Calendar No. 723

103D CONGRESS

2D SESSION S. 2467

[Report No. 103–412]

A BILL

To approve and implement the trade agreements

trade negotiations.concluded in the Uruguay Round of multilateral

NOVEMBER 22, 1994

Reported without amendment
II

Calendar No. 723

103D CONGRESS

2D SESSION S. 2467

[Report No. 103–412]

To approve and implement the trade agreements concluded in the Uruguay

Round of multilateral trade negotiations.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 27 (legislative day, SEPTEMBER 12), 1994

Mr. MITCHELL (for himself, Mr. MOYNIHAN, and Mr. PACKWOOD) (by request) introduced the following bill; which was referred jointly to the

Committees on Finance, Agriculture, Nutrition, and Forestry, Commerce,

Science, and Transportation, Governmental Affairs, the Judiciary, and

Labor and Human Resources pursuant to 19 U.S.C. 2191(c)(1)

NOVEMBER 22, 1994

Reported under authority of the order of the Senate of October 3 (legislative

day, September 12), 1994 by Mr. MOYNIHAN (from the Committee on Finance), and on behalf of Mr. LEAHY (from the Committee on Agriculture,

Nutrition, and Forestry), and Mr. GLENN (from the Committee on Governmental Affairs), without amendment

NOVEMBER 22, 1994

Committees on Commerce, Science, and Transportation, the Judiciary, and

Labor and Human Resources discharged, pursuant to (19 U.S.C. 2191(e)(2)).

A BILL

To approve and implement the trade agreements concluded

in the Uruguay Round of multilateral trade negotiations.
2

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 AND TABLE OF CONTENTS.

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

5 ‘‘Uruguay Round Agreements Act’’.

6 (b) TABLE OF CONTENTS.—
3

Sec. 1. Short title and table of contents.

Sec. 2. Definitions.

TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING

TO, THE URUGUAY ROUND AGREEMENTS

Subtitle A—Approval of Agreements and Related Provisions

Sec. 101. Approval and entry into force of the Uruguay Round Agreements.

Sec. 102. Relationship of the agreements to United States law and State law.

Sec. 103. Implementing actions in anticipation of entry into force; regulations.

Subtitle B—Tariff Modifications

Sec. 111. Tariff modifications.

Sec. 112. Implementation of Schedule XX provisions on ship repairs.

Sec. 113. Liquidation or reliquidation and refund of duty paid on certain entries.

Sec. 114. Modifications to the HTS.

Sec. 115. Consultation and layover requirements for, and effective date of, proclaimed actions.

Sec. 116. Effective date.

Subtitle C—Uruguay Round Implementation and Dispute Settlement

Sec. 121. Definitions.

Sec. 122. Implementation of Uruguay Round Agreements.

Sec. 123. Dispute settlement panels and procedures.

Sec. 124. Annual report on the WTO.

Sec. 125. Review of participation in the WTO.

Sec. 126. Increased transparency.

Sec. 127. Access to the WTO dispute settlement process.

Sec. 128. Advisory committee participation.

Sec. 129. Administrative action following WTO panel reports.

Sec. 130. Effective date.

Subtitle D—Related Provisions

Sec. 131. Working party on worker rights.

Sec. 132. Implementation of rules of origin work program.

Sec. 133. Membership in WTO of boycotting countries.

Sec. 134. Africa trade and development policy.

Sec. 135. Objectives for extended negotiations.

Sec. 136. Repeal of tax on imported perfumes; drawback of tax on distilled

spirits used in perfume manufacture.

Sec. 137. Certain nonrubber footwear.

Sec. 138. Effective date.

TITLE II—ANTIDUMPING AND COUNTERVAILING DUTY

PROVISIONS

Sec. 201. Reference.

Subtitle A—General Provisions

Sec. 211. Action with respect to petitions.

Sec. 212. Petition and preliminary determination.

Sec. 213. De minimis dumping margin.
4

Sec. 214. Critical circumstances.

Sec. 215. Provisional measures.

Sec. 216. Conditions on acceptance of suspension agreements.

Sec. 217. Termination of investigation.

Sec. 218. Special rules for regional industries.

Sec. 219. Determination of weighted average dumping margin.

Sec. 220. Review of determinations.

Sec. 221. Review determinations.

Sec. 222. Definitions.

Sec. 223. Export price and constructed export price.

Sec. 224. Normal value.

Sec. 225. Currency conversion.

Sec. 226. Proprietary and nonproprietary information.

Sec. 227. Opportunity for comment by consumers and industrial users.

Sec. 228. Public notice and explanation of determinations.

Sec. 229. Sampling and averaging; determination of weighted average dumping

margin.

Sec. 230. Anticircumvention.

Sec. 231. Evidence.

Sec. 232. Antidumping petitions by third countries.

Sec. 233. Conforming amendments.

Sec. 234. Application to Canada and Mexico.

Subtitle B—Subsidies Provisions

PART 1—COUNTERVAILABLE SUBSIDIES

Sec. 251. Countervailable subsidy.

PART 2—REPEAL OF SECTION 303 AND CONFORMING AMENDMENTS

Sec. 261. Repeal of section 303.

Sec. 262. Imposition of countervailing duties.

Sec. 263. De minimis countervailable subsidy.

Sec. 264. Determination of countervailable subsidy rate.

Sec. 265. Assessment of countervailing duty.

Sec. 266. Nature of countervailable subsidy.

Sec. 267. Definition of developing and least-developed country.

Sec. 268. Upstream subsidies.

Sec. 269. Determination of countervailable subsidy rate.

Sec. 270. Conforming amendments.

PART 3—SECTION 303 INJURY INVESTIGATIONS

Sec. 271. Special rules for injury investigations for certain section 303 countervailing duty orders and investigations.

PART 4—ENFORCEMENT OF UNITED STATES RIGHTS UNDER THE

SUBSIDIES AGREEMENT

Sec. 281. Subsidies enforcement.

Sec. 282. Review of subsidies agreement.

Sec. 283. Amendments to title VII of the Tariff Act of 1930.

Subtitle C—Effective Date

Sec. 291. Effective date.
5

TITLE III—ADDITIONAL IMPLEMENTATION OF AGREEMENTS

Subtitle A—Safeguards

Sec. 301. Investigations, determinations, and recommendations by International

Trade Commission.

Sec. 302. Action by President after determination of import injury.

Sec. 303. Miscellaneous amendments.

Sec. 304. Effective date.

Subtitle B—Foreign Trade Barriers and Unfair Trade Practices

Sec. 311. Identification of foreign anticompetitive practices.

Sec. 312. Consultation with committees.

Sec. 313. Identification of countries that deny protection of intellectual property rights.

Sec. 314. Amendments to title III of the Trade Act of 1974.

Sec. 315. Objectives in intellectual property.

Sec. 316. Effective date.

Subtitle C—Unfair Practices in Import Trade

Sec. 321. Unfair practices in import trade.

Sec. 322. Effective date.

Subtitle D—Textiles

Sec. 331. Textile product integration.

Sec. 332. Amendment to section 204 of the Agricultural Act of 1956.

Sec. 333. Textile transshipments.

Sec. 334. Rules of origin for textile and apparel products.

Sec. 335. Effective date.

Subtitle E—Government Procurement

Sec. 341. Monitoring and enforcement of the agreement on government procurement.

Sec. 342. Conforming amendments.

Sec. 343. Reciprocal competitive procurement practices.

Sec. 344. Effective date.

Subtitle F—Technical Barriers to Trade

Sec. 351. Technical barriers to trade.

Sec. 352. Effective date.

TITLE IV—AGRICULTURE-RELATED PROVISIONS

Subtitle A—Agriculture

PART I—MARKET ACCESS

Sec. 401. Section 22 amendments.

Sec. 402. Cheese and chocolate crumb imports.

Sec. 403. Meat Import Act.

Sec. 404. Administration of tariff-rate quotas.

Sec. 405. Special agricultural safeguard authority.

PART II—EXPORTS
6

Sec. 411. Export programs.

Sec. 412. Other conforming amendments.

PART III—OTHER PROVISIONS

Sec. 421. Authority for certain actions under Article XXVIII.

Sec. 422. Tobacco imports.

Sec. 423. Tobacco proclamation authority.

Sec. 424. Report to Congress on access to Canadian dairy and poultry markets.

Sec. 425. Study of milk marketing order system.

Sec. 426. Additional program funding.

Subtitle B—Sanitary and Phytosanitary Measures

Sec. 431. Sanitary and phytosanitary measures.

Sec. 432. International standard-setting activities.

Subtitle C—Standards

Sec. 441. The Federal Seed Act.

Subtitle D—General Effective Date

Sec. 451. General effective date.

TITLE V—INTELLECTUAL PROPERTY

Sec. 501. Definition.

Subtitle A—Copyright Provisions

Sec. 511. Rental rights in computer programs.

Sec. 512. Civil penalties for unauthorized fixation of and trafficking in sound

recordings and music videos of live musical performances.

Sec. 513. Criminal penalties for unauthorized fixation of and trafficking in

sound recordings and music videos or live musical performances.

Sec. 514. Restored works.

Subtitle B—Trademark Provisions

Sec. 521. Definition of ‘‘abandoned’’.

Sec. 522. Nonregistrability of misleading geographic indications for wines and

spirits.

Sec. 523. Effective date.

Subtitle C—Patent Provisions

Sec. 531. Treatment of inventive activity.

Sec. 532. Patent term and internal priority.

Sec. 533. Patent rights.

Sec. 534. Effective dates and application.

TITLE VI—RELATED PROVISIONS

Subtitle A—Expiring Provisions

Sec. 601. Generalized System of Preferences.

Sec. 602. U.S. insular possessions.
7

Subtitle B—Certain Customs Provisions

Sec. 611. Reimbursements from customs user fee account.

Sec. 612. Merchandise processing fees.

Subtitle C—Conforming Amendments

Sec. 621. Conforming amendments.

TITLE VII—REVENUE PROVISIONS

Sec. 700. Amendment of 1986 Code and table of contents.

Subtitle A—Withholding Tax Provisions

Sec. 701. Withholding on distributions of Indian casino profits to tribal members.

Sec. 702. Voluntary withholding on certain Federal payments and on unemployment compensation.

Subtitle B—Provisions Relating to Estimated Taxes and Payments and

Deposits of Taxes

Sec. 711. Treatment of subpart F and section 936 income of taxpayers using

annualized method for estimated tax.

Sec. 712. Time for payments and deposits of certain taxes.

Sec. 713. Reduction in rate of interest paid on certain corporate overpayments.

Subtitle C—Earned Income Tax Credit

Sec. 721. Extension of earned income tax credit to military personnel stationed

outside the United States.

Sec. 722. Certain nonresident aliens ineligible for earned income tax credit.

Sec. 723. Income of prisoners disregarded in determining earned income tax

credit.

Subtitle D—Provisions Relating To Retirement Benefits

Sec. 731. Treatment of excess pension assets used for retiree health benefits.

Sec. 732. Rounding rules for cost-of-living adjustments.

Sec. 733. Increase in inclusion of social security benefits paid to nonresidents.

Subtitle E—Other Provisions

Sec. 741. Partnership distributions of marketable securities.

Sec. 742. Taxpayer identification numbers required at birth.

Sec. 743. Extension of Internal Revenue Service user fees.

Sec. 744. Modification of substantial understatement penalty for corporations

participating in tax shelters.

Sec. 745. Modification of authority to set terms and conditions for savings

bonds.

Subtitle F—Pension Plan Funding and Premiums

Sec. 750. Short title.

PART I—PENSION PLAN FUNDING
8

SUBPART A—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 751. Minimum funding requirements.

Sec. 752. Limitation on changes in current liability assumptions.

Sec. 753. Anticipation of bargained benefit increases.

Sec. 754. Modification of quarterly contribution requirement.

Sec. 755. Exceptions to excise tax on nondeductible contributions.

SUBPART B—AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME

SECURITY ACT OF 1974

Sec. 761. Minimum funding requirements.

Sec. 762. Limitation on changes in current liability assumptions.

Sec. 763. Anticipation of bargained benefit increases.

Sec. 764. Modification of quarterly contribution requirement.

SUBPART C—OTHER FUNDING PROVISIONS

Sec. 766. Prohibition on benefit increases where plan sponsor is in bankruptcy.

Sec. 767. Single sum distributions.

Sec. 768. Adjustments to lien for missed minimum funding contributions.

Sec. 769. Special funding rules for certain plans.

PART II—AMENDMENTS RELATED TO TITLE IV OF THE EMPLOYEE

RETIREMENT INCOME SECURITY ACT OF 1974

Sec. 771. Reportable events.

Sec. 772. Certain information required to be furnished to PBGC.

Sec. 773. Enforcement of minimum funding requirements.

Sec. 774. Computation of additional PBGC premium.

Sec. 775. Disclosure to participants.

Sec. 776. Missing participants.

Sec. 777. Modification of maximum guarantee for disability benefits.

Sec. 778. Procedures to facilitate distribution of termination benefits.

PART III—EFFECTIVE DATES

Sec. 781. Effective dates.

TITLE VIII—PIONEER PREFERENCES

Sec. 801. Pioneer preferences.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act:

3 (1) GATT 1947; GATT 1994.—

4 (A) GATT 1947.—The term ‘‘GATT 1947’’

5 means the General Agreement on Tariffs and

6 Trade, dated October 30, 1947, annexed to the

7 Final Act Adopted at the Conclusion of the Sec-
9

1 ond Session of the Preparatory Committee of

2 the United Nations Conference on Trade and

3 Employment, as subsequently rectified, amend4 ed, or modified by the terms of legal instru5 ments which have entered into force before the

6 date of entry into force of the WTO Agreement.

7 (B) GATT 1994.—The term ‘‘GATT 1994’’

8 means the General Agreement on Tariffs and

9 Trade annexed to the WTO Agreement.

10 (2) HTS.—The term ‘‘HTS’’ means the Har11 monized Tariff Schedule of the United States.

12 (3) INTERNATIONAL TRADE COMMISSION.—The

13 term ‘‘International Trade Commission’’ means the

14 United States International Trade Commission.

15 (4) MULTILATERAL TRADE AGREEMENT.—The

16 term ‘‘multilateral trade agreement’’ means an

17 agreement described in section 101(d) of this Act

18 (other than an agreement described in paragraph

19 (17) or (18) of such section).

20 (5) SCHEDULE XX.—The term ‘‘Schedule XX’’

21 means Schedule XX—United States of America an22 nexed to the Marrakesh Protocol to the GATT 1994.

23 (6) TRADE REPRESENTATIVE.—The term

24 ‘‘Trade Representative’’ means the United States

25 Trade Representative.
10

1 (7) URUGUAY ROUND AGREEMENTS.—The term

2 ‘‘Uruguay Round Agreements’’ means the agree3 ments approved by the Congress under section

4 101(a)(1).

5 (8) WORLD TRADE ORGANIZATION AND WTO.—

6 The terms ‘‘World Trade Organization’’ and

7 ‘‘WTO’’ mean the organization established pursuant

8 to the WTO Agreement.

9 (9) WTO AGREEMENT.—The term ‘‘WTO

10 Agreement’’ means the Agreement Establishing the

11 World Trade Organization entered into on April 15,

12 1994.

13 (10) WTO MEMBER AND WTO MEMBER COUN14 TRY.—The terms ‘‘WTO member’’ and ‘‘WTO mem15 ber country’’ mean a state, or separate customs ter16 ritory (within the meaning of Article XII of the

17 WTO Agreement), with respect to which the United

18 States applies the WTO Agreement.
11

1 TITLE I—APPROVAL OF, AND

2 GENERAL PROVISIONS RE3 LATING TO, THE URUGUAY

4 ROUND AGREEMENTS

5 Subtitle A—Approval of Agree6 ments and Related Provisions

7 SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE URU8 GUAY ROUND AGREEMENTS.

9 (a) APPROVAL OF AGREEMENTS AND STATEMENT OF

10 ADMINISTRATIVE ACTION.—Pursuant to section 1103 of

11 the Omnibus Trade and Competitiveness Act of 1988 (19

12 U.S.C. 2903) and section 151 of the Trade Act of 1974

13 (19 U.S.C. 2191), the Congress approves—

14 (1) the trade agreements described in sub15 section (d) resulting from the Uruguay Round of

16 multilateral trade negotiations under the auspices of

17 the General Agreement on Tariffs and Trade, en18 tered into on April 15, 1994, and submitted to the

19 Congress on September 27, 1994; and

20 (2) the statement of administrative action pro21 posed to implement the agreements that was submit22 ted to the Congress on September 27, 1994.

23 (b) ENTRY INTO FORCE.—At such time as the Presi24 dent determines that a sufficient number of foreign coun25 tries are accepting the obligations of the Uruguay Round
12

1 Agreements, in accordance with article XIV of the WTO

2 Agreement, to ensure the effective operation of, and ade3 quate benefits for the United States under, those Agree4 ments, the President may accept the Uruguay Round

5 Agreements and implement article VIII of the WTO

6 Agreement.

7 (c) AUTHORIZATION OF APPROPRIATIONS.—There

8 are authorized to be appropriated annually such sums as

9 may be necessary for the payment by the United States

10 of its share of the expenses of the WTO.

11 (d) TRADE AGREEMENTS TO WHICH THIS ACT AP12 PLIES.—Subsection (a) applies to the WTO Agreement

13 and to the following agreements annexed to that Agree14 ment:

15 (1) The General Agreement on Tariffs and

16 Trade 1994.

17 (2) The Agreement on Agriculture.

18 (3) The Agreement on the Application of Sani19 tary and Phytosanitary Measures.

20 (4) The Agreement on Textiles and Clothing.

21 (5) The Agreement on Technical Barriers to

22 Trade.

23 (6) The Agreement on Trade-Related Invest24 ment Measures.
13

1 (7) The Agreement on Implementation of Arti2 cle VI of the General Agreement on Tariffs and

3 Trade 1994.

4 (8) The Agreement on Implementation of Arti5 cle VII of the General Agreement on Tariffs and

6 Trade 1994.

7 (9) The Agreement on Preshipment Inspection.

8 (10) The Agreement on Rules of Origin.

9 (11) The Agreement on Import Licensing Pro10 cedures.

11 (12) The Agreement on Subsidies and Counter12 vailing Measures.

13 (13) The Agreement on Safeguards.

14 (14) The General Agreement on Trade in Serv15 ices.

16 (15) The Agreement on Trade-Related Aspects

17 of Intellectual Property Rights.

18 (16) The Understanding on Rules and Proce19 dures Governing the Settlement of Disputes.

20 (17) The Agreement on Government Procure21 ment.

22 (18) The International Bovine Meat Agreement.
14

1 SEC. 102. RELATIONSHIP OF THE AGREEMENTS TO UNITED

2 STATES LAW AND STATE LAW.

3 (a) RELATIONSHIP OF AGREEMENTS TO UNITED

4 STATES LAW.—

5 (1) UNITED STATES LAW TO PREVAIL IN CON6 FLICT.—No provision of any of the Uruguay Round

7 Agreements, nor the application of any such provi8 sion to any person or circumstance, that is inconsist9 ent with any law of the United States shall have ef10 fect.

11 (2) CONSTRUCTION.—Nothing in this Act shall

12 be construed—

13 (A) to amend or modify any law of the

14 United States, including any law relating to—

15 (i) the protection of human, animal,

16 or plant life or health,

17 (ii) the protection of the environment,

18 or

19 (iii) worker safety, or

20 (B) to limit any authority conferred under

21 any law of the United States, including section

22 301 of the Trade Act of 1974,

23 unless specifically provided for in this Act.

24 (b) RELATIONSHIP OF AGREEMENTS TO STATE

25 LAW.—

26 (1) FEDERAL-STATE CONSULTATION.—
15

1 (A) IN GENERAL.—Upon the enactment of

2 this Act, the President shall, through the inter3 governmental policy advisory committees on

4 trade established under section 306(c)(2)(A) of

5 the Trade and Tariff Act of 1984 (19 U.S.C.

6 2114c(2)(A)), consult with the States for the

7 purpose of achieving conformity of State laws

8 and practices with the Uruguay Round Agree9 ments.

10 (B) FEDERAL-STATE CONSULTATION

11 PROCESS.—The Trade Representative shall es12 tablish within the Office of the United States

13 Trade Representative a Federal-State consulta14 tion process for addressing issues relating to

15 the Uruguay Round Agreements that directly

16 relate to, or will potentially have a direct effect

17 on, the States. The Federal-State consultation

18 process shall include procedures under which—

19 (i) the States will be informed on a

20 continuing basis of matters under the Uru21 guay Round Agreements that directly re22 late to, or will potentially have a direct im23 pact on, the States;

24 (ii) the States will be provided an op25 portunity to submit, on a continuing basis,
16

1 to the Trade Representative information

2 and advice with respect to matters referred

3 to in clause (i); and

4 (iii) the Trade Representative will

5 take into account the information and ad6 vice received from the States under clause

7 (ii) when formulating United States posi8 tions regarding matters referred to in

9 clause (i).

10 The Federal Advisory Committee Act (5 U.S.C.

11 App.) shall not apply to the Federal-State con12 sultation process established by this paragraph.

13 (C) FEDERAL-STATE COOPERATION IN

14 WTO DISPUTE SETTLEMENT.—

15 (i) When a WTO member requests

16 consultations with the United States under

17 Article 4 of the Understanding on Rules

18 and Procedures Governing the Settlement

19 of Disputes referred to in section

20 101(d)(16) (hereafter in this subsection re21 ferred to as the ‘‘Dispute Settlement Un22 derstanding’’) concerning whether the law

23 of a State is inconsistent with the obliga24 tions undertaken by the United States in

25 any of the Uruguay Round Agreements,
17

1 the Trade Representative shall notify the

2 Governor of the State or the Governor’s

3 designee, and the chief legal officer of the

4 jurisdiction whose law is the subject of the

5 consultations, as soon as possible after the

6 request is received, but in no event later

7 than 7 days thereafter.

8 (ii) Not later than 30 days after re9 ceiving such a request for consultations,

10 the Trade Representative shall consult

11 with representatives of the State concerned

12 regarding the matter. If the consultations

13 involve the laws of a large number of

14 States, the Trade Representative may con15 sult with an appropriate group of rep16 resentatives of the States concerned, as de17 termined by those States.

18 (iii) The Trade Representative shall

19 make every effort to ensure that the State

20 concerned is involved in the development of

21 the position of the United States at each

22 stage of the consultations and each subse23 quent stage of dispute settlement proceed24 ings regarding the matter. In particular,

25 the Trade Representative shall—
18

1 (I) notify the State concerned not

2 later than 7 days after a WTO mem3 ber requests the establishment of a

4 dispute settlement panel or gives no5 tice of the WTO member’s decision to

6 appeal a report by a dispute settle7 ment panel regarding the matter; and

8 (II) provide the State concerned

9 with the opportunity to advise and as10 sist the Trade Representative in the

11 preparation of factual information and

12 argumentation for any written or oral

13 presentations by the United States in

14 consultations or in proceedings of a

15 panel or the Appellate Body regarding

16 the matter.

17 (iv) If a dispute settlement panel or

18 the Appellate Body finds that the law of a

19 State is inconsistent with any of the Uru20 guay Round Agreements, the Trade Rep21 resentative shall consult with the State

22 concerned in an effort to develop a mutu23 ally agreeable response to the report of the

24 panel or the Appellate Body and shall

25 make every effort to ensure that the State
19

1 concerned is involved in the development of

2 the United States position regarding the

3 response.

4 (D) NOTICE TO STATES REGARDING CON5 SULTATIONS ON FOREIGN SUBCENTRAL GOV6 ERNMENT LAWS.—

7 (i) Subject to clause (ii), the Trade

8 Representative shall, at least 30 days be9 fore making a request for consultations

10 under Article 4 of the Dispute Settlement

11 Understanding regarding a subcentral gov12 ernment measure of another WTO mem13 ber, notify, and solicit the views of, appro14 priate representatives of each State regard15 ing the matter.

16 (ii) In exigent circumstances clause

17 (i) shall not apply, in which case the Trade

18 Representative shall notify the appropriate

19 representatives of each State not later than

20 3 days after making the request for con21 sultations referred to in clause (i).

22 (2) LEGAL CHALLENGE.—

23 (A) IN GENERAL.—No State law, or the

24 application of such a State law, may be de25 clared invalid as to any person or circumstance
20

1 on the ground that the provision or application

2 is inconsistent with any of the Uruguay Round

3 Agreements, except in an action brought by the

4 United States for the purpose of declaring such

5 law or application invalid.

6 (B) PROCEDURES GOVERNING ACTION.—In

7 any action described in subparagraph (A) that

8 is brought by the United States against a State

9 or any subdivision thereof—

10 (i) a report of a dispute settlement

11 panel or the Appellate Body convened

12 under the Dispute Settlement Understand13 ing regarding the State law, or the law of

14 any political subdivision thereof, shall not

15 be considered as binding or otherwise ac16 corded deference;

17 (ii) the United States shall have the

18 burden of proving that the law that is the

19 subject of the action, or the application of

20 that law, is inconsistent with the agree21 ment in question;

22 (iii) any State whose interests may be

23 impaired or impeded in the action shall

24 have the unconditional right to intervene in

25 the action as a party, and the United
21

1 States shall be entitled to amend its com2 plaint to include a claim or cross-claim

3 concerning the law of a State that so inter4 venes; and

5 (iv) any State law that is declared in6 valid shall not be deemed to have been in7 valid in its application during any period

8 before the court’s judgment becomes final

9 and all timely appeals, including discre10 tionary review, of such judgment are ex11 hausted.

12 (C) REPORTS TO CONGRESSIONAL COMMIT13 TEES.—At least 30 days before the United

14 States brings an action described in subpara15 graph (A), the Trade Representative shall pro16 vide a report to the Committee on Ways and

17 Means of the House of Representatives and the

18 Committee on Finance of the Senate—

19 (i) describing the proposed action;

20 (ii) describing efforts by the Trade

21 Representative to resolve the matter with

22 the State concerned by other means; and

23 (iii) if the State law was the subject

24 of consultations under the Dispute Settle25 ment Understanding, certifying that the
22

1 Trade Representative has substantially

2 complied with the requirements of para3 graph (1)(C) in connection with the mat4 ter.

5 Following the submission of the report, and before

6 the action is brought, the Trade Representative shall

7 consult with the committees referred to in the pre8 ceding sentence concerning the matter.

9 (3) DEFINITION OF STATE LAW.—For purposes

10 of this subsection—

11 (A) the term ‘‘State law’’ includes—

12 (i) any law of a political subdivision of

13 a State; and

14 (ii) any State law regulating or taxing

15 the business of insurance; and

16 (B) the terms ‘‘dispute settlement panel’’

17 and ‘‘Appellate Body’’ have the meanings given

18 those terms in section 121.

19 (c) EFFECT OF AGREEMENT WITH RESPECT TO PRI20 VATE REMEDIES.—

21 (1) LIMITATIONS.—No person other than the

22 United States—

23 (A) shall have any cause of action or de24 fense under any of the Uruguay Round Agree-
23

1 ments or by virtue of congressional approval of

2 such an agreement, or

3 (B) may challenge, in any action brought

4 under any provision of law, any action or inac5 tion by any department, agency, or other in6 strumentality of the United States, any State,

7 or any political subdivision of a State on the

8 ground that such action or inaction is inconsist9 ent with such agreement.

10 (2) INTENT OF CONGRESS.—It is the intention

11 of the Congress through paragraph (1) to occupy the

12 field with respect to any cause of action or defense

13 under or in connection with any of the Uruguay

14 Round Agreements, including by precluding any per15 son other than the United States from bringing any

16 action against any State or political subdivision

17 thereof or raising any defense to the application of

18 State law under or in connection with any of the

19 Uruguay Round Agreements—

20 (A) on the basis of a judgment obtained by

21 the United States in an action brought under

22 any such agreement; or

23 (B) on any other basis.

24 (d) STATEMENT OF ADMINISTRATIVE ACTION.—The

25 statement of administrative action approved by the Con-
24

1 gress under section 101(a) shall be regarded as an author2 itative expression by the United States concerning the in3 terpretation and application of the Uruguay Round Agree4 ments and this Act in any judicial proceeding in which

5 a question arises concerning such interpretation or appli6 cation.

7 SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF

8 ENTRY INTO FORCE; REGULATIONS.

9 (a) IMPLEMENTING ACTIONS.—After the date of the

10 enactment of this Act—

11 (1) the President may proclaim such actions,

12 and

13 (2) other appropriate officers of the United

14 States Government may issue such regulations,

15 as may be necessary to ensure that any provision of this

16 Act, or amendment made by this Act, that takes effect

17 on the date any of the Uruguay Round Agreements enters

18 into force with respect to the United States is appro19 priately implemented on such date. Such proclamation or

20 regulation may not have an effective date earlier than the

21 date of entry into force with respect to the United States

22 of the agreement to which the proclamation or regulation

23 relates.

24 (b) REGULATIONS.—Any interim regulation nec25 essary or appropriate to carry out any action proposed in
25

1 the statement of administrative action approved under sec2 tion 101(a) to implement an agreement described in sec3 tion 101(d) (7), (12), or (13) shall be issued not later than

4 1 year after the date on which the agreement enters into

5 force with respect to the United States.

6 Subtitle B—Tariff Modifications

7 SEC. 111. TARIFF MODIFICATIONS.

8 (a) IN GENERAL.—In addition to the authority pro9 vided by section 1102 of the Omnibus Trade and Competi10 tiveness Act of 1988 (19 U.S.C. 2902), the President shall

11 have the authority to proclaim—

12 (1) such other modification of any duty,

13 (2) such other staged rate reduction, or

14 (3) such additional duties,

15 as the President determines to be necessary or appropriate

16 to carry out Schedule XX.

17 (b) OTHER TARIFF MODIFICATIONS.—Subject to the

18 consultation and layover requirements of section 115, the

19 President may proclaim—

20 (1) the modification of any duty or staged rate

21 reduction of any duty set forth in Schedule XX if—

22 (A) the United States agrees to such modi23 fication or staged rate reduction in a multilat24 eral negotiation under the auspices of the

25 WTO, and
26

1 (B) such modification or staged rate reduc2 tion applies to the rate of duty on an article

3 contained in a tariff category that was the sub4 ject of reciprocal duty elimination or harmoni5 zation negotiations during the Uruguay Round

6 of multilateral trade negotiations, and

7 (2) such modifications as are necessary to cor8 rect technical errors in Schedule XX or to make

9 other rectifications to the Schedule.

10 (c) AUTHORITY TO INCREASE DUTIES ON ARTICLES

11 FROM CERTAIN COUNTRIES.—

12 (1) IN GENERAL.—

13 (A) DETERMINATION WITH RESPECT TO

14 CERTAIN COUNTRIES.—Notwithstanding section

15 251 of the Trade Expansion Act of 1962 (19

16 U.S.C. 1881), after the entry into force of the

17 WTO Agreement with respect to the United

18 States, if the President—

19 (i) determines that a foreign country

20 (other than a foreign country that is a

21 WTO member country) is not according

22 adequate trade benefits to the United

23 States, including substantially equal com24 petitive opportunities for the commerce of

25 the United States, and
27

1 (ii) consults with the Committee on

2 Ways and Means of the House of Rep3 resentatives and the Committee on Finance

4 of the Senate,

5 the President may proclaim an increase in the

6 rate of duty with respect to any article of such

7 country in accordance with subparagraph (B).

8 (B) RATE OF DUTY DESCRIBED.—The

9 President may proclaim a rate of duty on any

10 article of a country identified under subpara11 graph (A) that is equal to the greater of—

12 (i) the rate of duty set forth for such

13 article in the base rate of duty column of

14 Schedule XX, or

15 (ii) the rate of duty set forth for such

16 article in the bound rate of duty column of

17 Schedule XX.

18 (2) TERMINATION OF INCREASED DUTIES.—

19 The President shall terminate any increase in the

20 rate of duty proclaimed under this subsection by a

21 proclamation which shall be effective on the earlier

22 of—

23 (A) the date set out in such proclamation

24 of termination, or
28

1 (B) the date the WTO Agreement enters

2 into force with respect to the foreign country

3 with respect to which the determination under

4 paragraph (1) was made.

5 (3) PUBLICATION OF DETERMINATION AND

6 TERMINATION.—The President shall publish in the

7 Federal Register notice of a determination made

8 under paragraph (1) and a termination occurring by

9 reason of paragraph (2).

10 (d) ADJUSTMENTS TO CERTAIN COLUMN 2 RATES OF

11 DUTY.—At such time as the President proclaims any

12 modification to the HTS to implement the provisions of

13 Schedule XX, the President shall also proclaim the rate

14 of duty set forth in Column B as the column 2 rate of

15 duty for the subheading of the HTS that corresponds to

16 the subheading in Schedule XX listed in Column A.

