfers, or 

5 money transmitting services. 

6 ‘‘(B) PERSONS DESCRIBED.—A person re7 ferred to in subparagraph (A) is— 

8 ‘‘(i) a creditor; 

9 ‘‘(ii) a credit card issuer; 

10 ‘‘(iii) a financial institution; 

11 ‘‘(iv) an operator of a terminal at 

12 which an electronic fund transfer may be 

13 initiated; 

14 ‘‘(v) a money transmitting business; 

15 or 

16 ‘‘(vi) a participant in an international, 

17 national, regional, or local network used to 

18 effect a credit transaction, electronic fund 

19 transfer, or money transmitting service. 

20 ‘‘(3) RESTRICTED TRANSACTION.—The term 

21 ‘restricted transaction’ means a transaction or trans22 mittal, on behalf of an individual who places an un23 lawful drug importation request to any person en24 gaged in the operation of an unregistered foreign 

25 pharmacy, of— 


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1 ‘‘(A) credit, or the proceeds of credit, ex2 tended to or on behalf of the individual for the 

3 purpose of the unlawful drug importation re4 quest (including credit extended through the 

5 use of a credit card); 

6 ‘‘(B) an electronic fund transfer or funds 

7 transmitted by or through a money transmit8 ting business, or the proceeds of an electronic 

9 fund transfer or money transmitting service, 

10 from or on behalf of the individual for the pur11 pose of the unlawful drug importation request; 

12 ‘‘(C) a check, draft, or similar instrument 

13 which is drawn by or on behalf of the individual 

14 for the purpose of the unlawful drug importa15 tion request and is drawn on or payable at or 

16 through any financial institution; or 

17 ‘‘(D) the proceeds of any other form of fi18 nancial transaction (identified by the Board by 

19 regulation) that involves a financial institution 

20 as a payor or financial intermediary on behalf 

21 of or for the benefit of the individual for the 

22 purpose of the unlawful drug importation re23 quest. 

24 ‘‘(4) UNLAWFUL DRUG IMPORTATION RE25 QUEST.—The term ‘unlawful drug importation reVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00247 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 quest’ means the request, or transmittal of a re2 quest, made to an unregistered foreign pharmacy for 

3 a prescription drug by mail (including a private car4 rier), facsimile, phone, or electronic mail, or by a 

5 means that involves the use, in whole or in part, of 

6 the Internet. 

7 ‘‘(5) UNREGISTERED FOREIGN PHARMACY.— 

8 The term ‘unregistered foreign pharmacy’ means a 

9 person in a country other than the United States 

10 that is not a registered exporter under section 804. 

11 ‘‘(6) OTHER DEFINITIONS.— 

12 ‘‘(A) CREDIT; CREDITOR; CREDIT CARD.— 

13 The terms ‘credit’, ‘creditor’, and ‘credit card’ 

14 have the meanings given the terms in section 

15 103 of the Truth in Lending Act (15 U.S.C. 

16 1602). 

17 ‘‘(B) ACCESS DEVICE; ELECTRONIC FUND

18 TRANSFER.—The terms ‘access device’ and 

19 ‘electronic fund transfer’— 

20 ‘‘(i) have the meaning given the term 

21 in section 903 of the Electronic Fund 

22 Transfer Act (15 U.S.C. 1693a); and 

23 ‘‘(ii) the term ‘electronic fund trans24 fer’ also includes any fund transfer covered 


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1 under Article 4A of the Uniform Commer2 cial Code, as in effect in any State. 

3 ‘‘(C) FINANCIAL INSTITUTION.—The term 

4 ‘financial institution’— 

5 ‘‘(i) has the meaning given the term 

6 in section 903 of the Electronic Transfer 

7 Fund Act (15 U.S.C. 1693a); and 

8 ‘‘(ii) includes a financial institution 

9 (as defined in section 509 of the Gramm10 Leach-Bliley Act (15 U.S.C. 6809)). 

11 ‘‘(D) MONEY TRANSMITTING BUSINESS; 

12 MONEY TRANSMITTING SERVICE.—The terms 

13 ‘money transmitting business’ and ‘money 

14 transmitting service’ have the meaning given 

15 the terms in section 5330(d) of title 31, United 

16 States Code. 

17 ‘‘(E) BOARD.—The term ‘Board’ means 

18 the Board of Governors of the Federal Reserve 

19 System. 

20 ‘‘(7) POLICIES AND PROCEDURES REQUIRED TO

21 PREVENT RESTRICTED TRANSACTIONS.— 

22 ‘‘(A) REGULATIONS.—The Board shall 

23 promulgate regulations requiring— 

24 ‘‘(i) an operator of a credit card sys25 tem; 


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1 ‘‘(ii) an operator of an international, 

2 national, regional, or local network used to 

3 effect a credit transaction, an electronic 

4 fund transfer, or a money transmitting 

5 service; 

6 ‘‘(iii) an operator of any other pay7 ment system that is centrally managed and 

8 is primarily engaged in the transmission 

9 and settlement of credit transactions, elec10 tronic transfers or money transmitting 

11 services where at least one party to the 

12 transaction or transfer is an individual; 

13 and 

14 ‘‘(iv) any other person described in 

15 paragraph (2)(B) and specified by the 

16 Board in such regulations, 

17 to establish policies and procedures that are 

18 reasonably designed to prevent the introduction 

19 of a restricted transaction into a payment sys20 tem or the completion of a restricted trans21 action using a payment system. 

22 ‘‘(B) REQUIREMENTS FOR POLICIES AND

23 PROCEDURES.—In promulgating regulations 

24 under subparagraph (A), the Board shall— 


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1 ‘‘(i) identify types of policies and pro2 cedures, including nonexclusive examples, 

3 that shall be considered to be reasonably 

4 designed to prevent the introduction of re5 stricted transactions into a payment sys6 tem or the completion of restricted trans7 actions using a payment system; and 

8 ‘‘(ii) to the extent practicable, permit 

9 any payment system, or person described 

10 in paragraph (2)(B), as applicable, to 

11 choose among alternative means of pre12 venting the introduction or completion of 

13 restricted transactions. 

14 ‘‘(C) NO LIABILITY FOR BLOCKING OR RE15 FUSING TO HONOR RESTRICTED TRANS16 ACTION.— 

17 ‘‘(i) IN GENERAL.—A payment sys18 tem, or a person described in paragraph 

19 (2)(B) that is subject to a regulation 

20 issued under this subsection, and any par21 ticipant in such payment system that pre22 vents or otherwise refuses to honor trans23 actions in an effort to implement the poli24 cies and procedures required under this 

25 subsection or to otherwise comply with this 


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1 subsection shall not be liable to any party 

2 for such action. 

3 ‘‘(ii) COMPLIANCE.—A person de4 scribed in paragraph (2)(B) meets the re5 quirements of this subsection if the person 

6 relies on and complies with the policies and 

7 procedures of a payment system of which 

8 the person is a member or in which the 

9 person is a participant, and such policies 

10 and procedures of the payment system 

11 comply with the requirements of the regu12 lations promulgated under subparagraph 

13 (A). 

14 ‘‘(D) ENFORCEMENT.— 

15 ‘‘(i) IN GENERAL.—This section shall 

16 be enforced by the Federal functional regu17 lators and the Federal Trade Commission 

18 under applicable law in the manner pro19 vided in section 505(a) of the Gramm20 Leach-Bliley Act (15 U.S.C. 6805(a)). 

21 ‘‘(ii) FACTORS TO BE CONSIDERED.— 

22 In considering any enforcement action 

23 under this subsection against a payment 

24 system or person described in paragraph 

25 (2)(B), the Federal functional regulators 


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1 and the Federal Trade Commission shall 

2 consider the following factors: 

3 ‘‘(I) The extent to which the pay4 ment system or person knowingly per5 mits restricted transactions. 

6 ‘‘(II) The history of the payment 

7 system or person in connection with 

8 permitting restricted transactions. 

9 ‘‘(III) The extent to which the 

10 payment system or person has estab11 lished and is maintaining policies and 

12 procedures in compliance with regula13 tions prescribed under this subsection. 

14 ‘‘(8) TRANSACTIONS PERMITTED.—A payment 

15 system, or a person described in paragraph (2)(B) 

16 that is subject to a regulation issued under this sub17 section, is authorized to engage in transactions with 

18 foreign pharmacies in connection with investigating 

19 violations or potential violations of any rule or re20 quirement adopted by the payment system or person 

21 in connection with complying with paragraph (7). A 

22 payment system, or such a person, and its agents 

23 and employees shall not be found to be in violation 

24 of, or liable under, any Federal, State or other law 

25 by virtue of engaging in any such transaction. 


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1 ‘‘(9) RELATION TO STATE LAWS.—No require2 ment, prohibition, or liability may be imposed on a 

3 payment system, or a person described in paragraph 

4 (2)(B) that is subject to a regulation issued under 

5 this subsection, under the laws of any State with re6 spect to any payment transaction by an individual 

7 because the payment transaction involves a payment 

8 to a foreign pharmacy. 

9 ‘‘(10) TIMING OF REQUIREMENTS.—A payment 

10 system, or a person described in paragraph (2)(B) 

11 that is subject to a regulation issued under this sub12 section, must adopt policies and procedures reason13 ably designed to comply with any regulations re14 quired under paragraph (7) within 60 days after 

15 such regulations are issued in final form.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by this subsection shall take effect on the day that 

18 is 90 days after the date of enactment of this Act. 

19 (3) IMPLEMENTATION.—The Board of Gov20 ernors of the Federal Reserve System shall promul21 gate regulations as required by subsection (h)(7) of 

22 section 303 of the Federal Food, Drug, and Cos23 metic Act (21 U.S.C. 333), as added by paragraph 

24 (1), not later than 90 days after the date of enact25 ment of this Act. 


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1 (i) IMPORTATION EXEMPTION UNDER CONTROLLED

2 SUBSTANCES IMPORT AND EXPORT ACT.—Section 

3 1006(a)(2) of the Controlled Substances Import and Ex4 port Act (21 U.S.C. 956(a)(2)) is amended by striking 

5 ‘‘not import the controlled substance into the United 

6 States in an amount that exceeds 50 dosage units of the 

7 controlled substance.’’ and inserting ‘‘import into the 

8 United States not more than 10 dosage units combined 

9 of all such controlled substances.’’. 

10 (j) SEVERABILITY.—If any provision of this section, 

11 an amendment by this section, or the application of such 

12 provision or amendment to any person or circumstance is 

13 held to be unconstitutional, the remainder of this section, 

14 the amendments made by this section, and the application 

15 of the provisions of such to any person or circumstance 

16 shall not affected thereby. 

17 SEC. 3004. BRINGING DOWN PRICES FOR PRESCRIPTION 

18 DRUGS BY EXTENDING 340B DISCOUNTED 

19 DRUG PRICING TO MANAGED CARE ORGANI20 ZATIONS. 

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

22 ‘‘Drug Rebate Equalization Act of 2009’’. 

23 (b) EXTENSION OF PRESCRIPTION DRUG DISCOUNTS

24 TO ENROLLEES OF MEDICAID MANAGED CARE ORGANI25 ZATIONS.— 


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1 (1) IN GENERAL.—Section 1903(m)(2)(A) (42 

2 U.S.C. 1396b(m)(2)(A)) is amended— 

3 (A) in clause (xi), by striking ‘‘and’’ at the 

4 end; 

5 (B) in clause (xii), by striking the period 

6 at the end and inserting ‘‘; and’’; and 

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

8 ‘‘(xiii) such contract provides that (I) 

9 payment for covered outpatient drugs dis10 pensed to individuals eligible for medical 

11 assistance who are enrolled with the entity 

12 shall be subject to the same rebate re13 quired by the agreement entered into 

14 under section 1927 as the State is subject 

15 to, and (II) capitation rates paid to the en16 tity shall be based on actual cost experi17 ence related to rebates and subject to the 

18 Federal regulations requiring actuarially 

19 sound rates.’’. 