Column A Column B

Schedule XX subheading: Rate of duty for column 2

of the HTS:

0201.10.50 .............................................. 31.1%

0201.20.80 .............................................. 31.1%

0201.30.80 .............................................. 31.1%

0202.10.50 .............................................. 31.1%

0202.20.80 .............................................. 31.1%

0202.30.80 .............................................. 31.1%

0401.30.25 .............................................. 90.8¢/liter

0401.30.75 .............................................. $1.936/kg

0402.10.50 .............................................. $1.018/kg

0402.21.25 .............................................. $1.018/kg

0402.21.50 .............................................. $1.285/kg

0402.21.90 .............................................. $1.831/kg

0402.29.50 .............................................. $1.299/kg + 17.5%

0402.91.60 .............................................. 36.8¢/kg

0402.99.50 .............................................. 58.4¢/kg

0402.99.90 .............................................. 54.5¢/kg + 17.5%
29

Column A Column B

Schedule XX subheading: Rate of duty for column 2

of the HTS:

0403.10.50 .............................................. $1.217/kg + 20%

0403.90.16 .............................................. 90.8¢/liter

0403.90.45 .............................................. $1.03/kg

0403.90.55 .............................................. $1.285/kg

0403.90.65 .............................................. $1.831/kg

0403.90.78 .............................................. $1.936/kg

0403.90.95 .............................................. $1.217/kg + 20%

0404.10.11 .............................................. 20%

0404.10.15 .............................................. $1.217/kg + 10%

0404.10.90 .............................................. $1.03/kg

0404.90.30 .............................................. 25%

0404.90.50 .............................................. $1.399/kg + 10%

0405.00.40 .............................................. $1.813/kg

0405.00.90 .............................................. $2.194/kg + 10%

0406.10.08 .............................................. $1.775/kg

0406.10.18 .............................................. $2.67/kg

0406.10.28 .............................................. $1.443/kg

0406.10.38 .............................................. $1.241/kg

0406.10.48 .............................................. $2.121/kg

0406.10.58 .............................................. $2.525/kg

0406.10.68 .............................................. $1.631/kg

0406.10.78 .............................................. $1.328/kg

0406.10.88 .............................................. $1.775/kg

0406.20.28 .............................................. $2.67/kg

0406.20.33 .............................................. $1.443/kg

0406.20.39 .............................................. $1.241/kg

0406.20.48 .............................................. $2.121/kg

0406.20.53 .............................................. $2.525/kg

0406.20.63 .............................................. $2.67/kg

0406.20.67 .............................................. $1.443/kg

0406.20.71 .............................................. $1.241/kg

0406.20.75 .............................................. $2.121/kg

0406.20.79 .............................................. $2.525/kg

0406.20.83 .............................................. $1.631/kg

0406.20.87 .............................................. $1.328/kg

0406.20.91 .............................................. $1.775/kg

0406.30.18 .............................................. $2.67/kg

0406.30.28 .............................................. $1.443/kg

0406.30.38 .............................................. $1.241/kg

0406.30.48 .............................................. $2.121/kg

0406.30.53 .............................................. $1.631/kg

0406.30.63 .............................................. $2.67/kg

0406.30.67 .............................................. $1.443/kg

0406.30.71 .............................................. $1.241/kg

0406.30.75 .............................................. $2.121/kg

0406.30.79 .............................................. $2.525/kg

0406.30.83 .............................................. $1.631/kg

0406.30.87 .............................................. $1.328/kg

0406.30.91 .............................................. $1.775/kg

0406.40.70 .............................................. $2.67/kg
30

0406.90.12 .............................................. $1.443/kg

0406.90.18 .............................................. $2.121/kg

0406.90.33 .............................................. $2.525/kg

0406.90.38 .............................................. $2.525/kg

0406.90.43 .............................................. $2.525/kg

0406.90.48 .............................................. $2.208/kg

0406.90.64 .............................................. $1.241/kg

0406.90.68 .............................................. $2.525/kg

0406.90.74 .............................................. $2.67/kg

0406.90.78 .............................................. $1.443/kg

0406.90.84 .............................................. $1.241/kg

0406.90.88 .............................................. $2.121/kg

0406.90.92 .............................................. $1.631/kg

0406.90.94 .............................................. $1.328/kg

0406.90.97 .............................................. $1.775/kg

1202.10.80 .............................................. 192.7%

1202.20.80 .............................................. 155%

1517.90.60 .............................................. 40.2¢/kg

1701.11.50 .............................................. 39.85¢/kg

1701.12.10 .............................................. 6.58170¢/kg less 0.0622005¢/

kg for each degree under 100

degrees (and fractions of a degree in proportion) but not less

than 5.031562¢/kg

1701.12.50 .............................................. 42.05¢/kg

1701.91.10 .............................................. 6.58170¢/kg less 0.0622005¢/

kg for each degree under 100

degrees (and fractions of a degree in proportion) but not less

than 5.031562¢/kg

1701.91.30 .............................................. 42.05¢/kg

1701.91.48 .............................................. 39.9¢/kg + 6%

1701.91.58 .............................................. 39.9¢/kg + 6%

1701.99.10 .............................................. 6.58170¢/kg less 0.0622005¢/

kg for each degree under 100

degrees (and fractions of a degree in proportion) but not less

than 5.031562¢/kg

1701.99.50 .............................................. 42.05¢/kg

1702.20.28 .............................................. 19.9¢/kg of total sugars + 6%

1702.30.28 .............................................. 19.9¢/kg of total sugars + 6%

1702.40.28 .............................................. 39.9¢/kg of total sugars + 6%

1702.60.28 .............................................. 39.9¢/kg of total sugars + 6%

1702.90.10 .............................................. 6.58170¢/kg of total sugars

1702.90.20 .............................................. 42.05¢/kg

1702.90.58 .............................................. 39.9¢/kg of total sugars + 6%

1702.90.68 .............................................. 39.9¢/kg + 6%

1704.90.58 .............................................. 47.4¢/kg + 12.2%

1704.90.68 .............................................. 47.4¢/kg + 12.2%

1704.90.78 .............................................. 47.4¢/kg + 12.2%

1806.10.15 .............................................. 25.5¢/kg

1806.10.28 .............................................. 39.5¢/kg

1806.10.38 .............................................. 39.5¢/kg

1806.10.55 .............................................. 39.5¢/kg
31

1806.10.75 .............................................. 39.5¢/kg

1806.20.26 .............................................. 43.8¢/kg + 5%

1806.20.28 .............................................. 62.1¢/kg + 5%

1806.20.36 .............................................. 43.8¢/kg + 5%

1806.20.38 .............................................. 62.1¢/kg + 5%

1806.20.73 .............................................. 35.9¢/kg + 10%

1806.20.77 .............................................. 35.9¢/kg + 10%

1806.20.82 .............................................. 43.8¢/kg + 10%

1806.20.83 .............................................. 62.1¢/kg + 10%

1806.20.87 .............................................. 43.8¢/kg + 10%

1806.20.89 .............................................. 62.1¢/kg + 10%

1806.20.92 .............................................. 43.8¢/kg + 10%

1806.20.93 .............................................. 62.1¢/kg + 10%

1806.20.96 .............................................. 43.8¢/kg + 10%

1806.20.97 .............................................. 62.1¢/kg + 10%

1806.32.06 .............................................. 43.8¢/kg + 5%

1806.32.08 .............................................. 62.1¢/kg + 5%

1806.32.16 .............................................. 43.8¢/kg + 5%

1806.32.18 .............................................. 62.1¢/kg + 5%

1806.32.70 .............................................. 43.8¢/kg + 7%

1806.32.80 .............................................. 62.1¢/kg + 7%

1806.90.08 .............................................. 43.8¢/kg + 7%

1806.90.10 .............................................. 62.1¢/kg + 7%

1806.90.18 .............................................. 43.8¢/kg + 7%

1806.90.20 .............................................. 62.1¢/kg + 7%

1806.90.28 .............................................. 43.8¢/kg + 7%

1806.90.30 .............................................. 62.1¢/kg + 7%

1806.90.38 .............................................. 43.8¢/kg + 7%

1806.90.40 .............................................. 62.1¢/kg + 7%

1806.90.48 .............................................. 43.8¢/kg + 7%

1806.90.50 .............................................. 62.1¢/kg + 7%

1806.90.58 .............................................. 43.8¢/kg + 7%

1806.90.60 .............................................. 62.1¢/kg + 7%

1901.10.30 .............................................. $1.217/kg + 17.5%

1901.10.40 .............................................. $1.217/kg + 17.5%

1901.10.75 .............................................. $1.217/kg + 17.5%

1901.10.85 .............................................. $1.217/kg + 17.5%

1901.20.15 .............................................. 49.8¢/kg + 10%

1901.20.25 .............................................. 49.8¢/kg + 10%

1901.20.35 .............................................. 49.8¢/kg + 10%

1901.20.50 .............................................. 49.8¢/kg + 10%

1901.20.60 .............................................. 49.8¢/kg + 10%

1901.20.70 .............................................. 49.8¢/kg + 10%

1901.90.36 .............................................. $1.328/kg

1901.90.42 .............................................. 25%

1901.90.44 .............................................. $1.217/kg + 16%

1901.90.46 .............................................. 25%

1901.90.48 .............................................. $1.217/kg + 16%

1901.90.54 .............................................. 27.9¢/kg + 10%
32

1901.90.58 .............................................. 27.9¢/kg + 10%

2008.11.15 .............................................. 155%

2008.11.35 .............................................. 155%

2008.11.60 .............................................. 155%

2101.10.38 .............................................. 35.9¢/kg + 10%

2101.10.48 .............................................. 35.9¢/kg + 10%

2101.10.58 .............................................. 35.9¢/kg + 10%

2101.20.38 .............................................. 35.9¢/kg + 10%

2101.20.48 .............................................. 35.9¢/kg + 10%

2101.20.58 .............................................. 35.9¢/kg + 10%

2103.90.78 .............................................. 35.9¢/kg + 7.5%

2105.00.20 .............................................. 59¢/kg + 20%

2105.00.40 .............................................. 59¢/kg + 20%

2106.90.02 .............................................. $1.014/kg

2106.90.04 .............................................. $2.348/kg

2106.90.08 .............................................. $2.348/kg

2106.90.11 .............................................. 6.58170¢/kg of total sugars

2106.90.12 .............................................. 42.05¢/kg

2106.90.34 .............................................. 82.8¢/kg + 10%

2106.90.38 .............................................. 82.8¢/kg + 10%

2106.90.44 .............................................. 82.8¢/kg + 10%

2106.90.48 .............................................. 82.8¢/kg + 10%

2106.90.57 .............................................. 33.9¢/kg + 10%

2106.90.67 .............................................. 33.9¢/kg + 10%

2106.90.77 .............................................. 33.9¢/kg + 10%

2106.90.87 .............................................. 33.9¢/kg + 10%

2202.90.28 .............................................. 27.6¢/liter + 17.5%

2309.90.28 .............................................. 94.6¢/kg + 7.5%

2309.90.48 .............................................. 94.6¢/kg + 7.5%

2401.10.70 .............................................. 85¢/kg

2401.10.90 .............................................. 85¢/kg

2401.20.30 .............................................. $1.21/kg

2401.20.45 .............................................. $1.15/kg

2401.20.55 .............................................. $1.15/kg

2801.30.20 .............................................. 37%

2805.30.00 .............................................. 31.3%

2805.40.00 .............................................. 5.7%

2811.19.10 .............................................. 4.9%

2818.10.20 .............................................. 4.1%

2822.00.00 .............................................. 1.7%

2827.39.20 .............................................. 31.9%

2833.11.50 .............................................. 3.6%

2833.27.00 .............................................. 4.2%

2836.40.20 .............................................. 4.8%

2836.60.00 .............................................. 8.4%

2837.20.10 .............................................. 5.1%

2840.11.00 .............................................. 1.2%

2840.19.00 .............................................. 0.4%

2849.20.20 .............................................. 1.6%

2903.15.00 .............................................. 88%

2903.16.00 .............................................. 33.3%

2903.30.05 .............................................. 46.3%

2906.11.00 .............................................. 6.2%

2907.12.00 .............................................. 48.3%
33

2909.11.00 .............................................. 4%

2912.11.00 .............................................. 12.1%

2916.15.10 .............................................. 35.2%

2916.19.30 .............................................. 24.4%

2923.20.20 .............................................. 33.4%

3213.90.00 .............................................. 48.6%

3307.10.20 .............................................. 81.7%

3307.49.00 .............................................. 73.2%

3403.11.20 .............................................. 0.4%

3403.19.10 .............................................. 0.4%

3506.10.10 .............................................. 30.4%

3603.00.30 .............................................. 8.3%

3603.00.90 .............................................. 0.3%

3604.10.00 .............................................. 12.5%

3606.90.30 .............................................. 56.7%

3706.10.30 .............................................. 7%

3807.00.00 .............................................. 0.2%

3823.90.33 .............................................. 26.3%

3904.61.00 .............................................. 34.1%

3916.90.10 .............................................. 40.6%

3920.51.50 .............................................. 48.2%

3920.59.80 .............................................. 51.7%

3926.90.65 .............................................. 8.4%

5201.00.18 .............................................. 36.9¢/kg

5201.00.28 .............................................. 36.9¢/kg

5201.00.38 .............................................. 36.9¢/kg

5201.00.80 .............................................. 36.9¢/kg

5202.99.30 .............................................. 9.2¢/kg

5203.00.30 .............................................. 36.9¢/kg

1 (e) AUTHORITY TO CONSOLIDATE SUBHEADINGS

2 AND MODIFY COLUMN 2 RATES OF DUTY FOR TARIFF

3 SIMPLIFICATION PURPOSES.—

4 (1) IN GENERAL.—Whenever the HTS column

5 1 general rates of duty for 2 or more 8-digit sub6 headings are at the same level and such subheadings

7 are subordinate to a provision required by the Inter8 national Convention on the Harmonized Commodity

9 Description and Coding System, the President may
34

1 proclaim, subject to the consultation and layover re2 quirements of section 115, that the goods described

3 in such subheadings be provided for in a single 8-

4 digit subheading of the HTS, and that—

5 (A) the HTS column 1 general rate of

6 duty for such single subheading be the column

7 1 general rate of duty common to all such sub8 headings, and

9 (B) the HTS column 2 rate of duty for

10 such single subheading be the highest column 2

11 rate of duty for such subheadings that is in ef12 fect on the day before the effective date of such

13 proclamation.

14 (2) SAME LEVEL OF DUTY.—The provisions of

15 this subsection apply to subheadings described in

16 paragraph (1) that have the same column 1 general

17 rate of duty—

18 (A) on the date of the enactment of this

19 Act, or

20 (B) after such date of enactment as a re21 sult of a staged reduction in such column 1

22 rates of duty.
35

1 SEC. 112. IMPLEMENTATION OF SCHEDULE XX PROVISIONS

2 ON SHIP REPAIRS.

3 (a) IN GENERAL.—Section 484E(b) of the Customs

4 and Trade Act of 1990 (19 U.S.C. 1466 note; 104 Stat.

5 710) is amended—

6 (1) by striking ‘‘and’’ at the end of paragraph

7 (1);

8 (2) by striking the period at the end of para9 graph (2) and inserting ‘‘, and’’; and

10 (3) by adding at the end the following new

11 paragraph:

12 ‘‘(3) any entry made pursuant to section 466(h)

13 (1) or (2) of the Tariff Act of 1930 (19 U.S.C.

14 1466(h) (1) or (2)), on or after the date of the entry

15 into force of the WTO Agreement with respect to

16 the United States.’’.

17 (b) EXEMPTION FOR CERTAIN SPARE PARTS.—Sec18 tion 466(h) of the Tariff Act of 1930 (19 U.S.C. 1466(h))

19 is amended—

20 (1) by striking ‘‘or’’ at the end of paragraph

21 (1);

22 (2) by striking the period at the end of para23 graph (2) and inserting ‘‘, or’’; and

24 (3) by adding at the end the following new

25 paragraph:
36

1 ‘‘(3) the cost of spare parts necessarily installed

2 before the first entry into the United States, but

3 only if duty is paid under appropriate commodity

4 classifications of the Harmonized Tariff Schedule of

5 the United States upon first entry into the United

6 States of each such spare part purchased in, or im7 ported from, a foreign country.’’.

8 SEC. 113. LIQUIDATION OR RELIQUIDATION AND REFUND

9 OF DUTY PAID ON CERTAIN ENTRIES.

10 (a) LIQUIDATION OR RELIQUIDATION.—Notwith11 standing section 514 of the Tariff Act of 1930 (19 U.S.C.

12 1514) or any other provision of law, and subject to sub13 section (b), the Secretary of the Treasury shall liquidate

14 or reliquidate the entries listed or otherwise described in

15 subsection (c) and refund any duty or excess duty that

16 was paid, as provided in subsection (c).

17 (b) REQUESTS.—Liquidation or reliquidation may be

18 made under subsection (a) with respect to an entry only

19 if a request therefor is filed with the Customs Service,

20 within 180 days after the date on which the WTO Agree21 ment enters into force with respect to the United States,

22 that contains sufficient information to enable the Customs

23 Service—

24 (1) to locate the entry; or
37

1 (2) to reconstruct the entry if it cannot be lo2 cated.

3 (c) ENTRIES.—The entries referred to in subsection

4 (a) are as follows:

5 (1) AGGLOMERATED STONE TILES.—Any

6 goods—

7 (A) for which the importer claimed or

8 would have claimed entry under subheading

9 6810.19.12 of the HTS on or after October 1,

10 1990, and before the effective date of a procla11 mation issued by the President under section

12 103(a) of this Act with respect to items under

13 such subheading in order to carry out Schedule

14 XX, or

15 (B) entered on or after January 1, 1989,

16 and before October 1, 1990, for which entry

17 would have been claimed under subheading

18 6810.19.12 of the HTS on or after October 1,

19 1990,

20 shall be liquidated or reliquidated as if the wording

21 of that subheading were ‘‘Of stone agglomerated

22 with binders other than cement’’, and the Secretary

23 of the Treasury shall refund any excess duties paid

24 with respect to such entries.

25 (2) CLOMIPHENE CITRATE.—
38

1 (A) Any entry, or withdrawal from ware2 house for consumption, of goods under heading

3 9902.29.95 of the HTS (relating to clomiphene

4 citrate) which was made after December 31,

5 1988, and before January 1, 1993, and with re6 spect to which there would have been no duty

7 if the reference to subheading ‘‘2922.19.15’’ in

8 such heading were a reference to subheading

9 ‘‘2922.19.15 or any subheading of chapter 30’’

10 at the time of such entry or withdrawal, shall

11 be liquidated or reliquidated as free of duty.

12 (B) The Secretary of the Treasury shall

13 refund any duties paid with respect to entries

14 described in subparagraph (A).

15 SEC. 114. MODIFICATIONS TO THE HTS.

16 (a) WOOL.—

17 (1) AMENDMENTS.—Chapter 51 of the HTS is

18 amended—

19 (A) by striking subheading 5101.21.60 and

20 inserting the following new superior text and

21 subheadings, with the superior text having the

22 same degree of indentation as the article de23 scription in subheading 5101.11.60:

‘‘ Other:
39

5101.21.65 Unimproved wool; other wool,

not finer than 46s .................... Free 81.6¢/

kg+20%

5101.21.70 Other ........................................ 7.7¢/

kg+6.25%

Free (MX)

0.8¢/kg+0.6%

(IL) 3¢/

kg+2.5% (CA)

81.6¢/

kg+20%

’’;

1 (B) by striking subheading 5101.29.60 and

2 inserting the following new superior text and

3 subheadings, with the superior text having the

4 same degree of indentation as the article de5 scription in subheading 5102.10.20:

‘‘ Other:

5101.29.65 Unimproved wool; other wool,

not finer than 46s .................. Free 81.6¢/

kg+20%

5101.29.70 Other ...................................... 7.7¢/

kg+6.25%

0.8¢/kg+0.6%

(IL) 3¢/

kg+2.5% (CA)

6.1¢/kg+5%

(MX)

81.6¢/

kg+20%

’’;

6 and

7 (C) by striking subheading 5101.30.60 and

8 inserting the following new superior text and

9 subheadings, with the superior text having the

10 same degree of indentation as the superior text

11 immediately preceding subheading 5102.10.20:

‘‘ Other:

5101.30.65 Unimproved wool; other wool,

not finer than 46s .................... Free 81.6¢/

kg+20%

5101.30.70 Other ........................................ 7.7¢/

kg+6.25%

Free (MX)

0.8¢/kg+0.6%

(IL) 3¢/

kg+2.5% (CA)

81.6¢/

kg+20%

’’.

12 (2) EFFECTIVE DATE.—The amendments made

13 by this subsection take effect on the effective date

14 of the proclamation issued by the President under

15 section 103(a) to carry out Schedule XX.
40

1 (b) DUTY FREE TREATMENT FOR OCTADECYL

2 ISOCYANATE AND 5-CHLORO-2-(2,4-DICHLORO3 PHENOXY)PHENOL.—The President—

4 (1) shall proclaim duty-free entry for octadecyl

5 isocyanate and 5-Chloro-2-(2,4-dichloro6 phenoxy)phenol, to be effective on the effective date

7 of the proclamation issued by the President under

8 section 103(a) to carry out Schedule XX, and

9 (2) shall take such actions as are necessary to

10 reflect such tariff treatment in Schedule XX.

11 SEC. 115. CONSULTATION AND LAYOVER REQUIREMENTS

12 FOR, AND EFFECTIVE DATE OF, PROCLAIMED

13 ACTIONS.

14 If a provision of this Act provides that the implemen15 tation of an action by the President by proclamation is

16 subject to the consultation and layover requirements of

17 this section, such action may be proclaimed only if—

18 (1) the President has obtained advice regarding

19 the proposed action from—

20 (A) the appropriate advisory committees

21 established under section 135 of the Trade Act

22 of 1974 (19 U.S.C. 2155), and

23 (B) the International Trade Commission;

24 (2) the President has submitted a report to the

25 Committee on Ways and Means of the House of
41

1 Representatives and the Committee on Finance of

2 the Senate that sets forth—

3 (A) the action proposed to be proclaimed

4 and the reasons for such actions, and

5 (B) the advice obtained under paragraph

6 (1);

7 (3) a period of 60 calendar days, beginning

8 with the first day on which the President has met

9 the requirements of paragraphs (1) and (2) with re10 spect to such action, has expired; and

11 (4) the President has consulted with such com12 mittees regarding the proposed action during the pe13 riod referred to in paragraph (3).

14 SEC. 116. EFFECTIVE DATE.

15 (a) IN GENERAL.—Except as provided in section

16 114(a) and subsection (b) of this section, this subtitle and

17 the amendments made by this subtitle take effect on the

18 date on which the WTO Agreement enters into force with

19 respect to the United States.

20 (b) SECTION 115.—Section 115 takes effect on the

21 date of the enactment of this Act.
42

1 Subtitle C—Uruguay Round Imple2 mentation and Dispute Settle3 ment

4 SEC. 121. DEFINITIONS.

5 For purposes of this subtitle:

6 (1) ADMINISTERING AUTHORITY.—The term

7 ‘‘administering authority’’ has the meaning given

8 that term in section 771(1) of the Tariff Act of

9 1930.

10 (2) APPELLATE BODY.—The term ‘‘Appellate

11 Body’’ means the Appellate Body established under

12 Article 17.1 of the Dispute Settlement Understand13 ing.

14 (3) APPROPRIATE CONGRESSIONAL COMMIT15 TEES; CONGRESSIONAL COMMITTEES.—

16 (A) APPROPRIATE CONGRESSIONAL COM17 MITTEES.—The term ‘‘appropriate congres18 sional committees’’ means the committees re19 ferred to in subparagraph (B) and any other

20 committees of the Congress that have jurisdic21 tion involving the matter with respect to which

22 consultations are to be held.

23 (B) CONGRESSIONAL COMMITTEES.—The

24 term ‘‘congressional committees’’ means the

25 Committee on Ways and Means of the House of
43

1 Representatives and the Committee on Finance

2 of the Senate.

3 (4) DISPUTE SETTLEMENT PANEL; PANEL.—

4 The terms ‘‘dispute settlement panel’’ and ‘‘panel’’

5 mean a panel established pursuant to Article 6 of

6 the Dispute Settlement Understanding.

7 (5) DISPUTE SETTLEMENT BODY.—The term

8 ‘‘Dispute Settlement Body’’ means the Dispute Set9 tlement Body administering the rules and proce10 dures set forth in the Dispute Settlement Under11 standing.

12 (6) DISPUTE SETTLEMENT UNDERSTANDING.—

13 The term ‘‘Dispute Settlement Understanding’’

14 means the Understanding on Rules and Procedures

15 Governing the Settlement of Disputes referred to in

16 section 101(d)(16).

17 (7) GENERAL COUNCIL.—The term ‘‘General

18 Council’’ means the General Council established

19 under paragraph 2 of Article IV of the WTO Agree20 ment.

21 (8) MINISTERIAL CONFERENCE.—The term

22 ‘‘Ministerial Conference’’ means the Ministerial Con23 ference established under paragraph 1 of Article IV

24 of the WTO Agreement.
44

1 (9) OTHER TERMS.—The terms ‘‘Antidumping

2 Agreement’’, ‘‘Agreement on Subsidies and Counter3 vailing Measures’’, and ‘‘Safeguards Agreement’’

4 mean the agreements referred to in section

5 101(d)(7), (12), and (13), respectively.

6 SEC. 122. IMPLEMENTATION OF URUGUAY ROUND AGREE7 MENTS.

8 (a) DECISIONMAKING.—In the implementation of the

9 Uruguay Round Agreements and the functioning of the

10 World Trade Organization, it is the objective of the United

11 States to ensure that the Ministerial Conference and the

12 General Council continue the practice of decisionmaking

13 by consensus followed under the GATT 1947, as required

14 by paragraph 1 of article IX of the WTO Agreement.

15 (b) CONSULTATIONS WITH CONGRESSIONAL COM16 MITTEES.—In furtherance of the objective set forth in

17 subsection (a), the Trade Representative shall consult with

18 the appropriate congressional committees before any vote

19 is taken by the Ministerial Conference or the General

20 Council relating to—

21 (1) the adoption of an interpretation of the

22 WTO Agreement or another multilateral trade

23 agreement,

24 (2) the amendment of any such agreement,
45

1 (3) the granting of a waiver of any obligation

2 under any such agreement,

3 (4) the adoption of any amendment to the rules

4 or procedures of the Ministerial Conference or the

5 General Council,

6 (5) the accession of a state or separate customs

7 territory to the WTO Agreement, or

8 (6) the adoption of any other decision,

9 if the action described in paragraph (1), (2), (3), (4), (5),

10 or (6) would substantially affect the rights or obligations

11 of the United States under the WTO Agreement or an12 other multilateral trade agreement or potentially entails

13 a change in Federal or State law.

14 (c) REPORT ON DECISIONS.—

15 (1) IN GENERAL.—Not later than 30 days after

16 the end of any calendar year in which the Ministerial

17 Conference or the General Council adopts by vote

18 any decision to take any action described in para19 graph (1), (2), (4), or (6) of subsection (b), the

20 Trade Representative shall submit a report to the

21 appropriate congressional committees describing—

22 (A) the nature of the decision;

23 (B) the efforts made by the United States

24 to have the matter decided by consensus pursu-
46

1 ant to paragraph 1 of article IX of the WTO

2 Agreement, and the results of those efforts;

3 (C) which countries voted for, and which

4 countries voted against, the decision;

5 (D) the rights or obligations of the United

6 States affected by the decision and any Federal

7 or State law that would be amended or re8 pealed, if the President after consultation with

9 the Congress determined that such amendment

10 or repeal was an appropriate response; and

11 (E) the action the President intends to

12 take in response to the decision or, if the Presi13 dent does not intend to take any action, the

14 reasons therefor.

15 (2) ADDITIONAL REPORTING REQUIREMENTS.—

16 (A) GRANT OF WAIVER.—In the case of a

17 decision to grant a waiver described in sub18 section (b)(3), the report under paragraph (1)

19 shall describe the terms and conditions of the

20 waiver and the rights and obligations of the

21 United States that are affected by the waiver.

22 (B) ACCESSION.—In the case of a decision

23 on accession described in subsection (b)(5), the

24 report under paragraph (1) shall state whether
47

1 the United States intends to invoke Article XIII

2 of the WTO Agreement.

3 (d) CONSULTATION ON REPORT.—Promptly after the

4 submission of a report under subsection (c), the Trade

5 Representative shall consult with the appropriate congres6 sional committees with respect to the report.

7 SEC. 123. DISPUTE SETTLEMENT PANELS AND PROCE8 DURES.

9 (a) REVIEW BY PRESIDENT.—The President shall re10 view annually the WTO panel roster and shall include the

11 panel roster and the list of persons serving on the Appel12 late Body in the annual report submitted by the President

13 under section 163(a) of the Trade Act of 1974.

14 (b) QUALIFICATIONS OF APPOINTEES TO PANELS.—

15 The Trade Representative shall—

16 (1) seek to ensure that persons appointed to the

17 WTO panel roster are well-qualified, and that the

18 roster includes persons with expertise in the subject

19 areas covered by the Uruguay Round Agreements;

20 and

21 (2) inform the President of persons nominated

22 to the roster by other WTO member countries.

23 (c) RULES GOVERNING CONFLICTS OF INTEREST.—

24 The Trade Representative shall seek the establishment by

25 the General Council and the Dispute Settlement Body of
48

1 rules governing conflicts of interest by persons serving on

2 panels and members of the Appellate Body and shall de3 scribe, in the annual report submitted under section 124,

4 any progress made in establishing such rules.

5 (d) NOTIFICATION OF DISPUTES.—Promptly after a

6 dispute settlement panel is established to consider the con7 sistency of Federal or State law with any of the Uruguay

8 Round Agreements, the Trade Representative shall notify

9 the appropriate congressional committees of—

10 (1) the nature of the dispute, including the

11 matters set forth in the request for the establish12 ment of the panel, the legal basis of the complaint,

13 and the specific measures, in particular any State or

14 Federal law cited in the request for establishment of

15 the panel;

16 (2) the identity of the persons serving on the

17 panel; and

18 (3) whether there was any departure from the

19 rule of consensus with respect to the selection of

20 persons to serve on the panel.

21 (e) NOTICE OF APPEALS OF PANEL REPORTS.—If an

22 appeal is taken of a report of a panel in a proceeding de23 scribed in subsection (d), the Trade Representative shall,

24 promptly after the notice of appeal is filed, notify the ap25 propriate congressional committees of—
49

1 (1) the issues under appeal; and

2 (2) the identity of the persons serving on the

3 Appellate Body who are reviewing the report of the

4 panel.

5 (f) ACTIONS UPON CIRCULATION OF REPORTS.—

6 Promptly after the circulation of a report of a panel or

7 of the Appellate Body to WTO members in a proceeding

8 described in subsection (d), the Trade Representative

9 shall—

10 (1) notify the appropriate congressional com11 mittees of the report;

12 (2) in the case of a report of a panel, consult

13 with the appropriate congressional committees con14 cerning the nature of any appeal that may be taken

15 of the report; and

16 (3) if the report is adverse to the United

17 States, consult with the appropriate congressional

18 committees concerning whether to implement the re19 port’s recommendation and, if so, the manner of

20 such implementation and the period of time needed

21 for such implementation.

22 (g) REQUIREMENTS FOR AGENCY ACTION.—

23 (1) CHANGES IN AGENCY REGULATIONS OR

24 PRACTICE.—In any case in which a dispute settle25 ment panel or the Appellate Body finds in its report
50

1 that a regulation or practice of a department or

2 agency of the United States is inconsistent with any

3 of the Uruguay Round Agreements, that regulation

4 or practice may not be amended, rescinded, or other5 wise modified in the implementation of such report

6 unless and until—

7 (A) the appropriate congressional commit8 tees have been consulted under subsection (f);

9 (B) the Trade Representative has sought

10 advice regarding the modification from relevant

11 private sector advisory committees established

12 under section 135 of the Trade Act of 1974 (19

13 U.S.C. 2155);

14 (C) the head of the relevant department or

15 agency has provided an opportunity for public

16 comment by publishing in the Federal Register

17 the proposed modification and the explanation

18 for the modification;

19 (D) the Trade Representative has submit20 ted to the appropriate congressional committees

21 a report describing the proposed modification,

22 the reasons for the modification, and a sum23 mary of the advice obtained under subpara24 graph (B) with respect to the modification;
51

1 (E) the Trade Representative and the head

2 of the relevant department or agency have con3 sulted with the appropriate congressional com4 mittees on the proposed contents of the final

5 rule or other modification; and

6 (F) the final rule or other modification has

7 been published in the Federal Register.

8 (2) EFFECTIVE DATE OF MODIFICATION.—A

9 final rule or other modification to which paragraph

10 (1) applies may not go into effect before the end of

11 the 60-day period beginning on the date on which

12 consultations under paragraph (1)(E) begin, unless

13 the President determines that an earlier effective

14 date is in the national interest.

15 (3) VOTE BY CONGRESSIONAL COMMITTEES.—

16 During the 60-day period described in paragraph

17 (2), the Committee on Ways and Means of the

18 House of Representatives and the Committee on Fi19 nance of the Senate may vote to indicate the agree20 ment or disagreement of the committee with the pro21 posed contents of the final rule or other modifica22 tion. Any such vote shall not be binding on the de23 partment or agency which is implementing the rule

24 or other modification.
52

1 (4) INAPPLICABILITY TO ITC.—This subsection

2 does not apply to any regulation or practice of the

3 International Trade Commission.

4 (h) CONSULTATIONS REGARDING REVIEW OF WTO

5 RULES AND PROCEDURES.—Before the review is con6 ducted of the dispute settlement rules and procedures of

7 the WTO that is provided for in the Decision on the Appli8 cation of the Understanding on Rules and Procedures

9 Governing the Settlement of Disputes, as such decision is

10 set forth in the Ministerial Declarations and Decisions

11 adopted on April 15, 1994, together with the Uruguay

12 Round Agreements, the Trade Representative shall con13 sult with the congressional committees regarding the pol14 icy of the United States concerning the review.

15 SEC. 124. ANNUAL REPORT ON THE WTO.

16 Not later than March 1 of each year beginning in

17 1996, the Trade Representative shall submit to the Con18 gress a report describing, for the preceding fiscal year of

19 the WTO—

20 (1) the major activities and work programs of

21 the WTO, including the functions and activities of

22 the committees established under article IV of the

23 WTO Agreement, and the expenditures made by the

24 WTO in connection with those activities and pro25 grams;
53

1 (2) the percentage of budgetary assessments by

2 the WTO that were accounted for by each WTO

3 member country, including the United States;

4 (3) the total number of personnel employed or

5 retained by the Secretariat of the WTO, and the

6 number of professional, administrative, and support

7 staff of the WTO;

8 (4) for each personnel category described in

9 paragraph (3), the number of citizens of each coun10 try, and the average salary of the personnel, in that

11 category;

12 (5) each report issued by a panel or the Appel13 late Body in a dispute settlement proceeding regard14 ing Federal or State law, and any efforts by the

15 Trade Representative to provide for implementation

16 of the recommendations contained in a report that

17 is adverse to the United States;

18 (6) each proceeding before a panel or the Ap19 pellate Body that was initiated during that fiscal

20 year regarding Federal or State law, the status of

21 the proceeding, and the matter at issue;

22 (7) the status of consultations with any State

23 whose law was the subject of a report adverse to the

24 United States that was issued by a panel or the Ap25 pellate Body; and
54

1 (8) any progress achieved in increasing the

2 transparency of proceedings of the Ministerial Con3 ference and the General Council, and of dispute set4 tlement proceedings conducted pursuant to the Dis5 pute Settlement Understanding.