20 (2) CONFORMING AMENDMENTS.—Section 1927 

21 (42 U.S.C. 1396r–8) is amended— 

22 (A) in subsection (d)— 

23 (i) in paragraph (1), by adding at the 

24 end the following: 


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1 ‘‘(C) Notwithstanding the subparagraphs 

2 (A) and (B)— 

3 ‘‘(i) a Medicaid managed care organi4 zation with a contract under section 

5 1903(m) may exclude or otherwise restrict 

6 coverage of a covered outpatient drug on 

7 the basis of policies or practices of the or8 ganization, such as those affecting utiliza9 tion management, formulary adherence, 

10 and cost sharing or dispute resolution, in 

11 lieu of any State policies or practices relat12 ing to the exclusion or restriction of cov13 erage of such drugs, provided, however, 

14 that any such exclusions and restrictions of 

15 coverage shall be subject to any contrac16 tual requirements and oversight by the 

17 State as contained in the Medicaid man18 aged care organization’s contract with the 

19 State, and the State shall maintain ap20 proval authority over the formulary used 

21 by the Medicaid managed care organiza22 tion; and 

23 ‘‘(ii) nothing in this section or para24 graph (2)(A)(xiii) of section 1903(m) shall 

25 be construed as requiring a Medicaid manVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00257 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 aged care organization with a contract 

2 under such section to maintain the same 

3 such policies and practices as those estab4 lished by the State for purposes of individ5 uals who receive medical assistance for cov6 ered outpatient drugs on a fee-for-service 

7 basis.’’; and 

8 (ii) in paragraph (4), by inserting 

9 after subparagraph (E) the following: 

10 ‘‘(F) Notwithstanding the preceding sub11 paragraphs of this paragraph, any formulary 

12 established by Medicaid managed care organiza13 tion with a contract under section 1903(m) may 

14 be based on positive inclusion of drugs selected 

15 by a formulary committee consisting of physi16 cians, pharmacists, and other individuals with 

17 appropriate clinical experience as long as drugs 

18 excluded from the formulary are available 

19 through prior authorization, as described in 

20 paragraph (5).’’; and 

21 (B) in subsection (j), by striking para22 graph (1) and inserting the following: 

23 ‘‘(1) Covered outpatients drugs are not subject 

24 to the requirements of this section if such drugs 

25 are— 


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1 ‘‘(A) dispensed by health maintenance or2 ganizations, including Medicaid managed care 

3 organizations that contract under section 

4 1903(m); and 

5 ‘‘(B) subject to discounts under section 

6 340B of the Public Health Service Act.’’. 

7 (3) REPORTS.—Each State with a contract with 

8 a Medicaid managed care organization under section 

9 1903(m) of the Social Security Act (42 U.S.C. 

10 1396b(m)) shall report to the Secretary on a quar11 terly basis the total amount of rebates in dollars and 

12 volume received from manufacturers (as defined in 

13 section 1927(k)(5) of such Act (42 U.S.C. 1396r– 

14 8(k)(5)) for drugs provided to individuals enrolled 

15 with such an organization as a result of the amend16 ments made by this section for both brand-name and 

17 generic drugs. The Secretary shall review the reports 

18 submitted by States under this subsection and, after 

19 such review, make publically available the aggregate 

20 data contained in such reports. 

21 (4) EFFECTIVE DATE.—This section and the 

22 amendments made by this section take effect on the 

23 date of enactment of this Act and apply to rebate 

24 agreements entered into or renewed under section 


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1 1927 of the Social Security Act (42 U.S.C. 1396r– 

2 8) on or after such date. 

3 SEC. 3005. BRINGING DOWN PRICES FOR PRESCRIPTION 

4 DRUGS BY INCREASING THE MEDICAID DRUG 

5 REBATE. 

6 Section 1927(c)(1)(B)(i) of the Social Security Act 

7 (42 U.S.C. 1396r–8(c)(1)(B)(i)) is amended— 

8 (1) in subclause (IV), by striking ‘‘and’’ after 

9 the semicolon; 

10 (2) in subclause (V)— 

11 (A) by inserting ‘‘and before January 1, 

12 2010,’’ after ‘‘1995,’’; and 

13 (B) by striking the period and inserting ‘‘; 

14 and’’; and 

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

16 ‘‘(VI) after December 31, 2009, 

17 is 20 percent.’’. 

18 SEC. 3006. ENDING TAXPAYER SUBSIDIES FOR EXPORTERS. 

19 (a) IN GENERAL.—Not later than 1 year after the 

20 date of the enactment of this Act, the Secretary of Com21 merce shall develop and implement a program to impose 

22 fees on businesses that benefit from the trade promotion 

23 activities of the International Trade Administration. 

24 (b) BUDGET NEUTRALITY.—The fees shall be im25 posed in an amount that ensures that any Federal expendVerDate Nov 24 2008 02:06 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00260 Fmt 6652 Sfmt 6201 E:\BILLS\S1808.IS S1808

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1 itures on trade promotion activities of the International 

2 Trade Administration are offset by the fees collected 

3 under the program in a budget neutral manner. 

4 SEC. 3007. REDUCING TAXPAYER SUBSIDIES FOR EXPORT5 ERS OF AGRICULTURE COMMODITIES. 

6 Section 211(c)(1)(A) of the Agricultural Trade Act 

7 of 1978 (7 U.S.C. 5641(c)(1)(A)) is amended by striking 

8 ‘‘and $200,000,000 for each of fiscal years 2008 through 

9 2012’’ and inserting ‘‘$200,000,000 for each of fiscal 

10 years 2008 and 2009, and $160,000,000 for each of fiscal 

11 years 2010 through 2012’’. 

12 SEC. 3008. MAKING COMPANIES PAY WHEN THEY FAIL FDA 

13 QUALITY INSPECTIONS. 

14 (a) IN GENERAL.—The Secretary shall assess and 

15 collect a user fee from each facility registered under sec16 tion 415 of the Federal Food, Drug, and Cosmetic Act 

17 (21 U.S.C. 350d), establishment registered under section 

18 510 of such Act (21 U.S.C. 360), and facility described 

19 in section 351(a)(1)(C) of the Public Health Service Act 

20 (42 U.S.C. 262(1)(C)) for which a followup reinspection 

21 is required to ensure correction of a violation found by 

22 the Secretary during initial inspection of the facility or 

23 establishment of a good manufacturing practices require24 ment under the Federal Food, Drug, and Cosmetic Act 

25 (21 U.S.C. 301 et seq.). 


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1 (b) PAYMENT OF FEE.—The user fee required under 

2 subsection (a) shall be due from a facility or establishment 

3 described in such subsection upon the reinspection of such 

4 facility or establishment, as described in subsection (a). 

5 (c) AMOUNT OF USER FEE.—The amount of the user 

6 fee required under subsection (a) shall be established by 

7 the Secretary. 

8 (d) DEFINITIONS.—For purposes of this section— 

9 (1) the terms ‘‘animal drug’’, ‘‘device’’, ‘‘drug’’, 

10 and ‘‘food’’ have the meanings given those terms in 

11 section 201 of the Federal Food, Drug, and Cos12 metic Act (21 U.S.C. 321); 

13 (2) the term ‘‘biological product’’ has the mean14 ing given the term in section 351 of the Public 

15 Health Service Act (42 U.S.C. 262); and 

16 (3) the term ‘‘Secretary’’ means the Secretary 

17 of Health and Human Services. 

18 TITLE IV—ENDING TAXPAYER 

19 SUBSIDIES FOR BIG AGRI20 BUSINESSES 

21 SEC. 4001. REFORMING IRRIGATION SUBSIDIES. 

22 (a) DEFINITIONS.—Section 202 of the Reclamation 

23 Reform Act of 1982 (43 U.S.C. 390bb) is amended— 


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1 (1) by redesignating paragraphs (7), (8), (9), 

2 (10), and (11) as paragraphs (9), (10), (11), (12), 

3 and (13), respectively; 

4 (2) in paragraph (6), by striking ‘‘owned or op5 erated under a lease which’’ and inserting ‘‘that is 

6 owned, leased, or operated by an individual or legal 

7 entity and that’’; 

8 (3) by inserting after paragraph (6) the fol9 lowing: 

10 ‘‘(7) LEGAL ENTITY.—The term ‘legal entity’ 

11 includes a corporation, association, partnership, 

12 trust, joint tenancy, or tenancy in common, or any 

13 other entity that owns, leases, or operates a farm 

14 operation for the benefit of more than 1 individual 

15 under any form of agreement or arrangement. 

16 ‘‘(8) OPERATOR.— 

17 ‘‘(A) IN GENERAL.—The term ‘operator’— 

18 ‘‘(i) means an individual or legal enti19 ty that operates a single farm operation on 

20 a parcel (or parcels) of land that is owned 

21 or leased by another person (or persons) 

22 under any form of agreement or arrange23 ment (or agreements or arrangements); 

24 and 

25 ‘‘(ii) if the individual or legal entity— 


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1 ‘‘(I) is an employee of an indi2 vidual or legal entity, includes the in3 dividual or legal entity; or 

4 ‘‘(II) is a legal entity that con5 trols, is controlled by, or is under 

6 common control with another legal en7 tity, includes each such other legal en8 tity. 

9 ‘‘(B) OPERATION OF A FARM OPER10 ATION.—For the purposes of subparagraph (A), 

11 an individual or legal entity shall be considered 

12 to operate a farm operation if the individual or 

13 legal entity is the person that performs the 

14 greatest proportion of the decisionmaking for 

15 and supervision of the agricultural enterprise on 

16 land served with irrigation water.’’; and 

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

18 ‘‘(14) SINGLE FARM OPERATION.— 

19 ‘‘(A) IN GENERAL.—The term ‘single farm 

20 operation’ means the total acreage of land 

21 served with irrigation water for which an indi22 vidual or legal entity is the operator. 

23 ‘‘(B) RULES FOR DETERMINING WHETHER

24 SEPARATE PARCELS ARE OPERATED AS A SIN25 GLE FARM OPERATION.— 


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1 ‘‘(i) EQUIPMENT- AND LABOR-SHAR2 ING ACTIVITIES.—The conduct of 

3 equipment- and labor-sharing activities on 

4 separate parcels of land by separate indi5 viduals or legal entities shall not by itself 

6 serve as a basis for concluding that the 

7 farming operations of the individuals or 

8 legal entities constitute a single farm oper9 ation. 

10 ‘‘(ii) PERFORMANCE OF CERTAIN

11 SERVICES.—The performance by an indi12 vidual or legal entity of an agricultural 

13 chemical application, pruning, or har14 vesting for a farm operation on a parcel of 

15 land shall not by itself serve as a basis for 

16 concluding that the farm operation on that 

17 parcel of land is part of a single farm op18 eration operated by the individual or entity 

19 on other parcels of land.’’. 

20 (b) IDENTIFICATION OF OWNERS, LESSEES, AND OP21 ERATORS AND OF SINGLE FARM OPERATIONS.—The Rec22 lamation Reform Act of 1982 (43 U.S.C. 390aa et seq.) 

23 is amended by inserting after section 201 the following: 


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1 ‘‘SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND 

2 OPERATORS AND OF SINGLE FARM OPER3 ATIONS. 

4 ‘‘(a) IN GENERAL.—Subject to subsection (b), for 

5 each parcel of land to which irrigation water is delivered 

6 or proposed to be delivered, the Secretary shall identify 

7 a single individual or legal entity as the owner, lessee, or 

8 operator. 

9 ‘‘(b) SHARED DECISIONMAKING AND SUPER10 VISION.—If the Secretary determines that no single indi11 vidual or legal entity is the owner, lessee, or other indi12 vidual that performs the greatest proportion of decision13 making for and supervision of the agricultural enterprise 

14 on a parcel of land— 

15 ‘‘(1) all individuals and legal entities that own, 

16 lease, or perform a proportion of decisonmaking and 

17 supervision that is equal as among themselves but 

18 greater than the proportion performed by any other 

19 individual or legal entity shall be considered jointly 

20 to be the owner, lessee, or operator; and 

21 ‘‘(2) all parcels of land of which any such indi22 vidual or legal entity is the owner, lessee, or oper23 ator shall be considered to be part of the single farm 

24 operation of the owner, lessee, or operator identified 

25 under subsection (1).’’. 


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1 (c) PRICING.—Section 205 of the Reclamation Re2 form Act of 1982 (43 U.S.C. 390ee) is amended by adding 

3 at the end the following: 

4 ‘‘(d) SINGLE FARM OPERATIONS GENERATING MORE

5 THAN $500,000 IN GROSS FARM INCOME.— 

6 ‘‘(1) IN GENERAL.—Notwithstanding sub7 sections (a), (b), and (c), in the case of— 

8 ‘‘(A) a qualified recipient that reports 

9 gross farm income from a single farm operation 

10 in excess of $500,000 for a taxable year; or 

11 ‘‘(B) a limited recipient that received irri12 gation water on or before October 1, 1981, and 

13 that reports gross farm income from a single 

14 farm operation in excess of $500,000 for a tax15 able year; 

16 irrigation water may be delivered to the single farm 

17 operation of the qualified recipient or limited recipi18 ent at less than full cost to a number of acres that 

19 does not exceed the number of acres determined 

20 under paragraph (2). 