6 SEC. 125. REVIEW OF PARTICIPATION IN THE WTO.

7 (a) REPORT ON THE OPERATION OF THE WTO.—

8 The first annual report submitted to the Congress under

9 section 124—

10 (1) after the end of the 5-year period beginning

11 on the date on which the WTO Agreement enters

12 into force with respect to the United States, and

13 (2) after the end of every 5-year period there14 after,

15 shall include an analysis of the effects of the WTO Agree16 ment on the interests of the United States, the costs and

17 benefits to the United States of its participation in the

18 WTO, and the value of the continued participation of the

19 United States in the WTO.

20 (b) CONGRESSIONAL DISAPPROVAL OF U.S. PARTICI21 PATION IN THE WTO.—

22 (1) GENERAL RULE.—The approval of the Con23 gress, provided under section 101(a), of the WTO

24 Agreement shall cease to be effective if, and only if,

25 a joint resolution described in subsection (c) is en-
55

1 acted into law pursuant to the provisions of para2 graph (2).

3 (2) PROCEDURAL PROVISIONS.—(A) The re4 quirements of this paragraph are met if the joint

5 resolution is enacted under subsection (c), and

6 (i) the Congress adopts and transmits the

7 joint resolution to the President before the end

8 of the 90-day period (excluding any day de9 scribed in section 154(b) of the Trade Act of

10 1974), beginning on the date on which the Con11 gress receives a report referred to in subsection

12 (a), and

13 (ii) if the President vetoes the joint resolu14 tion, each House of Congress votes to override

15 that veto on or before the later of the last day

16 of the 90-day period referred to in clause (i) or

17 the last day of the 15-day period (excluding any

18 day described in section 154(b) of the Trade

19 Act of 1974) beginning on the date on which

20 the Congress receives the veto message from the

21 President.

22 (B) A joint resolution to which this section ap23 plies may be introduced at any time on or after the

24 date on which the President transmits to the Con25 gress a report described in subsection (a), and be-
56

1 fore the end of the 90-day period referred to in sub2 paragraph (A).

3 (c) JOINT RESOLUTIONS.—

4 (1) JOINT RESOLUTIONS.—For purposes of this

5 section, the term ‘‘joint resolution’’ means only a

6 joint resolution of the 2 Houses of Congress, the

7 matter after the resolving clause of which is as fol8 lows: ‘‘That the Congress withdraws its approval,

9 provided under section 101(a) of the Uruguay

10 Round Agreements Act, of the WTO Agreement as

11 defined in section 2(9) of that Act.’’.

12 (2) PROCEDURES.—(A) Joint resolutions may

13 be introduced in either House of the Congress by

14 any member of such House.

15 (B) Subject to the provisions of this subsection,

16 the provisions of subsections (b), (d), (e), and (f) of

17 section 152 of the Trade Act of 1974 (19 U.S.C.

18 2192(b), (d), (e), and (f)) apply to joint resolutions

19 to the same extent as such provisions apply to reso20 lutions under such section.

21 (C) If the committee of either House to which

22 a joint resolution has been referred has not reported

23 it by the close of the 45th day after its introduction

24 (excluding any day described in section 154(b) of the

25 Trade Act of 1974), such committee shall be auto-
57

1 matically discharged from further consideration of

2 the joint resolution and it shall be placed on the ap3 propriate calendar.

4 (D) It is not in order for—

5 (i) the Senate to consider any joint resolu6 tion unless it has been reported by the Commit7 tee on Finance or the committee has been dis8 charged under subparagraph (C); or

9 (ii) the House of Representatives to con10 sider any joint resolution unless it has been re11 ported by the Committee on Ways and Means

12 or the committee has been discharged under

13 subparagraph (C).

14 (E) A motion in the House of Representatives

15 to proceed to the consideration of a joint resolution

16 may only be made on the second legislative day after

17 the calendar day on which the Member making the

18 motion announces to the House his or her intention

19 to do so.

20 (3) CONSIDERATION OF SECOND RESOLUTION

21 NOT IN ORDER.—It shall not be in order in either

22 the House of Representatives or the Senate to con23 sider a joint resolution (other than a joint resolution

24 received from the other House), if that House has
58

1 previously adopted a joint resolution under this sec2 tion.

3 (d) RULES OF HOUSE OF REPRESENTATIVES AND

4 SENATE.—This section is enacted by the Congress—

5 (1) as an exercise of the rulemaking power of

6 the House of Representatives and the Senate, re7 spectively, and as such is deemed a part of the rules

8 of each House, respectively, and such procedures su9 persede other rules only to the extent that they are

10 inconsistent with such other rules; and

11 (2) with the full recognition of the constitu12 tional right of either House to change the rules (so

13 far as relating to the procedures of that House) at

14 any time, in the same manner, and to the same ex15 tent as any other rule of that House.

16 SEC. 126. INCREASED TRANSPARENCY.

17 The Trade Representative shall seek the adoption by

18 the Ministerial Conference and General Council of proce19 dures that will ensure broader application of the principle

20 of transparency and clarification of the costs and benefits

21 of trade policy actions, through the observance of open

22 and equitable procedures in trade matters by the Ministe23 rial Conference and the General Council, and by the dis24 pute settlement panels and the Appellate Body under the

25 Dispute Settlement Understanding.
59

1 SEC. 127. ACCESS TO THE WTO DISPUTE SETTLEMENT

2 PROCESS.

3 (a) IN GENERAL.—Whenever the United States is a

4 party before a dispute settlement panel established pursu5 ant to Article 6 of the Dispute Settlement Understanding,

6 the Trade Representative shall, at each stage of the pro7 ceeding before the panel or the Appellate Body, consult

8 with the appropriate congressional committees, the peti9 tioner (if any) under section 302(a) of the Trade Act of

10 1974 (19 U.S.C. 2412) with respect to the matter that

11 is the subject of the proceeding, and relevant private sec12 tor advisory committees established under section 135 of

13 the Trade Act of 1974 (19 U.S.C. 2155), and shall con14 sider the views of representatives of appropriate interested

15 private sector and nongovernmental organizations con16 cerning the matter.

17 (b) NOTICE AND PUBLIC COMMENT.—In any pro18 ceeding described in subsection (a), the Trade Representa19 tive shall—

20 (1) promptly after requesting the establishment

21 of a panel, or receiving a request from another WTO

22 member country for the establishment of a panel,

23 publish a notice in the Federal Register—

24 (A) identifying the initial parties to the

25 dispute,
60

1 (B) setting forth the major issues raised

2 by the country requesting the establishment of

3 a panel and the legal basis of the complaint,

4 (C) identifying the specific measures, in5 cluding any State or Federal law cited in the

6 request for establishment of the panel, and

7 (D) seeking written comments from the

8 public concerning the issues raised in the dis9 pute; and

10 (2) take into account any advice received from

11 appropriate congressional committees and relevant

12 private sector advisory committees referred to in

13 subsection (a), and written comments received pur14 suant to paragraph (1)(D), in preparing United

15 States submissions to the panel or the Appellate

16 Body.

17 (c) ACCESS TO DOCUMENTS.—In each proceeding de18 scribed in subsection (a), the Trade Representative shall—

19 (1) make written submissions by the United

20 States referred to in subsection (b) available to the

21 public promptly after they are submitted to the

22 panel or Appellate Body, except that the Trade Rep23 resentative is authorized to withhold from disclosure

24 any information contained in such submissions iden25 tified by the provider of the information as propri-
61

1 etary information or information treated as con2 fidential by a foreign government;

3 (2) request each other party to the dispute to

4 permit the Trade Representative to make that par5 ty’s written submissions to the panel or the Appel6 late Body available to the public; and

7 (3) make each report of the panel or the Appel8 late Body available to the public promptly after it is

9 circulated to WTO members, and inform the public

10 of such availability.

11 (d) REQUESTS FOR NONCONFIDENTIAL SUM12 MARIES.—In any dispute settlement proceeding conducted

13 pursuant to the Dispute Settlement Understanding, the

14 Trade Representative shall request each party to the dis15 pute to provide nonconfidential summaries of its written

16 submissions, if that party has not made its written sub17 missions public, and shall make those summaries available

18 to the public promptly after receiving them.

19 (e) PUBLIC FILE.—The Trade Representative shall

20 maintain a file accessible to the public on each dispute

21 settlement proceeding to which the United States is a

22 party that is conducted pursuant to the Dispute Settle23 ment Understanding. The file shall include all United

24 States submissions in the proceeding and a listing of any

25 submissions to the Trade Representative from the public
62

1 with respect to the proceeding, as well as the report of

2 the dispute settlement panel and the report of the Appel3 late Body.

4 (f) CONFORMING AMENDMENT.—Section

5 135(a)(1)(B) of the Trade Act of 1974 (19 U.S.C.

6 2155(a)(1)(B)) is amended to read as follows:

7 ‘‘(B) the operation of any trade agreement

8 once entered into, including preparation for dis9 pute settlement panel proceedings to which the

10 United States is a party; and’’.

11 SEC. 128. ADVISORY COMMITTEE PARTICIPATION.

12 Section 135(b)(1) of the Trade Act of 1974 (19

13 U.S.C. 2155(b)(1)) is amended by inserting ‘‘nongovern14 mental environmental and conservation organizations,’’

15 after ‘‘retailers,’’.

16 SEC. 129. ADMINISTRATIVE ACTION FOLLOWING WTO

17 PANEL REPORTS.

18 (a) ACTION BY UNITED STATES INTERNATIONAL

19 TRADE COMMISSION.—

20 (1) ADVISORY REPORT.—If a dispute settlement

21 panel finds in an interim report under Article 15 of

22 the Dispute Settlement Understanding, or the Ap23 pellate Body finds in a report under Article 17 of

24 that Understanding, that an action by the Inter25 national Trade Commission in connection with a
63

1 particular proceeding is not in conformity with the

2 obligations of the United States under the Anti3 dumping Agreement, the Safeguards Agreement, or

4 the Agreement on Subsidies and Countervailing

5 Measures, the Trade Representative may request the

6 Commission to issue an advisory report on whether

7 title VII of the Tariff Act of 1930 or title II of the

8 Trade Act of 1974, as the case may be, permits the

9 Commission to take steps in connection with the

10 particular proceeding that would render its action

11 not inconsistent with the findings of the panel or the

12 Appellate Body concerning those obligations. The

13 Trade Representative shall notify the congressional

14 committees of such request.

15 (2) TIME LIMITS FOR REPORT.—The Commis16 sion shall transmit its report under paragraph (1) to

17 the Trade Representative—

18 (A) in the case of an interim report de19 scribed in paragraph (1), within 30 calendar

20 days after the Trade Representative requests

21 the report; and

22 (B) in the case of a report of the Appellate

23 Body, within 21 calendar days after the Trade

24 Representative requests the report.
64

1 (3) CONSULTATIONS ON REQUEST FOR COMMIS2 SION DETERMINATION.—If a majority of the Com3 missioners issues an affirmative report under para4 graph (1), the Trade Representative shall consult

5 with the congressional committees concerning the

6 matter.

7 (4) COMMISSION DETERMINATION.—Notwith8 standing any provision of the Tariff Act of 1930 or

9 title II of the Trade Act of 1974, if a majority of

10 the Commissioners issues an affirmative report

11 under paragraph (1), the Commission, upon the

12 written request of the Trade Representative, shall

13 issue a determination in connection with the particu14 lar proceeding that would render the Commission’s

15 action described in paragraph (1) not inconsistent

16 with the findings of the panel or Appellate Body.

17 The Commission shall issue its determination not

18 later than 120 days after the request from the

19 Trade Representative is made.

20 (5) CONSULTATIONS ON IMPLEMENTATION OF

21 COMMISSION DETERMINATION.—The Trade Rep22 resentative shall consult with the congressional com23 mittees before the Commission’s determination

24 under paragraph (4) is implemented.
65

1 (6) REVOCATION OF ORDER.—If, by virtue of

2 the Commission’s determination under paragraph

3 (4), an antidumping or countervailing duty order

4 with respect to some or all of the imports that are

5 subject to the action of the Commission described in

6 paragraph (1) is no longer supported by an affirma7 tive Commission determination under title VII of the

8 Tariff Act of 1930 or this subsection, the Trade

9 Representative may, after consulting with the con10 gressional committees under paragraph (5), direct

11 the administering authority to revoke the antidump12 ing or countervailing duty order in whole or in part.

13 (7) MODIFICATION OF ACTION UNDER TITLE II

14 OF TRADE ACT OF 1974.—Section 204(b) of the

15 Trade Act of 1974 (19 U.S.C. 2254(b)) is amended

16 by adding at the end the following new paragraph:

17 ‘‘(3) Notwithstanding paragraph (1), the Presi18 dent may, after receipt of a Commission determina19 tion under section 129(a)(4) of the Uruguay Round

20 Agreements Act and consulting with the Committee

21 on Ways and Means of the House of Representatives

22 and the Committee on Finance of the Senate, re23 duce, modify, or terminate action taken under sec24 tion 203.’’.

25 (b) ACTION BY ADMINISTERING AUTHORITY.—
66

1 (1) CONSULTATIONS WITH ADMINISTERING AU2 THORITY AND CONGRESSIONAL COMMITTEES.—

3 Promptly after a report by a dispute settlement

4 panel or the Appellate body is issued that contains

5 findings that an action by the administering author6 ity in a proceeding under title VII of the Tariff Act

7 of 1930 is not in conformity with the obligations of

8 the United States under the Antidumping Agree9 ment or the Agreement on Subsidies and Counter10 vailing Measures, the Trade Representative shall

11 consult with the administering authority and the

12 congressional committees on the matter.

13 (2) DETERMINATION BY ADMINISTERING AU14 THORITY.—Notwithstanding any provision of the

15 Tariff Act of 1930, the administering authority

16 shall, within 180 days after receipt of a written re17 quest from the Trade Representative, issue a deter18 mination in connection with the particular proceed19 ing that would render the administering authority’s

20 action described in paragraph (1) not inconsistent

21 with the findings of the panel or the Appellate Body.

22 (3) CONSULTATIONS BEFORE IMPLEMENTA23 TION.—Before the administering authority imple24 ments any determination under paragraph (2), the

25 Trade Representative shall consult with the admin-
67

1 istering authority and the congressional committees

2 with respect to such determination.

3 (4) IMPLEMENTATION OF DETERMINATION.—

4 The Trade Representative may, after consulting with

5 the administering authority and the congressional

6 committees under paragraph (3), direct the admin7 istering authority to implement, in whole or in part,

8 the determination made under paragraph (2).

9 (c) EFFECTS OF DETERMINATIONS; NOTICE OF IM10 PLEMENTATION.—

11 (1) EFFECTS OF DETERMINATIONS.—Deter12 minations concerning title VII of the Tariff Act of

13 1930 that are implemented under this section shall

14 apply with respect to unliquidated entries of the sub15 ject merchandise (as defined in section 771 of that

16 Act) that are entered, or withdrawn from warehouse,

17 for consumption on or after—

18 (A) in the case of a determination by the

19 Commission under subsection (a)(4), the date

20 on which the Trade Representative directs the

21 administering authority under subsection (a)(6)

22 to revoke an order pursuant to that determina23 tion, and

24 (B) in the case of a determination by the

25 administering authority under subsection
68

1 (b)(2), the date on which the Trade Represent2 ative directs the administering authority under

3 subsection (b)(4) to implement that determina4 tion.

5 (2) NOTICE OF IMPLEMENTATION.—

6 (A) The administering authority shall pub7 lish in the Federal Register notice of the imple8 mentation of any determination made under

9 this section with respect to title VII of the Tar10 iff Act of 1930.

11 (B) The Trade Representative shall pub12 lish in the Federal Register notice of the imple13 mentation of any determination made under

14 this section with respect to title II of the Trade

15 Act of 1974.

16 (d) OPPORTUNITY FOR COMMENT BY INTERESTED

17 PARTIES.—Prior to issuing a determination under this

18 section, the administering authority or the Commission,

19 as the case may be, shall provide interested parties with

20 an opportunity to submit written comments and, in appro21 priate cases, may hold a hearing, with respect to the deter22 mination.

23 (e) JUDICIAL OR BINATIONAL PANEL REVIEW.—
69

1 (1) REVIEW OF DETERMINATIONS ON

2 RECORD.—Section 516A(a)(2) of the Tariff Act of

3 1930 (19 U.S.C. 1516a(a)(2)) is amended—

4 (A) in subparagraph (A)(i)—

5 (i) in subclause (I) by striking ‘‘(B),

6 or’’ and inserting ‘‘(B)’’, and

7 (ii) by adding after subclause (II) the

8 following:

9 ‘‘(III) notice of the implementa10 tion of any determination described in

11 clause (vii) of subparagraph (B), or’’;

12 and

13 (B) in subparagraph (B), by adding at the

14 end the following new clause:

15 ‘‘(vii) A determination by the admin16 istering authority or the Commission under

17 section 129 of the Uruguay Round Agree18 ments Act concerning a determination

19 under title VII of the Tariff Act of 1930.’’.

20 (2) TIME LIMITS FOR CASES INVOLVING FREE

21 TRADE AREA COUNTRIES.—Section 516A(a)(5) of

22 the Tariff Act of 1930 (19 U.S.C. 1516a(a)(5)) is

23 amended by adding at the end the following new

24 subparagraph:
70

1 ‘‘(E) For a determination described in

2 clause (vii) of paragraph (2)(B), the 31st day

3 after the date on which notice of the implemen4 tation of the determination is published in the

5 Federal Register.’’.

6 (3) REVIEW OF CASES INVOLVING FREE TRADE

7 AREA COUNTRY MERCHANDISE.—Section

8 516A(g)(8)(A)(i) of the Tariff Act of 1930 (19

9 U.S.C. 1516a(g)(8)(A)(i)) is amended by striking

10 ‘‘subparagraph (A) or (B)’’ and inserting ‘‘subpara11 graph (A), (B), or (E)’’.

12 SEC. 130. EFFECTIVE DATE.

13 This subtitle and the amendments made by this sub14 title take effect on the date on which the WTO Agreement

15 enters into force with respect to the United States.

16 Subtitle D—Related Provisions

17 SEC. 131. WORKING PARTY ON WORKER RIGHTS.

18 (a) IN GENERAL.—The President shall seek the es19 tablishment in the GATT 1947, and, upon entry into force

20 of the WTO Agreement with respect to the United States,

21 in the WTO, of a working party to examine the relation22 ship of internationally recognized worker rights, as defined

23 in section 502(a)(4) of the Trade Act of 1974, to the arti24 cles, objectives, and related instruments of the GATT

25 1947 and of the WTO, respectively.
71

1 (b) OBJECTIVES OF WORKING PARTY.—The objec2 tives of the United States for the working party described

3 in subsection (a) are to—

4 (1) explore the linkage between international

5 trade and internationally recognized worker rights,

6 as defined in section 502(a)(4) of the Trade Act of

7 1974, taking into account differences in the level of

8 development among countries;

9 (2) examine the effects on international trade of

10 the systematic denial of such rights;

11 (3) consider ways to address such effects; and

12 (4) develop methods to coordinate the work pro13 gram of the working party with the International

14 Labor Organization.

15 (c) REPORT TO CONGRESS.—The President shall re16 port to the Congress, not later than 1 year after the date

17 of the enactment of this Act, on the progress made in es18 tablishing the working party under this section, and on

19 United States objectives with respect to the working par20 ty’s work program.

21 SEC. 132. IMPLEMENTATION OF RULES OF ORIGIN WORK

22 PROGRAM.

23 If the President enters into an agreement developed

24 under the work program described in Article 9 of the

25 Agreement on Rules of Origin referred to in section
72

1 101(d)(10), the President may implement United States

2 obligations under such an agreement under United States

3 law only pursuant to authority granted to the President

4 for that purpose by law enacted after the effective date

5 of this title.

6 SEC. 133. MEMBERSHIP IN WTO OF BOYCOTTING COUN7 TRIES.

8 It is the sense of the Congress that the Trade Rep9 resentative should vigorously oppose the admission into

10 the World Trade Organization of any country which,

11 through its laws, regulations, official policies, or govern12 mental practices, fosters, imposes, complies with, furthers,

13 or supports any boycott described in section 8(a) of the

14 Export Administration Act of 1979 (50 U.S.C. App.

15 2407(a)) (as in effect on August 20, 1994), including re16 quiring or encouraging entities within that country to

17 refuse to do business with persons who do not comply with

18 requests to take any action prohibited under that section.

19 SEC. 134. AFRICA TRADE AND DEVELOPMENT POLICY.

20 (a) DEVELOPMENT OF POLICY.—The President

21 should develop and implement a comprehensive trade and

22 development policy for the countries of Africa.

23 (b) REPORTS TO CONGRESS.—The President shall,

24 not later than 12 months after the date of the enactment

25 of this Act and annually thereafter for a period of 4 years,
73

1 submit to the Committee on Ways and Means and the

2 Committee on Foreign Affairs of the House of Representa3 tives, the Committee on Finance and the Committee on

4 Foreign Relations of the Senate, and other appropriate

5 committees of the Congress, a report on the steps taken

6 to carry out subsection (a).

7 SEC. 135. OBJECTIVES FOR EXTENDED NEGOTIATIONS.

8 (a) TRADE IN FINANCIAL SERVICES.—The principal

9 negotiating objective of the United States in the extended

10 negotiations on financial services to be conducted under

11 the auspices of the WTO is to seek to secure commit12 ments, from a wide range of commercially important de13 veloped and developing countries, to reduce or eliminate

14 barriers to the supply of financial services, including bar15 riers that deny national treatment or market access by re16 stricting the establishment or operation of financial serv17 ices providers, as the condition for the United States—

18 (1) offering commitments to provide national

19 treatment and market access in each of the financial

20 services subsectors, and

21 (2) making such commitments on a most-fa22 vored-nation basis.

23 (b) TRADE IN BASIC TELECOMMUNICATIONS SERV24 ICES.—The principal negotiating objective of the United

25 States in the extended negotiations on basic telecommuni-
74

1 cations services to be conducted under the auspices of the

2 WTO is to obtain the opening on nondiscriminatory terms

3 and conditions of foreign markets for basic telecommuni4 cations services through facilities-based competition or

5 through the resale of services on existing networks.

6 (c) TRADE IN CIVIL AIRCRAFT.—

7 (1) NEGOTIATIONS.—The principal negotiating

8 objectives of the United States in the extended nego9 tiations on trade in civil aircraft to be conducted

10 under the auspices of the WTO are—

11 (A) to obtain competitive opportunities for

12 United States exports in foreign markets sub13 stantially equivalent to those afforded to foreign

14 products in the United States,

15 (B) to obtain the reduction or elimination

16 of specific tariff and nontariff barriers, includ17 ing through expanded membership in the

18 Agreement on Trade in Civil Aircraft and in the

19 US–EC bilateral agreement for large civil air20 craft,

21 (C) to maintain vigorous and effective dis22 ciplines on subsidies practices with respect to

23 civil aircraft products under the Agreement on

24 Subsidies and Countervailing Measures referred

25 to in section 101(d)(12),
75

1 (D) to maintain the scope and coverage on

2 indirect support as specified in the US–EC bi3 lateral agreement on large civil aircraft, and

4 (E) to obtain increased transparency with

5 respect to foreign subsidy programs in the civil

6 aircraft sector, both through greater govern7 ment disclosure with respect to the use of tax8 payer moneys and higher financial disclosure

9 standards for companies receiving government

10 supports (including disclosure comparable to

11 that required under United States securities

12 laws).

13 (2) DEFINITIONS.—For purposes of paragraph

14 (1)—

15 (A) the term ‘‘civil aircraft’’ means those

16 products to which the Agreement on Trade in

17 Civil Aircraft applies,

18 (B) the term ‘‘large civil aircraft’’ has the

19 meaning given that term in Annex II to the

20 US–EC bilateral agreement,

21 (C) the term ‘‘indirect support’’ means in22 direct government support as defined in Annex

23 II to the US–EC bilateral agreement,

24 (D) the term ‘‘Agreement on Trade in

25 Civil Aircraft’’ means the Agreement on Trade
76

1 in Civil Aircraft approved by the Congress

2 under section 2 of the Trade Agreements Act of

3 1979, and

4 (E) the term ‘‘US–EC bilateral agree5 ment’’ means the Agreement Concerning the

6 Application of the GATT Agreement on Trade

7 in Civil Aircraft Between the European Eco8 nomic Community and the Government of the

9 United States of America on trade in large civil

10 aircraft, entered into on July 17, 1992.

11 SEC. 136. REPEAL OF TAX ON IMPORTED PERFUMES; DRAW12 BACK OF TAX ON DISTILLED SPIRITS USED IN

13 PERFUME MANUFACTURE.

14 (a) REPEAL OF TAX ON IMPORTED PERFUMES.—

15 Subsection (a) of section 5001 of the Internal Revenue

16 Code of 1986 is amended by striking paragraph (3) and

17 redesignating the following paragraphs accordingly.

18 (b) DRAWBACK OF TAX ON DISTILLED SPIRITS

19 USED IN PERFUME MANUFACTURE.—Sections 5131(a),

20 5132, 5134(c)(1), and 7652(g) of such Code are each

21 amended by striking ‘‘or flavoring extracts’’ and inserting

22 ‘‘flavoring extracts, or perfume’’.

23 (c) CONFORMING AMENDMENTS.—
77

1 (1) Subsection (b) of section 5002 of such Code

2 is amended by striking paragraph (1) and redesig3 nating the following paragraphs accordingly.

4 (2) Subsection (f) of section 5005 of such Code

5 is amended—

6 (A) by striking ‘‘section 5001(a)(6) and

7 (7)’’ in paragraph (3) and inserting ‘‘section

8 5001(a)(5) and (6)’’, and

9 (B) by striking ‘‘section 5001(a)(5)’’ in

10 paragraph (4) and inserting ‘‘section

11 5001(a)(4)’’.

12 (3) Subsection (b) of section 5007 of such Code

13 is amended to read as follows:

14 ‘‘(b) COLLECTION OF TAX ON IMPORTED DISTILLED

15 SPIRITS.—The internal revenue tax imposed by section

16 5001(a)(1) and (2) upon imported distilled spirits shall

17 be collected by the Secretary and deposited as internal rev18 enue collections, under such regulations as the Secretary

19 may prescribe. Section 5688 shall be applicable to the dis20 position of imported spirits.’’.

21 (4) Paragraph (3) of section 5007(c) of such

22 Code is amended by striking ‘‘section 5001(a)(5),

23 (6), and (7)’’ and inserting ‘‘section 5001(a)(4), (5),

24 and (6)’’.
78

1 (5) Paragraph (1) of section 5061(b) of such

2 Code is amended to read as follows:

3 ‘‘(1) section 5001(a)(4), (5), or (6),’’.

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

5 this section shall take effect on January 1, 1995.

6 SEC. 137. CERTAIN NONRUBBER FOOTWEAR.

7 In the case of nonrubber footwear imported from

8 Brazil—

9 (1) which is subject to Treasury Decision 74-

10 233, dated September 9, 1974,

11 (2) which was entered, or withdrawn from

12 warehouse for consumption, on or before October 28,

13 1981, and

14 (3) with respect to which entries are unliqui15 dated on the date of the enactment of this Act,

16 countervailing duties shall be assessed at rates equal to

17 the amount of the cash deposit of the estimated counter18 vailing duties required on such footwear at the time of

19 entry or withdrawal from warehouse for consumption. In20 terest on underpayments of amounts required to be depos21 ited as countervailing duties shall be paid in accordance

22 with section 778 of the Tariff Act of 1930 (19 U.S.C.

23 1677g).
79

1 SEC. 138. EFFECTIVE DATE.

2 (a) IN GENERAL.—Except as provided in section

3 136(d) and subsection (b) of this section, this subtitle and

4 the amendments made by this subtitle take effect on the

5 date of the enactment of this Act.

6 (b) SECTIONS 132 AND 135.—Sections 132 and 135

7 take effect on the date on which the WTO Agreement en8 ters into force with respect to the United States.

9 TITLE II—ANTIDUMPING AND

10 COUNTERVAILING DUTY PRO11 VISIONS

12 SEC. 201. REFERENCE.

13 Except as otherwise expressly provided, whenever in

14 this title an amendment or repeal is expressed in terms

15 of an amendment to, or repeal of, a section or other provi16 sion, the reference shall be considered to be made to a

17 section or other provision of the Tariff Act of 1930.

18 Subtitle A—General Provisions

19 SEC. 211. ACTION WITH RESPECT TO PETITIONS.

20 (a) COUNTERVAILING DUTY INVESTIGATIONS.—Sec21 tion 702(b) (19 U.S.C. 1671a(b)) is amended—

22 (1) in paragraph (3) by striking ‘‘subsection

23 702(b)(1)’’ and inserting ‘‘paragraph (1)’’, and

24 (2) by adding at the end the following:

25 ‘‘(4) ACTION WITH RESPECT TO PETITIONS.—
80

1 ‘‘(A) NOTIFICATION OF GOVERNMENTS.—

2 Upon receipt of a petition filed under para3 graph (1), the administering authority shall—

4 ‘‘(i) notify the government of any ex5 porting country named in the petition by

6 delivering a public version of the petition

7 to an appropriate representative of such

8 country; and

9 ‘‘(ii) provide the government of any

10 exporting country named in the petition

11 that is a Subsidies Agreement country an

12 opportunity for consultations with respect

13 to the petition.

14 ‘‘(B) ACCEPTANCE OF COMMUNICA15 TIONS.—The administering authority shall not

16 accept any unsolicited oral or written commu17 nication from any person other than an inter18 ested party described in section 771(9) (C),

19 (D), (E), (F), or (G) before the administering

20 authority makes its decision whether to initiate

21 an investigation, except as provided in subpara22 graph (A)(ii) and subsection (c)(4)(D), and ex23 cept for inquiries regarding the status of the

24 administering authority’s consideration of the

25 petition.
81

1 ‘‘(C) NONDISCLOSURE OF CERTAIN INFOR2 MATION.—The administering authority and the

3 Commission shall not disclose information with

4 regard to any draft petition submitted for re5 view and comment before it is filed under para6 graph (1).’’.

7 (b) ANTIDUMPING INVESTIGATIONS.—Section 732(b)

8 (19 U.S.C. 1673a(b)) is amended by adding at the end

9 the following:

10 ‘‘(3) ACTION WITH RESPECT TO PETITIONS.—

11 ‘‘(A) NOTIFICATION OF GOVERNMENTS.—

12 Upon receipt of a petition filed under para13 graph (1), the administering authority shall no14 tify the government of any exporting country

15 named in the petition by delivering a public ver16 sion of the petition to an appropriate represent17 ative of such country.

18 ‘‘(B) ACCEPTANCE OF COMMUNICA19 TIONS.—The administering authority shall not

20 accept any unsolicited oral or written commu21 nication from any person other than an inter22 ested party described in section 771(9) (C),

23 (D), (E), (F), or (G) before the administering

24 authority makes its decision whether to initiate

25 an investigation, except as provided in sub-
82

1 section (c)(4)(D), and except for inquiries re2 garding the status of the administering

3 authority’s consideration of the petition.

4 ‘‘(C) NONDISCLOSURE OF CERTAIN INFOR5 MATION.—The administering authority and the

6 Commission shall not disclose information with

7 regard to any draft petition submitted for re8 view and comment before it is filed under para9 graph (1).’’.

10 SEC. 212. PETITION AND PRELIMINARY DETERMINATION.

11 (a) GENERAL REQUIREMENTS.—

12 (1) COUNTERVAILING DUTY PETITION.—Section

13 702(c) (19 U.S.C. 1671a(c)) is amended to read as

14 follows:

15 ‘‘(c) PETITION DETERMINATION.—

16 ‘‘(1) IN GENERAL.—

17 ‘‘(A) TIME FOR INITIAL DETERMINA18 TION.—Except as provided in subparagraph

19 (B), within 20 days after the date on which a

20 petition is filed under subsection (b), the ad21 ministering authority shall—

22 ‘‘(i) after examining, on the basis of

23 sources readily available to the administer24 ing authority, the accuracy and adequacy

25 of the evidence provided in the petition, de-
83

1 termine whether the petition alleges the

2 elements necessary for the imposition of a

3 duty under section 701(a) and contains in4 formation reasonably available to the peti5 tioner supporting the allegations, and

6 ‘‘(ii) determine if the petition has

7 been filed by or on behalf of the industry.

8 ‘‘(B) EXTENSION OF TIME.—In any case

9 in which the administering authority is required

10 to poll or otherwise determine support for the

11 petition by the industry under paragraph

12 (4)(D), the administering authority may, in ex13 ceptional circumstances, apply subparagraph

14 (A) by substituting ‘a maximum of 40 days’ for

15 ‘20 days’.

16 ‘‘(C) TIME LIMITS WHERE PETITION IN17 VOLVES SAME MERCHANDISE AS AN ORDER

18 THAT HAS BEEN REVOKED.—If a petition is

19 filed under this section with respect to mer20 chandise that was the subject merchandise of—

21 ‘‘(i) a countervailing duty order that

22 was revoked under section 751(d) in the

23 24 months preceding the date the petition

24 is filed, or
84

1 ‘‘(ii) a suspended investigation that

2 was terminated under section 751(d) in the

3 24 months preceding the date the petition

4 is filed,

5 the administering authority and the Commis6 sion shall, to the maximum extent practicable,

7 expedite any investigation initiated under this

8 section with respect to the petition.

9 ‘‘(2) AFFIRMATIVE DETERMINATIONS.—If the

10 determinations under clauses (i) and (ii) of para11 graph (1)(A) are affirmative, the administering au12 thority shall initiate an investigation to determine

13 whether a countervailable subsidy is being provided

14 with respect to the subject merchandise.

15 ‘‘(3) NEGATIVE DETERMINATIONS.—If the de16 termination under clause (i) or (ii) of paragraph

17 (1)(A) is negative, the administering authority shall

18 dismiss the petition, terminate the proceeding, and

19 notify the petitioner in writing of the reasons for the

20 determination.

21 ‘‘(4) DETERMINATION OF INDUSTRY SUP22 PORT.—

23 ‘‘(A) GENERAL RULE.—For purposes of

24 this subsection, the administering authority
85

1 shall determine that the petition has been filed

2 by or on behalf of the industry, if—

3 ‘‘(i) the domestic producers or work4 ers who support the petition account for at

5 least 25 percent of the total production of

6 the domestic like product, and

7 ‘‘(ii) the domestic producers or work8 ers who support the petition account for

9 more than 50 percent of the production of

10 the domestic like product produced by that

11 portion of the industry expressing support

12 for or opposition to the petition.

13 ‘‘(B) CERTAIN POSITIONS DIS14 REGARDED.—

15 ‘‘(i) PRODUCERS RELATED TO FOR16 EIGN PRODUCERS.—In determining indus17 try support under subparagraph (A), the

18 administering authority shall disregard the

19 position of domestic producers who oppose

20 the petition, if such producers are related

21 to foreign producers, as defined in section

22 771(4)(B)(ii), unless such domestic pro23 ducers demonstrate that their interests as

24 domestic producers would be adversely af-
86

1 fected by the imposition of a countervailing

2 duty order.

3 ‘‘(ii) PRODUCERS WHO ARE IMPORT4 ERS.—The administering authority may

5 disregard the position of domestic produc6 ers of a domestic like product who are im7 porters of the subject merchandise.

8 ‘‘(C) SPECIAL RULE FOR REGIONAL INDUS9 TRIES.—If the petition alleges that the industry

10 is a regional industry, the administering author11 ity shall determine whether the petition has

12 been filed by or on behalf of the industry by ap13 plying subparagraph (A) on the basis of produc14 tion in the region.

15 ‘‘(D) POLLING THE INDUSTRY.—If the pe16 tition does not establish support of domestic

17 producers or workers accounting for more than

18 50 percent of the total production of the domes19 tic like product, the administering authority

20 shall—

21 ‘‘(i) poll the industry or rely on other

22 information in order to determine if there

23 is support for the petition as required by

24 subparagraph (A), or
87

1 ‘‘(ii) if there is a large number of pro2 ducers in the industry, the administering

3 authority may determine industry support

4 for the petition by using any statistically

5 valid sampling method to poll the industry.

6 ‘‘(E) COMMENTS BY INTERESTED PAR7 TIES.—Before the administering authority

8 makes a determination with respect to initiating

9 an investigation, any person who would qualify

10 as an interested party under section 771(9) if

11 an investigation were initiated, may submit

12 comments or information on the issue of indus13 try support. After the administering authority

14 makes a determination with respect to initiating

15 an investigation, the determination regarding

16 industry support shall not be reconsidered.

17 ‘‘(5) DEFINITION OF DOMESTIC PRODUCERS OR

18 WORKERS.—For purposes of this subsection, the

19 term ‘domestic producers or workers’ means those

20 interested parties who are eligible to file a petition

21 under subsection (b)(1)(A).’’.

22 (2) ANTIDUMPING DUTY PETITION.—Section

23 732(c) (19 U.S.C. 1673a(c)) is amended to read as

24 follows:

25 ‘‘(c) PETITION DETERMINATION.—
88

1 ‘‘(1) IN GENERAL.—

2 ‘‘(A) TIME FOR INITIAL DETERMINA3 TION.—Except as provided in subparagraph

4 (B), within 20 days after the date on which a

5 petition is filed under subsection (b), the ad6 ministering authority shall—

7 ‘‘(i) after examining, on the basis of

8 sources readily available to the administer9 ing authority, the accuracy and adequacy

10 of the evidence provided in the petition, de11 termine whether the petition alleges the

12 elements necessary for the imposition of a

13 duty under section 731 and contains infor14 mation reasonably available to the peti15 tioner supporting the allegations, and

16 ‘‘(ii) determine if the petition has

17 been filed by or on behalf of the industry.

18 ‘‘(B) EXTENSION OF TIME.—In any case

19 in which the administering authority is required

20 to poll or otherwise determine support for the

21 petition by the industry under paragraph

22 (4)(D), the administering authority may, in ex23 ceptional circumstances, apply subparagraph

24 (A) by substituting ‘a maximum of 40 days’ for

25 ‘20 days’.
89

1 ‘‘(C) TIME LIMITS WHERE PETITION IN2 VOLVES SAME MERCHANDISE AS AN ORDER

3 THAT HAS BEEN REVOKED.—If a petition is

4 filed under this section with respect to mer5 chandise that was the subject merchandise of—

6 ‘‘(i) an antidumping duty order or

7 finding that was revoked under section

8 751(d) in the 24 months preceding the

9 date the petition is filed, or

10 ‘‘(ii) a suspended investigation that

11 was terminated under section 751(d) in the

12 24 months preceding the date the petition

13 is filed,

14 the administering authority and the Commis15 sion shall, to the maximum extent practicable,

16 expedite any investigation initiated under this

17 section with respect to the petition.

18 ‘‘(2) AFFIRMATIVE DETERMINATIONS.—If the

19 determinations under clauses (i) and (ii) of para20 graph (1)(A) are affirmative, the administering au21 thority shall initiate an investigation to determine

22 whether the subject merchandise is being, or is likely

23 to be, sold in the United States at less than its fair

24 value.
90

1 ‘‘(3) NEGATIVE DETERMINATIONS.—If the de2 termination under clause (i) or (ii) of paragraph

3 (1)(A) is negative, the administering authority shall

4 dismiss the petition, terminate the proceeding, and

5 notify the petitioner in writing of the reasons for the

6 determination.

7 ‘‘(4) DETERMINATION OF INDUSTRY SUP8 PORT.—

9 ‘‘(A) GENERAL RULE.—For purposes of

10 this subsection, the administering authority

11 shall determine that the petition has been filed

12 by or on behalf of the industry, if—

13 ‘‘(i) the domestic producers or work14 ers who support the petition account for at

15 least 25 percent of the total production of

16 the domestic like product, and

17 ‘‘(ii) the domestic producers or work18 ers who support the petition account for

19 more than 50 percent of the production of

20 the domestic like product produced by that

21 portion of the industry expressing support

22 for or opposition to the petition.

23 ‘‘(B) CERTAIN POSITIONS DIS24 REGARDED.—
91

1 ‘‘(i) PRODUCERS RELATED TO FOR2 EIGN PRODUCERS.—In determining indus3 try support under subparagraph (A), the

4 administering authority shall disregard the

5 position of domestic producers who oppose

6 the petition, if such producers are related

7 to foreign producers, as defined in section

8 771(4)(B)(ii), unless such domestic pro9 ducers demonstrate that their interests as

10 domestic producers would be adversely af11 fected by the imposition of an antidumping

12 duty order.

13 ‘‘(ii) PRODUCERS WHO ARE IMPORT14 ERS.—The administering authority may

15 disregard the position of domestic produc16 ers of a domestic like product who are im17 porters of the subject merchandise.

18 ‘‘(C) SPECIAL RULE FOR REGIONAL INDUS19 TRIES.—If the petition alleges the industry is a

20 regional industry, the administering authority

21 shall determine whether the petition has been

22 filed by or on behalf of the industry by applying

23 subparagraph (A) on the basis of production in

24 the region.
92

1 ‘‘(D) POLLING THE INDUSTRY.—If the pe2 tition does not establish support of domestic

3 producers or workers accounting for more than

4 50 percent of the total production of the domes5 tic like product, the administering authority

6 shall—

7 ‘‘(i) poll the industry or rely on other

8 information in order to determine if there

9 is support for the petition as required by

10 subparagraph (A), or

11 ‘‘(ii) if there is a large number of pro12 ducers in the industry, the administering

13 authority may determine industry support

14 for the petition by using any statistically

15 valid sampling method to poll the industry.

16 ‘‘(E) COMMENTS BY INTERESTED PAR17 TIES.—Before the administering authority

18 makes a determination with respect to initiating

19 an investigation, any person who would qualify

20 as an interested party under section 771(9) if

21 an investigation were initiated, may submit

22 comments or information on the issue of indus23 try support. After the administering authority

24 makes a determination with respect to initiating
93

1 an investigation, the determination regarding

2 industry support shall not be reconsidered.

3 ‘‘(5) DEFINITION OF DOMESTIC PRODUCERS OR

4 WORKERS.—For purposes of this subsection, the

5 term ‘domestic producers or workers’ means those

6 interested parties who are eligible to file a petition

7 under subsection (b)(1)(A).’’.

8 (b) DETERMINATION BY THE COMMISSION OF REA9 SONABLE INDICATION OF INJURY; PRELIMINARY DETER10 MINATION BY THE ADMINISTERING AUTHORITY.—

11 (1) COUNTERVAILING DUTY INVESTIGATIONS.—

12 (A) Section 703(a) (19 U.S.C. 1671b(a))

13 is amended to read as follows:

14 ‘‘(a) DETERMINATION BY COMMISSION OF REASON15 ABLE INDICATION OF INJURY.—

16 ‘‘(1) GENERAL RULE.—Except in the case of a

17 petition dismissed by the administering authority

18 under section 702(c)(3), the Commission, within the

19 time specified in paragraph (2), shall determine,

20 based on the information available to it at the time

21 of the determination, whether there is a reasonable

22 indication that—

23 ‘‘(A) an industry in the United States—

24 ‘‘(i) is materially injured, or
94

1 ‘‘(ii) is threatened with material in2 jury, or

3 ‘‘(B) the establishment of an industry in

4 the United States is materially retarded,

5 by reason of imports of the subject merchandise and

6 that imports of the subject merchandise are not neg7 ligible. If the Commission finds that imports of the

8 subject merchandise are negligible or otherwise

9 makes a negative determination under this para10 graph, the investigation shall be terminated.

11 ‘‘(2) TIME FOR COMMISSION DETERMINA12 TION.—The Commission shall make the determina13 tion described in paragraph (1)—

14 ‘‘(A) in the case of a petition filed under

15 section 702(b)—

16 ‘‘(i) within 45 days after the date on

17 which the petition is filed, or

18 ‘‘(ii) if the time has been extended

19 pursuant to section 702(c)(1)(B), within

20 25 days after the date on which the Com21 mission receives notice from the admin22 istering authority of initiation of the inves23 tigation, and

24 ‘‘(B) in the case of an investigation initi25 ated under section 702(a), within 45 days after
95

1 the date on which the Commission receives no2 tice from the administering authority that an

3 investigation has been initiated under such sec4 tion.’’.

5 (B) Section 705(b)(1) (19 U.S.C.

6 1671d(b)(1)) is amended by adding at the end

7 the following: ‘‘If the Commission determines

8 that imports of the subject merchandise are

9 negligible, the investigation shall be termi10 nated.’’.

11 (C) Section 703(b) (19 U.S.C. 1671b(b))

12 is amended—

13 (i) in paragraph (1)—

14 (I) by striking ‘‘85 days after the

15 date on which the petition is filed

16 under section 702(b)’’ and inserting

17 ‘‘65 days after the date on which the

18 administering authority initiates an

19 investigation under section 702(c)’’;

20 (II) by striking ‘‘best informa21 tion’’ and inserting ‘‘information’’;

22 and

23 (III) by striking the last sen24 tence; and
96

1 (ii) in paragraph (2), by striking ‘‘85

2 days after the date on which the petition

3 is filed under section 702(b)’’ and inserting

4 ‘‘65 days after the date on which the ad5 ministering authority initiates an investiga6 tion under section 702(c)’’.

7 (D) Section 703(c)(1) (19 U.S.C.

8 1671b(c)) is amended by striking ‘‘150th day

9 after the date on which a petition is filed under

10 section 702(b)’’ and inserting ‘‘130th day after

11 the date on which the administering authority

12 initiates an investigation under section 702(c)’’.

13 (E) Section 702(b)(3) (19 U.S.C.

14 1671a(b)(3)) is amended by striking ‘‘twenty

15 days’’ and inserting ‘‘5 days after the date on

16 which the administering authority initiates an

17 investigation under subsection (c),’’.

18 (F) Section 703(f) (19 U.S.C. 1671b(f)) is

19 amended to read as follows:

20 ‘‘(f) NOTICE OF DETERMINATION.—Whenever the

21 Commission or the administering authority makes a deter22 mination under this section, the Commission or the admin23 istering authority, as the case may be, shall notify the pe24 titioner, and other parties to the investigation, and the

25 Commission or the administering authority (whichever is
97

1 appropriate) of its determination. The administering au2 thority shall include with such notification the facts and

3 conclusions on which its determination is based. Not later

4 than 5 days after the date on which the determination is

5 required to be made under subsection (a)(2), the Commis6 sion shall transmit to the administering authority the facts

7 and conclusions on which its determination is based.’’.

8 (2) ANTIDUMPING DUTY INVESTIGATIONS.—

9 (A) Section 733(a) (19 U.S.C. 1673b(a))

10 is amended to read as follows:

11 ‘‘(a) DETERMINATION BY COMMISSION OF REASON12 ABLE INDICATION OF INJURY.—

13 ‘‘(1) GENERAL RULE.—Except in the case of a

14 petition dismissed by the administering authority

15 under section 732(c)(3), the Commission, within the

16 time specified in paragraph (2), shall determine,

17 based on the information available to it at the time

18 of the determination, whether there is a reasonable

19 indication that—

20 ‘‘(A) an industry in the United States—

21 ‘‘(i) is materially injured, or

22 ‘‘(ii) is threatened with material in23 jury, or

24 ‘‘(B) the establishment of an industry in

25 the United States is materially retarded,
98

1 by reason of imports of the subject merchandise and

2 that imports of the subject merchandise are not neg3 ligible. If the Commission finds that imports of the

4 subject merchandise are negligible or otherwise

5 makes a negative determination under this para6 graph, the investigation shall be terminated.

7 ‘‘(2) TIME FOR COMMISSION DETERMINA8 TION.—The Commission shall make the determina9 tion described in paragraph (1)—

10 ‘‘(A) in the case of a petition filed under

11 section 732(b)—

12 ‘‘(i) within 45 days after the date on

13 which the petition is filed, or

14 ‘‘(ii) if the time has been extended

15 pursuant to section 732(c)(1)(B), within

16 25 days after the date on which the Com17 mission receives notice from the admin18 istering authority of initiation of the inves19 tigation, and

20 ‘‘(B) in the case of an investigation initi21 ated under section 732(a), within 45 days after

22 the date on which the Commission receives no23 tice from the administering authority that an

24 investigation has been initiated under such sec25 tion.’’.
99

1 (B) Section 735(b)(1) (19 U.S.C.

2 1673d(b)(1)) is amended by adding at the end

3 the following: ‘‘If the Commission determines

4 that imports of the subject merchandise are

5 negligible, the investigation shall be termi6 nated.’’.

7 (C) Section 733(b)(1) (19 U.S.C.

8 1673b(b)(1)) is amended—

9 (i) in subparagraph (A)—

10 (I) by striking ‘‘160 days after

11 the date on which a petition is filed

12 under section 732(b)’’ and inserting

13 ‘‘140 days after the date on which the

14 administering authority initiates an

15 investigation under section 732(c)’’;

16 and

17 (II) by striking ‘‘best informa18 tion’’ and inserting ‘‘information’’;

19 and

20 (ii) in subparagraph (B)—

21 (I) by striking ‘‘120’’ and insert22 ing ‘‘100’’;

23 (II) by striking ‘‘160’’ and in24 serting ‘‘140’’;
100

1 (III) by striking ‘‘100’’ and in2 serting ‘‘80’’; and

3 (IV) by striking ‘‘160’’ and in4 serting ‘‘140’’.

5 (D) Section 733(c)(1) (19 U.S.C.

6 1673b(c)(1)) is amended by striking ‘‘210th

7 day after the date on which a petition is filed

8 under section 732(b)’’ and inserting ‘‘190th day

9 after the date on which the administering au10 thority initiates an investigation under section

11 732(c)’’.

12 (E) Section 733(f) (19 U.S.C. 1673b(f)) is

13 amended to read as follows:

14 ‘‘(f) NOTICE OF DETERMINATION.—Whenever the

15 Commission or the administering authority makes a deter16 mination under this section, the Commission or the admin17 istering authority, as the case may be, shall notify the pe18 titioner, and other parties to the investigation, and the

19 Commission or the administering authority (whichever is

20 appropriate) of its determination. The administering au21 thority shall include with such notification the facts and

22 conclusions on which its determination is based. Not later

23 than 5 days after the date on which the determination is

24 required to be made under subsection (a)(2), the Commis-
101

1 sion shall transmit to the administering authority the facts

2 and conclusions on which its determination is based.’’.

3 SEC. 213. DE MINIMIS DUMPING MARGIN.

4 (a) PRELIMINARY DETERMINATIONS.—Section

5 733(b) (19 U.S.C. 1673b(b)) is amended by adding at the

6 end the following new paragraph:

7 ‘‘(3) DE MINIMIS DUMPING MARGIN.—In mak8 ing a determination under this subsection, the ad9 ministering authority shall disregard any weighted

10 average dumping margin that is de minimis. For

11 purposes of the preceding sentence, a weighted aver12 age dumping margin is de minimis if the administer13 ing authority determines that it is less than 2 per14 cent ad valorem or the equivalent specific rate for

15 the subject merchandise.’’.

16 (b) FINAL DETERMINATIONS.—Section 735(a) (19

17 U.S.C. 1673d(a)) is amended by adding at the end the

18 following new paragraph:

19 ‘‘(4) DE MINIMIS DUMPING MARGIN.—In mak20 ing a determination under this subsection, the ad21 ministering authority shall disregard any weighted

22 average dumping margin that is de minimis as de23 fined in section 733(b)(3).’’.

24 SEC. 214. CRITICAL CIRCUMSTANCES.

25 (a) COUNTERVAILING DUTY INVESTIGATIONS.—
102

1 (1) PRELIMINARY DETERMINATIONS.—Section

2 703(e)(1) (19 U.S.C. 1671b(e)(1)) is amended—

3 (A) in the matter preceding subparagraph

4 (A) by striking ‘‘best information’’ and insert5 ing ‘‘information’’; and

6 (B) by amending subparagraphs (A) and

7 (B) to read as follows:

8 ‘‘(A) the alleged countervailable subsidy is

9 inconsistent with the Subsidies Agreement, and

10 ‘‘(B) there have been massive imports of

11 the subject merchandise over a relatively short

12 period.’’.

13 (2) FINAL DETERMINATIONS.—(A) Section

14 705(a)(2) (19 U.S.C. 1671d(a)(2)) is amended—

15 (i) in subparagraph (A) by inserting ‘‘Sub16 sidies’’ before ‘‘Agreement’’; and

17 (ii) in subparagraph (B) by striking ‘‘class

18 or kind of merchandise involved’’ and inserting

19 ‘‘subject merchandise’’.

20 (B) Section 705(b)(4)(A) (19 U.S.C.

21 1671d(b)(4)) is amended to read as follows:

22 ‘‘(A) COMMISSION STANDARD FOR RETRO23 ACTIVE APPLICATION.—

24 ‘‘(i) IN GENERAL.—If the finding of

25 the administering authority under sub-
103

1 section (a)(2) is affirmative, then the final

2 determination of the Commission shall in3 clude a finding as to whether the imports

4 subject to the affirmative determination

5 under subsection (a)(2) are likely to under6 mine seriously the remedial effect of the

7 countervailing duty order to be issued

8 under section 706.

9 ‘‘(ii) FACTORS TO CONSIDER.—In

10 making the evaluation under clause (i), the

11 Commission shall consider, among other

12 factors it considers relevant—

13 ‘‘(I) the timing and the volume of

14 the imports,

15 ‘‘(II) any rapid increase in inven16 tories of the imports, and

17 ‘‘(III) any other circumstances

18 indicating that the remedial effect of

19 the countervailing duty order will be

20 seriously undermined.’’.

21 (b) ANTIDUMPING INVESTIGATIONS.—

22 (1) PRELIMINARY DETERMINATIONS.—Section

23 733(e)(1) (19 U.S.C. 1673b(e)(1)) is amended—
104

1 (A) in the matter preceding subparagraph

2 (A) by striking ‘‘best information’’ and insert3 ing ‘‘information’’; and

4 (B) by amending subparagraphs (A) and

5 (B) to read as follows:

6 ‘‘(A)(i) there is a history of dumping and

7 material injury by reason of dumped imports in

8 the United States or elsewhere of the subject

9 merchandise, or

10 ‘‘(ii) the person by whom, or for whose ac11 count, the merchandise was imported knew or

12 should have known that the exporter was selling

13 the subject merchandise at less than its fair

14 value and that there was likely to be material

15 injury by reason of such sales, and

16 ‘‘(B) there have been massive imports of

17 the subject merchandise over a relatively short

18 period.’’.

19 (2) FINAL DETERMINATIONS.—(A) Section

20 735(a)(3) (19 U.S.C. 1673d(a)(3)) is amended—

21 (i) in clause (i) of subparagraph (A)—

22 (I) by inserting ‘‘and material injury

23 by reason of dumped imports’’ after ‘‘his24 tory of dumping’’; and
105

1 (II) by striking ‘‘class or kind of the

2 merchandise which is the subject of the in3 vestigation’’ and inserting ‘‘subject mer4 chandise’’;

5 (ii) in clause (ii) of subparagraph (A) by

6 striking ‘‘merchandise which is the subject of

7 the investigation at less than its fair value’’ and

8 inserting ‘‘subject merchandise at less than its

9 fair value and that there would be material in10 jury by reason of such sales’’; and

11 (iii) in subparagraph (B) by striking ‘‘mer12 chandise which is the subject of the investiga13 tion’’ and inserting ‘‘subject merchandise’’.

14 (B) Section 735(b)(4)(A) (19 U.S.C.

15 1673d(b)(4)(A)) is amended to read as follows:

16 ‘‘(A) COMMISSION STANDARD FOR RETRO17 ACTIVE APPLICATION.—

18 ‘‘(i) IN GENERAL.—If the finding of

19 the administering authority under sub20 section (a)(3) is affirmative, then the final

21 determination of the Commission shall in22 clude a finding as to whether the imports

23 subject to the affirmative determination

24 under subsection (a)(3) are likely to under25 mine seriously the remedial effect of the
106

1 antidumping duty order to be issued under

2 section 736.

3 ‘‘(ii) FACTORS TO CONSIDER.—In

4 making the evaluation under clause (i), the

5 Commission shall consider, among other

6 factors it considers relevant—

7 ‘‘(I) the timing and the volume of

8 the imports,

9 ‘‘(II) a rapid increase in inven10 tories of the imports, and

11 ‘‘(III) any other circumstances

12 indicating that the remedial effect of

13 the antidumping order will be seri14 ously undermined.’’.

15 SEC. 215. PROVISIONAL MEASURES.

16 (a) COUNTERVAILING DUTIES.—

17 (1) SUSPENSION OF LIQUIDATION.—Section

18 703(d) (19 U.S.C. 1671b(d)) is amended—

19 (A) in paragraph (1), by striking ‘‘ware20 house’’ and all that follows through ‘‘Register,’’

21 and inserting ‘‘warehouse, for consumption on

22 or after the later of—

23 ‘‘(A) the date on which notice of the deter24 mination is published in the Federal Register,

25 or
107

1 ‘‘(B) the date that is 60 days after the

2 date on which notice of the determination to

3 initiate the investigation is published in the

4 Federal Register,’’; and

5 (B) by adding at the end the following:

6 ‘‘The instructions of the administering authority under

7 paragraphs (1) and (2) may not remain in effect for more

8 than 4 months.’’.

9 (2) CRITICAL CIRCUMSTANCES CASES.—Section

10 703(e)(2) (19 U.S.C. 1671b(e)(2)) is amended by

11 striking ‘‘warehouse, for consumption on or after the

12 date which is 90 days before the date on which sus13 pension of liquidation was first ordered.’’ and insert14 ing ‘‘warehouse, for consumption on or after the

15 later of—

16 ‘‘(A) the date which is 90 days before the

17 date on which the suspension of liquidation was

18 first ordered, or

19 ‘‘(B) the date on which notice of the deter20 mination to initiate the investigation is pub21 lished in the Federal Register.’’.

22 (b) ANTIDUMPING DUTIES.—

23 (1) SUSPENSION OF LIQUIDATION.—Section

24 733(d) (19 U.S.C. 1673b(d)) is amended—
108

1 (A) in paragraph (1), by striking ‘‘ware2 house’’ and all that follows through ‘‘Register,’’

3 and inserting ‘‘warehouse, for consumption on

4 or after the later of—

5 ‘‘(A) the date on which notice of the deter6 mination is published in the Federal Register,

7 or

8 ‘‘(B) the date that is 60 days after the

9 date on which notice of the determination to

10 initiate the investigation is published in the

11 Federal Register,’’; and

12 (B) by adding at the end the following:

13 ‘‘The instructions of the administering authority under

14 paragraphs (1) and (2) may not remain in effect for more

15 than 4 months, except that the administering authority

16 may, at the request of exporters representing a significant

17 proportion of exports of the subject merchandise, extend

18 that 4-month period to not more than 6 months.’’.

19 (2) CRITICAL CIRCUMSTANCES CASES.—Section

20 733(e)(2) (19 U.S.C. 1673b(e)(2)) is amended by

21 striking ‘‘warehouse, for consumption on or after the

22 date which is 90 days before the date on which sus23 pension of liquidation was first ordered.’’ and insert24 ing ‘‘warehouse, for consumption on or after the

25 later of—
109

1 ‘‘(A) the date which is 90 days before the

2 date on which the suspension of liquidation was

3 first ordered, or

4 ‘‘(B) the date on which notice of the deter5 mination to initiate the investigation is pub6 lished in the Federal Register.’’.

7 SEC. 216. CONDITIONS ON ACCEPTANCE OF SUSPENSION

8 AGREEMENTS.

9 (a) COUNTERVAILING DUTIES.—Section 704(d)(1)

10 (19 U.S.C. 1671c(d)(1)) is amended by striking ‘‘In apply11 ing’’ and inserting the following:

12 ‘‘Where practicable, the administering authority

13 shall provide to the exporters who would have been

14 subject to the agreement the reasons for not accept15 ing the agreement and, to the extent possible, an op16 portunity to submit comments thereon. In applying’’.

17 (b) ANTIDUMPING DUTIES.—Section 734(d) (19

18 U.S.C. 1673c(d)) is amended by adding at the end the

19 following flush sentence:

20 ‘‘Where practicable, the administering authority shall pro21 vide to the exporters who would have been subject to the

22 agreement the reasons for not accepting the agreement

23 and, to the extent possible, an opportunity to submit com24 ments thereon.’’.
110

1 SEC. 217. TERMINATION OF INVESTIGATION.

2 (a) COUNTERVAILING DUTY INVESTIGATIONS.—Sec3 tion 704(a)(1) (19 U.S.C. 1671c(a)(1)) is amended—

4 (1) by striking ‘‘Except’’ and inserting ‘‘(A)

5 WITHDRAWAL OF PETITION.—Except’’;

6 (2) by indenting the text so as to align it with

7 subparagraph (B) (as added by paragraph (3) of

8 this subsection); and

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

10 ‘‘(B) REFILING OF PETITION.—If, within 3

11 months after the withdrawal of a petition under

12 subparagraph (A), a new petition is filed seek13 ing the imposition of duties on both the subject

14 merchandise of the withdrawn petition and the

15 subject merchandise from another country, the

16 administering authority and the Commission

17 may use in the investigation initiated pursuant

18 to the new petition any records compiled in an

19 investigation conducted pursuant to the with20 drawn petition. This subparagraph applies only

21 with respect to the first withdrawal of a peti22 tion.’’.

23 (b) ANTIDUMPING DUTY INVESTIGATIONS.—Section

24 734(a)(1) (19 U.S.C. 1673c(a)(1)) is amended—

25 (1) by striking ‘‘Except’’ and inserting ‘‘(A)

26 WITHDRAWAL OF PETITION.—Except’’;
111

1 (2) by indenting the text so as to align it with

2 subparagraph (B) (as added by paragraph (3) of

3 this subsection); and

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

5 ‘‘(B) REFILING OF PETITION.—If, within 3

6 months after the withdrawal of a petition under

7 subparagraph (A), a new petition is filed seek8 ing the imposition of duties on both the subject

9 merchandise of the withdrawn petition and the

10 subject merchandise from another country, the

11 administering authority and the Commission

12 may use in the investigation initiated pursuant

13 to the new petition any records compiled in an

14 investigation conducted pursuant to the with15 drawn petition. This subparagraph applies only

16 with respect to the first withdrawal of a peti17 tion.’’.

18 SEC. 218. SPECIAL RULES FOR REGIONAL INDUSTRIES.

19 (a) SUSPENSION AGREEMENTS.—

20 (1) COUNTERVAILING DUTY INVESTIGATIONS.—

21 Section 704 (19 U.S.C. 1671c) is amended by add22 ing at the end the following new subsection:

23 ‘‘(l) SPECIAL RULE FOR REGIONAL INDUSTRY IN24 VESTIGATIONS.—
112

1 ‘‘(1) SUSPENSION AGREEMENTS.—If the Com2 mission makes a regional industry determination

3 under section 771(4)(C), the administering authority

4 shall offer exporters of the subject merchandise who

5 account for substantially all exports of that mer6 chandise for sale in the region concerned the oppor7 tunity to enter into an agreement described in sub8 section (b) or (c).

9 ‘‘(2) REQUIREMENTS FOR SUSPENSION AGREE10 MENTS.—Any agreement described in paragraph (1)

11 shall be subject to all the requirements imposed

12 under this section for other agreements under sub13 section (b) or (c), except that if the Commission

14 makes a regional industry determination described

15 in paragraph (1) in the final affirmative determina16 tion under section 705(b) but not in the preliminary

17 affirmative determination under section 703(a), any

18 agreement described in paragraph (1) may be ac19 cepted within 60 days after the countervailing duty

20 order is published under section 706.

21 ‘‘(3) EFFECT OF SUSPENSION AGREEMENT ON

22 COUNTERVAILING DUTY ORDER.—If an agreement

23 described in paragraph (1) is accepted after the

24 countervailing duty order is published, the admin25 istering authority shall rescind the order, refund any
113

1 cash deposit and release any bond or other security

2 deposited under section 703(d)(1)(B), and instruct

3 the Customs Service that entries of the subject mer4 chandise that were made during the period that the

5 order was in effect shall be liquidated without regard

6 to countervailing duties.’’.

7 (2) ANTIDUMPING INVESTIGATIONS.—Section

8 734 (19 U.S.C. 1673c) is amended by adding at the

9 end the following new subsection:

10 ‘‘(m) SPECIAL RULE FOR REGIONAL INDUSTRY IN11 VESTIGATIONS.—

12 ‘‘(1) SUSPENSION AGREEMENTS.—If the Com13 mission makes a regional industry determination

14 under section 771(4)(C), the administering authority

15 shall offer exporters of the subject merchandise who

16 account for substantially all exports of that mer17 chandise for sale in the region concerned the oppor18 tunity to enter into an agreement described in sub19 section (b), (c), or (l).

20 ‘‘(2) REQUIREMENTS FOR SUSPENSION AGREE21 MENTS.—Any agreement described in paragraph (1)

22 shall be subject to all the requirements imposed

23 under this section for other agreements under sub24 section (b), (c), or (l), except that if the Commission

25 makes a regional industry determination described
114

1 in paragraph (1) in the final affirmative determina2 tion under section 735(b) but not in the preliminary

3 affirmative determination under section 733(a), any

4 agreement described in paragraph (1) may be ac5 cepted within 60 days after the antidumping order

6 is published under section 736.

7 ‘‘(3) EFFECT OF SUSPENSION AGREEMENT ON

8 ANTIDUMPING DUTY ORDER.—If an agreement de9 scribed in paragraph (1) is accepted after the anti10 dumping duty order is published, the administering

11 authority shall rescind the order, refund any cash

12 deposit and release any bond or other security de13 posited under section 733(d)(1)(B), and instruct the

14 Customs Service that entries of the subject merchan15 dise that were made during the period that the order

16 was in effect shall be liquidated without regard to

17 antidumping duties.’’.

18 (b) APPLICABILITY OF ORDERS TO NEW SHIP19 PERS.—

20 (1) COUNTERVAILING DUTY CASES.—Section

21 706 (19 U.S.C. 1671e) is amended by adding at the

22 end the following new subsection:

23 ‘‘(c) SPECIAL RULE FOR REGIONAL INDUSTRIES.—

24 ‘‘(1) IN GENERAL.—In an investigation under

25 this subtitle in which the Commission makes a re-
115

1 gional industry determination under section

2 771(4)(C), the administering authority shall, to the

3 maximum extent possible, direct that duties be as4 sessed only on the subject merchandise of the spe5 cific exporters or producers that exported the subject

6 merchandise for sale in the region concerned during

7 the period of investigation.

8 ‘‘(2) EXCEPTION FOR NEW EXPORTERS AND

9 PRODUCERS.—After publication of the countervailing

10 duty order, if the administering authority finds that

11 a new exporter or producer is exporting the subject

12 merchandise for sale in the region concerned, the ad13 ministering authority shall direct that duties be as14 sessed on the subject merchandise of the new ex15 porter or producer consistent with the provisions of

16 section 751(a)(2)(B).’’.

17 (2) ANTIDUMPING DUTY CASES.—Section 736

18 (19 U.S.C. 1673e) is amended by adding at the end

19 the following new subsection:

20 ‘‘(d) SPECIAL RULE FOR REGIONAL INDUSTRIES.—

21 ‘‘(1) IN GENERAL.—In an investigation in

22 which the Commission makes a regional industry de23 termination under section 771(4)(C), the administer24 ing authority shall, to the maximum extent possible,

25 direct that duties be assessed only on the subject
116

1 merchandise of the specific exporters or producers

2 that exported the subject merchandise for sale in the

3 region concerned during the period of investigation.

4 ‘‘(2) EXCEPTION FOR NEW EXPORTERS AND

5 PRODUCERS.—After publication of the antidumping

6 duty order, if the administering authority finds that

7 a new exporter or producer is exporting the subject

8 merchandise for sale in the region concerned, the ad9 ministering authority shall direct that duties be as10 sessed on the subject merchandise of the new ex11 porter or producer consistent with the provisions of

12 section 751(a)(2)(B).’’.