21 ‘‘(2) MAXIMUM NUMBER OF ACRES TO WHICH

22 IRRIGATION WATER MAY BE DELIVERED AT LESS

23 THAN FULL COST.—The number of acres determined 

24 under this subparagraph is the number equal to the 

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1 plied by a fraction, the numerator of which is 

2 $500,000 and the denominator of which is the 

3 amount of gross farm income reported by the quali4 fied recipient or limited recipient in the most recent 

5 taxable year. 

6 ‘‘(3) INFLATION ADJUSTMENT.— 

7 ‘‘(A) IN GENERAL.—The $500,000 amount 

8 under paragraphs (1) and (2) for any taxable 

9 year beginning in a calendar year after 2004 

10 shall be equal to the product of— 

11 ‘‘(i) $500,000, multiplied by 

12 ‘‘(ii) the inflation adjustment factor 

13 for the taxable year. 

14 ‘‘(B) INFLATION ADJUSTMENT FACTOR.— 

15 The term ‘inflation adjustment factor’ means, 

16 with respect to any calendar year, a fraction the 

17 numerator of which is the GDP implicit price 

18 deflator for the preceding calendar year and the 

19 denominator of which is the GDP implicit price 

20 deflator for 2004. Not later than April 1 of any 

21 calendar year, the Secretary shall publish the 

22 inflation adjustment factor for the preceding 

23 calendar year. 

24 ‘‘(C) GDP IMPLICIT PRICE DEFLATOR.— 

25 For purposes of subparagraph (B), the term 


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1 ‘GDP implicit price deflator’ means the first re2 vision of the implicit price deflator for the gross 

3 domestic product as computed and published by 

4 the Secretary of Commerce. 

5 ‘‘(D) ROUNDING.—If any increase deter6 mined under subparagraph (A) is not a multiple 

7 of $100, the increase shall be rounded to the 

8 next lowest multiple of $100.’’. 

9 (d) CERTIFICATION OF COMPLIANCE.—Section 206 

10 of the Reclamation Reform Act of 1982 (43 U.S.C. 390ff) 

11 is amended to read as follows: 

12 ‘‘SEC. 206. CERTIFICATION OF COMPLIANCE. 

13 ‘‘(a) IN GENERAL.—As a condition to the receipt of 

14 irrigation water for land in a district that has a contract 

15 described in section 203, each owner, lessee, or operator 

16 in the district shall furnish the district, in a form pre17 scribed by the Secretary, a certificate that the owner, les18 see, or operator is in compliance with this title, including 

19 a statement of the number of acres owned, leased, or oper20 ated, the terms of any lease or agreement pertaining to 

21 the operation of a farm operation, and, in the case of a 

22 lessee or operator, a certification that the rent or other 

23 fees paid reflect the reasonable value of the irrigation 

24 water to the productivity of the land. 


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1 ‘‘(b) DOCUMENTATION.—The Secretary may require 

2 a lessee or operator to submit for the Secretary’s examina3 tion— 

4 ‘‘(1) a complete copy of any lease or other 

5 agreement executed by each of the parties to the 

6 lease or other agreement; and 

7 ‘‘(2) a copy of the return of income tax imposed 

8 by chapter 1 of the Internal Revenue Code of 1986 

9 for any taxable year in which the single farm oper10 ation of the lessee or operator received irrigation 

11 water at less than full cost.’’. 

12 (e) TRUSTS.—Section 214 of the Reclamation Re13 form Act of 1982 (43 U.S.C. 390nn) is repealed. 

14 (f) ADMINISTRATIVE PROVISIONS.— 

15 (1) PENALTIES.—Section 224(c) of the Rec16 lamation Reform Act of 1982 (43 U.S.C. 390ww(c)) 

17 is amended— 

18 (A) by striking ‘‘(c) The Secretary’’ and 

19 inserting the following: 

20 ‘‘(c) REGULATIONS; DATA COLLECTION; PEN21 ALTIES.— 

22 ‘‘(1) REGULATIONS; DATA COLLECTION.—The 

23 Secretary’’; and 

24 (B) by adding at the end the following: 


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1 ‘‘(2) PENALTIES.—Notwithstanding any other 

2 provision of law, the Secretary shall establish appro3 priate and effective penalties for failure to comply 

4 with any provision of this Act or any regulation 

5 issued under this Act.’’. 

6 (2) INTEREST.—Section 224(i) of the Reclama7 tion Reform Act of 1982 (43 U.S.C. 390ww(i)) is 

8 amended by striking the last sentence and inserting 

9 the following: ‘‘The interest rate applicable to under10 payments shall be equal to the rate applicable to ex11 penditures under section 202(3)(C).’’. 

12 (g) REPORTING.—Section 228 of the Reclamation 

13 Reform Act of 1982 (43 U.S.C. 390zz) is amended by in14 serting ‘‘operator or’’ before ‘‘contracting entity’’ each 

15 place it appears. 

16 (h) MEMORANDUM OF UNDERSTANDING.—The Rec17 lamation Reform Act of 1982 (43 U.S.C. 390aa et seq.) 

18 is amended— 

19 (1) by redesignating sections 229 and 230 as 

20 sections 230 and 231; and 

21 (2) by inserting after section 228 the following: 

22 ‘‘SEC. 229. MEMORANDUM OF UNDERSTANDING. 

23 ‘‘The Secretary, the Secretary of the Treasury, and 

24 the Secretary of Agriculture shall enter into a memo25 randum of understanding or other appropriate instrument 


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1 to permit the Secretary, notwithstanding section 6103 of 

2 the Internal Revenue Code of 1986, to have access to and 

3 use of available information collected or maintained by the 

4 Department of the Treasury and the Department of Agri5 culture that would aid enforcement of the ownership and 

6 pricing limitations of Federal reclamation law.’’. 

7 SEC. 4002. REFORMING CROP INSURANCE SUBSIDIES. 

8 (a) FEDERAL SHARE OF RISK.—Section 508(k)(3) of 

9 the Federal Crop Insurance Act (7 U.S.C. 1508(k)(3)) is 

10 amended— 

11 (1) by striking ‘‘require the’’ and inserting ‘‘re12 quire— 

13 ‘‘(A) the’’; 

14 (2) by striking the period at the end and insert15 ing ‘‘; and’’; and 

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

17 ‘‘(B) the cumulative underwriting gain or 

18 loss, and the associated premium and losses 

19 with such amount, calculated under any rein20 surance agreement (except livestock) ceded to 

21 the Corporation by each approved insurance 

22 provider to be not less than 20 percent.’’. 

23 (b) REIMBURSEMENT RATE.—Section 508 of the 

24 Federal Crop Insurance Act (7 U.S.C. 1508) is amend25 ed— 


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1 (1) in subsection (b)(11), by striking ‘‘6 per2 cent’’ and inserting ‘‘4 percent’’; and 

3 (2) in subsection (k)(4)— 

4 (A) in subparagraph (E)— 

5 (i) by striking ‘‘2009’’ and inserting 

6 ‘‘2011’’; and 

7 (ii) by striking ‘‘2.3 percent’’ and in8 serting ‘‘4.3 percent’’; and 

9 (B) in subparagraph (F)— 

10 (i) by striking ‘‘2009’’ and inserting 

11 ‘‘2011’’; and 

12 (ii) by striking ‘‘12 percent’’ and in13 serting ‘‘10 percent’’. 

14 SEC. 4003. REDUCING DIRECT PAYMENTS TO LARGE LAND15 OWNERS. 

16 (a) IN GENERAL.—Section 1001(b)(1)(A) of the 

17 Food Security Act of 1985 (7 U.S.C. 1308(b)(1)(A)) is 

18 amended by striking ‘‘of that Act, $40,0000; or’’ and in19 serting ‘‘of that Act— 

20 ‘‘(i) $40,000; or 

21 ‘‘(ii) if the national average market 

22 price received by producers during the 12- 

23 month marketing year for a covered com24 modity (as determined by the Secretary) is 

25 more than 110 percent of the target price 


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1 for the covered commodity (as determined 

2 under section 1104(c) of the Food, Con3 servation, and Energy Act of 2008 (7 

4 U.S.C. 8714(c)), $20,000; or’’. 

5 (b) PEANUTS.—Section 1001(c)(1)(A) of the Food 

6 Security Act of 1985 (7 U.S.C. 1308(c)(1)(A)) is amended 

7 by striking ‘‘of that Act, $40,000; or’’ and inserting ‘‘of 

8 that Act— 

9 ‘‘(i) $40,000; or 

10 ‘‘(ii) if the national average market 

11 price received by producers during the 12- 

12 month marketing year for peanuts (as de13 termined by the Secretary) is more than 

14 110 percent of the target price for peanuts 

15 (as determined under section 1304(c) of 

16 the Food, Conservation, and Energy Act of 

17 2008 (7 U.S.C. 8754(c)), $20,000; or’’. 

18 SEC. 4004. CUTTING FARM SUBSIDIES FOR HIGH-INCOME 

19 INDIVIDUALS. 

20 Section 1001D(b)(1) of the Food Security Act of 

21 1985 (7 U.S.C. 1308–3a(b)(1)) is amended— 

22 (1) by striking subparagraphs (A) and (B) and 

23 inserting the following: 

24 ‘‘(A) NONFARM LIMITATIONS.— 


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1 ‘‘(i) PROHIBITION.—Notwithstanding 

2 any other provision of law, a person or 

3 legal entity shall not be eligible to receive 

4 any benefit described in subparagraph (C) 

5 during a crop, fiscal, or program year, as 

6 appropriate, if the average adjusted gross 

7 nonfarm income of the person or legal enti8 ty exceeds $250,000. 

9 ‘‘(ii) PARTIAL ELIGIBILITY.—Notwith10 standing any other provision of law, a per11 son or legal entity the average adjusted 

12 gross nonfarm income of which is more 

13 than $100,000 but less than $250,000 

14 shall be eligible to receive only 66 percent 

15 of any benefit described in subparagraph 

16 (C) during a crop, fiscal, or program year, 

17 as appropriate. 

18 ‘‘(B) FARM LIMITATION.— 

19 ‘‘(i) PROHIBITION.—Notwithstanding 

20 any other provision of law, a person or 

21 legal entity shall not be eligible to receive 

22 any benefit described in subparagraph (C) 

23 during a crop, fiscal, or program year, as 

24 appropriate, if the average adjusted gross 


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1 farm income of the person or legal entity 

2 exceeds $750,000. 

3 ‘‘(ii) PARTIAL ELIGIBILITY.—Notwith4 standing any other provision of law, a per5 son or legal entity the average adjusted 

6 gross farm income of which is more than 

7 $500,000 but less than $750,000 shall be 

8 eligible to receive only 66 percent of any 

9 benefit described in subparagraph (C) dur10 ing a crop, fiscal, or program year, as ap11 propriate.’’; and 

12 (2) in subparagraph (C), by striking ‘‘Subpara13 graph (A) applies’’ and inserting ‘‘Subparagraphs 

14 (A) and (B) apply’’. 

15 SEC. 4005. ELIMINATING THE COTTON STORAGE SUBSIDY. 

16 (a) IN GENERAL.—Section 1204 of the Food, Con17 servation, and Energy Act of 2008 (7 U.S.C. 8734) is 

18 amended— 

19 (1) by striking subsection (g); and 

20 (2) by redesignating subsection (h) as sub21 section (g). 

22 (b) APPLICATION.—The amendments made by sub23 section (a) apply effective beginning with the 2010 crop 

24 year. 


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1 SEC. 4006. ENDING SUBSIDIZED GRAZING FEES. 

2 Section 6(a) of the Public Rangelands Improvement 

3 Act of 1978 (43 U.S.C. 1905) is amended— 

4 (1) by striking ‘‘For the grazing years 1979 

5 through 1985, the’’ and inserting ‘‘The’’; and 

6 (2) by striking ‘‘the $1.23 base’’ and all that 

7 follows through ‘‘previous year’s fee’’ and inserting 

8 ‘‘an amount that is at the same level as the State 

9 in which the land is located charges for public graz10 ing on land owned by the State, as determined by 

11 the Secretary of Agriculture and the Secretary of 

12 the Interior, as appropriate’’. 

13 TITLE V—ENDING TAXPAYER 

14 SUBSIDIES FOR THE USE OF 

15 PUBLIC RESOURCES AND 

16 GOVERNMENT SERVICES 

17 SEC. 5001. PREVENTING GIVEAWAYS OF THE PUBLIC SPEC18 TRUM. 

19 Section 309(j)(11) of the Communications Act of 

20 1934 (47 U.S.C. 309(j)(11)) is amended by striking 

21 ‘‘2012’’ and inserting ‘‘2019’’. 

22 SEC. 5002. ELIMINATING DOUBLE SUBSIDIES FOR 

23 HARDROCK MINING BY REPEALING PER24 CENTAGE DEPLETION ALLOWANCES. 

25 (a) IN GENERAL.—Section 613(a) of the Internal 

26 Revenue Code of 1986 (relating to percentage depletion) 


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1 is amended by inserting ‘‘(other than hardrock mines lo2 cated on lands subject to the general mining laws or on 

3 land patented under the general mining laws)’’ after ‘‘In 

4 the case of the mines’’. 

5 (b) GENERAL MINING LAWS DEFINED.—Section 613 

6 of the Internal Revenue Code of 1986 is amended by add7 ing at the end the following: 

8 ‘‘(f) GENERAL MINING LAWS.—For purposes of sub9 section (a), the term ‘general mining laws’ means those 

10 Acts which generally comprise chapters 2, 12A, and 16, 

11 and sections 161 and 162 of title 30 of the United States 

12 Code.’’. 

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2009. 

16 SEC. 5003. ENDING SUBSIDIES FOR HARDROCK MINING ON 

17 PUBLIC LANDS BY IMPOSING MINING ROYAL18 TIES AND CLAIM FEES. 

19 (a) ROYALTY FOR HARDROCK MINING.—The Revised 

20 Statutes are amended by inserting after section 2352 (30 

21 U.S.C. 76) the following: 

22 ‘‘SEC. 2353. RESERVATION OF ROYALTY. 

23 ‘‘(a) DEFINITION OF LOCATABLE MINERAL.—In this 

24 section: 


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1 ‘‘(1) IN GENERAL.—The term ‘locatable min2 eral’ means any mineral, the legal and beneficial 

3 title to which remains in the United States and that 

4 is not subject to disposition under— 

5 ‘‘(A) the Mineral Leasing Act (30 U.S.C. 

6 181 et seq.); 

7 ‘‘(B) the Act of August 7, 1947 (commonly 

8 known as the ‘Mineral Leasing Act for Ac9 quired Lands’) (30 U.S.C. 351 et seq.); 

10 ‘‘(C) the Act of July 31, 1947 (commonly 

11 known as the ‘Materials Act of 1947’) (30 

12 U.S.C. 601 et seq.); or 

13 ‘‘(D) the Geothermal Steam Act of 1970 

14 (30 U.S.C. 1001 et seq.). 

15 ‘‘(2) EXCLUSIONS.—The term ‘locatable min16 eral’ does not include any mineral that is subject to 

17 a restriction against alienation imposed by the 

18 United States and is— 

19 ‘‘(A) held in trust by the United States for 

20 any Indian or Indian tribe (as defined in sec21 tion 2 of the Indian Mineral Development Act 

22 of 1982 (25 U.S.C. 2101)); or 

23 ‘‘(B) owned by any Indian or Indian tribe 

24 (s defined in section 2 of that Act). 


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1 ‘‘(b) ROYALTY.—Production of all locatable minerals 

2 from any mining claim located under the general mining 

3 laws, or mineral concentrates or products derived from 

4 locatable minerals from any such mining claim, as the case 

5 may be, shall be subject to a royalty of 8 percent of the 

6 gross income from mining. 

7 ‘‘(c) LIABILITY FOR PAYMENT.—The claim holder or 

8 any operator to whom the claim holder has assigned the 

9 obligation to make royalty payments under the claim, and 

10 any person who controls the claim holder or operator, shall 

11 be liable for payment of royalties under this section. 

12 ‘‘(d) DEPOSIT.—Amounts received by the United 

13 States as royalties under this section shall be deposited 

14 into the general fund of the Treasury.’’. 

15 (b) HARDROCK MINING CLAIM MAINTENANCE

16 FEE.—Subtitle B of title X of the Omnibus Budget Rec17 onciliation Act of 1993 (30 U.S.C. 28f et seq.) is amended 

18 to read as follows: 

19 ‘‘Subchapter B—Hardrock Mining Claim 

20 Maintenance Fee 

21 ‘‘SEC. 10101. HARDROCK MINING CLAIM MAINTENANCE 

22 FEE. 

23 ‘‘(a) FEE.— 

24 ‘‘(1) IN GENERAL.—Except as provided in sec25 tion 2511(e)(2) of the Energy Policy Act of 1992 


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1 (30 U.S.C. 242(e)(2)), for each unpatented mining 

2 claim, mill, or tunnel site on federally owned land, 

3 whether located before, on, or after enactment of 

4 this Act, each claimant shall pay to the Secretary, 

5 on or before August 31 of each year, a claim mainte6 nance fee of $150 per claim to hold the unpatented 

7 mining claim, mill, or tunnel site for the assessment 

8 year beginning at noon on September 1. 

9 ‘‘(2) RELATION TO OTHER LAW.—A claim 

10 maintenance fee described in paragraph (1) shall be 

11 in lieu of— 

12 ‘‘(A) the assessment work requirement in 

13 section 2324 of the Revised Statutes (30 U.S.C. 

14 28); and 

15 ‘‘(B) the related filing requirements in sub16 sections (a) and (c) of section 314 of the Fed17 eral Land Policy and Management Act of 1976 

18 (43 U.S.C. 1744). 

19 ‘‘(3) WAIVER.— 

20 ‘‘(A) IN GENERAL.—The claim mainte21 nance fee required under paragraph (1) shall be 

22 waived for a claimant who certifies in writing to 

23 the Secretary that on the date the payment was 

24 due, the claimant and all related parties— 


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1 ‘‘(i) held not more than 10 mining 

2 claims, mill sites, or tunnel sites, or any 

3 combination of mining claims, mill sites, or 

4 tunnel sites, on public land; and 

5 ‘‘(ii) have performed assessment work 

6 required under section 2324 of the Revised 

7 Statutes (30 U.S.C. 28) to maintain the 

8 mining claims held by the claimant and all 

9 related parties for the assessment year 

10 ending on noon of September 1 of the cal11 endar year in which payment of the claim 

12 maintenance fee was due. 

13 ‘‘(B) DEFINITION OF ALL RELATED PAR14 TIES.—In subparagraph (A), with the respect 

15 to any claimant, the term ‘all related parties’ 

16 means— 

17 ‘‘(i) the spouse and dependent chil18 dren (as defined in section 152 of the In19 ternal Revenue Code of 1986), of the 

20 claimant; or 

21 ‘‘(ii) a person affiliated with the 

22 claimant, including— 

23 ‘‘(I) a person controlled by, con24 trolling, or under common control 

25 with the claimant; or 


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1 ‘‘(II) a subsidiary or parent com2 pany or corporation of the claimant. 

3 ‘‘(4) ADJUSTMENT.— 

4 ‘‘(A) IN GENERAL.—Not less than 5 years 

5 after the date of enactment of the Control 

6 Spending Now Act, and every 5 years there7 after, or more frequently if the Secretary deter8 mines an adjustment to be reasonable, the Sec9 retary shall adjust the claim maintenance fee 

10 required under paragraph (1) to reflect changes 

11 for the 12-month period ending the preceding 

12 November 30 in the Consumer Price Index for 

13 All Urban Consumers published by the Bureau 

14 of Labor Statistics of the Department of Labor. 

15 ‘‘(B) NOTIFICATION.—Not later than July 

16 1 of any year in which an adjustment is made 

17 under subparagraph (A), the Secretary shall 

18 provide claimants notice of the adjustment. 

19 ‘‘(C) APPLICATION.—A fee adjustment 

20 under subparagraph (A) shall be effective be21 ginning January 1 of the calendar year fol22 lowing the calendar year in which the adjust23 ment is made. 

24 ‘‘(b) LOCATION FEE.—Notwithstanding any other 

25 provision of law, for each unpatented mining claim, mill, 


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1 or tunnel site located during the period beginning on the 

2 date of enactment of the Control Spending Now Act and 

3 ending on September 30, 2008, the locator shall, at the 

4 time the location notice is recorded with the Bureau of 

5 Land Management, pay to the Secretary a location fee, 

6 in addition to the fee required by subsection (a), of $50 

7 per claim. 

8 ‘‘(c) DEPOSIT.—Amounts received under subsection 

9 (a) or (b) that are not otherwise allocated for the adminis10 tration of the mining laws by the Department of the Inte11 rior shall be deposited into the general fund of the Treas12 ury. 

13 ‘‘(d) CO-OWNERSHIP.—The co-ownership provisions 

14 of section 2324 of the Revised Statutes (30 U.S.C. 28) 

15 shall remain in effect except that the annual claim mainte16 nance fee, if applicable, shall replace applicable assessment 

17 requirements and expenditures. 

18 ‘‘(e) FAILURE TO PAY.—Failure to pay the claim 

19 maintenance fee required by subsection (a) shall conclu20 sively constitute a forfeiture of the unpatented mining 

21 claim, mill, or tunnel site by the claimant and the claim 

22 shall be considered to be null and void by operation of 

23 law. 

24 ‘‘(f) RELATION TO OTHER LAW.—Nothing in this 

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1 sections (b) or (c) of section 314(b) of the Federal Land 

2 Policy and Management Act of 1976 (43 U.S.C. 1744).’’. 

3 SEC. 5004. REDUCING STATE SUBSIDIES FOR ONSHORE OIL, 

4 GAS, COAL, AND MINERAL LEASES ON PUBLIC 

5 LANDS. 

6 Section 35 of the Mineral Leasing Act (30 U.S.C. 

7 191) is amended by striking subsection (b) and inserting 

8 the following: 

9 ‘‘(b) ADMINISTRATIVE COSTS.—Before making a 

10 payment to a State under subsection (a), the Secretary 

11 of the Treasury shall deduct 2 percent of the payment 

12 amount to reimburse the administrative costs incurred by 

13 the United States in managing mineral leasing activities 

14 under this Act.’’. 

15 SEC. 5005. REDUCING SUBSIDIES FOR OIL, GAS, AND GEO16 THERMAL ENERGY PRODUCTION ON PUBLIC 

17 LANDS. 

18 (a) REMOVAL OF PROHIBITION ON INCREASING FEES

19 FOR PERMITS.—Section 365 of the Energy Policy Act of 

20 2005 (42 U.S.C. 15924) is amended— 

21 (1) by striking subsection (i); and 

22 (2) by redesignating subsection (j) as sub23 section (i). 

24 (b) DISPOSAL OF MONEYS FROM SALES, BONUSES, 

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1 thermal Steam Act of 1970 (30 U.S.C. 1019) is amended 

2 to read as follows: 

3 ‘‘SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, 

4 RENTALS, AND ROYALTIES. 

5 ‘‘Subject to section 35 of the Mineral Leasing Act 

6 (30 U.S.C. 191), all funds received from the sales, bo7 nuses, royalties, and rentals under this Act (including pay8 ments referred to in section 6) shall be disposed of in the 

9 same manner as funds received pursuant to section 6 of 

10 this Act or section 35 of the Mineral Leasing Act (30 

11 U.S.C. 191), as the case may be.’’. 

12 SEC. 5006. REDUCING AVIATION SUBSIDIES. 

13 Section 44940 of title 49, United States Code, is 

14 amended— 

15 (1) in subsection (a)(1), by inserting ‘‘in an 

16 amount equal to $5.00 per one-way trip’’ after ‘‘uni17 form fee’’; 

18 (2) by striking subsection (c); and 

19 (3) in subsection (d)— 

20 (A) in paragraph (2), by striking ‘‘sub21 section (d)’’ each place it appears and inserting 

22 ‘‘this subsection’’; and 

23 (B) in paragraph (3), by striking ‘‘in ac24 cordance with paragraph (1)’’ and inserting 

25 ‘‘under subsection (a)(2)’’. 