13 SEC. 219. DETERMINATION OF WEIGHTED AVERAGE DUMP14 ING MARGIN.

15 (a) PRELIMINARY DETERMINATION.—

16 (1) IN GENERAL.—Section 733(d) (19 U.S.C.

17 1673b(d)) is amended—

18 (A) by striking paragraph (2);

19 (B) by redesignating paragraph (1), as

20 amended by section 215(b)(1)(A), as paragraph

21 (2);

22 (C) by inserting ‘‘and’’ at the end of para23 graph (2), as so redesignated; and

24 (D) by inserting before such paragraph (2)

25 the following new paragraph:
117

1 ‘‘(1)(A) shall—

2 ‘‘(i) determine an estimated weighted aver3 age dumping margin for each exporter and pro4 ducer individually investigated, and

5 ‘‘(ii) determine, in accordance with section

6 735(c)(5), an estimated all-others rate for all

7 exporters and producers not individually inves8 tigated, and

9 ‘‘(B) shall order the posting of a cash deposit,

10 bond, or other security, as the administering author11 ity deems appropriate, for each entry of the subject

12 merchandise in an amount based on the estimated

13 weighted average dumping margin or the estimated

14 all-others rate, whichever is applicable,’’.

15 (2) CONFORMING AMENDMENTS.—Section

16 733(b)(1)(A) (19 U.S.C. 1673b(b)(1)(A)) is amend17 ed by striking the last sentence.

18 (b) FINAL DETERMINATION.—

19 (1) IN GENERAL.—Section 735(c)(1) (19

20 U.S.C. 1673d(c)(1)) is amended—

21 (A) in subparagraph (B)—

22 (i) by redesignating such subpara23 graph as subparagraph (C); and

24 (ii) by striking ‘‘under paragraphs (1)

25 and (2)’’ and all that follows through ‘‘se-
118

1 curity’’ and inserting ‘‘the suspension of

2 liquidation under section 733(d)(2)’’;

3 (B) by striking ‘‘and’’ at the end of sub4 paragraph (A); and

5 (C) by inserting after subparagraph (A)

6 the following new subparagraph:

7 ‘‘(B)(i) the administering authority shall—

8 ‘‘(I) determine the estimated weighted

9 average dumping margin for each exporter

10 and producer individually investigated, and

11 ‘‘(II) determine, in accordance with

12 paragraph (5), the estimated all-others

13 rate for all exporters and producers not in14 dividually investigated, and

15 ‘‘(ii) the administering authority shall

16 order the posting of a cash deposit, bond, or

17 other security, as the administering authority

18 deems appropriate, for each entry of the subject

19 merchandise in an amount based on the esti20 mated weighted average dumping margin or the

21 estimated all-others rate, whichever is applica22 ble, and’’.

23 (2) METHOD FOR DETERMINING WEIGHTED AV24 ERAGE DUMPING MARGIN.—Section 735(c) (19
119

1 U.S.C. 1673d(c)) is amended by adding at the end

2 the following new paragraph:

3 ‘‘(5) METHOD FOR DETERMINING ESTIMATED

4 ALL-OTHERS RATE.—

5 ‘‘(A) GENERAL RULE.—For purposes of

6 this subsection and section 733(d), the esti7 mated all-others rate shall be an amount equal

8 to the weighted average of the estimated

9 weighted average dumping margins established

10 for exporters and producers individually inves11 tigated, excluding any zero and de minimis

12 margins, and any margins determined entirely

13 under section 776.

14 ‘‘(B) EXCEPTION.—If the estimated

15 weighted average dumping margins established

16 for all exporters and producers individually in17 vestigated are zero or de minimis margins, or

18 are determined entirely under section 776, the

19 administering authority may use any reasonable

20 method to establish the estimated all-others

21 rate for exporters and producers not individ22 ually investigated, including averaging the esti23 mated weighted average dumping margins de24 termined for the exporters and producers indi25 vidually investigated.’’.
120

1 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

2 (1) Section 733(e)(2) is amended by striking

3 ‘‘subsection (d)(1)’’ and inserting ‘‘subsection

4 (d)(2)’’.

5 (2) Section 734(f)(2)(A) is amended—

6 (A) in clause (i), by striking ‘‘section

7 733(d)(1)’’ and inserting ‘‘section 733(d)(2)’’;

8 and

9 (B) in clause (iii), by striking ‘‘section

10 733(d)(2)’’ and inserting ‘‘section

11 733(d)(1)(B)’’.

12 (3) Section 734(f)(2)(B) is amended—

13 (A) by striking ‘‘section 733(d)(1)’’ and in14 serting ‘‘section 733(d)(2)’’; and

15 (B) by striking ‘‘section 733(d)(2)’’ and

16 inserting ‘‘section 733(d)(1)(B)’’.

17 (4) Section 734(h)(3) is amended—

18 (A) in subparagraph (A), by striking ‘‘sec19 tion 733(d)(1)’’ and inserting ‘‘section

20 733(d)(2)’’; and

21 (B) in subparagraph (B), by striking ‘‘sec22 tion 733(d)(2)’’ and inserting ‘‘section

23 733(d)(1)(B)’’.
121

1 (5) Section 734(i)(1)(A) is amended by striking

2 ‘‘section 733(d)(1)’’ and inserting ‘‘section

3 733(d)(2)’’.

4 (6) Section 735(c)(2)(A) is amended by striking

5 ‘‘section 703(d)(1)’’ and inserting ‘‘section

6 733(d)(2)’’.

7 (7) Section 735(c)(2)(B) is amended by striking

8 ‘‘section 733(d)(2)’’ and inserting ‘‘section

9 733(d)(1)(B)’’.

10 (8) Section 735(c)(3)(B) is amended by striking

11 ‘‘section 733(d)(2)’’ and inserting ‘‘section

12 733(d)(1)(B)’’.

13 (9) Section 736(b)(1) is amended by striking

14 ‘‘section 733(d)(1)’’ each place it appears and in15 serting ‘‘section 733(d)(2)’’.

16 (10) Section 737(a) is amended by striking

17 ‘‘section 733(d)(2)’’ each place it appears in the

18 heading and in the text and inserting ‘‘section

19 733(d)(1)(B)’’.

20 SEC. 220. REVIEW OF DETERMINATIONS.

21 (a) IN GENERAL.—Section 751 (19 U.S.C. 1675) is

22 amended to read as follows:

23 ‘‘SEC. 751. ADMINISTRATIVE REVIEW OF DETERMINATIONS.

24 ‘‘(a) PERIODIC REVIEW OF AMOUNT OF DUTY.—
122

1 ‘‘(1) IN GENERAL.—At least once during each

2 12-month period beginning on the anniversary of the

3 date of publication of a countervailing duty order

4 under this title or under section 303 of this Act, an

5 antidumping duty order under this title or a finding

6 under the Antidumping Act, 1921, or a notice of the

7 suspension of an investigation, the administering au8 thority, if a request for such a review has been re9 ceived and after publication of notice of such review

10 in the Federal Register, shall—

11 ‘‘(A) review and determine the amount of

12 any net countervailable subsidy,

13 ‘‘(B) review, and determine (in accordance

14 with paragraph (2)), the amount of any anti15 dumping duty, and

16 ‘‘(C) review the current status of, and

17 compliance with, any agreement by reason of

18 which an investigation was suspended, and re19 view the amount of any net countervailable sub20 sidy or dumping margin involved in the agree21 ment,

22 and shall publish in the Federal Register the results

23 of such review, together with notice of any duty to

24 be assessed, estimated duty to be deposited, or inves25 tigation to be resumed.
123

1 ‘‘(2) DETERMINATION OF ANTIDUMPING DU2 TIES.—

3 ‘‘(A) IN GENERAL.—For the purpose of

4 paragraph (1)(B), the administering authority

5 shall determine—

6 ‘‘(i) the normal value and export price

7 (or constructed export price) of each entry

8 of the subject merchandise, and

9 ‘‘(ii) the dumping margin for each

10 such entry.

11 ‘‘(B) DETERMINATION OF ANTIDUMPING

12 OR COUNTERVAILING DUTIES FOR NEW EX13 PORTERS AND PRODUCERS.—

14 ‘‘(i) IN GENERAL.—If the administer15 ing authority receives a request from an

16 exporter or producer of the subject mer17 chandise establishing that—

18 ‘‘(I) such exporter or producer

19 did not export the merchandise that

20 was the subject of an antidumping

21 duty or countervailing duty order to

22 the United States (or, in the case of

23 a regional industry, did not export the

24 subject merchandise for sale in the re-
124

1 gion concerned) during the period of

2 investigation, and

3 ‘‘(II) such exporter or producer

4 is not affiliated (within the meaning

5 of section 771(33)) with any exporter

6 or producer who exported the subject

7 merchandise to the United States (or

8 in the case of a regional industry, who

9 exported the subject merchandise for

10 sale in the region concerned) during

11 that period,

12 the administering authority shall conduct a

13 review under this subsection to establish

14 an individual weighted average dumping

15 margin or an individual countervailing

16 duty rate (as the case may be) for such ex17 porter or producer.

18 ‘‘(ii) TIME FOR REVIEW UNDER

19 CLAUSE (i).—The administering authority

20 shall commence a review under clause (i)

21 in the calendar month beginning after—

22 ‘‘(I) the end of the 6-month pe23 riod beginning on the date of the

24 countervailing duty or antidumping

25 duty order under review, or
125

1 ‘‘(II) the end of any 6-month pe2 riod occurring thereafter,

3 if the request for the review is made dur4 ing that 6-month period.

5 ‘‘(iii) POSTING BOND OR SECURITY.—

6 The administering authority shall, at the

7 time a review under this subparagraph is

8 initiated, direct the Customs Service to

9 allow, at the option of the importer, the

10 posting, until the completion of the review,

11 of a bond or security in lieu of a cash de12 posit for each entry of the subject mer13 chandise.

14 ‘‘(iv) TIME LIMITS.—The administer15 ing authority shall make a preliminary de16 termination in a review conducted under

17 this subparagraph within 180 days after

18 the date on which the review is initiated,

19 and a final determination within 90 days

20 after the date the preliminary determina21 tion is issued, except that if the admin22 istering authority concludes that the case

23 is extraordinarily complicated, it may ex24 tend the 180-day period to 300 days and

25 may extend the 90-day period to 150 days.
126

1 ‘‘(C) RESULTS OF DETERMINATIONS.—The

2 determination under this paragraph shall be the

3 basis for the assessment of countervailing or

4 antidumping duties on entries of merchandise

5 covered by the determination and for deposits

6 of estimated duties.

7 ‘‘(3) TIME LIMITS.—

8 ‘‘(A) PRELIMINARY AND FINAL DETER9 MINATIONS.—The administering authority shall

10 make a preliminary determination under sub11 paragraph (A), (B), or (C) of paragraph (1)

12 within 245 days after the last day of the month

13 in which occurs the anniversary of the date of

14 publication of the order, finding, or suspension

15 agreement for which the review under para16 graph (1) is requested, and a final determina17 tion under paragraph (1) within 120 days after

18 the date on which the preliminary determina19 tion is published. If it is not practicable to com20 plete the review within the foregoing time, the

21 administering authority may extend that 245-

22 day period to 365 days and may extend that

23 120-day period to 180 days. The administering

24 authority may extend the time for making a

25 final determination without extending the time
127

1 for making a preliminary determination, if such

2 final determination is made not later than 300

3 days after the date on which the preliminary

4 determination is published.

5 ‘‘(B) LIQUIDATION OF ENTRIES.—If the

6 administering authority orders any liquidation

7 of entries pursuant to a review under paragraph

8 (1), such liquidation shall be made promptly

9 and, to the greatest extent practicable, within

10 90 days after the instructions to Customs are

11 issued. In any case in which liquidation has not

12 occurred within that 90-day period, the Sec13 retary of the Treasury shall, upon the request

14 of the affected party, provide an explanation

15 thereof.

16 ‘‘(C) EFFECT OF PENDING REVIEW UNDER

17 SECTION 516A.—In a case in which a final de18 termination under paragraph (1) is under re19 view under section 516A and a liquidation of

20 entries covered by the determination is enjoined

21 under section 516A(c)(2) or suspended under

22 section 516A(g)(5)(C), the administering au23 thority shall, within 10 days after the final dis24 position of the review under section 516A,

25 transmit to the Federal Register for publication
128

1 the final disposition and issue instructions to

2 the Customs Service with respect to the liquida3 tion of entries pursuant to the review. In such

4 a case, the 90-day period referred to in sub5 paragraph (B) shall begin on the day on which

6 the administering authority issues such instruc7 tions.

8 ‘‘(4) ABSORPTION OF ANTIDUMPING DUTIES.—

9 During any review under this subsection initiated 2

10 years or 4 years after the publication of an anti11 dumping duty order under section 736(a), the ad12 ministering authority, if requested, shall determine

13 whether antidumping duties have been absorbed by

14 a foreign producer or exporter subject to the order

15 if the subject merchandise is sold in the United

16 States through an importer who is affiliated with

17 such foreign producer or exporter. The administer18 ing authority shall notify the Commission of its find19 ings regarding such duty absorption for the Commis20 sion to consider in conducting a review under sub21 section (c).

22 ‘‘(b) REVIEWS BASED ON CHANGED CIR23 CUMSTANCES.—

24 ‘‘(1) IN GENERAL.—Whenever the administer25 ing authority or the Commission receives informa-
129

1 tion concerning, or a request from an interested

2 party for a review of—

3 ‘‘(A) a final affirmative determination that

4 resulted in an antidumping duty order under

5 this title or a finding under the Antidumping

6 Act, 1921, or in a countervailing duty order

7 under this title or section 303,

8 ‘‘(B) a suspension agreement accepted

9 under section 704 or 734, or

10 ‘‘(C) a final affirmative determination re11 sulting from an investigation continued pursu12 ant to section 704(g) or 734(g),

13 which shows changed circumstances sufficient to

14 warrant a review of such determination or agree15 ment, the administering authority or the Commis16 sion (as the case may be) shall conduct a review of

17 the determination or agreement after publishing no18 tice of the review in the Federal Register.

19 ‘‘(2) COMMISSION REVIEW.—In conducting a

20 review under this subsection, the Commission

21 shall—

22 ‘‘(A) in the case of a countervailing duty

23 order or antidumping duty order or finding, de24 termine whether revocation of the order or find-
130

1 ing is likely to lead to continuation or recur2 rence of material injury,

3 ‘‘(B) in the case of a determination made

4 pursuant to section 704(h)(2) or 734(h)(2), de5 termine whether the suspension agreement con6 tinues to eliminate completely the injurious ef7 fects of imports of the subject merchandise, and

8 ‘‘(C) in the case of an affirmative deter9 mination resulting from an investigation contin10 ued under section 704(g) or 734(g), determine

11 whether termination of the suspended investiga12 tion is likely to lead to continuation or recur13 rence of material injury.

14 ‘‘(3) BURDEN OF PERSUASION.—During a re15 view conducted by the Commission under this sub16 section—

17 ‘‘(A) the party seeking revocation of an

18 order or finding described in paragraph (1)(A)

19 shall have the burden of persuasion with respect

20 to whether there are changed circumstances

21 sufficient to warrant such revocation, and

22 ‘‘(B) the party seeking termination of a

23 suspended investigation or a suspension agree24 ment shall have the burden of persuasion with

25 respect to whether there are changed cir-
131

1 cumstances sufficient to warrant such termi2 nation.

3 ‘‘(4) LIMITATION ON PERIOD FOR REVIEW.—In

4 the absence of good cause shown—

5 ‘‘(A) the Commission may not review a de6 termination made under section 705(b) or

7 735(b), or an investigation suspended under

8 section 704 or 734, and

9 ‘‘(B) the administering authority may not

10 review a determination made under section

11 705(a) or 735(a), or an investigation suspended

12 under section 704 or 734,

13 less than 24 months after the date of publication of

14 notice of that determination or suspension.

15 ‘‘(c) FIVE-YEAR REVIEW.—

16 ‘‘(1) IN GENERAL.—Notwithstanding subsection

17 (b) and except in the case of a transition order de18 fined in paragraph (6), 5 years after the date of

19 publication of—

20 ‘‘(A) a countervailing duty order (other

21 than a countervailing duty order to which sub22 paragraph (B) applies or which was issued

23 without an affirmative determination of injury

24 by the Commission under section 303), an anti25 dumping duty order, or a notice of suspension
132

1 of an investigation, described in subsection

2 (a)(1),

3 ‘‘(B) a notice of injury determination

4 under section 753 with respect to a countervail5 ing duty order, or

6 ‘‘(C) a determination under this section to

7 continue an order or suspension agreement,

8 the administering authority and the Commission

9 shall conduct a review to determine, in accordance

10 with section 752, whether revocation of the counter11 vailing or antidumping duty order or termination of

12 the investigation suspended under section 704 or

13 734 would be likely to lead to continuation or recur14 rence of dumping or a countervailable subsidy (as

15 the case may be) and of material injury.

16 ‘‘(2) NOTICE OF INITIATION OF REVIEW.—Not

17 later than 30 days before the fifth anniversary of the

18 date described in paragraph (1), the administering

19 authority shall publish in the Federal Register a no20 tice of initiation of a review under this subsection

21 and request that interested parties submit—

22 ‘‘(A) a statement expressing their willing23 ness to participate in the review by providing

24 information requested by the administering au25 thority and the Commission,
133

1 ‘‘(B) a statement regarding the likely ef2 fects of revocation of the order or termination

3 of the suspended investigation, and

4 ‘‘(C) such other information or industry

5 data as the administering authority or the Com6 mission may specify.

7 ‘‘(3) RESPONSES TO NOTICE OF INITIATION.—

8 ‘‘(A) NO RESPONSE.—If no interested

9 party responds to the notice of initiation under

10 this subsection, the administering authority

11 shall issue a final determination, within 90 days

12 after the initiation of a review, revoking the

13 order or terminating the suspended investiga14 tion to which such notice relates. For purposes

15 of this paragraph, an interested party means a

16 party described in section 771(9) (C), (D), (E),

17 (F), or (G).

18 ‘‘(B) INADEQUATE RESPONSE.—If inter19 ested parties provide inadequate responses to a

20 notice of initiation, the administering authority,

21 within 120 days after the initiation of the re22 view, or the Commission, within 150 days after

23 such initiation, may issue, without further in24 vestigation, a final determination based on the

25 facts available, in accordance with section 776.
134

1 ‘‘(4) WAIVER OF PARTICIPATION BY CERTAIN

2 INTERESTED PARTIES.—

3 ‘‘(A) IN GENERAL.—An interested party

4 described in section 771(9) (A) or (B) may

5 elect not to participate in a review conducted by

6 the administering authority under this sub7 section and to participate only in the review

8 conducted by the Commission under this sub9 section.

10 ‘‘(B) EFFECT OF WAIVER.—In a review in

11 which an interested party waives its participa12 tion pursuant to this paragraph, the admin13 istering authority shall conclude that revocation

14 of the order or termination of the investigation

15 would be likely to lead to continuation or recur16 rence of dumping or a countervailable subsidy

17 (as the case may be) with respect to that inter18 ested party.

19 ‘‘(5) CONDUCT OF REVIEW.—

20 ‘‘(A) TIME LIMITS FOR COMPLETION OF

21 REVIEW.—Unless the review has been com22 pleted pursuant to paragraph (3) or paragraph

23 (4) applies, the administering authority shall

24 make its final determination pursuant to sec25 tion 752 (b) or (c) within 240 days after the
135

1 date on which a review is initiated under this

2 subsection. If the administering authority

3 makes a final affirmative determination, the

4 Commission shall make its final determination

5 pursuant to section 752(a) within 360 days

6 after the date on which a review is initiated

7 under this subsection.

8 ‘‘(B) EXTENSION OF TIME LIMIT.—The

9 administering authority or the Commission (as

10 the case may be) may extend the period of time

11 for making their respective determinations

12 under this subsection by not more than 90

13 days, if the administering authority or the Com14 mission (as the case may be) determines that

15 the review is extraordinarily complicated. In a

16 review in which the administering authority ex17 tends the time for making a final determina18 tion, but the Commission does not extend the

19 time for making a determination, the Commis20 sion’s determination shall be made not later

21 than 120 days after the date on which the final

22 determination of the administering authority is

23 published.

24 ‘‘(C) EXTRAORDINARILY COMPLICATED.—

25 For purposes of this subsection, the administer-
136

1 ing authority or the Commission (as the case

2 may be) may treat a review as extraordinarily

3 complicated if—

4 ‘‘(i) there is a large number of issues,

5 ‘‘(ii) the issues to be considered are

6 complex,

7 ‘‘(iii) there is a large number of firms

8 involved,

9 ‘‘(iv) the orders or suspended inves10 tigations have been grouped as described

11 in subparagraph (D), or

12 ‘‘(v) it is a review of a transition

13 order.

14 ‘‘(D) GROUPED REVIEWS.—The Commis15 sion, in consultation with the administering au16 thority, may group orders or suspended inves17 tigations for review if it considers that such

18 grouping is appropriate and will promote ad19 ministrative efficiency. Where orders or sus20 pended investigations have been grouped, the

21 Commission shall, subject to subparagraph (B),

22 make its final determination under this sub23 section not later than 120 days after the date

24 that the administering authority publishes no-
137

1 tice of its final determination with respect to

2 the last order or agreement in the group.

3 ‘‘(6) SPECIAL TRANSITION RULES.—

4 ‘‘(A) SCHEDULE FOR REVIEWS OF TRANSI5 TION ORDERS.—

6 ‘‘(i) INITIATION.—The administering

7 authority shall begin its review of transi8 tion orders in the 42d calendar month

9 after the date such orders are issued. A re10 view of all transition orders shall be initi11 ated not later than the 5th anniversary

12 after the date such orders are issued.

13 ‘‘(ii) COMPLETION.—A review of a

14 transition order shall be completed not

15 later than 18 months after the date such

16 review is initiated. Reviews of all transition

17 orders shall be completed not later than 18

18 months after the 5th anniversary of the

19 date such orders are issued.

20 ‘‘(iii) SUBSEQUENT REVIEWS.—The

21 time limits set forth in clauses (i) and (ii)

22 shall be applied to all subsequent 5-year

23 reviews of transition orders by substituting

24 ‘date of the determination to continue such

25 orders’ for ‘date such orders are issued’.
138

1 ‘‘(iv) REVOCATION AND TERMI2 NATION.—No transition order may be re3 voked under this subsection before the date

4 that is 5 years after the date the WTO

5 Agreement enters into force with respect to

6 the United States.

7 ‘‘(B) SEQUENCE OF TRANSITION RE8 VIEWS.—The administering authority, in con9 sultation with the Commission, shall determine

10 such sequence of review of transition orders as

11 it deems appropriate to promote administrative

12 efficiency. To the extent practicable, older or13 ders shall be reviewed first.

14 ‘‘(C) DEFINITION OF TRANSITION

15 ORDER.—For purposes of this section, the term

16 ‘transition order’ means—

17 ‘‘(i) a countervailing duty order under

18 this title or under section 303,

19 ‘‘(ii) an antidumping duty order under

20 this title or a finding under the Antidump21 ing Act, 1921, or

22 ‘‘(iii) a suspension of an investigation

23 under section 704 or 734,
139

1 which is in effect on the date the WTO Agree2 ment enters into force with respect to the Unit3 ed States.

4 ‘‘(D) ISSUE DATE FOR TRANSITION OR5 DERS.—For purposes of this subsection, a tran6 sition order shall be treated as issued on the

7 date the WTO Agreement enters into force with

8 respect to the United States, if such order is

9 based on an investigation conducted by both the

10 administering authority and the Commission.

11 ‘‘(d) REVOCATION OF ORDER OR FINDING; TERMI12 NATION OF SUSPENDED INVESTIGATION.—

13 ‘‘(1) IN GENERAL.—The administering author14 ity may revoke, in whole or in part, a countervailing

15 duty order or an antidumping duty order or finding,

16 or terminate a suspended investigation, after review

17 under subsection (a) or (b). The administering au18 thority shall not revoke, in whole or in part, a coun19 tervailing duty order or terminate a suspended in20 vestigation on the basis of any export taxes, duties,

21 or other charges levied on the export of the subject

22 merchandise to the United States which are specifi23 cally intended to offset the countervailable subsidy

24 received.
140

1 ‘‘(2) FIVE-YEAR REVIEWS.—In the case of a re2 view conducted under subsection (c), the administer3 ing authority shall revoke a countervailing duty

4 order or an antidumping duty order or finding, or

5 terminate a suspended investigation, unless—

6 ‘‘(A) the administering authority makes a

7 determination that dumping or a

8 countervailable subsidy, as the case may be,

9 would be likely to continue or recur, and

10 ‘‘(B) the Commission makes a determina11 tion that material injury would be likely to con12 tinue or recur as described in section 752(a).

13 ‘‘(3) APPLICATION OF REVOCATION OR TERMI14 NATION.—A determination under this section to re15 voke an order or finding or terminate a suspended

16 investigation shall apply with respect to unliquidated

17 entries of the subject merchandise which are en18 tered, or withdrawn from warehouse, for consump19 tion on or after the date determined by the admin20 istering authority.

21 ‘‘(e) HEARINGS.—Whenever the administering au22 thority or the Commission conducts a review under this

23 section, it shall, upon the request of an interested party,

24 hold a hearing in accordance with section 774(b) in con25 nection with that review.
141

1 ‘‘(f) DETERMINATION THAT BASIS FOR SUSPENSION

2 NO LONGER EXISTS.—If the determination of the Com3 mission under subsection (b)(2)(B) is negative, the sus4 pension agreement shall be treated as not accepted, begin5 ning on the date of publication of the Commission’s deter6 mination, and the administering authority and the Com7 mission shall proceed, under section 704(i) or 734(i), as

8 if the suspension agreement had been violated on that

9 date, except that no duty under any order subsequently

10 issued shall be assessed on merchandise entered, or with11 drawn from warehouse, for consumption before that date.

12 ‘‘(g) CORRECTION OF MINISTERIAL ERRORS.—The

13 administering authority shall establish procedures for the

14 correction of ministerial errors in final determinations

15 within a reasonable time after the determinations are is16 sued under this section. Such procedures shall ensure op17 portunity for interested parties to present their views re18 garding any such errors. As used in this subsection, the

19 term ‘ministerial error’ includes errors in addition, sub20 traction, or other arithmetic function, clerical errors re21 sulting from inaccurate copying, duplication, or the like,

22 and any other type of unintentional error which the ad23 ministering authority considers ministerial.’’.

24 (b) REVIEW OF DETERMINATIONS.—
142

1 (1) IN GENERAL.—Section 516A(a)(1) (19

2 U.S.C. 1516A(a)(1)) is amended by striking ‘‘or’’ at

3 the end of subparagraph (B), by inserting ‘‘or’’ at

4 the end of subparagraph (C), and by inserting im5 mediately after subparagraph (C) the following new

6 subparagraph:

7 ‘‘(D) a final determination by the admin8 istering authority or the Commission under sec9 tion 751(c)(3),’’.

10 (2) TECHNICAL AMENDMENTS.—Section

11 516A(b)(1) (19 U.S.C. 1516a(b)(1)) is amended—

12 (A) in subparagraph (A), by striking

13 ‘‘under paragraph (1) of subsection (a)’’ and in14 serting ‘‘under subparagraph (A), (B), or (C) of

15 subsection (a)(1)’’, and

16 (B) in subparagraph (B)—

17 (i) by striking ‘‘(B) in an action’’ and

18 inserting ‘‘(B)(i) in an action’’,

19 (ii) by striking the end period and in20 serting ‘‘, or’’, and

21 (iii) by adding at the end the follow22 ing:

23 ‘‘(ii) in an action brought under para24 graph (1)(D) of subsection (a), to be arbi-
143

1 trary, capricious, an abuse of discretion, or

2 otherwise not in accordance with law.’’.

3 (c) CONFORMING AMENDMENT.—Section 504 (19

4 U.S.C. 1504) is amended—

5 (1) in subsection (a), by inserting ‘‘except as

6 provided in section 751(a)(3),’’ before ‘‘an entry of

7 merchandise not liquidated’’, and

8 (2) in subsection (d), by striking ‘‘When a sus9 pension’’ and inserting ‘‘Except as provided in sec10 tion 751(a)(3), when a suspension’’.

11 SEC. 221. REVIEW DETERMINATIONS.

12 (a) IN GENERAL.—Chapter 1 of subtitle C of title

13 VII (19 U.S.C. 1675) is amended by adding at the end

14 the following new section:

15 ‘‘SEC. 752. SPECIAL RULES FOR SECTION 751(b) AND 751(c)

16 REVIEWS.

17 ‘‘(a) DETERMINATION OF LIKELIHOOD OF CONTINU18 ATION OR RECURRENCE OF MATERIAL INJURY.—

19 ‘‘(1) IN GENERAL.—In a review conducted

20 under section 751 (b) or (c), the Commission shall

21 determine whether revocation of an order, or termi22 nation of a suspended investigation, would be likely

23 to lead to continuation or recurrence of material in24 jury within a reasonably foreseeable time. The Com25 mission shall consider the likely volume, price effect,
144

1 and impact of imports of the subject merchandise on

2 the industry if the order is revoked or the suspended

3 investigation is terminated. The Commission shall

4 take into account—

5 ‘‘(A) its prior injury determinations, in6 cluding the volume, price effect, and impact of

7 imports of the subject merchandise on the in8 dustry before the order was issued or the sus9 pension agreement was accepted,

10 ‘‘(B) whether any improvement in the state

11 of the industry is related to the order or the

12 suspension agreement,

13 ‘‘(C) whether the industry is vulnerable to

14 material injury if the order is revoked or the

15 suspension agreement is terminated, and

16 ‘‘(D) in an antidumping proceeding under

17 section 751(c), the findings of the administer18 ing authority regarding duty absorption under

19 section 751(a)(4).

20 ‘‘(2) VOLUME.—In evaluating the likely volume

21 of imports of the subject merchandise if the order is

22 revoked or the suspended investigation is termi23 nated, the Commission shall consider whether the

24 likely volume of imports of the subject merchandise

25 would be significant if the order is revoked or the
145

1 suspended investigation is terminated, either in ab2 solute terms or relative to production or consump3 tion in the United States. In so doing, the Commis4 sion shall consider all relevant economic factors, in5 cluding—

6 ‘‘(A) any likely increase in production ca7 pacity or existing unused production capacity in

8 the exporting country,

9 ‘‘(B) existing inventories of the subject

10 merchandise, or likely increases in inventories,

11 ‘‘(C) the existence of barriers to the impor12 tation of such merchandise into countries other

13 than the United States, and

14 ‘‘(D) the potential for product-shifting if

15 production facilities in the foreign country,

16 which can be used to produce the subject mer17 chandise, are currently being used to produce

18 other products.

19 ‘‘(3) PRICE.—In evaluating the likely price ef20 fects of imports of the subject merchandise if the

21 order is revoked or the suspended investigation is

22 terminated, the Commission shall consider wheth23 er—
146

1 ‘‘(A) there is likely to be significant price

2 underselling by imports of the subject merchan3 dise as compared to domestic like products, and

4 ‘‘(B) imports of the subject merchandise

5 are likely to enter the United States at prices

6 that otherwise would have a significant depress7 ing or suppressing effect on the price of domes8 tic like products.

9 ‘‘(4) IMPACT ON THE INDUSTRY.—In evaluating

10 the likely impact of imports of the subject merchan11 dise on the industry if the order is revoked or the

12 suspended investigation is terminated, the Commis13 sion shall consider all relevant economic factors

14 which are likely to have a bearing on the state of the

15 industry in the United States, including, but not

16 limited to—

17 ‘‘(A) likely declines in output, sales, mar18 ket share, profits, productivity, return on in19 vestments, and utilization of capacity,

20 ‘‘(B) likely negative effects on cash flow,

21 inventories, employment, wages, growth, ability

22 to raise capital, and investment, and

23 ‘‘(C) likely negative effects on the existing

24 development and production efforts of the in25 dustry, including efforts to develop a derivative
147

1 or more advanced version of the domestic like

2 product.

3 The Commission shall evaluate all relevant economic

4 factors described in this paragraph within the con5 text of the business cycle and the conditions of com6 petition that are distinctive to the affected industry.

7 ‘‘(5) BASIS FOR DETERMINATION.—The pres8 ence or absence of any factor which the Commission

9 is required to consider under this subsection shall

10 not necessarily give decisive guidance with respect to

11 the Commission’s determination of whether material

12 injury is likely to continue or recur within a reason13 ably foreseeable time if the order is revoked or the

14 suspended investigation is terminated. In making

15 that determination, the Commission shall consider

16 that the effects of revocation or termination may not

17 be imminent, but may manifest themselves only over

18 a longer period of time.

19 ‘‘(6) MAGNITUDE OF MARGIN OF DUMPING AND

20 NET COUNTERVAILABLE SUBSIDY; NATURE OF

21 COUNTERVAILABLE SUBSIDY.—In making a deter22 mination under section 751 (b) or (c), the Commis23 sion may consider the magnitude of the margin of

24 dumping or the magnitude of the net countervailable

25 subsidy. If a countervailable subsidy is involved the
148

1 Commission shall consider information regarding the

2 nature of the countervailable subsidy and whether

3 the subsidy is a subsidy described in Article 3 or 6.1

4 of the Subsidies Agreement.

5 ‘‘(7) CUMULATION.—For purposes of this sub6 section, the Commission may cumulatively assess the

7 volume and effect of imports of the subject merchan8 dise from all countries with respect to which reviews

9 under section 751 (b) or (c) were initiated on the

10 same day, if such imports would be likely to compete

11 with each other and with domestic like products in

12 the United States market. The Commission shall not

13 cumulatively assess the volume and effects of im14 ports of the subject merchandise in a case in which

15 it determines that such imports are likely to have no

16 discernible adverse impact on the domestic industry.

17 ‘‘(8) SPECIAL RULE FOR REGIONAL INDUS18 TRIES.—In a review under section 751 (b) or (c) in19 volving a regional industry, the Commission may

20 base its determination on the regional industry de21 fined in the original investigation under this title,

22 another region that satisfies the criteria established

23 in section 771(4)(C), or the United States as a

24 whole. In determining if a regional industry analysis

25 is appropriate for the determination in the review,
149

1 the Commission shall consider whether the criteria

2 established in section 771(4)(C) are likely to be sat3 isfied if the order is revoked or the suspended inves4 tigation is terminated.