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1 SEC. 5007. TARGETING MEDICARE PRESCRIPTION DRUG AS2 SISTANCE TO THOSE WHO NEED IT MOST. 

3 (a) IN GENERAL.—Section 1860D–13(a) of the So4 cial Security Act (42 U.S.C. 1395w–113(a)) is amended 

5 by adding at the end the following new paragraph: 

6 ‘‘(7) REDUCTION IN PREMIUM SUBSIDY BASED

7 ON INCOME.—The provisions of subsection (i) of sec8 tion 1839 shall apply to the monthly beneficiary pre9 mium under this subsection in the same manner as 

10 they apply to the monthly premium under such sec11 tion except that in so applying— 

12 ‘‘(A) paragraph (1) of such subsection (i) 

13 to this subsection— 

14 ‘‘(i) the reference to December 2006 

15 is deemed a reference to December 2009; 

16 and 

17 ‘‘(ii) the reference to the monthly pre18 mium is deemed a reference to the base 

19 beneficiary premium (computed under 

20 paragraph (2) of this subsection); 

21 ‘‘(B) clause (i) of paragraph (3)(A) of such 

22 subsection (i) to this subsection, the reference 

23 to 25 percentage points is deemed a reference 

24 to the beneficiary premium percentage (as spec25 ified in paragraph (3) of this subsection); 


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1 ‘‘(C) clause (ii) of paragraph (3)(A) of 

2 such subsection (i) to this subsection, the na3 tional average monthly bid amount (computed 

4 under paragraph (4) of this subsection) shall be 

5 substituted for the amount specified in such 

6 clause (ii) (relating to the unsubsidized part B 

7 premium amount); and 

8 ‘‘(D) subparagraph (B) of paragraph (3) 

9 of such subsection (i) to this subsection, the 

10 reference to 2009 shall be a reference to 2010, 

11 the reference to 2007 shall be a reference to 

12 2009, and the reference to 2008 shall be a ref13 erence to 2010.’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) MEDICARE.—Section 1860D–13(a)(1) of 

16 the Social Security Act (42 U.S.C. 1395w– 

17 113(a)(1)) is amended— 

18 (A) by redesignating subparagraph (F) as 

19 subparagraph (G); 

20 (B) in subparagraph (G), as redesignated 

21 by subparagraph (A), by striking ‘‘(D) and 

22 (E)’’ and inserting ‘‘(D), (E), and (F)’’; and 

23 (C) by inserting after subparagraph (E) 

24 the following new subparagraph: 


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1 ‘‘(F) INCREASE BASED ON INCOME.—The 

2 base beneficiary premium shall be increased 

3 pursuant to paragraph (7).’’. 

4 (2) INTERNAL REVENUE CODE.—Section 

5 6103(l)(20) of the Internal Revenue Code of 1986 

6 (relating to disclosure of return information to carry 

7 out Medicare part B premium subsidy adjustment) 

8 is amended— 

9 (A) in the heading, by striking ‘‘PART B

10 PREMIUM SUBSIDY ADJUSTMENT’’ and inserting 

11 ‘‘PARTS B AND D PREMIUM SUBSIDY ADJUST12 MENTS’’; 

13 (B) in subparagraph (A)— 

14 (i) in the matter preceding clause (i), 

15 by inserting ‘‘or 1860D–13(a)(7)’’ after 

16 ‘‘1839(i)’’; and 

17 (ii) in clause (vii), by inserting after 

18 ‘‘the amount of such adjustment’’ the fol19 lowing: ‘‘or that the amount of the pre20 mium of the taxpayer under such sub21 section (as applied under section 1860D– 

22 13(a)(7)) may be subject to adjustment 

23 under such section 1860D–13(a)(7) and 

24 the amount of such adjustment’’; and 


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1 (C) in subparagraph (B), by inserting ‘‘or 

2 such section 1860D–13(a)(7)’’ before the period 

3 at the end. 

4 TITLE VI—TARGETING WASTE5 FUL OR UNNECESSARY GOV6 ERNMENT SPENDING 

7 SEC. 6001. DELAYING A LUNAR MISSION. 

8 (a) IN GENERAL.—Except as provided in subsection 

9 (b)— 

10 (1) no amounts appropriated or otherwise made 

11 available for fiscal year 2010 (or for a fiscal year be12 fore fiscal year 2010 that remain available for obli13 gation) may be obligated or expended, and no other14 wise obligated amounts that remain available for ex15 penditure may be expended, to support a human 

16 lunar mission under the National Aeronautics and 

17 Space Administration Constellation Program sched18 uled to occur before the year 2025; and 

19 (2) no additional funds may be appropriated to 

20 support such a human lunar mission. 

21 (b) EXCEPTIONS.—An amount otherwise covered by 

22 the prohibition under subsection (a) of not more than 

23 $600,000,000 may be appropriated, obligated, or ex24 pended each fiscal year solely for purposes in connection 

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1 nance of the manufacturing and technology base with re2 spect to the mission described in subsection (a). 

3 SEC. 6002. ELIMINATING THE V–22 OSPREY. 

4 (a) PROHIBITION.—Except as provided in subsection 

5 (b), no amounts appropriated or otherwise made available 

6 for fiscal year 2010 (or for a fiscal year before fiscal year 

7 2010 that remain available for obligation) may be obli8 gated or expended, and no otherwise obligated amounts 

9 that remain available for expenditure may be expended, 

10 for the V–22 or CV–22 Osprey tiltrotor aircraft program. 

11 (b) EXCEPTION FOR WINDUP OF PROGRAM.— 

12 Amounts covered by the prohibition in subsection (a) that 

13 are available for the program described in that subsection 

14 may be utilized solely for purposes in connection with the 

15 winding up of the program. 

16 (c) REPEAL OF SUPERSEDED AUTHORITY.—Section 

17 127 of the John Warner National Defense Authorization 

18 Act for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 

19 2109) is repealed. 

20 SEC. 6003. CUTTING C–17S. 

21 (a) PROHIBITION.—Except as provided in subsection 

22 (b), no amounts appropriated or otherwise made available 

23 for fiscal year 2010 (or for a fiscal year after 2006 and 

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1 gated amounts that remain available for expenditure may 

2 be expended, for the C–17 Globemaster III aircraft pro3 gram. 

4 (b) EXCEPTION FOR WINDUP OF PROGRAM.— 

5 Amounts covered by the prohibition in subsection (a) that 

6 are available for the program described in that subsection 

7 may be utilized solely for purposes in connection with the 

8 winding up of the program. 

9 SEC. 6004. ENDING SPENDING FOR HIGH-RISK SATELLITES. 

10 (a) PROHIBITION.—Except as provided in subsection 

11 (b), no amounts appropriated or otherwise made available 

12 for fiscal year 2010 (or for a fiscal year before fiscal year 

13 2010 that remain available for obligation) may be obli14 gated or expended, and no otherwise obligated amounts 

15 that remain available for expenditure may be expended, 

16 to research, produce, deploy, or maintain a constellation 

17 of nondemonstration satellites under the Space Tracking 

18 and Surveillance System. 

19 (b) EXCEPTION FOR WINDUP OF SYSTEM.—Amounts 

20 covered by the prohibition in subsection (a) that are avail21 able for the system described in that subsection may be 

22 utilized solely for purposes in connection with the winding 

23 up of the system. 


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1 SEC. 6005. REDUCING COST OVERRUNS AND DELAYS ON 

2 MAJOR WEAPONS SYSTEMS. 

3 (a) IN GENERAL.—Chapter 144 of title 10, United 

4 States Code, is amended by inserting after section 2435 

5 the following new section: 

6 ‘‘§ 2435a. High-risk major defense acquisition pro7 grams: alternative acquisition strategies 

8 to meet essential joint military require9 ments 

10 ‘‘(a) DESIGNATION REQUIRED.—The Under Sec11 retary of Defense for Acquisition, Technology, and Logis12 tics shall designate as high-risk for purposes of this sec13 tion a major defense acquisition program if— 

14 ‘‘(1) the critical technologies of the program 

15 have not been demonstrated, or are not planned to 

16 be demonstrated, in a realistic environment prior to 

17 making a production decision; or 

18 ‘‘(2) the program has experienced development 

19 cost growth of 25 percent or more, or schedule 

20 delays of 12 months or more, since receiving a cer21 tification pursuant to section 2366a of this title. 

22 ‘‘(b) ALTERNATIVE ACQUISITION STRATEGY.—(1) 

23 Not later than 60 days after the date of the designation 

24 of a major defense acquisition program as high-risk under 

25 subsection (a), the Under Secretary for Acquisition, Tech26 nology, and Logistics shall— 


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1 ‘‘(A) review the joint military requirements in2 tended to be met by the program to determine 

3 whether or not all elements of such requirements are 

4 essential; and 

5 ‘‘(B) develop an alternative acquisition strategy 

6 that— 

7 ‘‘(i) achieves capabilities in increments to 

8 be delivered in less than five years each; and 

9 ‘‘(ii) relies on mature technologies to meet 

10 all essential elements of the joint military re11 quirement for each increment. 

12 ‘‘(2) The Under Secretary shall submit to the Sec13 retary of Defense and Congress each alternative acquisi14 tion strategy developed under this subsection. In submit15 ting such strategy to Congress, the Under Secretary shall 

16 also submit a report on the results of the review required 

17 by paragraph (1)(B) for purposes of such strategy. 

18 ‘‘(c) CONTINUATION OF PROGRAM.—(1) Upon receipt 

19 of an alternative acquisition strategy to meet joint military 

20 requirements under subsection (b)(2), the Secretary of 

21 Defense shall determine whether or not to terminate the 

22 major defense acquisition program otherwise intended to 

23 meet such requirements so as to meet such requirements 

24 through the alternative acquisition strategy. 


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1 ‘‘(2) The Secretary shall submit to Congress a report 

2 on each determination made under paragraph (1). The re3 port on a determination shall include a detailed justifica4 tion of the determination’’. 

5 (b) CLERICAL AMENDMENT.—The table of sections 

6 at the beginning of chapter 144 of such title is amended 

7 by inserting after the item relating to section 2435 the 

8 following new item: 

‘‘2435a. High-risk major defense acquisition programs: alternative acquisition 

strategies to meet essential joint military requirements.’’. 

9 SEC. 6006. REDUCING SPENDING ON UNNEEDED DEFENSE 

10 SPARE PARTS. 

11 Of the amount appropriated for fiscal year 2010 to 

12 purchase excess secondary inventory for the Department 

13 of the Air Force, the amount available for obligation and 

14 expenditure for that purpose in fiscal year 2010 is hereby 

15 reduced by $50,000,000. 

16 SEC. 6007. REDUCING OVERPAYMENTS TO DEFENSE CON17 TRACTORS. 

18 (a) RECOVERY.—Notwithstanding any provision of 

19 subchapter VI of chapter 35 of title 31, United States 

20 Code, an amount in the aggregate of $50,000,000 shall 

21 be derived from amounts recovered by the Department of 

22 Defense from erroneous payments to contractors pursuant 

23 to recovery audits and activities carried out by the Depart24 ment under section 3561 of such title. 


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1 (b) DEBT REDUCTION.—The amount recovered 

2 under subsection (a) may be used only for the reduction 

3 of the public debt of the United States. 

4 SEC. 6008. ENDING WASTEFUL INTELLIGENCE SPENDING. 

5 (a) VULNERABILITY ASSESSMENTS OF MAJOR SYS6 TEMS.— 

7 (1) IN GENERAL.—Title V of the National Se8 curity Act of 1947 (50 U.S.C. 413 et seq.), as 

9 amended by section 305 of this Act, is further 

10 amended by inserting after section 506B, as added 

11 by section 305(a), the following new section: 

12 ‘‘VULNERABILITY ASSESSMENTS OF MAJOR SYSTEMS

13 ‘‘SEC. 506C. (a) INITIAL VULNERABILITY ASSESS14 MENTS.— 

15 ‘‘(1) REQUIREMENT FOR INITIAL VULNER16 ABILITY ASSESSMENTS.—The Director of National 

17 Intelligence shall conduct an initial vulnerability as18 sessment for any major system and its significant 

19 items of supply that is proposed for inclusion in the 

20 National Intelligence Program prior to completion of 

21 Milestone B or an equivalent acquisition decision. 

22 The initial vulnerability assessment of a major sys23 tem and its significant items of supply shall include 

24 use of an analysis-based approach to— 

25 ‘‘(A) identify vulnerabilities; 

26 ‘‘(B) define exploitation potential; 


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1 ‘‘(C) examine the system’s potential effec2 tiveness; 

3 ‘‘(D) determine overall vulnerability; and 

4 ‘‘(E) make recommendations for risk re5 duction. 