5 ‘‘(b) DETERMINATION OF LIKELIHOOD OF CONTINU6 ATION OR RECURRENCE OF A COUNTERVAILABLE SUB7 SIDY.—

8 ‘‘(1) IN GENERAL.—In a review conducted

9 under section 751(c), the administering authority

10 shall determine whether revocation of a countervail11 ing duty order or termination of a suspended inves12 tigation under section 704 would be likely to lead to

13 continuation or recurrence of a countervailable sub14 sidy. The administering authority shall consider—

15 ‘‘(A) the net countervailable subsidy deter16 mined in the investigation and subsequent re17 views, and

18 ‘‘(B) whether any change in the program

19 which gave rise to the net countervailable sub20 sidy described in subparagraph (A) has oc21 curred that is likely to affect that net

22 countervailable subsidy.

23 ‘‘(2) CONSIDERATION OF OTHER FACTORS.—If

24 good cause is shown, the administering authority

25 shall also consider—
150

1 ‘‘(A) programs determined to provide

2 countervailable subsidies in other investigations

3 or reviews under this title, but only to the ex4 tent that such programs—

5 ‘‘(i) can potentially be used by the ex6 porters or producers subject to the review

7 under section 751(c), and

8 ‘‘(ii) did not exist at the time that the

9 countervailing duty order was issued or the

10 suspension agreement was accepted, and

11 ‘‘(B) programs newly alleged to provide

12 countervailable subsidies but only to the extent

13 that the administering authority makes an af14 firmative countervailing duty determination

15 with respect to such programs and with respect

16 to the exporters or producers subject to the re17 view.

18 ‘‘(3) NET COUNTERVAILABLE SUBSIDY.—The

19 administering authority shall provide to the Commis20 sion the net countervailable subsidy that is likely to

21 prevail if the order is revoked or the suspended in22 vestigation is terminated. The administering author23 ity shall normally choose a net countervailable sub24 sidy that was determined under section 705 or sub25 section (a) or (b)(1) of section 751.
151

1 ‘‘(4) SPECIAL RULE.—

2 ‘‘(A) TREATMENT OF ZERO AND DE

3 MINIMIS RATES.—A net countervailable subsidy

4 described in paragraph (1)(A) that is zero or de

5 minimis shall not by itself require the admin6 istering authority to determine that revocation

7 of a countervailing duty order or termination of

8 a suspended investigation would not be likely to

9 lead to continuation or recurrence of a

10 countervailable subsidy.

11 ‘‘(B) APPLICATION OF DE MINIMIS STAND12 ARDS.—For purposes of this paragraph, the ad13 ministering authority shall apply the de minimis

14 standards applicable to reviews conducted under

15 subsections (a) and (b)(1) of section 751.

16 ‘‘(c) DETERMINATION OF LIKELIHOOD OF CONTINU17 ATION OR RECURRENCE OF DUMPING.—

18 ‘‘(1) IN GENERAL.—In a review conducted

19 under section 751(c), the administering authority

20 shall determine whether revocation of an antidump21 ing duty order or termination of a suspended inves22 tigation under section 734 would be likely to lead to

23 continuation or recurrence of sales of the subject

24 merchandise at less than fair value. The administer25 ing authority shall consider—
152

1 ‘‘(A) the weighted average dumping mar2 gins determined in the investigation and subse3 quent reviews, and

4 ‘‘(B) the volume of imports of the subject

5 merchandise for the period before and the pe6 riod after the issuance of the antidumping duty

7 order or acceptance of the suspension agree8 ment.

9 ‘‘(2) CONSIDERATION OF OTHER FACTORS.—If

10 good cause is shown, the administering authority

11 shall also consider such other price, cost, market, or

12 economic factors as it deems relevant.

13 ‘‘(3) MAGNITUDE OF THE MARGIN OF DUMP14 ING.—The administering authority shall provide to

15 the Commission the magnitude of the margin of

16 dumping that is likely to prevail if the order is re17 voked or the suspended investigation is terminated.

18 The administering authority shall normally choose a

19 margin that was determined under section 735 or

20 under subsection (a) or (b)(1) of section 751.

21 ‘‘(4) SPECIAL RULE.—

22 ‘‘(A) TREATMENT OF ZERO OR DE MINIMIS

23 MARGINS.—A dumping margin described in

24 paragraph (1)(A) that is zero or de minimis

25 shall not by itself require the administering au-
153

1 thority to determine that revocation of an anti2 dumping duty order or termination of a sus3 pended investigation would not be likely to lead

4 to continuation or recurrence of sales at less

5 than fair value.

6 ‘‘(B) APPLICATION OF DE MINIMIS STAND7 ARDS.—For purposes of this paragraph, the ad8 ministering authority shall apply the de minimis

9 standards applicable to reviews conducted under

10 subsections (a) and (b) of section 751.’’.

11 (b) AFFIRMATIVE DETERMINATIONS BY DIVIDED

12 COMMISSION.—Section 771(11) (19 U.S.C. 1677(11)) is

13 amended by inserting ‘‘, including a determination under

14 section 751,’’ after ‘‘determination by the Commission’’.

15 (c) CONFORMING AMENDMENT.—The table of con16 tents for title VII is amended by inserting after the item

17 relating to section 751 the following:

‘‘Sec. 752. Special rules for section 751(b) and 751(c) reviews.’’.

18 SEC. 222. DEFINITIONS.

19 (a) INDUSTRY.—

20 (1) IN GENERAL.—Subparagraphs (A) and (B)

21 of section 771(4) (19 U.S.C. 1677(4) (A) and (B))

22 are amended to read as follows:

23 ‘‘(A) IN GENERAL.—The term ‘industry’

24 means the producers as a whole of a domestic

25 like product, or those producers whose collective
154

1 output of a domestic like product constitutes a

2 major proportion of the total domestic produc3 tion of the product.

4 ‘‘(B) RELATED PARTIES.—

5 ‘‘(i) If a producer of a domestic like

6 product and an exporter or importer of the

7 subject merchandise are related parties, or

8 if a producer of the domestic like product

9 is also an importer of the subject merchan10 dise, the producer may, in appropriate cir11 cumstances, be excluded from the industry.

12 ‘‘(ii) For purposes of clause (i), a pro13 ducer and an exporter or importer shall be

14 considered to be related parties, if—

15 ‘‘(I) the producer directly or indi16 rectly controls the exporter or im17 porter,

18 ‘‘(II) the exporter or importer di19 rectly or indirectly controls the pro20 ducer,

21 ‘‘(III) a third party directly or

22 indirectly controls the producer and

23 the exporter or importer, or

24 ‘‘(IV) the producer and the ex25 porter or importer directly or indi-
155

1 rectly control a third party and there

2 is reason to believe that the relation3 ship causes the producer to act dif4 ferently than a nonrelated producer.

5 For purposes of this subparagraph, a party

6 shall be considered to directly or indirectly

7 control another party if the party is legally

8 or operationally in a position to exercise

9 restraint or direction over the other

10 party.’’.

11 (2) REGIONAL INDUSTRY.—Section 771(4)(C)

12 (19 U.S.C. 1677(4)(C)) is amended by adding at the

13 end the following new sentence: ‘‘The term ‘regional

14 industry’ means the domestic producers within a re15 gion who are treated as a separate industry under

16 this subparagraph.’’.

17 (b) IMPACT ON AFFECTED DOMESTIC INDUSTRY.—

18 (1) IN GENERAL.—Section 771(7)(C)(iii) (19

19 U.S.C. 1677(7)(C)(iii)) is amended—

20 (A) by striking ‘‘and’’ at the end of

21 subclause (III), and

22 (B) by striking the period at the end of

23 subclause (IV) and inserting ‘‘, and
156

1 ‘‘(V) in a proceeding under sub2 title B, the magnitude of the margin

3 of dumping.’’.

4 (2) CAPTIVE PRODUCTION.—Section 771(7)(C)

5 (19 U.S.C. 1677(7)(C)) is amended by striking

6 clause (iv) and inserting the following:

7 ‘‘(iv) CAPTIVE PRODUCTION.—If do8 mestic producers internally transfer signifi9 cant production of the domestic like prod10 uct for the production of a downstream ar11 ticle and sell significant production of the

12 domestic like product in the merchant

13 market, and the Commission finds that—

14 ‘‘(I) the domestic like product

15 produced that is internally transferred

16 for processing into that downstream

17 article does not enter the merchant

18 market for the domestic like product,

19 ‘‘(II) the domestic like product is

20 the predominant material input in the

21 production of that downstream article,

22 and

23 ‘‘(III) the production of the do24 mestic like product sold in the mer25 chant market is not generally used in
157

1 the production of that downstream ar2 ticle,

3 then the Commission, in determining mar4 ket share and the factors affecting finan5 cial performance set forth in clause (iii),

6 shall focus primarily on the merchant mar7 ket for the domestic like product.’’.

8 (3) TECHNICAL CORRECTION.—Section

9 771(7)(C)(iii) is amended by striking ‘‘subparagraph

10 (B)(iii)’’ and inserting ‘‘subparagraph (B)(i)(III)’’.

11 (c) DETERMINATION OF THREAT OF INJURY.—

12 Clauses (i) and (ii) of section 771(7)(F) (19 U.S.C.

13 1677(7)(F) (i) and (ii)) are amended to read as follows:

14 ‘‘(i) IN GENERAL.—In determining

15 whether an industry in the United States

16 is threatened with material injury by rea17 son of imports (or sales for importation) of

18 the subject merchandise, the Commission

19 shall consider, among other relevant eco20 nomic factors—

21 ‘‘(I) if a countervailable subsidy

22 is involved, such information as may

23 be presented to it by the administer24 ing authority as to the nature of the

25 subsidy (particularly as to whether the
158

1 countervailable subsidy is a subsidy

2 described in Article 3 or 6.1 of the

3 Subsidies Agreement), and whether

4 imports of the subject merchandise

5 are likely to increase,

6 ‘‘(II) any existing unused produc7 tion capacity or imminent, substantial

8 increase in production capacity in the

9 exporting country indicating the likeli10 hood of substantially increased im11 ports of the subject merchandise into

12 the United States, taking into account

13 the availability of other export mar14 kets to absorb any additional exports,

15 ‘‘(III) a significant rate of in16 crease of the volume or market pene17 tration of imports of the subject mer18 chandise indicating the likelihood of

19 substantially increased imports,

20 ‘‘(IV) whether imports of the

21 subject merchandise are entering at

22 prices that are likely to have a signifi23 cant depressing or suppressing effect

24 on domestic prices, and are likely to

25 increase demand for further imports,
159

1 ‘‘(V) inventories of the subject

2 merchandise,

3 ‘‘(VI) the potential for product4 shifting if production facilities in the

5 foreign country, which can be used to

6 produce the subject merchandise, are

7 currently being used to produce other

8 products,

9 ‘‘(VII) in any investigation under

10 this title which involves imports of

11 both a raw agricultural product (with12 in the meaning of paragraph

13 (4)(E)(iv)) and any product processed

14 from such raw agricultural product,

15 the likelihood that there will be in16 creased imports, by reason of product

17 shifting, if there is an affirmative de18 termination by the Commission under

19 section 705(b)(1) or 735(b)(1) with

20 respect to either the raw agricultural

21 product or the processed agricultural

22 product (but not both),

23 ‘‘(VIII) the actual and potential

24 negative effects on the existing devel25 opment and production efforts of the
160

1 domestic industry, including efforts to

2 develop a derivative or more advanced

3 version of the domestic like product,

4 and

5 ‘‘(IX) any other demonstrable ad6 verse trends that indicate the prob7 ability that there is likely to be mate8 rial injury by reason of imports (or

9 sale for importation) of the subject

10 merchandise (whether or not it is ac11 tually being imported at the time).

12 ‘‘(ii) BASIS FOR DETERMINATION.—

13 The Commission shall consider the factors

14 set forth in clause (i) as a whole in making

15 a determination of whether further

16 dumped or subsidized imports are immi17 nent and whether material injury by rea18 son of imports would occur unless an

19 order is issued or a suspension agreement

20 is accepted under this title. The presence

21 or absence of any factor which the Com22 mission is required to consider under

23 clause (i) shall not necessarily give decisive

24 guidance with respect to the determination.

25 Such a determination may not be made on
161

1 the basis of mere conjecture or suppo2 sition.’’.

3 (d) NEGLIGIBLE IMPORTS.—Section 771 (19 U.S.C.

4 1677) is amended—

5 (1) in paragraph (7) by striking clause (v) of

6 subparagraph (C), and

7 (2) by adding at the end the following:

8 ‘‘(24) NEGLIGIBLE IMPORTS.—

9 ‘‘(A) IN GENERAL.—

10 ‘‘(i) LESS THAN 3 PERCENT.—Except

11 as provided in clauses (ii) and (iv), imports

12 from a country of merchandise correspond13 ing to a domestic like product identified by

14 the Commission are ‘negligible’ if such im15 ports account for less than 3 percent of the

16 volume of all such merchandise imported

17 into the United States in the most recent

18 12-month period for which data are avail19 able that precedes—

20 ‘‘(I) the filing of the petition

21 under section 702(b) or 732(b), or

22 ‘‘(II) the initiation of the inves23 tigation, if the investigation was initi24 ated under section 702(a) or 732(a).
162

1 ‘‘(ii) EXCEPTION.—Imports that

2 would otherwise be negligible under clause

3 (i) shall not be negligible if the aggregate

4 volume of imports of the merchandise from

5 all countries described in clause (i) with re6 spect to which investigations were initiated

7 on the same day exceeds 7 percent of the

8 volume of all such merchandise imported

9 into the United States during the applica10 ble 12-month period.

11 ‘‘(iii) DETERMINATION OF AGGRE12 GATE VOLUME.—In determining aggregate

13 volume under clause (ii) or (iv), the Com14 mission shall not consider imports from

15 any country specified in paragraph

16 (7)(G)(ii).

17 ‘‘(iv) NEGLIGIBILITY IN THREAT

18 ANALYSIS.—Notwithstanding clauses (i)

19 and (ii), the Commission shall not treat

20 imports as negligible if it determines that

21 there is a potential that imports from a

22 country described in clause (i) will immi23 nently account for more than 3 percent of

24 the volume of all such merchandise im25 ported into the United States, or that the
163

1 aggregate volumes of imports from all

2 countries described in clause (ii) will immi3 nently exceed 7 percent of the volume of

4 all such merchandise imported into the

5 United States. The Commission shall con6 sider such imports only for purposes of de7 termining threat of material injury.

8 ‘‘(B) NEGLIGIBILITY FOR CERTAIN COUN9 TRIES IN COUNTERVAILING DUTY INVESTIGA10 TIONS.—In the case of an investigation under

11 section 701, subparagraph (A) shall be applied

12 to imports of subject merchandise from develop13 ing countries by substituting ‘4 percent’ for ‘3

14 percent’ in subparagraph (A)(i) and by sub15 stituting ‘9 percent’ for ‘7 percent’ in subpara16 graph (A)(ii).

17 ‘‘(C) COMPUTATION OF IMPORT VOL18 UMES.—In computing import volumes for pur19 poses of subparagraphs (A) and (B), the Com20 mission may make reasonable estimates on the

21 basis of available statistics.

22 ‘‘(D) REGIONAL INDUSTRIES.—In an in23 vestigation in which the Commission makes a

24 regional industry determination under para25 graph (4)(C), the Commission’s examination
164

1 under subparagraphs (A) and (B) shall be

2 based upon the volume of subject merchandise

3 exported for sale in the regional market in lieu

4 of the volume of all subject merchandise im5 ported into the United States.’’.

6 (e) CUMULATION.—Section 771(7) (19 U.S.C.

7 1677(7)) is amended—

8 (1) in subparagraph (F) by striking clause (iv),

9 and

10 (2) by adding at the end the following:

11 ‘‘(G) CUMULATION FOR DETERMINING MA12 TERIAL INJURY.—

13 ‘‘(i) IN GENERAL.—For purposes of

14 clauses (i) and (ii) of subparagraph (C),

15 and subject to clause (ii), the Commission

16 shall cumulatively assess the volume and

17 effect of imports of the subject merchan18 dise from all countries with respect to

19 which—

20 ‘‘(I) petitions were filed under

21 section 702(b) or 732(b) on the same

22 day,

23 ‘‘(II) investigations were initiated

24 under section 702(a) or 732(a) on the

25 same day, or
165

1 ‘‘(III) petitions were filed under

2 section 702(b) or 732(b) and inves3 tigations were initiated under section

4 702(a) or 732(a) on the same day,

5 if such imports compete with each other

6 and with domestic like products in the

7 United States market.

8 ‘‘(ii) EXCEPTIONS.—The Commission

9 shall not cumulatively assess the volume

10 and effect of imports under clause (i)—

11 ‘‘(I) with respect to which the ad12 ministering authority has made a pre13 liminary negative determination, un14 less the administering authority sub15 sequently made a final affirmative de16 termination with respect to those im17 ports before the Commission’s final

18 determination is made;

19 ‘‘(II) from any country with re20 spect to which the investigation has

21 been terminated;

22 ‘‘(III) from any country des23 ignated as a beneficiary country under

24 the Caribbean Basin Economic Recov25 ery Act (19 U.S.C. 2701 et seq.) for
166

1 purposes of making a determination

2 with respect to that country, except

3 that the volume and effect of imports

4 of the subject merchandise from such

5 country may be cumulatively assessed

6 with imports of the subject merchan7 dise from any other country des8 ignated as such a beneficiary country

9 to the extent permitted by clause (i);

10 or

11 ‘‘(IV) from any country that is a

12 party to an agreement with the Unit13 ed States establishing a free trade

14 area, which entered into force and ef15 fect before January 1, 1987, unless

16 the Commission determines that a do17 mestic industry is materially injured

18 or threatened with material injury by

19 reason of imports from that country.

20 ‘‘(iii) RECORDS IN FINAL INVESTIGA21 TIONS.—In each final determination in

22 which it cumulatively assesses the volume

23 and effect of imports under clause (i), the

24 Commission shall make its determinations

25 based on the record compiled in the first
167

1 investigation in which it makes a final de2 termination, except that when the admin3 istering authority issues its final deter4 mination in a subsequently completed in5 vestigation, the Commission shall permit

6 the parties in the subsequent investigation

7 to submit comments concerning the signifi8 cance of the administering authority’s final

9 determination, and shall include such com10 ments and the administering authority’s

11 final determination in the record for the

12 subsequent investigation.

13 ‘‘(iv) REGIONAL INDUSTRY DETER14 MINATIONS.—In an investigation which in15 volves a regional industry, and in which

16 the Commission decides that the volume

17 and effect of imports should be cumula18 tively assessed under this subparagraph,

19 such assessment shall be based upon the

20 volume and effect of imports into the re21 gion or regions determined by the Commis22 sion. The provisions of clause (iii) shall

23 apply to such investigations.

24 ‘‘(H) CUMULATION FOR DETERMINING

25 THREAT OF MATERIAL INJURY.—To the extent
168

1 practicable and subject to subparagraph (G)(ii),

2 for purposes of clause (i)(III) and (IV) of sub3 paragraph (F), the Commission may cumula4 tively assess the volume and price effects of im5 ports of the subject merchandise from all coun6 tries with respect to which—

7 ‘‘(i) petitions were filed under section

8 702(b) or 732(b) on the same day,

9 ‘‘(ii) investigations were initiated

10 under section 702(a) or 732(a) on the

11 same day, or

12 ‘‘(iii) petitions were filed under sec13 tion 702(b) or 732(b) and investigations

14 were initiated under section 702(a) or

15 732(a) on the same day,

16 if such imports compete with each other and

17 with domestic like products in the United

18 States market.’’.

19 (f) CONSIDERATION OF POST-PETITION INFORMA20 TION.—Section 771(7) (19 U.S.C. 1677(7)), is amended

21 by adding at the end the following:

22 ‘‘(I) CONSIDERATION OF POST-PETITION

23 INFORMATION.—The Commission shall consider

24 whether any change in the volume, price effects,

25 or impact of imports of the subject merchandise
169

1 since the filing of the petition in an investiga2 tion under subtitle A or B is related to the

3 pendency of the investigation and, if so, the

4 Commission may reduce the weight accorded to

5 the data for the period after the filing of the

6 petition in making its determination of material

7 injury, threat of material injury, or material re8 tardation of the establishment of an industry in

9 the United States.’’.

10 (g) INTERESTED PARTY.—Section 771(9) (19 U.S.C.

11 1677(9)) is amended—

12 (1) in subparagraph (A), by inserting ‘‘produc13 ers, exporters, or’’ before ‘‘importers’’, and

14 (2) in subparagraph (B), inserting ‘‘or from

15 which such merchandise is exported’’ after ‘‘manu16 factured’’.

17 (h) ORDINARY COURSE OF TRADE.—Section 771(15)

18 (19 U.S.C. 1677(15)) is amended—

19 (1) by striking ‘‘merchandise which is the sub20 ject of an investigation’’ and inserting ‘‘subject mer21 chandise’’; and

22 (2) by adding at the end the following: ‘‘The

23 administering authority shall consider the following

24 sales and transactions, among others, to be outside

25 the ordinary course of trade:
170

1 ‘‘(A) Sales disregarded under section

2 773(b)(1).

3 ‘‘(B) Transactions disregarded under sec4 tion 773(f)(2).’’.

5 (i) OTHER DEFINITIONS.—

6 (1) IN GENERAL.—Section 771 (19 U.S.C.

7 1677), as amended by subsection (d), is amended by

8 adding at the end the following:

9 ‘‘(25) SUBJECT MERCHANDISE.—The term

10 ‘subject merchandise’ means the class or kind of

11 merchandise that is within the scope of an investiga12 tion, a review, a suspension agreement, an order

13 under this title or section 303, or a finding under

14 the Antidumping Act, 1921.

15 ‘‘(26) SECTION 303.—The terms ‘section 303’

16 and ‘303’ mean section 303 of this Act as in effect

17 on the day before the effective date of title II of the

18 Uruguay Round Agreements Act.

19 ‘‘(27) SUSPENSION AGREEMENT.—The term

20 ‘suspension agreement’ means an agreement de21 scribed in section 704(b), 704(c), 734(b), 734(c), or

22 734(l).

23 ‘‘(28) EXPORTER OR PRODUCER.—The term

24 ‘exporter or producer’ means the exporter of the

25 subject merchandise, the producer of the subject
171

1 merchandise, or both where appropriate. For pur2 poses of section 773, the term ‘exporter or producer’

3 includes both the exporter of the subject merchan4 dise and the producer of the same subject merchan5 dise to the extent necessary to accurately calculate

6 the total amount incurred and realized for costs, ex7 penses, and profits in connection with production

8 and sale of that merchandise.

9 ‘‘(29) WTO AGREEMENT.—The term ‘WTO

10 Agreement’ means the Agreement defined in section

11 2(9) of the Uruguay Round Agreements Act.

12 ‘‘(30) WTO MEMBER AND WTO MEMBER COUN13 TRY.—The terms ‘WTO member’ and ‘WTO mem14 ber country’ mean a state, or separate customs terri15 tory (within the meaning of Article XII of the WTO

16 Agreement), with respect to which the United States

17 applies the WTO agreement.

18 ‘‘(31) GATT 1994.—The term ‘GATT 1994’

19 means the General Agreement on Tariffs and Trade

20 annexed to the WTO Agreement.

21 ‘‘(32) TRADE REPRESENTATIVE.—The term

22 ‘Trade Representative’ means the United States

23 Trade Representative.
172

1 ‘‘(33) AFFILIATED PERSONS.—The following

2 persons shall be considered to be ‘affiliated’ or ‘af3 filiated persons’:

4 ‘‘(A) Members of a family, including broth5 ers and sisters (whether by the whole or half

6 blood), spouse, ancestors, and lineal descend7 ants.

8 ‘‘(B) Any officer or director of an organi9 zation and such organization.

10 ‘‘(C) Partners.

11 ‘‘(D) Employer and employee.

12 ‘‘(E) Any person directly or indirectly own13 ing, controlling, or holding with power to vote,

14 5 percent or more of the outstanding voting

15 stock or shares of any organization and such

16 organization.

17 ‘‘(F) Two or more persons directly or indi18 rectly controlling, controlled by, or under com19 mon control with, any person.

20 ‘‘(G) Any person who controls any other

21 person and such other person.

22 For purposes of this paragraph, a person shall be

23 considered to control another person if the person is

24 legally or operationally in a position to exercise re25 straint or direction over the other person.
173

1 ‘‘(34) DUMPED; DUMPING.—The terms

2 ‘dumped’ and ‘dumping’ refer to the sale or likely

3 sale of goods at less than fair value.’’.

4 (2) EXPORTER.—Paragraph (13) of section 771

5 (19 U.S.C. 1677(13)) is repealed.

6 SEC. 223. EXPORT PRICE AND CONSTRUCTED EXPORT

7 PRICE.

8 Section 772 (19 U.S.C. 1677a) is amended to read

9 as follows:

10 ‘‘SEC. 772. EXPORT PRICE AND CONSTRUCTED EXPORT

11 PRICE.

12 ‘‘(a) EXPORT PRICE.—The term ‘export price’ means

13 the price at which the subject merchandise is first sold

14 (or agreed to be sold) before the date of importation by

15 the producer or exporter of the subject merchandise out16 side of the United States to an unaffiliated purchaser in

17 the United States or to an unaffiliated purchaser for ex18 portation to the United States, as adjusted under sub19 section (c).

20 ‘‘(b) CONSTRUCTED EXPORT PRICE.—The term ‘con21 structed export price’ means the price at which the subject

22 merchandise is first sold (or agreed to be sold) in the Unit23 ed States before or after the date of importation by or

24 for the account of the producer or exporter of such mer25 chandise or by a seller affiliated with the producer or ex-
174

1 porter, to a purchaser not affiliated with the producer or

2 exporter, as adjusted under subsections (c) and (d).

3 ‘‘(c) ADJUSTMENTS FOR EXPORT PRICE AND CON4 STRUCTED EXPORT PRICE.—The price used to establish

5 export price and constructed export price shall be—

6 ‘‘(1) increased by—

7 ‘‘(A) when not included in such price, the

8 cost of all containers and coverings and all

9 other costs, charges, and expenses incident to

10 placing the subject merchandise in condition

11 packed ready for shipment to the United

12 States,

13 ‘‘(B) the amount of any import duties im14 posed by the country of exportation which have

15 been rebated, or which have not been collected,

16 by reason of the exportation of the subject mer17 chandise to the United States, and

18 ‘‘(C) the amount of any countervailing

19 duty imposed on the subject merchandise under

20 subtitle A to offset an export subsidy, and

21 ‘‘(2) reduced by—

22 ‘‘(A) except as provided in paragraph

23 (1)(C), the amount, if any, included in such

24 price, attributable to any additional costs,

25 charges, or expenses, and United States import
175

1 duties, which are incident to bringing the sub2 ject merchandise from the original place of

3 shipment in the exporting country to the place

4 of delivery in the United States, and

5 ‘‘(B) the amount, if included in such price,

6 of any export tax, duty, or other charge im7 posed by the exporting country on the expor8 tation of the subject merchandise to the United

9 States, other than an export tax, duty, or other

10 charge described in section 771(6)(C).

11 ‘‘(d) ADDITIONAL ADJUSTMENTS TO CONSTRUCTED

12 EXPORT PRICE.—For purposes of this section, the price

13 used to establish constructed export price shall also be re14 duced by—

15 ‘‘(1) the amount of any of the following ex16 penses generally incurred by or for the account of

17 the producer or exporter, or the affiliated seller in

18 the United States, in selling the subject merchandise

19 (or subject merchandise to which value has been

20 added)—

21 ‘‘(A) commissions for selling the subject

22 merchandise in the United States;

23 ‘‘(B) expenses that result from, and bear a

24 direct relationship to, the sale, such as credit

25 expenses, guarantees and warranties;
176

1 ‘‘(C) any selling expenses that the seller

2 pays on behalf of the purchaser;

3 ‘‘(D) any selling expenses not deducted

4 under subparagraph (A), (B), or (C);

5 ‘‘(2) the cost of any further manufacture or as6 sembly (including additional material and labor), ex7 cept in circumstances described in subsection (e);

8 and

9 ‘‘(3) the profit allocated to the expenses de10 scribed in paragraphs (1) and (2).

11 ‘‘(e) SPECIAL RULE FOR MERCHANDISE WITH

12 VALUE ADDED AFTER IMPORTATION.—Where the subject

13 merchandise is imported by a person affiliated with the

14 exporter or producer, and the value added in the United

15 States by the affiliated person is likely to exceed substan16 tially the value of the subject merchandise, the administer17 ing authority shall determine the constructed export price

18 for such merchandise by using one of the following prices

19 if there is a sufficient quantity of sales to provide a rea20 sonable basis for comparison and the administering au21 thority determines that the use of such sales is appro22 priate:

23 ‘‘(1) The price of identical subject merchandise

24 sold by the exporter or producer to an unaffiliated

25 person.
177

1 ‘‘(2) The price of other subject merchandise

2 sold by the exporter or producer to an unaffiliated

3 person.

4 If there is not a sufficient quantity of sales to provide a

5 reasonable basis for comparison under paragraph (1) or

6 (2), or the administering authority determines that neither

7 of the prices described in such paragraphs is appropriate,

8 then the constructed export price may be determined on

9 any other reasonable basis.

10 ‘‘(f) SPECIAL RULE FOR DETERMINING PROFIT.—

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

12 (d)(3), profit shall be an amount determined by mul13 tiplying the total actual profit by the applicable per14 centage.

15 ‘‘(2) DEFINITIONS.—For purposes of this sub16 section:

17 ‘‘(A) APPLICABLE PERCENTAGE.—The

18 term ‘applicable percentage’ means the percent19 age determined by dividing the total United

20 States expenses by the total expenses.

21 ‘‘(B) TOTAL UNITED STATES EXPENSES.—

22 The term ‘total United States expenses’ means

23 the total expenses described in subsection (d)

24 (1) and (2).
178

1 ‘‘(C) TOTAL EXPENSES.—The term ‘total

2 expenses’ means all expenses in the first of the

3 following categories which applies and which

4 are incurred by or on behalf of the foreign pro5 ducer and foreign exporter of the subject mer6 chandise and by or on behalf of the United

7 States seller affiliated with the producer or ex8 porter with respect to the production and sale

9 of such merchandise:

10 ‘‘(i) The expenses incurred with re11 spect to the subject merchandise sold in

12 the United States and the foreign like

13 product sold in the exporting country if

14 such expenses were requested by the ad15 ministering authority for the purpose of es16 tablishing normal value and constructed

17 export price.

18 ‘‘(ii) The expenses incurred with re19 spect to the narrowest category of mer20 chandise sold in the United States and the

21 exporting country which includes the sub22 ject merchandise.

23 ‘‘(iii) The expenses incurred with re24 spect to the narrowest category of mer-
179

1 chandise sold in all countries which in2 cludes the subject merchandise.

3 ‘‘(D) TOTAL ACTUAL PROFIT.—The term

4 ‘total actual profit’ means the total profit

5 earned by the foreign producer, exporter, and

6 affiliated parties described in subparagraph (C)

7 with respect to the sale of the same merchan8 dise for which total expenses are determined

9 under such subparagraph.’’.

10 SEC. 224. NORMAL VALUE.

11 Section 773 (19 U.S.C. 1677b) is amended to read

12 as follows:

13 ‘‘SEC. 773. NORMAL VALUE.

14 ‘‘(a) DETERMINATION.—In determining under this

15 title whether subject merchandise is being, or is likely to

16 be, sold at less than fair value, a fair comparison shall

17 be made between the export price or constructed export

18 price and normal value. In order to achieve a fair compari19 son with the export price or constructed export price, nor20 mal value shall be determined as follows:

21 ‘‘(1) DETERMINATION OF NORMAL VALUE.—

22 ‘‘(A) IN GENERAL.—The normal value of

23 the subject merchandise shall be the price de24 scribed in subparagraph (B), at a time reason25 ably corresponding to the time of the sale used
180

1 to determine the export price or constructed ex2 port price under section 772(a) or (b).

3 ‘‘(B) PRICE.—The price referred to in sub4 paragraph (A) is—

5 ‘‘(i) the price at which the foreign like

6 product is first sold (or, in the absence of

7 a sale, offered for sale) for consumption in

8 the exporting country, in the usual com9 mercial quantities and in the ordinary

10 course of trade and, to the extent prac11 ticable, at the same level of trade as the

12 export price or constructed export price, or

13 ‘‘(ii) in a case to which subparagraph

14 (C) applies, the price at which the foreign

15 like product is so sold (or offered for sale)

16 for consumption in a country other than

17 the exporting country or the United States,

18 if—

19 ‘‘(I) such price is representative,

20 ‘‘(II) the aggregate quantity (or,

21 if quantity is not appropriate, value)

22 of the foreign like product sold by the

23 exporter or producer in such other

24 country is 5 percent or more of the

25 aggregate quantity (or value) of the
181

1 subject merchandise sold in the

2 United States or for export to the

3 United States, and

4 ‘‘(III) the administering author5 ity does not determine that the par6 ticular market situation in such other

7 country prevents a proper comparison

8 with the export price or constructed

9 export price.

10 ‘‘(C) THIRD COUNTRY SALES.—This sub11 paragraph applies when—

12 ‘‘(i) the foreign like product is not

13 sold (or offered for sale) for consumption

14 in the exporting country as described in

15 subparagraph (B)(i),

16 ‘‘(ii) the administering authority de17 termines that the aggregate quantity (or, if

18 quantity is not appropriate, value) of the

19 foreign like product sold in the exporting

20 country is insufficient to permit a proper

21 comparison with the sales of the subject

22 merchandise to the United States, or

23 ‘‘(iii) the particular market situation

24 in the exporting country does not permit a
182

1 proper comparison with the export price or

2 constructed export price.

3 For purposes of clause (ii), the aggregate quan4 tity (or value) of the foreign like product sold

5 in the exporting country shall normally be con6 sidered to be insufficient if such quantity (or

7 value) is less than 5 percent of the aggregate

8 quantity (or value) of sales of the subject mer9 chandise to the United States.

10 ‘‘(2) FICTITIOUS MARKETS.—No pretended sale

11 or offer for sale, and no sale or offer for sale in12 tended to establish a fictitious market, shall be

13 taken into account in determining normal value. The

14 occurrence of different movements in the prices at

15 which different forms of the foreign like product are

16 sold (or, in the absence of sales, offered for sale) in

17 the exporting country after the issuance of an anti18 dumping duty order may be considered by the ad19 ministering authority as evidence of the establish20 ment of a fictitious market for the foreign like prod21 uct if the movement in such prices appears to reduce

22 the amount by which the normal value exceeds the

23 export price (or the constructed export price) of the

24 subject merchandise.
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1 ‘‘(3) EXPORTATION FROM AN INTERMEDIATE

2 COUNTRY.—Where the subject merchandise is ex3 ported to the United States from an intermediate

4 country, normal value shall be determined in the in5 termediate country, except that normal value may be

6 determined in the country of origin of the subject

7 merchandise if—

8 ‘‘(A) the producer knew at the time of the

9 sale that the subject merchandise was destined

10 for exportation;

11 ‘‘(B) the subject merchandise is merely

12 transshipped through the intermediate country;

13 ‘‘(C) sales of the foreign like product in

14 the intermediate country do not satisfy the con15 ditions of paragraph (1)(C); or

16 ‘‘(D) the foreign like product is not pro17 duced in the intermediate country.

18 ‘‘(4) USE OF CONSTRUCTED VALUE.—If the ad19 ministering authority determines that the normal

20 value of the subject merchandise cannot be deter21 mined under paragraph (1)(B)(i), then, notwith22 standing paragraph (1)(B)(ii), the normal value of

23 the subject merchandise may be the constructed

24 value of that merchandise, as determined under sub25 section (e).
184

1 ‘‘(5) INDIRECT SALES OR OFFERS FOR SALE.—

2 If the foreign like product is sold or, in the absence

3 of sales, offered for sale through an affiliated party,

4 the prices at which the foreign like product is sold

5 (or offered for sale) by such affiliated party may be

6 used in determining normal value.

7 ‘‘(6) ADJUSTMENTS.—The price described in

8 paragraph (1)(B) shall be—

9 ‘‘(A) increased by the cost of all containers

10 and coverings and all other costs, charges, and

11 expenses incident to placing the subject mer12 chandise in condition packed ready for ship13 ment to the United States;

14 ‘‘(B) reduced by—

15 ‘‘(i) when included in the price de16 scribed in paragraph (1)(B), the cost of all

17 containers and coverings and all other

18 costs, charges, and expenses incident to

19 placing the foreign like product in condi20 tion packed ready for shipment to the

21 place of delivery to the purchaser,

22 ‘‘(ii) the amount, if any, included in

23 the price described in paragraph (1)(B),

24 attributable to any additional costs,

25 charges, and expenses incident to bringing
185

1 the foreign like product from the original

2 place of shipment to the place of delivery

3 to the purchaser, and

4 ‘‘(iii) the amount of any taxes im5 posed directly upon the foreign like prod6 uct or components thereof which have been

7 rebated, or which have not been collected,

8 on the subject merchandise, but only to the

9 extent that such taxes are added to or in10 cluded in the price of the foreign like prod11 uct, and

12 ‘‘(C) increased or decreased by the amount

13 of any difference (or lack thereof) between the

14 export price or constructed export price and the

15 price described in paragraph (1)(B) (other than

16 a difference for which allowance is otherwise

17 provided under this section) that is established

18 to the satisfaction of the administering author19 ity to be wholly or partly due to—

20 (i) the fact that the quantities in

21 which the subject merchandise is sold or

22 agreed to be sold to the United States are

23 greater than or less than the quantities in

24 which the foreign like product is sold,

25 agreed to be sold, or offered for sale,
186

1 ‘‘(ii) the fact that merchandise de2 scribed in subparagraph (B) or (C) of sec3 tion 771(16) is used in determining normal

4 value, or

5 ‘‘(iii) other differences in the cir6 cumstances of sale.

7 ‘‘(7) ADDITIONAL ADJUSTMENTS.—

8 ‘‘(A) LEVEL OF TRADE.—The price de9 scribed in paragraph (1)(B) shall also be in10 creased or decreased to make due allowance for

11 any difference (or lack thereof) between the ex12 port price or constructed export price and the

13 price described in paragraph (1)(B) (other than

14 a difference for which allowance is otherwise

15 made under this section) that is shown to be

16 wholly or partly due to a difference in level of

17 trade between the export price or constructed

18 export price and normal value, if the difference

19 in level of trade—

20 ‘‘(i) involves the performance of dif21 ferent selling activities; and

22 ‘‘(ii) is demonstrated to affect price

23 comparability, based on a pattern of con24 sistent price differences between sales at
187

1 different levels of trade in the country in

2 which normal value is determined.

3 In a case described in the preceding sentence,

4 the amount of the adjustment shall be based on

5 the price differences between the two levels of

6 trade in the country in which normal value is

7 determined.

8 ‘‘(B) CONSTRUCTED EXPORT PRICE OFF9 SET.—When normal value is established at a

10 level of trade which constitutes a more ad11 vanced stage of distribution than the level of

12 trade of the constructed export price, but the

13 data available do not provide an appropriate

14 basis to determine under subparagraph (A)(ii) a

15 level of trade adjustment, normal value shall be

16 reduced by the amount of indirect selling ex17 penses incurred in the country in which normal

18 value is determined on sales of the foreign like

19 product but not more than the amount of such

20 expenses for which a deduction is made under

21 section 772(d)(1)(D).

22 ‘‘(8) ADJUSTMENTS TO CONSTRUCTED

23 VALUE.—Constructed value as determined under

24 subsection (e), may be adjusted, as appropriate, pur25 suant to this subsection.
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1 ‘‘(b) SALES AT LESS THAN COST OF PRODUCTION.—

2 ‘‘(1) DETERMINATION; SALES DISREGARDED.—

3 Whenever the administering authority has reason4 able grounds to believe or suspect that sales of the

5 foreign like product under consideration for the de6 termination of normal value have been made at

7 prices which represent less than the cost of produc8 tion of that product, the administering authority

9 shall determine whether, in fact, such sales were

10 made at less than the cost of production. If the ad11 ministering authority determines that sales made at

12 less than the cost of production—

13 ‘‘(A) have been made within an extended

14 period of time in substantial quantities, and

15 ‘‘(B) were not at prices which permit re16 covery of all costs within a reasonable period of

17 time,

18 such sales may be disregarded in the determination

19 of normal value. Whenever such sales are dis20 regarded, normal value shall be based on the re21 maining sales of the foreign like product in the ordi22 nary course of trade. If no sales made in the ordi23 nary course of trade remain, the normal value shall

24 be based on the constructed value of the merchan25 dise.
189

1 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For

2 purposes of this subsection—

3 ‘‘(A) REASONABLE GROUNDS TO BELIEVE

4 OR SUSPECT.—There are reasonable grounds to

5 believe or suspect that sales of the foreign like

6 product were made at prices that are less than

7 the cost of production of the product, if—

8 ‘‘(i) in an investigation initiated under

9 section 732 or a review conducted under

10 section 751, an interested party described

11 in subparagraph (C), (D), (E), (F), or (G)

12 of section 771(9) provides information,

13 based upon observed prices or constructed

14 prices or costs, that sales of the foreign

15 like product under consideration for the

16 determination of normal value have been

17 made at prices which represent less than

18 the cost of production of the product; or

19 ‘‘(ii) in a review conducted under sec20 tion 751 involving a specific exporter, the

21 administering authority disregarded some

22 or all of the exporter’s sales pursuant to

23 paragraph (1) in the investigation or if a

24 review has been completed, in the most re25 cently completed review.
190

1 ‘‘(B) EXTENDED PERIOD OF TIME.—The

2 term ‘extended period of time’ means a period

3 that is normally 1 year, but not less than 6

4 months.

5 ‘‘(C) SUBSTANTIAL QUANTITIES.—Sales

6 made at prices below the cost of production

7 have been made in substantial quantities if—

8 ‘‘(i) the volume of such sales rep9 resents 20 percent or more of the volume

10 of sales under consideration for the deter11 mination of normal value, or

12 ‘‘(ii) the weighted average per unit

13 price of the sales under consideration for

14 the determination of normal value is less

15 than the weighted average per unit cost of

16 production for such sales.

17 ‘‘(D) RECOVERY OF COSTS.—If prices

18 which are below the per unit cost of production

19 at the time of sale are above the weighted aver20 age per unit cost of production for the period

21 of investigation or review, such prices shall be

22 considered to provide for recovery of costs with23 in a reasonable period of time.
191

1 ‘‘(3) CALCULATION OF COST OF PRODUC2 TION.—For purposes of this subtitle, the cost of pro3 duction shall be an amount equal to the sum of—

4 ‘‘(A) the cost of materials and of fabrica5 tion or other processing of any kind employed

6 in producing the foreign like product, during a

7 period which would ordinarily permit the pro8 duction of that foreign like product in the ordi9 nary course of business;

10 ‘‘(B) an amount for selling, general, and

11 administrative expenses based on actual data

12 pertaining to production and sales of the for13 eign like product by the exporter in question;

14 and

15 ‘‘(C) the cost of all containers and cover16 ings of whatever nature, and all other expenses

17 incidental to placing the foreign like product in

18 condition packed ready for shipment.

19 For purposes of subparagraph (A), if the normal

20 value is based on the price of the foreign like prod21 uct sold for consumption in a country other than the

22 exporting country, the cost of materials shall be de23 termined without regard to any internal tax in the

24 exporting country imposed on such materials or their
192

1 disposition which are remitted or refunded upon ex2 portation.

3 ‘‘(c) NONMARKET ECONOMY COUNTRIES.—

4 ‘‘(1) IN GENERAL.—If—

5 ‘‘(A) the subject merchandise is exported

6 from a nonmarket economy country, and

7 ‘‘(B) the administering authority finds that

8 available information does not permit the nor9 mal value of the subject merchandise to be de10 termined under subsection (a),

11 the administering authority shall determine the nor12 mal value of the subject merchandise on the basis of

13 the value of the factors of production utilized in pro14 ducing the merchandise and to which shall be added

15 an amount for general expenses and profit plus the

16 cost of containers, coverings, and other expenses.

17 Except as provided in paragraph (2), the valuation

18 of the factors of production shall be based on the

19 best available information regarding the values of

20 such factors in a market economy country or coun21 tries considered to be appropriate by the administer22 ing authority.

23 ‘‘(2) EXCEPTION.—If the administering author24 ity finds that the available information is inadequate

25 for purposes of determining the normal value of sub-
193

1 ject merchandise under paragraph (1), the admin2 istering authority shall determine the normal value

3 on the basis of the price at which merchandise that

4 is—

5 ‘‘(A) comparable to the subject merchan6 dise, and

7 ‘‘(B) produced in one or more market

8 economy countries that are at a level of eco9 nomic development comparable to that of the

10 nonmarket economy country,

11 is sold in other countries, including the United

12 States.

13 ‘‘(3) FACTORS OF PRODUCTION.—For purposes

14 of paragraph (1), the factors of production utilized

15 in producing merchandise include, but are not lim16 ited to—

17 ‘‘(A) hours of labor required,

18 ‘‘(B) quantities of raw materials employed,

19 ‘‘(C) amounts of energy and other utilities

20 consumed, and

21 ‘‘(D) representative capital cost, including

22 depreciation.

23 ‘‘(4) VALUATION OF FACTORS OF PRODUC24 TION.—The administering authority, in valuing fac25 tors of production under paragraph (1), shall utilize,
194

1 to the extent possible, the prices or costs of factors

2 of production in one or more market economy coun3 tries that are—

4 ‘‘(A) at a level of economic development

5 comparable to that of the nonmarket economy

6 country, and

7 ‘‘(B) significant producers of comparable

8 merchandise.

9 ‘‘(d) SPECIAL RULE FOR CERTAIN MULTINATIONAL

10 CORPORATIONS.—Whenever, in the course of an investiga11 tion under this title, the administering authority deter12 mines that—

13 ‘‘(1) subject merchandise exported to the Unit14 ed States is being produced in facilities which are

15 owned or controlled, directly or indirectly, by a per16 son, firm, or corporation which also owns or con17 trols, directly or indirectly, other facilities for the

18 production of the foreign like product which are lo19 cated in another country or countries,

20 ‘‘(2) subsection (a)(1)(C) applies, and

21 ‘‘(3) the normal value of the foreign like prod22 uct produced in one or more of the facilities outside

23 the exporting country is higher than the normal

24 value of the foreign like product produced in the fa25 cilities located in the exporting country,
195

1 it shall determine the normal value of the subject mer2 chandise by reference to the normal value at which the

3 foreign like product is sold in substantial quantities from

4 one or more facilities outside the exporting country. The

5 administering authority, in making any determination

6 under this paragraph, shall make adjustments for the dif7 ference between the cost of production (including taxes,

8 labor, materials, and overhead) of the foreign like product

9 produced in facilities outside the exporting country and

10 costs of production of the foreign like product produced

11 in facilities in the exporting country, if such differences

12 are demonstrated to its satisfaction. For purposes of this

13 subsection, in determining the normal value of the foreign

14 like product produced in a country outside of the exporting

15 country, the administering authority shall determine its

16 price at the time of exportation from the exporting country

17 and shall make any adjustments required by subsection

18 (a) for the cost of all containers and coverings and all

19 other costs, charges, and expenses incident to placing the

20 merchandise in condition packed ready for shipment to the

21 United States by reference to such costs in the exporting

22 country.

23 ‘‘(e) CONSTRUCTED VALUE.—For purposes of this

24 title, the constructed value of imported merchandise shall

25 be an amount equal to the sum of—
196

1 ‘‘(1) the cost of materials and fabrication or

2 other processing of any kind employed in producing

3 the merchandise, during a period which would ordi4 narily permit the production of the merchandise in

5 the ordinary course of business;

6 ‘‘(2)(A) the actual amounts incurred and real7 ized by the specific exporter or producer being exam8 ined in the investigation or review for selling, gen9 eral, and administrative expenses, and for profits, in

10 connection with the production and sale of a foreign

11 like product, in the ordinary course of trade, for con12 sumption in the foreign country, or

13 ‘‘(B) if actual data are not available with re14 spect to the amounts described in subparagraph (A),

15 then—

16 ‘‘(i) the actual amounts incurred and real17 ized by the specific exporter or producer being

18 examined in the investigation or review for sell19 ing, general, and administrative expenses, and

20 for profits, in connection with the production

21 and sale, for consumption in the foreign coun22 try, of merchandise that is in the same general

23 category of products as the subject merchan24 dise,
197

1 ‘‘(ii) the weighted average of the actual

2 amounts incurred and realized by exporters or

3 producers that are subject to the investigation

4 or review (other than the exporter or producer

5 described in clause (i)) for selling, general, and

6 administrative expenses, and for profits, in con7 nection with the production and sale of a for8 eign like product, in the ordinary course of

9 trade, for consumption in the foreign country,

10 or

11 ‘‘(iii) the amounts incurred and realized

12 for selling, general, and administrative ex13 penses, and for profits, based on any other rea14 sonable method, except that the amount allowed

15 for profit may not exceed the amount normally

16 realized by exporters or producers (other than

17 the exporter or producer described in clause (i))

18 in connection with the sale, for consumption in

19 the foreign country, of merchandise that is in

20 the same general category of products as the

21 subject merchandise ; and

22 ‘‘(3) the cost of all containers and coverings of

23 whatever nature, and all other expenses incidental to

24 placing the subject merchandise in condition packed

25 ready for shipment to the United States.
198

1 For purposes of paragraph (1), the cost of materials shall

2 be determined without regard to any internal tax in the

3 exporting country imposed on such materials or their dis4 position which are remitted or refunded upon exportation

5 of the subject merchandise produced from such materials.

6 ‘‘(f) SPECIAL RULES FOR CALCULATION OF COST OF

7 PRODUCTION AND FOR CALCULATION OF CONSTRUCTED

8 VALUE.—For purposes of subsections (b) and (e)—

9 ‘‘(1) COSTS.—

10 ‘‘(A) IN GENERAL.—Costs shall normally

11 be calculated based on the records of the ex12 porter or producer of the merchandise, if such

13 records are kept in accordance with the gen14 erally accepted accounting principles of the ex15 porting country (or the producing country,

16 where appropriate) and reasonably reflect the

17 costs associated with the production and sale of

18 the merchandise. The administering authority

19 shall consider all available evidence on the prop20 er allocation of costs, including that which is

21 made available by the exporter or producer on

22 a timely basis, if such allocations have been his23 torically used by the exporter or producer, in

24 particular for establishing appropriate amorti25 zation and depreciation periods, and allowances
199

1 for capital expenditures and other development

2 costs.

3 ‘‘(B) NONRECURRING COSTS.—Costs shall

4 be adjusted appropriately for those non5 recurring costs that benefit current or future

6 production, or both.

7 ‘‘(C) STARTUP COSTS.—

8 ‘‘(i) IN GENERAL.—Costs shall be ad9 justed appropriately for circumstances in

10 which costs incurred during the time pe11 riod covered by the investigation or review

12 are affected by startup operations.

13 ‘‘(ii) STARTUP OPERATIONS.—Adjust14 ments shall be made for startup operations

15 only where—

16 ‘‘(I) a producer is using new pro17 duction facilities or producing a new

18 product that requires substantial ad19 ditional investment, and

20 ‘‘(II) production levels are limited

21 by technical factors associated with

22 the initial phase of commercial pro23 duction.

24 For purposes of subclause (II), the initial

25 phase of commercial production ends at
200

1 the end of the startup period. In determin2 ing whether commercial production levels

3 have been achieved, the administering au4 thority shall consider factors unrelated to

5 startup operations that might affect the

6 volume of production processed, such as

7 demand, seasonality, or business cycles.

8 ‘‘(iii) ADJUSTMENT FOR STARTUP OP9 ERATIONS.—The adjustment for startup

10 operations shall be made by substituting

11 the unit production costs incurred with re12 spect to the merchandise at the end of the

13 startup period for the unit production

14 costs incurred during the startup period. If

15 the startup period extends beyond the pe16 riod of the investigation or review under

17 this title, the administering authority shall

18 use the most recent cost of production data

19 that it reasonably can obtain, analyze, and

20 verify without delaying the timely comple21 tion of the investigation or review. For

22 purposes of this subparagraph, the startup

23 period ends at the point at which the level

24 of commercial production that is char-
201

1 acteristic of the merchandise, producer, or

2 industry concerned is achieved.

3 ‘‘(2) TRANSACTIONS DISREGARDED.—A trans4 action directly or indirectly between affiliated per5 sons may be disregarded if, in the case of any ele6 ment of value required to be considered, the amount

7 representing that element does not fairly reflect the

8 amount usually reflected in sales of merchandise

9 under consideration in the market under consider10 ation. If a transaction is disregarded under the pre11 ceding sentence and no other transactions are avail12 able for consideration, the determination of the

13 amount shall be based on the information available

14 as to what the amount would have been if the trans15 action had occurred between persons who are not af16 filiated.

17 ‘‘(3) MAJOR INPUT RULE.—If, in the case of a

18 transaction between affiliated persons involving the

19 production by one of such persons of a major input

20 to the merchandise, the administering authority has

21 reasonable grounds to believe or suspect that an

22 amount represented as the value of such input is

23 less than the cost of production of such input, then

24 the administering authority may determine the value

25 of the major input on the basis of the information
202

1 available regarding such cost of production, if such

2 cost is greater than the amount that would be deter3 mined for such input under paragraph (2).’’.

4 SEC. 225. CURRENCY CONVERSION.

5 (a) IN GENERAL.—Subtitle D of title VII (19 U.S.C.

6 1677 et seq.) is amended by inserting after section 773

7 the following new section:

8 ‘‘SEC. 773A. CURRENCY CONVERSION.

9 ‘‘(a) IN GENERAL.—In an antidumping proceeding

10 under this title, the administering authority shall convert

11 foreign currencies into United States dollars using the ex12 change rate in effect on the date of sale of the subject

13 merchandise, except that, if it is established that a cur14 rency transaction on forward markets is directly linked to

15 an export sale under consideration, the exchange rate

16 specified with respect to such currency in the forward sale

17 agreement shall be used to convert the foreign currency.

18 Fluctuations in exchange rates shall be ignored.

19 ‘‘(b) SUSTAINED MOVEMENT IN FOREIGN CURRENCY

20 VALUE.—In an investigation under subtitle B, if there is

21 a sustained movement in the value of the foreign currency

22 relative to the United States dollar, the administering au23 thority shall allow exporters at least 60 days to adjust

24 their export prices to reflect such sustained movement.’’.
203

1 (b) CONFORMING AMENDMENT.—The table of con2 tents for title VII is amended by inserting after the item

3 relating to section 773 the following new item:

‘‘Sec. 773A. Currency conversion.’’.

4 SEC. 226. PROPRIETARY AND NONPROPRIETARY INFORMA5 TION.

6 (a) PROPRIETARY STATUS MAINTAINED.—

7 (1) IN GENERAL.—Section 777(b)(1) (19

8 U.S.C. 1677f(b)(1)) is amended to read as follows:

9 ‘‘(1) PROPRIETARY STATUS MAINTAINED.—

10 ‘‘(A) IN GENERAL.—Except as provided in

11 subsection (a)(4)(A) and subsection (c), infor12 mation submitted to the administering author13 ity or the Commission which is designated as

14 proprietary by the person submitting the infor15 mation shall not be disclosed to any person

16 without the consent of the person submitting

17 the information, other than—

18 ‘‘(i) to an officer or employee of the

19 administering authority or the Commission

20 who is directly concerned with carrying out

21 the investigation in connection with which

22 the information is submitted or any review

23 under this title covering the same subject

24 merchandise, or
204

1 ‘‘(ii) to an officer or employee of the

2 United States Customs Service who is di3 rectly involved in conducting an investiga4 tion regarding fraud under this title.

5 ‘‘(B) ADDITIONAL REQUIREMENTS.—The

6 administering authority and the Commission

7 shall require that information for which propri8 etary treatment is requested be accompanied

9 by—

10 ‘‘(i) either—

11 ‘‘(I) a non-proprietary summary

12 in sufficient detail to permit a reason13 able understanding of the substance

14 of the information submitted in con15 fidence, or

16 ‘‘(II) a statement that the infor17 mation is not susceptible to summary

18 accompanied by a statement of the

19 reasons in support of the contention,

20 and

21 ‘‘(ii) either—

22 ‘‘(I) a statement which permits

23 the administering authority or the

24 Commission to release under adminis25 trative protective order, in accordance
205

1 with subsection (c), the information

2 submitted in confidence, or

3 ‘‘(II) a statement to the admin4 istering authority or the Commission

5 that the business proprietary informa6 tion is of a type that should not be re7 leased under administrative protective

8 order.’’.

9 (2) SECTION 751 REVIEWS.—Section 777(b) (19

10 U.S.C. 1677f(b)) is amended by adding at the end

11 the following:

12 ‘‘(3) SECTION 751 REVIEWS.—Notwithstanding

13 the provisions of paragraph (1), information submit14 ted to the administering authority or the Commis15 sion in connection with a review under section

16 751(b) or 751(c) which is designated as proprietary

17 by the person submitting the information may, if the

18 review results in the revocation of an order or find19 ing (or termination of a suspended investigation)

20 under section 751(d), be used by the agency to

21 which the information was originally submitted in

22 any investigation initiated within 2 years after the

23 date of the revocation or termination pursuant to a

24 petition covering the same subject merchandise.’’.
206

1 (b) UNWARRANTED PROPRIETARY DESIGNATION.—

2 Section 777(b)(2) (19 U.S.C. 1677f(b)(2)) is amended by

3 adding at the end the following new sentence: ‘‘In a case

4 in which the administering authority or the Commission

5 returns the information to the person submitting it, the

6 person may thereafter submit other material concerning

7 the subject matter of the returned information if the sub8 mission is made within the time otherwise provided for

9 submitting such material.’’.

10 SEC. 227. OPPORTUNITY FOR COMMENT BY CONSUMERS

11 AND INDUSTRIAL USERS.

12 Section 777 (19 U.S.C. 1677f) is amended by adding

13 at the end the following new subsection:

14 ‘‘(h) OPPORTUNITY FOR COMMENT BY CONSUMERS

15 AND INDUSTRIAL USERS.—The administering authority

16 and the Commission shall provide an opportunity for in17 dustrial users of the subject merchandise and, if the mer18 chandise is sold at the retail level, for representative

19 consumer organizations, to submit relevant information to

20 the administering authority concerning dumping or a

21 countervailable subsidy, and to the Commission concern22 ing material injury by reason of dumped or subsidized im23 ports.’’.
207

1 SEC. 228. PUBLIC NOTICE AND EXPLANATION OF DETER2 MINATIONS.

3 Section 777 (19 U.S.C. 1677f), as amended by sec4 tion 227, is amended by adding at the end the following:

5 ‘‘(i) PUBLICATION OF DETERMINATIONS; REQUIRE6 MENTS FOR FINAL DETERMINATIONS.—

7 ‘‘(1) IN GENERAL.—Whenever the administer8 ing authority makes a determination under section

9 702 or 732 whether to initiate an investigation, or

10 the administering authority or the Commission

11 makes a preliminary determination under section

12 703 or 733, a final determination under section 705

13 or section 735, a preliminary or final determination

14 in a review under section 751, a determination to

15 suspend an investigation under this title, or a deter16 mination under section 753, the administering au17 thority or the Commission, as the case may be, shall

18 publish the facts and conclusions supporting that de19 termination, and shall publish notice of that deter20 mination in the Federal Register.

21 ‘‘(2) CONTENTS OF NOTICE OR DETERMINA22 TION.—The notice or determination published under

23 paragraph (1) shall include, to the extent applica24 ble—

25 ‘‘(A) in the case of a determination of the

26 administering authority—
208

1 ‘‘(i) the names of the exporters or

2 producers of the subject merchandise or,

3 when providing such names is impractica4 ble, the countries exporting the subject

5 merchandise to the United States,

6 ‘‘(ii) a description of the subject mer7 chandise that is sufficient to identify the

8 subject merchandise for customs purposes,

9 ‘‘(iii)(I) with respect to a determina10 tion in an investigation under subtitle A or

11 section 753 or in a review of a countervail12 ing duty order, the amount of the

13 countervailable subsidy established and a

14 full explanation of the methodology used in

15 establishing the amount, and

16 ‘‘(II) with respect to a determination

17 in an investigation under subtitle B or in

18 a review of an antidumping duty order, the

19 weighted average dumping margins estab20 lished and a full explanation of the meth21 odology used in establishing such margins,

22 and

23 ‘‘(iv) the primary reasons for the de24 termination; and
209

1 ‘‘(B) in the case of a determination of the

2 Commission—

3 ‘‘(i) considerations relevant to the de4 termination of injury, and

5 ‘‘(ii) the primary reasons for the de6 termination.

7 ‘‘(3) ADDITIONAL REQUIREMENTS FOR FINAL

8 DETERMINATIONS.—In addition to the requirements

9 set forth in paragraph (2)—

10 ‘‘(A) the administering authority shall in11 clude in a final determination described in para12 graph (1) an explanation of the basis for its de13 termination that addresses relevant arguments,

14 made by interested parties who are parties to

15 the investigation or review (as the case may be),

16 concerning the establishment of dumping or a

17 countervailable subsidy, or the suspension of

18 the investigation, with respect to which the de19 termination is made; and

20 ‘‘(B) the Commission shall include in a

21 final determination of injury an explanation of

22 the basis for its determination that addresses

23 relevant arguments that are made by interested

24 parties who are parties to the investigation or

25 review (as the case may be) concerning volume,
210

1 price effects, and impact on the industry of im2 ports of the subject merchandise.’’.

3 SEC. 229. SAMPLING AND AVERAGING; DETERMINATION OF

4 WEIGHTED AVERAGE DUMPING MARGIN.

5 (a) IN GENERAL.—Section 777A (19 U.S.C.

6 1677f–1) is amended to read as follows:

7 ‘‘SEC. 777A. SAMPLING AND AVERAGING; DETERMINATION

8 OF WEIGHTED AVERAGE DUMPING MARGIN.

9 ‘‘(a) IN GENERAL.—For purposes of determining the

10 export price (or constructed export price) under section

11 772 or the normal value under section 773, and in carry12 ing out reviews under section 751, the administering au13 thority may—

14 ‘‘(1) use averaging and statistically valid sam15 ples, if there is a significant volume of sales of the

16 subject merchandise or a significant number or types

17 of products, and

18 ‘‘(2) decline to take into account adjustments

19 which are insignificant in relation to the price or

20 value of the merchandise.

21 ‘‘(b) SELECTION OF AVERAGES AND SAMPLES.—The

22 authority to select averages and statistically valid samples

23 shall rest exclusively with the administering authority. The

24 administering authority shall, to the greatest extent pos25 sible, consult with the exporters and producers regarding
211

1 the method to be used to select exporters, producers, or

2 types of products under this section.

3 ‘‘(c) DETERMINATION OF DUMPING MARGIN.—

4 ‘‘(1) GENERAL RULE.—In determining weighted

5 average dumping margins under section 733(d),

6 735(c), or 751(a), the administering authority shall

7 determine the individual weighted average dumping

8 margin for each known exporter and producer of the

9 subject merchandise.

10 ‘‘(2) EXCEPTION.—If it is not practicable to

11 make individual weighted average dumping margin

12 determinations under paragraph (1) because of the

13 large number of exporters or producers involved in

14 the investigation or review, the administering au15 thority may determine the weighted average dump16 ing margins for a reasonable number of exporters or

17 producers by limiting its examination to—

18 ‘‘(A) a sample of exporters, producers, or

19 types of products that is statistically valid

20 based on the information available to the ad21 ministering authority at the time of selection,

22 or

23 ‘‘(B) exporters and producers accounting

24 for the largest volume of the subject merchan-
212

1 dise from the exporting country that can be

2 reasonably examined.

3 ‘‘(d) DETERMINATION OF LESS THAN FAIR

4 VALUE.—

5 ‘‘(1) INVESTIGATIONS.—

6 ‘‘(A) IN GENERAL.—In an investigation

7 under subtitle B, the administering authority

8 shall determine whether the subject merchan9 dise is being sold in the United States at less

10 than fair value—

11 ‘‘(i) by comparing the weighted aver12 age of the normal values to the weighted

13 average of the export prices (and con14 structed export prices) for comparable

15 merchandise, or

16 ‘‘(ii) by comparing the normal values

17 of individual transactions to the export

18 prices (or constructed export prices) of in19 dividual transactions for comparable mer20 chandise.

21 ‘‘(B) EXCEPTION.—The administering au22 thority may determine whether the subject mer23 chandise is being sold in the United States at

24 less than fair value by comparing the weighted

25 average of the normal values to the export
213

1 prices (or constructed export prices) of individ2 ual transactions for comparable merchandise,

3 if—

4 ‘‘(i) there is a pattern of export prices

5 (or constructed export prices) for com6 parable merchandise that differ signifi7 cantly among purchasers, regions, or peri8 ods of time, and

9 ‘‘(ii) the administering authority ex10 plains why such differences cannot be

11 taken into account using a method de12 scribed in paragraph (1)(A)(i) or (ii).

13 ‘‘(2) REVIEWS.—In a review under section 751,

14 when comparing export prices (or constructed export

15 prices) of individual transactions to the weighted av16 erage price of sales of the foreign like product, the

17 administering authority shall limit its averaging of

18 prices to a period not exceeding the calendar month

19 that corresponds most closely to the calendar month

20 of the individual export sale.’’.

21 (b) DUMPING MARGIN; WEIGHTED AVERAGE DUMP22 ING MARGIN.—Section 771 (19 U.S.C. 1677), as amended

23 by section 222(i), is amended by adding at the end the

24 following new paragraph:
214

1 ‘‘(35) DUMPING MARGIN; WEIGHTED AVERAGE

2 DUMPING MARGIN.—

3 ‘‘(A) DUMPING MARGIN.—The term

4 ‘dumping margin’ means the amount by which

5 the normal value exceeds the export price or

6 constructed export price of the subject mer7 chandise.

8 ‘‘(B) WEIGHTED AVERAGE DUMPING MAR9 GIN.—The term ‘weighted average dumping

10 margin’ is the percentage determined by divid11 ing the aggregate dumping margins determined

12 for a specific exporter or producer by the aggre13 gate export prices and constructed export prices

14 of such exporter or producer.

15 ‘‘(C) MAGNITUDE OF THE MARGIN OF

16 DUMPING.—The magnitude of the margin of

17 dumping used by the Commission shall be—

18 ‘‘(i) in making a preliminary deter19 mination under section 733(a) in an inves20 tigation (including any investigation in

21 which the Commission cumulatively as22 sesses the volume and effect of imports

23 under paragraph (7)(G)(i)), the dumping

24 margin or margins published by the ad-
215

1 ministering authority in its notice of initi2 ation of the investigation;

3 ‘‘(ii) in making a final determination

4 under section 735(b), the dumping margin

5 or margins most recently published by the

6 administering authority prior to the closing

7 of the Commission’s administrative record;

8 ‘‘(iii) in a review under section

9 751(b)(2), the most recent dumping mar10 gin or margins determined by the admin11 istering authority under section 752(c)(3),

12 if any, or under section 733(b) or 735(a);

13 and

14 ‘‘(iv) in a review under section 751(c),

15 the dumping margin or margins deter16 mined by the administering authority

17 under section 752(c)(3).’’.