6 ‘‘(2) LIMITATION ON OBLIGATION OF FUNDS.— 

7 For any major system for which an initial vulner8 ability assessment is required under paragraph (1) 

9 on the date of the enactment of the Intelligence Au10 thorization Act for Fiscal Year 2010, such assess11 ment shall be submitted to the congressional intel12 ligence committees within 180 days of such date of 

13 enactment. If such assessment is not submitted to 

14 the congressional intelligence committees within 180 

15 days of such date of enactment, funds appropriated 

16 for the acquisition of the major system may not be 

17 obligated for a major contract related to the major 

18 system. Such prohibition on the obligation of funds 

19 for the acquisition of the major system shall cease 

20 to apply at the end of the 30-day period of a contin21 uous session of Congress that begins on the date on 

22 which Congress receives the initial vulnerability as23 sessment. 

24 ‘‘(b) SUBSEQUENT VULNERABILITY ASSESS25 MENTS.—(1) The Director of National Intelligence shall, 


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1 periodically throughout the life span of a major system 

2 or if the Director determines that a change in cir3 cumstances warrants the issuance of a subsequent vulner4 ability assessment, conduct a subsequent vulnerability as5 sessment of each major system and its significant items 

6 of supply within the National Intelligence Program. 

7 ‘‘(2) Upon the request of a congressional intelligence 

8 committee, the Director of National Intelligence may con9 duct a subsequent vulnerability assessment of a particular 

10 major system and its significant items of supply within 

11 the National Intelligence Program. 

12 ‘‘(3) Any subsequent vulnerability assessment of a 

13 major system and its significant items of supply shall in14 clude use of an analysis-based approach and, if applicable, 

15 a testing-based approach, to monitor the exploitation po16 tential of such system and reexamine the factors described 

17 in subparagraphs (A) through (E) of subsection (a)(1). 

18 ‘‘(c) MAJOR SYSTEM MANAGEMENT.—The Director 

19 of National Intelligence shall give due consideration to the 

20 vulnerability assessments prepared for a given major sys21 tem when developing and determining the National Intel22 ligence Program budget. 

23 ‘‘(d) CONGRESSIONAL OVERSIGHT.—(1) The Direc24 tor of National Intelligence shall provide to the congres25 sional intelligence committees a copy of each vulnerability 


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1 assessment conducted under subsection (a) or (b) not later 

2 than 10 days after the date of the completion of such as3 sessment. 

4 ‘‘(2) The Director of National Intelligence shall pro5 vide the congressional intelligence committees with a pro6 posed schedule for subsequent vulnerability assessments of 

7 a major system under subsection (b) when providing such 

8 committees with the initial vulnerability assessment under 

9 subsection (a) of such system as required by paragraph 

10 (1). 

11 ‘‘(e) DEFINITIONS.—In this section: 

12 ‘‘(1) The term ‘items of supply’— 

13 ‘‘(A) means any individual part, compo14 nent, subassembly, assembly, or subsystem inte15 gral to a major system, and other property 

16 which may be replaced during the service life of 

17 the major system, including spare parts and re18 plenishment parts; and 

19 ‘‘(B) does not include packaging or label20 ing associated with shipment or identification of 

21 items. 

22 ‘‘(2) The term ‘major system’ has the meaning 

23 given that term in section 506A(e). 

24 ‘‘(3) The term ‘Milestone B’ means a decision 

25 to enter into system development and demonstration 


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1 pursuant to guidance prescribed by the Director of 

2 National Intelligence. 

3 ‘‘(4) The term ‘vulnerability assessment’ means 

4 the process of identifying and quantifying 

5 vulnerabilities in a major system and its significant 

6 items of supply.’’. 

7 (2) TABLE OF CONTENTS AMENDMENT.—The 

8 table of contents in the first section of the National 

9 Security Act of 1947, as amended by section 305 of 

10 this Act, is further amended by inserting after the 

11 item relating to section 506B, as added by section 

12 305(b), the following: 

‘‘Sec. 506C. Vulnerability assessments of major systems.’’. 

13 (3) DEFINITION OF MAJOR SYSTEM.—Para14 graph (3) of section 506A(e) of the National Secu15 rity Act of 1947 (50 U.S.C. 415a–1(e)) is amended 

16 to read as follows: 

17 ‘‘(3) The term ‘major system’ has the meaning 

18 given that term in section 4 of the Office of Federal 

19 Procurement Policy Act (41 U.S.C. 403).’’. 

20 (b) REPORTS ON THE ACQUISITION OF MAJOR SYS21 TEMS.— 

22 (1) REPORTS.— 

23 (A) IN GENERAL.—Title V of the National 

24 Security Act of 1947 (50 U.S.C. 413 et seq.), 

25 as amended by sections 305, 321, and 322 of 


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1 this Act, is further amended by inserting after 

2 section 506D, as added by section 322(a)(1), 

3 the following new section: 

4 ‘‘REPORTS ON THE ACQUISITION OF MAJOR SYSTEMS

5 ‘‘SEC. 506E. (a) ANNUAL REPORTS REQUIRED.—(1) 

6 The Director of National Intelligence shall submit to the 

7 congressional intelligence committees each year, at the 

8 same time the budget of the President for the fiscal year 

9 beginning in such year is submitted to Congress pursuant 

10 to section 1105 of title 31, United States Code, a separate 

11 report on each acquisition of a major system by an ele12 ment of the intelligence community. 

13 ‘‘(2) Each report under this section shall be known 

14 as a ‘Report on the Acquisition of Major Systems’. 

15 ‘‘(b) ELEMENTS.—Each report under this section 

16 shall include, for the acquisition of a major system, infor17 mation on the following: 

18 ‘‘(1) The current total acquisition cost for such 

19 system, and the history of such cost from the date 

20 the system was first included in a report under this 

21 section to the end of the fiscal year immediately pre22 ceding the submission of the report under this sec23 tion. 

24 ‘‘(2) The current development schedule for the 

25 system, including an estimate of annual development 

26 costs until development is completed. 


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1 ‘‘(3) The planned procurement schedule for the 

2 system, including the best estimate of the Director 

3 of National Intelligence of the annual costs and 

4 units to be procured until procurement is completed. 

5 ‘‘(4) A full life-cycle cost analysis for such sys6 tem. 

7 ‘‘(5) The result of any significant test and eval8 uation of such major system as of the date of the 

9 submission of such report, or, if a significant test 

10 and evaluation has not been conducted, a statement 

11 of the reasons therefor and the results of any other 

12 test and evaluation that has been conducted of such 

13 system. 

14 ‘‘(6) The reasons for any change in acquisition 

15 cost, or schedule, for such system from the previous 

16 report under this section, if applicable. 

17 ‘‘(7) The major contracts or subcontracts re18 lated to the major system. 

19 ‘‘(8) If there is any cost or schedule variance 

20 under a contract referred to in paragraph (7) since 

21 the previous report under this section, the reasons 

22 for such cost or schedule variance. 

23 ‘‘(c) DETERMINATION OF INCREASE IN COSTS.—Any 

24 determination of a percentage increase in the acquisition 

25 costs of a major system for which a report is filed under 


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1 this section shall be stated in terms of constant dollars 

2 from the first fiscal year in which funds are appropriated 

3 for such contract. 

4 ‘‘(d) SUBMISSION TO THE CONGRESSIONAL ARMED

5 SERVICES COMMITTEES.—To the extent that the report 

6 required by subsection (a) addresses an element of the in7 telligence community within the Department of Defense, 

8 the Director of National Intelligence shall submit that por9 tion of the report, and any associated material that is nec10 essary to make that portion understandable, to the Com11 mittee on Armed Services of the Senate and the Com12 mittee on Armed Services of the House of Representatives. 

13 ‘‘(e) DEFINITIONS.—In this section: 

14 ‘‘(1) The term ‘acquisition cost’, with respect to 

15 a major system, means the amount equal to the total 

16 cost for development and procurement of, and sys17 tem-specific construction for, such system. 

18 ‘‘(2) The term ‘full life-cycle cost’, with respect 

19 to the acquisition of a major system, means all costs 

20 of development, procurement, construction, deploy21 ment, and operation and support for such program, 

22 without regard to funding source or management 

23 control, including costs of development and procure24 ment required to support or utilize such system. 


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1 ‘‘(3) The term ‘major contract’, with respect to 

2 a major system acquisition, means each of the 6 

3 largest prime, associate, or government-furnished 

4 equipment contracts under the program that is in 

5 excess of $40,000,000 and that is not a firm, fixed 

6 price contract. 

7 ‘‘(4) The term ‘major system’ has the meaning 

8 given that term in section 506A(e). 

9 ‘‘(5) The term ‘significant test and evaluation’ 

10 means the functional or environmental testing of a 

11 major system or of the subsystems that combine to 

12 create a major system.’’. 

13 (B) APPLICABILITY DATE.—The first re14 port required to be submitted under section 

15 506E(a) of the National Security Act of 1947, 

16 as added by subparagraph (A), shall be sub17 mitted with the budget for fiscal year 2011 sub18 mitted by the President under section 1105 of 

19 title 31, United States Code. 

20 (C) TABLE OF CONTENTS AMENDMENT.— 

21 The table of contents in the first section of that 

22 Act is amended by inserting after the item re23 lating to section 506D, as added by section 

24 322(a)(2), the following new item: 

‘‘Sec. 506E. Reports on the acquisition of major systems.’’. 


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1 (2) MAJOR DEFENSE ACQUISITION PRO2 GRAMS.—Nothing in this subsection, subsection (c), 

3 or an amendment made by such subsections, shall be 

4 construed to exempt an acquisition program of the 

5 Department of Defense from the requirements of 

6 chapter 144 of title 10, United States Code or De7 partment of Defense Directive 5000, to the extent 

8 that such requirements are otherwise applicable. 

9 (c) EXCESSIVE COST GROWTH OF MAJOR SYS10 TEMS.— 

11 (1) NOTIFICATION.—Title V of the National 

12 Security Act of 1947 (50 U.S.C. 413 et seq.), as 

13 amended by sections 305, 321, 322, and 323 of this 

14 Act, is further amended by inserting after section 

15 506E, as added by section 323(a), the following new 

16 section: 

17 ‘‘EXCESSIVE COST GROWTH OF MAJOR SYSTEMS

18 ‘‘SEC. 506F. (a) COST INCREASES OF AT LEAST 25 

19 PERCENT.—(1)(A) On a continuing basis, and separate 

20 from the submission of any report on a major system re21 quired by section 506E of this Act, the program manager 

22 shall determine if the acquisition cost of such major sys23 tem has increased by at least 25 percent as compared to 

24 the baseline cost of such major system. 


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1 ‘‘(B) Not later than 10 days after the date that a 

2 program manager determines that an increase described 

3 in subparagraph (A) has occurred, the program manager 

4 shall submit to the Director of National Intelligence notifi5 cation of such increase. 

6 ‘‘(2)(A) If, after receiving a notification described in 

7 paragraph (1)(B), the Director of National Intelligence 

8 determines that the acquisition cost of a major system has 

9 increased by at least 25 percent, the Director shall submit 

10 to the congressional intelligence committees a written noti11 fication of such determination as described in subpara12 graph (B), a description of the amount of the increase in 

13 the acquisition cost of such major system, and a certifi14 cation as described in subparagraph (C). 

15 ‘‘(B) The notification required by subparagraph (A) 

16 shall include— 

17 ‘‘(i) an updated cost estimate; 

18 ‘‘(ii) the date on which the determination cov19 ered by such notification was made; 

20 ‘‘(iii) contract performance assessment informa21 tion with respect to each significant contract or sub22 contract related to such major system, including the 

23 name of the contractor, the phase of the contract at 

24 the time of the report, the percentage of work under 

25 the contract that has been completed, any change in 


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1 contract cost, the percentage by which the contract 

2 is currently ahead or behind schedule, and a sum3 mary explanation of significant occurrences, such as 

4 cost and schedule variances, and the effect of such 

5 occurrences on future costs and schedules; 

6 ‘‘(iv) the prior estimate of the full life-cycle cost 

7 for such major system, expressed in constant dollars 

8 and in current year dollars; 

9 ‘‘(v) the current estimated full life-cycle cost of 

10 such major system, expressed in constant dollars 

11 and current year dollars; 

12 ‘‘(vi) a statement of the reasons for any in13 creases in the full life-cycle cost of such major sys14 tem; 

15 ‘‘(vii) the current change and the total change, 

16 in dollars and expressed as a percentage, in the full 

17 life-cycle cost applicable to such major system, stat18 ed both in constant dollars and current year dollars; 

19 ‘‘(viii) the completion status of such major sys20 tem expressed as the percentage— 

21 ‘‘(I) of the total number of years for which 

22 funds have been appropriated for such major 

23 system compared to the number of years for 

24 which it is planned that such funds will be ap25 propriated; and 


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1 ‘‘(II) of the amount of funds that have 

2 been appropriated for such major system com3 pared to the total amount of such funds which 

4 it is planned will be appropriated; 

5 ‘‘(ix) the action taken and proposed to be taken 

6 to control future cost growth of such major system; 

7 and 

8 ‘‘(x) any changes made in the performance or 

9 schedule of such major system and the extent to 

10 which such changes have contributed to the increase 

11 in full life-cycle costs of such major system. 

12 ‘‘(C) The certification described in this subparagraph 

13 is a written certification made by the Director and sub14 mitted to the congressional intelligence committees that— 

15 ‘‘(i) the acquisition of such major system is es16 sential to the national security; 

17 ‘‘(ii) there are no alternatives to such major 

18 system that will provide equal or greater intelligence 

19 capability at equal or lesser cost to completion; 

20 ‘‘(iii) the new estimates of the full life-cycle cost 

21 for such major system are reasonable; and 

22 ‘‘(iv) the management structure for the acquisi23 tion of such major system is adequate to manage 

24 and control full life-cycle cost of such major system. 


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1 ‘‘(b) COST INCREASES OF AT LEAST 50 PERCENT.— 

2 (1)(A) On a continuing basis, and separate from the sub3 mission of any report on a major system required by sec4 tion 506E of this Act, the program manager shall deter5 mine if the acquisition cost of such major system has in6 creased by at least 50 percent as compared to the baseline 

7 cost of such major system. 

8 ‘‘(B) Not later than 10 days after the date that a 

9 program manager determines that an increase described 

10 in subparagraph (A) has occurred, the program manager 

11 shall submit to the Director of National Intelligence notifi12 cation of such increase. 

13 ‘‘(2) If, after receiving a notification described in 

14 paragraph (1)(B), the Director of National Intelligence 

15 determines that the acquisition cost of a major system has 

16 increased by at least 50 percent as compared to the base17 line cost of such major system, the Director shall submit 

18 to the congressional intelligence committees a written cer19 tification stating that— 

20 ‘‘(A) the acquisition of such major system is es21 sential to the national security; 

22 ‘‘(B) there are no alternatives to such major 

23 system that will provide equal or greater intelligence 

24 capability at equal or lesser cost to completion; 


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1 ‘‘(C) the new estimates of the full life-cycle cost 

2 for such major system are reasonable; and 

3 ‘‘(D) the management structure for the acquisi4 tion of such major system is adequate to manage 

5 and control the full life-cycle cost of such major sys6 tem. 

7 ‘‘(3) In addition to the certification required by para8 graph (2), the Director of National Intelligence shall sub9 mit to the congressional intelligence committees an up10 dated notification, with current accompanying informa11 tion, as required by subsection (a)(2). 

12 ‘‘(c) PROHIBITION ON OBLIGATION OF FUNDS.—(1) 

13 If a written certification required under subsection 

14 (a)(2)(A) is not submitted to the congressional intelligence 

15 committees within 90 days of the notification made under 

16 subsection (a)(1)(B), funds appropriated for the acquisi17 tion of a major system may not be obligated for a major 

18 contract under the program. Such prohibition on the obli19 gation of funds shall cease to apply at the end of the 30- 

20 day period of a continuous session of Congress that begins 

21 on the date on which Congress receives the notification 

22 required under subsection (a)(2). 

23 ‘‘(2) If a written certification required under sub24 section (b)(2) is not submitted to the congressional intel25 ligence committees within 90 days of the notification made 


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1 under subsection (b)(1)(B), funds appropriated for the ac2 quisition of a major system may not be obligated for a 

3 major contract under the program. Such prohibition on 

4 the obligation of funds for the acquisition of a major sys5 tem shall cease to apply at the end of the 30-day period 

6 of a continuous session of Congress that begins on the 

7 date on which Congress receives the notification required 

8 under subsection (b)(3). 

9 ‘‘(d) INITIAL CERTIFICATIONS.—Notwithstanding 

10 subsection (c), for any major system for which a written 

11 certification is required under either subsection (a)(2) or 

12 (b)(2) on the date of the enactment of the Intelligence Au13 thorization Act for Fiscal Year 2010, such written certifi14 cation shall be submitted to the congressional intelligence 

15 committees within 180 days of such date of enactment. 

16 If such written certification is not submitted to the con17 gressional intelligence committees within 180 days of such 

18 date of enactment, funds appropriated for the acquisition 

19 of a major system may not be obligated for a major con20 tract under the program. Such prohibition on the obliga21 tion of funds for the acquisition of a major system shall 

22 cease to apply at the end of the 30-day period of a contin23 uous session of Congress that begins on the date on which 

24 Congress receives the notification required under sub25 section (a)(2) or (b)(3). 


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1 ‘‘(e) SUBMISSION TO THE CONGRESSIONAL ARMED

2 SERVICES COMMITTEES.—To the extent that a submission 

3 required to be made to the congressional intelligence com4 mittees under this section addresses an element of the in5 telligence community within the Department of Defense, 

6 the Director of National Intelligence shall submit that por7 tion of the submission, and any associated material that 

8 is necessary to make that portion understandable, to the 

9 Committee on Armed Services of the Senate and the Com10 mittee on Armed Services of the House of Representatives. 

11 ‘‘(f) DEFINITIONS.—In this section: 

12 ‘‘(1) The term ‘acquisition cost’ has the mean13 ing given that term in section 506E(d). 

14 ‘‘(2) The term ‘baseline cost’, with respect to a 

15 major system, means the projected acquisition cost 

16 of such system that is approved by the Director of 

17 National Intelligence at Milestone B or an equivalent 

18 acquisition decision for the development, procure19 ment, and construction of such system. The baseline 

20 cost may be in the form of an independent cost esti21 mate. 

22 ‘‘(3) The term ‘cost estimate’— 

23 ‘‘(A) means an assessment and quantifica24 tion of all costs and risks associated with the 

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1 sonably available information at the time a 

2 written certification is required under either 

3 subsection (a)(2) or (b)(2); and 

4 ‘‘(B) does not mean an ‘independent cost 

5 estimate’. 

6 ‘‘(4) The term ‘full life-cycle cost’ has the 

7 meaning given that term in section 506E(d). 

8 ‘‘(5) The term ‘independent cost estimate’ has 

9 the meaning given that term in section 506A(e). 

10 ‘‘(6) The term ‘major system’ has the meaning 

11 given that term in section 506A(e). 

12 ‘‘(7) The term ‘Milestone B’ means a decision 

13 to enter into system development and demonstration 

14 pursuant to guidance prescribed by the Director of 

15 National Intelligence. 

16 ‘‘(8) The term ‘program manager’, with respect 

17 to a major system, means— 

18 ‘‘(A) the head of the element of the intel19 ligence community which is responsible for the 

20 budget, cost, schedule, and performance of the 

21 major system; or 

22 ‘‘(B) in the case of a major system within 

23 the Office of the Director of National Intel24 ligence, the deputy who is responsible for the 


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1 budget, cost, schedule, and performance of the 

2 major system.’’. 

3 (2) TABLE OF CONTENTS AMENDMENT.—The 

4 table of contents in the first section of that Act, as 

5 amended by sections 305, 321, 322, and 323 of this 

6 Act, is further amended by inserting after the items 

7 relating to section 506E, as added by section 

8 323(a)(3), the following new item: 

‘‘Sec. 506F. Excessive cost growth of major systems.’’. 

9 (d) FUTURE BUDGET PROJECTIONS.— 

10 (1) IN GENERAL.—Title V of the National Se11 curity Act of 1947 (50 U.S.C. 413 et seq.), as 

12 amended by sections 305, 321, 322, 323, and 324 

13 of this Act, is further amended by inserting after 

14 section 506F, as added by section 324(a), the fol15 lowing new section: 

16 ‘‘FUTURE BUDGET PROJECTIONS

17 ‘‘SEC. 506G. (a) FUTURE YEAR INTELLIGENCE

18 PLANS.—(1) The Director of National Intelligence, with 

19 the concurrence of the Office of Management and Budget, 

20 shall provide to the congressional intelligence committees 

21 a Future Year Intelligence Plan, as described in para22 graph (2), for— 

23 ‘‘(A) each expenditure center in the National 

24 Intelligence Program; and 


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1 ‘‘(B) each major system in the National Intel2 ligence Program. 

3 ‘‘(2)(A) A Future Year Intelligence Plan submitted 

4 under this subsection shall include the year-by-year pro5 posed funding for each center or system referred to in sub6 paragraph (A) or (B) of paragraph (1), for the budget 

7 year for which the Plan is submitted and not less than 

8 the 4 subsequent budget years. 

9 ‘‘(B) A Future Year Intelligence Plan submitted 

10 under subparagraph (B) of paragraph (1) for a major sys11 tem shall include— 

12 ‘‘(i) the estimated total life-cycle cost of such 

13 major system; and 

14 ‘‘(ii) any major acquisition or programmatic 

15 milestones for such major system. 

16 ‘‘(b) LONG-TERM BUDGET PROJECTIONS.—(1) The 

17 Director of National Intelligence, with the concurrence of 

18 the Director of the Office of Management and Budget, 

19 shall provide to the congressional intelligence committees 

20 a Long-term Budget Projection for each element of the 

21 National Intelligence Program acquiring a major system 

22 that includes the budget for such element for the 5-year 

23 period following the last budget year for which proposed 

24 funding was submitted under subsection (a)(2)(A). 


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1 ‘‘(2) A Long-term Budget Projection submitted 

2 under paragraph (1) shall include projections for the ap3 propriate element of the intelligence community for— 

4 ‘‘(A) pay and benefits of officers and employees 

5 of such element; 

6 ‘‘(B) other operating and support costs and 

7 minor acquisitions of such element; 

8 ‘‘(C) research and technology required by such 

9 element; 

10 ‘‘(D) current and planned major system acqui11 sitions for such element; and 

12 ‘‘(E) any unplanned but necessary next-genera13 tion major system acquisitions for such element. 

14 ‘‘(c) SUBMISSION TO CONGRESS.—Each Future Year 

15 Intelligence Plan or Long-term Budget Projection re16 quired under subsection (a) or (b) shall be submitted to 

17 Congress along with the budget for a fiscal year submitted 

18 to Congress by the President pursuant to section 1105 of 

19 title 31, United States Code. 

20 ‘‘(d) CONTENT OF LONG-TERM BUDGET PROJEC21 TIONS.—(1) Each Long-term Budget Projection sub22 mitted under subsection (b) shall include— 

23 ‘‘(A) a budget projection based on constrained 

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1 est or no cost-growth for undefined, next-generation 

2 systems; and 

3 ‘‘(B) a budget projection based on constrained 

4 budgets, modest cost increases in executing current 

5 and planned programs, and more costly next-genera6 tion systems. 

7 ‘‘(2) Each budget projection required by paragraph 

8 (1) shall include a description of whether, and to what 

9 extent, the total projection for each year exceeds the level 

10 that would result from applying the most recent Office of 

11 Management and Budget inflation estimate to the budget 

12 of that element of the intelligence community. 

13 ‘‘(e) NEW MAJOR SYSTEM AFFORDABILITY RE14 PORT.—(1) Beginning on February 1, 2010, not later 

15 than 30 days prior to the date that an element of the intel16 ligence community may proceed to Milestone A, Milestone 

17 B, or an analogous stage of system development, in the 

18 acquisition of a major system in the National Intelligence 

19 Program, the Director of National Intelligence, with the 

20 concurrence of the Director of the Office of Management 

21 and Budget, shall provide a report on such major system 

22 to the congressional intelligence committees. 

23 ‘‘(2)(A) A report submitted under paragraph (1) 

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1 ated, is projected to cause an increase in the most recent 

2 Future Year Intelligence Plan and Long-term Budget 

3 Projection for that element of the intelligence community. 

4 ‘‘(B) If an increase is projected under subparagraph 

5 (A), the report required by this subsection shall include 

6 a specific finding, and the reasons therefor, by the Direc7 tor of National Intelligence and the Director of the Office 

8 of Management and Budget that such increase is nec9 essary for national security. 

10 ‘‘(f) DEFINITIONS.—In this section: 

11 ‘‘(1) The term ‘major system’ has the meaning 

12 given that term in section 506A(e). 

13 ‘‘(2) The term ‘Milestone A’ means a decision 

14 to enter into concept refinement and technology ma15 turity demonstration pursuant to guidance issued by 

16 the Director of National Intelligence. 

17 ‘‘(3) The term ‘Milestone B’ means a decision 

18 to enter into system development, integration, and 

19 demonstration pursuant to guidance prescribed by 

20 the Director of National Intelligence.’’. 

21 (2) APPLICABILITY DATE.—The first Future 

22 Year Intelligence Plan or Long-term Budget Projec23 tion required to be submitted under subsection (a) 

24 or (b) of section 506G of the National Security Act 

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1 mitted with the budget for fiscal year 2011 sub2 mitted by the President under section 1105 of title 

3 31, United States Code. 

4 (3) TABLE OF CONTENTS AMENDMENT.—The 

5 table of contents in the first section of that Act, as 

6 amended by sections 305, 321, 322, 323, and 324 

7 of this Act, is further amended by inserting after the 

8 items relating to section 506F, as added by section 

9 324(b), the following new item: 

‘‘Sec. 506G. Future budget projections.’’. 

10 (e) CORRECTING LONG-STANDING MATERIAL WEAK11 NESSES.— 

12 (1) DEFINITIONS.—In this subsection: 

13 (A) COVERED ELEMENT OF THE INTEL14 LIGENCE COMMUNITY.—The term ‘‘covered ele15 ment of the intelligence community’’ means— 

16 (i) the Central Intelligence Agency; 

17 (ii) the Defense Intelligence Agency; 

18 (iii) the National Geospatial-Intel19 ligence Agency; 

20 (iv) the National Reconnaissance Of21 fice; or 

22 (v) the National Security Agency. 

23 (B) INDEPENDENT AUDITOR.—The term 

24 ‘‘independent auditor’’ means an individual 

25 who— 


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1 (i)(I) is a Federal, State, or local gov2 ernment auditor who meets the independ3 ence standards included in generally ac4 cepted government auditing standards; or 

5 (II) is a public accountant who meets 

6 such independence standards; and 

7 (ii) is designated as an auditor by the 

8 Director of National Intelligence or the 

9 head of a covered element of the intel10 ligence community, as appropriate. 

11 (C) LONG-STANDING, CORRECTABLE MATE12 RIAL WEAKNESS.—The term ‘‘long-standing, 

13 correctable material weakness’’ means a mate14 rial weakness— 

15 (i) that was first reported in the an16 nual financial report of a covered element 

17 of the intelligence community for a fiscal 

18 year prior to fiscal year 2007; and 

19 (ii) the correction of which is not sub20 stantially dependent on a business system 

21 that will not be implemented prior to the 

22 end of fiscal year 2010. 

23 (D) MATERIAL WEAKNESS.—The term 

24 ‘‘material weakness’’ has the meaning given 

25 that term under the Office of Management and 


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1 Budget Circular A–123, entitled ‘‘Manage2 ment’s Responsibility for Internal Control,’’ re3 vised December 21, 2004. 

4 (E) COVERED PROGRAM.—The term ‘‘cov5 ered program’’ means— 

6 (i) the Central Intelligence Agency 

7 Program; 

8 (ii) the Consolidated Cryptologic Pro9 gram; 

10 (iii) the General Defense Intelligence 

11 Program; 

12 (iv) the National Geospatial-Intel13 ligence Program; or 

14 (v) the National Reconnaissance Pro15 gram. 

16 (F) SENIOR INTELLIGENCE MANAGEMENT

17 OFFICIAL.—The term ‘‘senior intelligence man18 agement official’’ means an official within a 

19 covered element of the intelligence community 

20 who holds a position— 

21 (i)(I) for which the level of the duties 

22 and responsibilities and the rate of pay are 

23 comparable to that of a position— 

24 (aa) above grade 15 of the Gen25 eral Schedule (as described in section 


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1 5332 of title 5, United States Code); 

2 or 

3 (bb) at or above level IV of the 

4 Executive Level (as described in sec5 tion 5315 of title 5, United States 

6 Code); or 

7 (II) as the head of a covered element 

8 of the intelligence community; and 

9 (ii) which is compensated for employ10 ment with funds appropriated pursuant to 

11 an authorization of appropriations in this 

12 Act. 

13 (2) IDENTIFICATION OF SENIOR INTELLIGENCE

14 MANAGEMENT OFFICIALS.— 

15 (A) REQUIREMENT TO IDENTIFY.—Not 

16 later than 30 days after the date of the enact17 ment of this Act, the head of a covered element 

18 of the intelligence community shall identify each 

19 senior intelligence management official of such 

20 element who is responsible for correcting a 

21 long-standing, correctable material weakness. 

22 (B) HEAD OF A COVERED ELEMENT OF

23 THE INTELLIGENCE COMMUNITY.—The head of 

24 a covered element of the intelligence community 

25 may designate himself or herself as the senior 


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1 intelligence management official responsible for 

2 correcting a long-standing, correctable material 

3 weakness. 

4 (C) REQUIREMENT TO UPDATE DESIGNA5 TION.—In the event a senior intelligence man6 agement official identified under subparagraph 

7 (A) is determined by the head of the appro8 priate covered element of the intelligence com9 munity to no longer be responsible for cor10 recting a long-standing, correctable material 

11 weakness, the head of such element shall iden12 tify the successor to such official not later than 

13 10 days after the date of such determination. 

14 (3) NOTIFICATION.—Not later than 10 days 

15 after the date that the head of a covered element of 

16 the intelligence community has identified a senior in17 telligence management official pursuant to sub18 section (b)(1), the head of such element shall pro19 vide written notification of such identification to the 

20 Director of National Intelligence and to such senior 

21 intelligence management official. 

22 (4) INDEPENDENT REVIEW.— 

23 (A) NOTIFICATION OF CORRECTION OF DE24 FICIENCY.—A senior intelligence management 

25 official who has received a notification under 


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1 paragraph (3) regarding a long-standing, cor2 rectable material weakness shall notify the head 

3 of the appropriate covered element of the intel4 ligence community, not later than 5 days after 

5 the date that such official determines that the 

6 specified material weakness is corrected. 

7 (B) REQUIREMENT FOR INDEPENDENT RE8 VIEW.— 

9 (i) IN GENERAL.—Not later than 10 

10 days after the date a notification is pro11 vided under subparagraph (A), the head of 

12 the appropriate covered element of the in13 telligence community shall appoint an inde14 pendent auditor to conduct an independent 

15 review to determine whether the specified 

16 long-standing, correctable material weak17 ness has been corrected. 

18 (ii) REVIEW ALREADY IN PROCESS.— 

19 If an independent review is already being 

20 conducted by an independent auditor, the 

21 head of the covered element of the intel22 ligence community may approve the con23 tinuation of such review to comply with 

24 clause (i). 


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1 (iii) CONDUCT OF REVIEW.—A review 

2 conducted under clause (i) or (ii) shall be 

3 conducted as expeditiously as possible and 

4 in accordance with generally accepted ac5 counting principles. 

6 (C) NOTIFICATION OF RESULTS OF RE7 VIEW.—Not later than 5 days after the date 

8 that a review required by subparagraph (B) is 

9 completed, the independent auditor shall submit 

10 to the head of the covered element of the intel11 ligence community, the Director of National In12 telligence, and the senior intelligence manage13 ment official involved a notification of the re14 sults of such review. 

15 (5) CONGRESSIONAL OVERSIGHT.—The head of 

16 a covered element of the intelligence community 

17 shall notify the congressional intelligence committees 

18 not later than 30 days after the date of— 

19 (A) that a senior intelligence management 

20 official is identified under paragraph (2)(A) and 

21 notified under paragraph (3); or 

22 (B) the correction of a long-standing, cor23 rectable material weakness, as verified by an 

24 independent review under paragraph (4)(B). 


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1 SEC. 6009. ENDING THE IRS SLUSH FUND. 

2 The Internal Revenue Service shall deposit in the 

3 Treasury as miscellaneous receipts all of the fees it re4 ceives for services. 

5 SEC. 6010. RESCINDING UNSPENT EARMARKS. 

6 (a) DEFINITION.—In this section, the term ‘‘ear7 mark’’ means the following: 

8 (1) A congressionally directed spending item, as 

9 defined in Rule XLIV of the Standing Rules of the 

10 Senate. 

11 (2) A congressional earmark for purposes of 

12 Rule XXI of the House of Representatives. 

13 (b) RESCISSION.—Any appropriated earmark with 

14 more than 90 percent of the appropriated amount remain15 ing available for obligation at the end of the 9th fiscal 

16 year following the fiscal year in which the earmark was 

17 made available is rescinded effective at the end of that 

18 9th fiscal year. 

19 (c) AGENCY IDENTIFICATION AND REPORTS.— 

20 (1) AGENCY IDENTIFICATION.—Each Federal 

21 agency shall identify and report every project that is 

22 an earmark with an unobligated balance at the end 

23 of each fiscal year to the Director of OMB. 

24 (2) ANNUAL REPORT.—The Director of OMB 

25 shall submit to Congress and publically post on the 

26 website of OMB an annual report that includes— 


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•S 1808 IS

1 (A) a listing and accounting for earmarks 

2 with unobligated balances summarized by agen3 cy including the amount of the original ear4 mark, amount of the unobligated balance and 

5 year when the funding expires, if applicable; 

6 (B) the number of rescissions resulting 

7 from this section and the annual savings result8 ing from this section for the previous fiscal 

9 year; and 

10 (C) a listing a accounting for earmarks 

11 scheduled to be rescinded at the end of the cur12 rent fiscal year. 

13 SEC. 6011. REPEALING THE RAIL-LINE RELOCATION PRO14 GRAM. 

15 Section 20154 of title 49, United States Code, is re16 pealed. 

17 SEC. 6012. ELIMINATING RADIO/TV MARTI AT THE OFFICE 

18 OF CUBA BROADCASTING. 

19 (a) RADIO BROADCASTING TO CUBA ACT.—The 

20 Radio Broadcasting to Cuba Act (22 U.S.C. 1465 et seq.) 

21 is repealed. 

22 (b) TELEVISION BROADCASTING TO CUBA ACT.— 

23 The Television Broadcasting to Cuba Act (22 U.S.C. 

24 1465aa et seq.) is repealed. 


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1 (c) REPORT ON PUBLIC COMMUNICATION WITH

2 CUBAN PEOPLE.—Not later than 90 days after the date 

3 of the enactment of this Act, the Secretary of State, in 

4 consultation with the Broadcasting Board of Governors, 

5 the International Broadcasting Bureau, and other relevant 

6 agencies and organizations, shall submit a report to the 

7 Committee on Appropriations of the Senate, the Com8 mittee on Foreign Relations of the Senate, the Committee 

9 on Appropriations of the House of Representatives, and 

10 the Committee on Foreign Affairs of the House of Rep11 resentatives that describes— 

12 (1) alternatives to television and radio broad13 casts for disseminating news and information to, 

14 and otherwise communicating with, the Cuban peo15 ple, including DVDs, the Internet, cell phones, and 

16 other handheld electronic devices; and 

17 (2) the relative effectiveness of each of the com18 munication alternatives identified under paragraph 

19 (1). 

20 SEC. 6013. ENDING SUPPORT FOR THE COLOMBIAN MILI21 TARY. 

22 None of the funds appropriated or otherwise made 

23 available by any Act under the headings ‘‘INTERNATIONAL

24 NARCOTICS CONTROL AND LAW ENFORCEMENT’’ or ‘‘FOR25 EIGN MILITARY FINANCING PROGRAM’’ may be used for 


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•S 1808 IS

1 direct support to the military forces of the Government 

2 of Colombia. 

Æ 


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