18 SEC. 230. ANTICIRCUMVENTION.

19 (a) IN GENERAL.—Subsections (a) and (b) of section

20 781 (19 U.S.C. 1677j (a) and (b)) are amended to read

21 as follows:

22 ‘‘(a) MERCHANDISE COMPLETED OR ASSEMBLED IN

23 THE UNITED STATES.—

24 ‘‘(1) IN GENERAL.—If—
216

1 ‘‘(A) merchandise sold in the United

2 States is of the same class or kind as any other

3 merchandise that is the subject of—

4 ‘‘(i) an antidumping duty order issued

5 under section 736,

6 ‘‘(ii) a finding issued under the Anti7 dumping Act, 1921, or

8 ‘‘(iii) a countervailing duty order is9 sued under section 706 or section 303,

10 ‘‘(B) such merchandise sold in the United

11 States is completed or assembled in the United

12 States from parts or components produced in

13 the foreign country with respect to which such

14 order or finding applies,

15 ‘‘(C) the process of assembly or completion

16 in the United States is minor or insignificant,

17 and

18 ‘‘(D) the value of the parts or components

19 referred to in subparagraph (B) is a significant

20 portion of the total value of the merchandise,

21 the administering authority, after taking into ac22 count any advice provided by the Commission under

23 subsection (e), may include within the scope of such

24 order or finding the imported parts or components

25 referred to in subparagraph (B) that are used in the
217

1 completion or assembly of the merchandise in the

2 United States at any time such order or finding is

3 in effect.

4 ‘‘(2) DETERMINATION OF WHETHER PROCESS

5 IS MINOR OR INSIGNIFICANT.—In determining

6 whether the process of assembly or completion is

7 minor or insignificant under paragraph (1)(C), the

8 administering authority shall take into account—

9 ‘‘(A) the level of investment in the United

10 States,

11 ‘‘(B) the level of research and development

12 in the United States,

13 ‘‘(C) the nature of the production process

14 in the United States,

15 ‘‘(D) the extent of production facilities in

16 the United States, and

17 ‘‘(E) whether the value of the processing

18 performed in the United States represents a

19 small proportion of the value of the merchan20 dise sold in the United States.

21 ‘‘(3) FACTORS TO CONSIDER.—In determining

22 whether to include parts or components in a coun23 tervailing or antidumping duty order or finding

24 under paragraph (1), the administering authority

25 shall take into account such factors as—
218

1 ‘‘(A) the pattern of trade, including

2 sourcing patterns,

3 ‘‘(B) whether the manufacturer or exporter

4 of the parts or components is affiliated with the

5 person who assembles or completes the mer6 chandise sold in the United States from the

7 parts or components produced in the foreign

8 country with respect to which the order or find9 ing described in paragraph (1) applies, and

10 ‘‘(C) whether imports into the United

11 States of the parts or components produced in

12 such foreign country have increased after the

13 initiation of the investigation which resulted in

14 the issuance of such order or finding.

15 ‘‘(b) MERCHANDISE COMPLETED OR ASSEMBLED IN

16 OTHER FOREIGN COUNTRIES.—

17 ‘‘(1) IN GENERAL.—If—

18 ‘‘(A) merchandise imported into the United

19 States is of the same class or kind as any mer20 chandise produced in a foreign country that is

21 the subject of—

22 ‘‘(i) an antidumping duty order issued

23 under section 736,

24 ‘‘(ii) a finding issued under the Anti25 dumping Act, 1921, or
219

1 ‘‘(iii) a countervailing duty order is2 sued under section 706 or section 303,

3 ‘‘(B) before importation into the United

4 States, such imported merchandise is completed

5 or assembled in another foreign country from

6 merchandise which—

7 ‘‘(i) is subject to such order or find8 ing, or

9 ‘‘(ii) is produced in the foreign coun10 try with respect to which such order or

11 finding applies,

12 ‘‘(C) the process of assembly or completion

13 in the foreign country referred to in subpara14 graph (B) is minor or insignificant,

15 ‘‘(D) the value of the merchandise pro16 duced in the foreign country to which the anti17 dumping duty order applies is a significant por18 tion of the total value of the merchandise ex19 ported to the United States, and

20 ‘‘(E) the administering authority deter21 mines that action is appropriate under this

22 paragraph to prevent evasion of such order or

23 finding,

24 the administering authority, after taking into ac25 count any advice provided by the Commission under
220

1 subsection (e), may include such imported merchan2 dise within the scope of such order or finding at any

3 time such order or finding is in effect.

4 ‘‘(2) DETERMINATION OF WHETHER PROCESS

5 IS MINOR OR INSIGNIFICANT.—In determining

6 whether the process of assembly or completion is

7 minor or insignificant under paragraph (1)(C), the

8 administering authority shall take into account—

9 ‘‘(A) the level of investment in the foreign

10 country,

11 ‘‘(B) the level or research and development

12 in the foreign country,

13 ‘‘(C) the nature of the production process

14 in the foreign country,

15 ‘‘(D) the extent of production facilities in

16 the foreign country, and

17 ‘‘(E) whether the value of the processing

18 performed in the foreign country represents a

19 small proportion of the value of the merchan20 dise imported into the United States.

21 ‘‘(3) FACTORS TO CONSIDER.—In determining

22 whether to include merchandise assembled or com23 pleted in a foreign country in a countervailing duty

24 order or an antidumping duty order or finding under
221

1 paragraph (1), the administering authority shall

2 take into account such factors as—

3 ‘‘(A) the pattern of trade, including

4 sourcing patterns,

5 ‘‘(B) whether the manufacturer or exporter

6 of the merchandise described in paragraph

7 (1)(B) is affiliated with the person who uses the

8 merchandise described in paragraph (1)(B) to

9 assemble or complete in the foreign country the

10 merchandise that is subsequently imported into

11 the United States, and

12 ‘‘(C) whether imports into the foreign

13 country of the merchandise described in para14 graph (1)(B) have increased after the initiation

15 of the investigation which resulted in the issu16 ance of such order or finding.’’.

17 (b) TIME LIMITS FOR ADMINISTERING AUTHORITY

18 DETERMINATIONS.—Section 781 (19 U.S.C. 1677j) is

19 amended by adding at the end the following:

20 ‘‘(f) TIME LIMITS FOR ADMINISTERING AUTHORITY

21 DETERMINATIONS.—The administering authority shall, to

22 the maximum extent practicable, make the determinations

23 under this section within 300 days from the date of the

24 initiation of a countervailing duty or antidumping cir25 cumvention inquiry under this section.’’.
222

1 SEC. 231. EVIDENCE.

2 (a) CONDUCT OF INVESTIGATIONS AND ADMINISTRA3 TIVE REVIEWS.—Subtitle D of title VII (19 U.S.C. 1671)

4 is amended by adding at the end the following new section:

5 ‘‘SEC. 782. CONDUCT OF INVESTIGATIONS AND ADMINIS6 TRATIVE REVIEWS.

7 ‘‘(a) TREATMENT OF VOLUNTARY RESPONSES IN

8 COUNTERVAILING OR ANTIDUMPING DUTY INVESTIGA9 TIONS AND REVIEWS.—In any investigation under subtitle

10 A or B or a review under section 751(a) in which the ad11 ministering authority has, under section 777A(c)(2) or

12 section 777A(e)(2)(A) (whichever is applicable), limited

13 the number of exporters or producers examined, or deter14 mined a single country-wide rate, the administering au15 thority shall establish an individual countervailable sub16 sidy rate or an individual weighted average dumping mar17 gin for any exporter or producer not initially selected for

18 individual examination under such sections who submits

19 to the administering authority the information requested

20 from exporters or producers selected for examination, if—

21 ‘‘(1) such information is so submitted by the

22 date specified—

23 ‘‘(A) for exporters and producers that were

24 initially selected for examination, or

25 ‘‘(B) for the foreign government, in a

26 countervailing duty case where the administer-
223

1 ing authority has determined a single country2 wide rate; and

3 ‘‘(2) the number of exporters or producers who

4 have submitted such information is not so large that

5 individual examination of such exporters or produc6 ers would be unduly burdensome and inhibit the

7 timely completion of the investigation.

8 ‘‘(b) CERTIFICATION OF SUBMISSIONS.—Any person

9 providing factual information to the administering author10 ity or the Commission in connection with a proceeding

11 under this title on behalf of the petitioner or any other

12 interested party shall certify that such information is ac13 curate and complete to the best of that person’s knowl14 edge.

15 ‘‘(c) DIFFICULTIES IN MEETING REQUIREMENTS.—

16 ‘‘(1) NOTIFICATION BY INTERESTED PARTY.—

17 If an interested party, promptly after receiving a re18 quest from the administering authority or the Com19 mission for information, notifies the administering

20 authority or the Commission (as the case may be)

21 that such party is unable to submit the information

22 requested in the requested form and manner, to23 gether with a full explanation and suggested alter24 native forms in which such party is able to submit

25 the information, the administering authority or the
224

1 Commission (as the case may be) shall consider the

2 ability of the interested party to submit the informa3 tion in the requested form and manner and may

4 modify such requirements to the extent necessary to

5 avoid imposing an unreasonable burden on that

6 party.

7 ‘‘(2) ASSISTANCE TO INTERESTED PARTIES.—

8 The administering authority and the Commission

9 shall take into account any difficulties experienced

10 by interested parties, particularly small companies,

11 in supplying information requested by the admin12 istering authority or the Commission in connection

13 with investigations and reviews under this title, and

14 shall provide to such interested parties any assist15 ance that is practicable in supplying such informa16 tion.

17 ‘‘(d) DEFICIENT SUBMISSIONS.—If the administering

18 authority or the Commission determines that a response

19 to a request for information under this title does not com20 ply with the request, the administering authority or the

21 Commission (as the case may be) shall promptly inform

22 the person submitting the response of the nature of the

23 deficiency and shall, to the extent practicable, provide that

24 person with an opportunity to remedy or explain the defi25 ciency in light of the time limits established for the com-
225

1 pletion of investigations or reviews under this title. If that

2 person submits further information in response to such

3 deficiency and either—

4 ‘‘(1) the administering authority or the Com5 mission (as the case may be) finds that such re6 sponse is not satisfactory, or

7 ‘‘(2) such response is not submitted within the

8 applicable time limits,

9 then the administering authority or the Commission (as

10 the case may be) may, subject to subsection (e), disregard

11 all or part of the original and subsequent responses.

12 ‘‘(e) USE OF CERTAIN INFORMATION.—In reaching

13 a determination under section 703, 705, 733, 735, 751,

14 or 753 the administering authority and the Commission

15 shall not decline to consider information that is submitted

16 by an interested party and is necessary to the determina17 tion but does not meet all the applicable requirements es18 tablished by the administering authority or the Commis19 sion, if—

20 ‘‘(1) the information is submitted by the dead21 line established for its submission,

22 ‘‘(2) the information can be verified,

23 ‘‘(3) the information is not so incomplete that

24 it cannot serve as a reliable basis for reaching the

25 applicable determination,
226

1 ‘‘(4) the interested party has demonstrated that

2 it acted to the best of its ability in providing the in3 formation and meeting the requirements established

4 by the administering authority or the Commission

5 with respect to the information, and

6 ‘‘(5) the information can be used without undue

7 difficulties.

8 ‘‘(f) NONACCEPTANCE OF SUBMISSIONS.—If the ad9 ministering authority or the Commission declines to accept

10 into the record any information submitted in an investiga11 tion or review under this title, it shall, to the extent prac12 ticable, provide to the person submitting the information

13 a written explanation of the reasons for not accepting the

14 information.

15 ‘‘(g) PUBLIC COMMENT ON INFORMATION.—Infor16 mation that is submitted on a timely basis to the admin17 istering authority or the Commission during the course of

18 a proceeding under this title shall be subject to comment

19 by other parties to the proceeding within such reasonable

20 time as the administering authority or the Commission

21 shall provide. The administering authority and the Com22 mission, before making a final determination under section

23 705, 735, 751, or 753 shall cease collecting information

24 and shall provide the parties with a final opportunity to

25 comment on the information obtained by the administer-
227

1 ing authority or the Commission (as the case may be)

2 upon which the parties have not previously had an oppor3 tunity to comment. Comments containing new factual in4 formation shall be disregarded.

5 ‘‘(h) TERMINATION OF INVESTIGATION OR REVOCA6 TION OF ORDER FOR LACK OF INTEREST.—The admin7 istering authority may—

8 ‘‘(1) terminate an investigation under subtitle A

9 or B with respect to a domestic like product if, prior

10 to publication of an order under section 706 or 736,

11 the administering authority determines that produc12 ers accounting for substantially all of the production

13 of that domestic like product have expressed a lack

14 of interest in issuance of an order; and

15 ‘‘(2) revoke an order issued under section 706

16 or 736 with respect to a domestic like product, or

17 terminate an investigation suspended under section

18 704 or 734 with respect to a domestic like product,

19 if the administering authority determines that pro20 ducers accounting for substantially all of the produc21 tion of that domestic like product, have expressed a

22 lack of interest in the order or suspended investiga23 tion.

24 ‘‘(i) VERIFICATION.—The administering authority

25 shall verify all information relied upon in making—
228

1 ‘‘(1) a final determination in an investigation,

2 ‘‘(2) a revocation under section 751(d), and

3 ‘‘(3) a final determination in a review under

4 section 751(a), if—

5 ‘‘(A) verification is timely requested by an

6 interested party as defined in section

7 771(9)(C), (D), (E), (F), or (G), and

8 ‘‘(B) no verification was made under this

9 subparagraph during the 2 immediately preced10 ing reviews and determinations under section

11 751(a) of the same order, finding, or notice, ex12 cept that this clause shall not apply if good

13 cause for verification is shown.’’.

14 (b) AVAILABILITY OF NONPROPRIETARY INFORMA15 TION.—Section 777(a)(4) (19 U.S.C. 1677f(a)(4)) is

16 amended by striking ‘‘may disclose’’ and inserting ‘‘shall

17 disclose’’.

18 (c) DETERMINATIONS ON THE BASIS OF THE FACTS

19 AVAILABLE.—Section 776 (19 U.S.C. 1677e) is amended

20 to read as follows:

21 ‘‘SEC. 776. DETERMINATIONS ON THE BASIS OF THE FACTS

22 AVAILABLE.

23 ‘‘(a) IN GENERAL.—If—

24 ‘‘(1) necessary information is not available on

25 the record, or
229

1 ‘‘(2) an interested party or any other person—

2 ‘‘(A) withholds information that has been

3 requested by the administering authority or the

4 Commission under this title,

5 ‘‘(B) fails to provide such information by

6 the deadlines for submission of the information

7 or in the form and manner requested, subject to

8 subsections (c)(1) and (e) of section 782,

9 ‘‘(C) significantly impedes a proceeding

10 under this title, or

11 ‘‘(D) provides such information but the in12 formation cannot be verified as provided in sec13 tion 782(i),

14 the administering authority and the Commission shall,

15 subject to section 782(d), use the facts otherwise available

16 in reaching the applicable determination under this title.

17 ‘‘(b) ADVERSE INFERENCES.—If the administering

18 authority or the Commission (as the case may be) finds

19 that an interested party has failed to cooperate by not act20 ing to the best of its ability to comply with a request for

21 information from the administering authority or the Com22 mission, the administering authority or the Commission

23 (as the case may be), in reaching the applicable determina24 tion under this title, may use an inference that is adverse

25 to the interests of that party in selecting from among the
230

1 facts otherwise available. Such adverse inference may in2 clude reliance on information derived from—

3 ‘‘(1) the petition,

4 ‘‘(2) a final determination in the investigation

5 under this title,

6 ‘‘(3) any previous review under section 751 or

7 determination under section 753, or

8 ‘‘(4) any other information placed on the

9 record.

10 ‘‘(c) CORROBORATION OF SECONDARY INFORMA11 TION.—When the administering authority or the Commis12 sion relies on secondary information rather than on infor13 mation obtained in the course of an investigation or re14 view, the administering authority or the Commission, as

15 the case may be, shall, to the extent practicable, corrobo16 rate that information from independent sources that are

17 reasonably at their disposal.’’.

18 (d) CONFORMING AMENDMENTS.—

19 (1) Section 777(e) (19 U.S.C. 1677f(e)) is re20 pealed.

21 (2) The table of contents for title VII is amend22 ed—

23 (A) by amending the item relating to sec24 tion 776 to read as follows:

‘‘Sec. 776. Determinations on the basis of the facts available.’’;

25 and
231

1 (B) by inserting after the item relating to

2 section 781 the following new item:

‘‘Sec. 782. Conduct of investigations and administrative reviews.’’.

3 SEC. 232. ANTIDUMPING PETITIONS BY THIRD COUNTRIES.

4 (a) IN GENERAL.—Subtitle D of title VII (19 U.S.C.

5 1677 et seq.), as amended by section 231(a), is amended

6 by adding at the end the following new section:

7 ‘‘SEC. 783. ANTIDUMPING PETITIONS BY THIRD COUNTRIES.

8 ‘‘(a) FILING OF PETITION.—The government of a

9 WTO member may file with the Trade Representative a

10 petition requesting that an investigation be conducted to

11 determine if—

12 ‘‘(1) imports from another country are being

13 sold in the United States at less than fair value, and

14 ‘‘(2) an industry in the petitioning country is

15 materially injured by reason of those imports.

16 ‘‘(b) INITIATION.—The Trade Representative, after

17 consultation with the administering authority and the

18 Commission and obtaining the approval of the WTO

19 Council for Trade in Goods, shall determine whether to

20 initiate an investigation described in subsection (a).

21 ‘‘(c) DETERMINATIONS.—Upon initiation of an inves22 tigation under this section, the Trade Representative shall

23 request the following determinations be made according

24 to substantive and procedural requirements specified by
232

1 the Trade Representative, notwithstanding any other pro2 vision of this title:

3 ‘‘(1) The administering authority shall deter4 mine whether imports into the United States of the

5 subject merchandise are being sold at less than fair

6 value.

7 ‘‘(2) The Commission shall determine whether

8 an industry in the petitioning country is materially

9 injured by reason of imports of the subject merchan10 dise into the United States.

11 ‘‘(d) PUBLIC COMMENT.—An opportunity for public

12 comment shall be provided, as appropriate—

13 ‘‘(1) by the Trade Representative, in making

14 the determination required by subsection (b), and

15 ‘‘(2) by the administering authority and the

16 Commission, in making the determination required

17 by subsection (c).

18 ‘‘(e) ISSUANCE OF ORDER.—If the administering au19 thority makes an affirmative determination under para20 graph (1) of subsection (c), and the Commission makes

21 an affirmative determination under paragraph (2) of sub22 section (c), the administering authority shall issue an anti23 dumping duty order in accordance with section 736 and

24 take such other actions as are required by section 736.
233

1 ‘‘(f) REVIEWS OF DETERMINATIONS.—For purposes

2 of review under section 516A or review under section 751,

3 if an order is issued under subsection (d), the final deter4 minations of the administering authority and the Commis5 sion under this section shall be treated as final determina6 tions made under section 735.

7 ‘‘(g) ACCESS TO INFORMATION.—Section 777 shall

8 apply to investigations under this section, to the extent

9 specified by the Trade Representative, after consultation

10 with the administering authority and the Commission.’’.

11 (b) CONFORMING AMENDMENT.—The table of con12 tents for title VII, as amended by section 231(d)(2), is

13 amended by adding after the item relating to section 782

14 the following new item:

‘‘Sec. 783. Antidumping petitions by third countries.’’.

15 SEC. 233. CONFORMING AMENDMENTS.

16 (a) TERMINOLOGY.—

17 (1) NORMAL VALUE.—Each of the following

18 sections is amended by striking ‘‘foreign market

19 value’’ each place it appears in the text and in the

20 heading and inserting ‘‘normal value’’:

21 (A) Section 731 (19 U.S.C. 1673).

22 (B) Section 734 (19 U.S.C. 1673c).

23 (C) Section 736 (19 U.S.C. 1673e).

24 (D) Section 739 (19 U.S.C. 1673h).

25 (E) Section 780 (19 U.S.C. 1677i).
234

1 (2) EXPORT PRICE.—

2 (A) IN GENERAL.—Each of the following

3 sections is amended by striking ‘‘United States

4 price’’ each place it appears in the text and in

5 the heading and inserting ‘‘export price (or the

6 constructed export price)’’:

7 (i) Section 731 (19 U.S.C. 1673).

8 (ii) Section 734 (19 U.S.C. 1673c).

9 (iii) Section 736 (19 U.S.C. 1673e).

10 (iv) Section 738 (19 U.S.C. 1673g).

11 (v) Section 739 (19 U.S.C. 1673h).

12 (vi) Section 780 (19 U.S.C. 1677i).

13 (B) EXPORTER’S SALES PRICE.—Section

14 738(b)(3) (19 U.S.C. 1673g(b)(3)) is amended

15 by striking ‘‘exporter’s sales price’’ and insert16 ing ‘‘constructed export price’’.

17 (3) DOMESTIC LIKE PRODUCT.—

18 (A) Each of the following sections is

19 amended by striking ‘‘like product’’ each place

20 it appears in the text and in the heading and

21 inserting ‘‘domestic like product’’:

22 (i) Section 771(4)(C) and (D) (19

23 U.S.C. 1677(4)(C) and (D)).

24 (ii) Section 771(7)(C)(iii)(IV) (19

25 U.S.C. 1677(7)(C)(iii)(IV)).
235

1 (iii) Section 771(9) (19 U.S.C.

2 1677(9)).

3 (iv) Section 771(10) (19 U.S.C.

4 1677(10)).

5 (B) Sections 771(7)(B)(i)(II) and (III)

6 and section 771(7)(C)(ii)(I) (19 U.S.C.

7 1677(7)(B)(i)(II) and (III) and (C)(ii)(I)) are

8 amended by striking ‘‘like products’’ and insert9 ing ‘‘domestic like products’’.

10 (4) FOREIGN LIKE PRODUCT.—Section 771(16)

11 (19 U.S.C. 1677(16)) is amended—

12 (A) by striking ‘‘such or similar merchan13 dise’’ in the text and inserting ‘‘foreign like

14 product’’, and

15 (B) by amending the heading to read as

16 follows: ‘‘FOREIGN LIKE PRODUCT.’’.

17 (5) SUBJECT MERCHANDISE.—

18 (A) Section 701(d) (19 U.S.C. 1671(d)) is

19 amended by striking ‘‘a class or kind of mer20 chandise subject to a countervailing duty inves21 tigation’’ and inserting ‘‘subject merchandise’’.

22 (B) Section 702(e) (19 U.S.C. 1671a(e)) is

23 amended by striking ‘‘class or kind of merchan24 dise that is the subject of the investigation’’
236

1 each place it appears and inserting ‘‘subject

2 merchandise’’.

3 (C) Section 703(b)(1) (19 U.S.C.

4 1671b(b)(1)) is amended by striking ‘‘merchan5 dise which is the subject of the investigation’’

6 and inserting ‘‘subject merchandise’’.

7 (D) Section 704(a)(2)(A) (19 U.S.C.

8 1671c(a)(2)(A)) is amended by striking ‘‘mer9 chandise that is subject to the investigation’’

10 and inserting ‘‘subject merchandise’’.

11 (E) Section 704(b) (19 U.S.C. 1671c(b))

12 is amended by striking ‘‘merchandise which is

13 the subject of the investigation’’ and inserting

14 ‘‘subject merchandise’’.

15 (F) Section 704(c)(1) (19 U.S.C.

16 1671c(c)(1)) is amended by striking ‘‘merchan17 dise which is the subject of the investigation’’

18 and inserting ‘‘subject merchandise’’.

19 (G) Section 704(c)(2) (19 U.S.C.

20 1671c(c)(2)) is amended by striking ‘‘merchan21 dise which is the subject of the investigation’’

22 and inserting ‘‘subject merchandise’’.

23 (H) Section 704(c)(3) (19 U.S.C.

24 1671c(c)(3)) is amended by striking ‘‘merchan-
237

1 dise which is the subject of an investigation’’

2 and inserting ‘‘subject merchandise’’.

3 (I) Section 704(d)(3) (19 U.S.C.

4 1671c(d)(3)) is amended by striking ‘‘merchan5 dise covered by such agreement’’ and inserting

6 ‘‘subject merchandise’’.

7 (J) Section 704(f)(1)(A) (19 U.S.C.

8 1671c(f)(1)(A)) is amended by striking ‘‘mer9 chandise which is the subject of the investiga10 tion’’ and inserting ‘‘subject merchandise’’.

11 (K) Subparagraphs (A)(i) and (B) of sec12 tion 704(f)(2) (19 U.S.C. 1671c(f)(2)(A)(i) and

13 (B)) are amended by striking ‘‘merchandise

14 which is the subject of the investigation’’ each

15 place it appears and inserting ‘‘subject mer16 chandise’’.

17 (L) Paragraphs (2) and (3) of section

18 704(h) (19 U.S.C. 1671c(h) (2) and (3)) are

19 amended by striking ‘‘merchandise which is the

20 subject of the investigation’’ each place it ap21 pears and inserting ‘‘subject merchandise’’.

22 (M) Section 704(j) (19 U.S.C. 1671c(j)) is

23 amended by striking ‘‘merchandise which is the

24 subject of the investigation’’ and inserting

25 ‘‘subject merchandise’’.
238

1 (N) Section 705(a)(1) (19 U.S.C.

2 1671d(a)(1)) is amended by striking ‘‘the mer3 chandise’’ and inserting ‘‘the subject merchan4 dise’’.

5 (O) Section 706(a)(2) (19 U.S.C.

6 1671e(a)(2)), as redesignated by section 265, is

7 amended by striking ‘‘class or kind of merchan8 dise to which it applies’’ and inserting ‘‘subject

9 merchandise’’.

10 (P) Section 732(e)(1) (19 U.S.C.

11 1673a(e)(1)) is amended by striking ‘‘class or

12 kind of the merchandise which is the subject of

13 the investigation’’ and inserting ‘‘the subject

14 merchandise’’.

15 (Q) Section 732(e)(2) (19 U.S.C.

16 1673a(e)(2)) is amended by striking ‘‘merchan17 dise which is the subject of the investigation’’

18 and inserting ‘‘subject merchandise’’.

19 (R) Section 732(e) (19 U.S.C. 1673a(e)) is

20 amended by striking ‘‘class or kind of merchan21 dise that is the subject of the investigation’’

22 each place it appears and inserting ‘‘subject

23 merchandise’’.

24 (S) Section 734(a)(2)(A) (19 U.S.C

25 1673c(a)(2)(A)) is amended by striking ‘‘mer-
239

1 chandise that is subject to the investigation’’

2 and inserting ‘‘subject merchandise’’.

3 (T) Subsections (b), (c)(1), (f)(1)(A),

4 (f)(2)(A)(i), (g)(1), (h)(2), (h)(3), and (j) of

5 section 734 (19 U.S.C 1673c(b), (c)(1),

6 (f)(1)(A), (f)(2)(A)(i), (g)(1), (h)(2), (h)(3),

7 and (j)) are amended by striking ‘‘merchandise

8 which is the subject of the investigation’’ each

9 place it appears and inserting ‘‘subject mer10 chandise’’.

11 (U) Section 734(f)(2)(B) (19 U.S.C.

12 1673c(f)(2)(B)) is amended by striking ‘‘mer13 chandise subject to the investigation’’ and in14 serting ‘‘subject merchandise’’.

15 (V) Section 735(a)(1) (19 U.S.C.

16 1673d(a)(1)) is amended by striking ‘‘merchan17 dise which was the subject of the investigation’’

18 and inserting ‘‘subject merchandise’’.

19 (W) Section 736(a)(2) (19 U.S.C.

20 1673e(a)(2)) is amended by striking ‘‘class or

21 kind of merchandise to which it applies’’ and

22 inserting ‘‘subject merchandise’’.

23 (X) Section 736(b)(1) (19 U.S.C.

24 1673e(b)(1)) is amended by striking ‘‘merchan-
240

1 dise subject to the antidumping duty order’’

2 and inserting ‘‘subject merchandise’’.

3 (Y) Section 736(b)(2) (19 U.S.C.

4 1673e(b)(2)) is amended by striking ‘‘merchan5 dise subject to an antidumping duty order’’ and

6 inserting ‘‘subject merchandise’’.

7 (Z) Section 762(a)(1) (19 U.S.C.

8 1676a(a)(1)) is amended by striking ‘‘merchan9 dise subject to the agreement’’ and inserting

10 ‘‘subject merchandise’’.

11 (AA) Section 762(b)(2) (19 U.S.C.

12 1676a(b)(2)) is amended by striking ‘‘merchan13 dise subject to the order’’ and inserting ‘‘sub14 ject merchandise’’.

15 (BB) Section 771(7)(B)(i)(I) (19 U.S.C.

16 1677(7)(B)(i)(I)) is amended by striking ‘‘mer17 chandise which is the subject of the investiga18 tion’’ and inserting ‘‘subject merchandise’’.

19 (CC) Section 771(9)(A) (19 U.S.C.

20 1677(9)(A)) is amended by striking ‘‘merchan21 dise which is the subject of an investigation

22 under this title’’ and inserting ‘‘subject mer23 chandise’’.

24 (DD) Section 771(16)(A) (19 U.S.C.

25 1677(16)(A)) is amended by striking ‘‘merchan-
241

1 dise which is the subject of an investigation’’

2 and inserting ‘‘subject merchandise’’.

3 (EE) Section 771(16)(B)(i) (19 U.S.C.

4 1677(16)(B)(i)) is amended by striking ‘‘mer5 chandise which is the subject of an investiga6 tion’’ and inserting ‘‘subject merchandise’’.

7 (FF) Section 771(17) (19 U.S.C.

8 1677(17)) is amended by striking ‘‘merchandise

9 which is the subject of the investigation’’ and

10 inserting ‘‘subject merchandise’’.

11 (GG) Section 771A(c) (19 U.S.C. 1677–

12 1(c)) is amended by striking ‘‘merchandise

13 under investigation’’ and inserting ‘‘subject

14 merchandise’’.

15 (6) INITIATE.—(A) Each of the following sec16 tions is amended by striking ‘‘commenced’’ and in17 serting ‘‘initiated’’:

18 (i) Section 702(a).

19 (ii) Section 702(b)(1).

20 (iii) Section 703(b)(1).

21 (iv) Section 703(c)(1).

22 (v) Section 732(a)(1).

23 (vi) Section 732(a)(2)(D).

24 (vii) Section 732(b)(1).

25 (viii) Section 733(b)(1)(A) and (B).
242

1 (ix) Section 733(b)(2).

2 (x) Section 733(c)(1).

3 (B) Sections 703(g)(1) and 733(b)(2) are each

4 amended by striking ‘‘commencement’’ and inserting

5 ‘‘initiation’’.

6 (C) Section 732(a)(2)(B) is amended by strik7 ing ‘‘commence’’ and inserting ‘‘initiate’’.

8 (7) TECHNICAL AMENDMENTS.—The table of

9 contents for title VII is amended—

10 (A) by amending the item relating to sec11 tion 772 to read as follows:

‘‘Sec. 772. Export price and constructed export price.’’;

12 (B) by striking ‘‘Foreign market value’’ in

13 the item relating to section 773 and inserting

14 ‘‘Normal value’’, and

15 (C) by inserting after the item relating to

16 section 708 the following new item:

‘‘Sec. 709. Conditional payment of countervailing duty.’’.

17 (b) OTHER CONFORMING AMENDMENTS.—

18 (1) WTO MEMBER.—Section 771(7)(F)(iii) (19

19 U.S.C. 1677(7)(F)(iii)) is amended—

20 (A) in subclause (I), by striking ‘‘GATT

21 member’’ and inserting ‘‘WTO member’’; and

22 (B) in subclause (II)—
243

1 (i) in the subclause heading, by strik2 ing ‘‘GATT MEMBER’’ and inserting

3 ‘‘WTO MEMBER’’;

4 (ii) by striking ‘‘GATT member’’ and

5 inserting ‘‘WTO member’’; and

6 (iii) by striking ‘‘signatory’’ and all

7 that follows through ‘‘measures)’’ and in8 serting ‘‘WTO member’’.

9 (2) ADMINISTERING AUTHORITY.—Section

10 771(1) (19 U.S.C. 1677(1)) is amended by striking

11 ‘‘the Treasury’’ and inserting ‘‘Commerce’’.

12 SEC. 234. APPLICATION TO CANADA AND MEXICO.

13 Pursuant to article 1902 of the North American Free

14 Trade Agreement and section 408 of the North American

15 Free Trade Agreement Implementation Act, the amend16 ments made by this title shall apply with respect to goods

17 from Canada and Mexico.

18 Subtitle B—Subsidies Provisions

19 PART 1—COUNTERVAILABLE SUBSIDIES

20 SEC. 251. COUNTERVAILABLE SUBSIDY.

21 (a) IN GENERAL.—Section 771 (19 U.S.C. 1677) is

22 amended by striking paragraph (5) and inserting the fol23 lowing:

24 ‘‘(5) COUNTERVAILABLE SUBSIDY.—
244

1 ‘‘(A) IN GENERAL.—Except as provided in

2 paragraph (5B), a countervailable subsidy is a

3 subsidy described in this paragraph which is

4 specific as described in paragraph (5A).

5 ‘‘(B) SUBSIDY DESCRIBED.—A subsidy is

6 described in this paragraph in the case in which

7 an authority—

8 ‘‘(i) provides a financial contribution,

9 ‘‘(ii) provides any form of income or

10 price support within the meaning of Article

11 XVI of the GATT 1994, or

12 ‘‘(iii) makes a payment to a funding

13 mechanism to provide a financial contribu14 tion, or entrusts or directs a private entity

15 to make a financial contribution, if provid16 ing the contribution would normally be

17 vested in the government and the practice

18 does not differ in substance from practices

19 normally followed by governments,

20 to a person and a benefit is thereby conferred.

21 For purposes of this paragraph and paragraphs

22 (5A) and (5B), the term ‘authority’ means a

23 government of a country or any public entity

24 within the territory of the country.
245

1 ‘‘(C) OTHER FACTORS.—The determina2 tion of whether a subsidy exists shall be made

3 without regard to whether the recipient of the

4 subsidy is publicly or privately owned and with5 out regard to whether the subsidy is provided

6 directly or indirectly on the manufacture, pro7 duction, or export of merchandise. The admin8 istering authority is not required to consider

9 the effect of the subsidy in determining whether

10 a subsidy exists under this paragraph.

11 ‘‘(D) FINANCIAL CONTRIBUTION.—The

12 term ‘financial contribution’ means—

13 ‘‘(i) the direct transfer of funds, such

14 as grants, loans, and equity infusions, or

15 the potential direct transfer of funds or li16 abilities, such as loan guarantees,

17 ‘‘(ii) foregoing or not collecting reve18 nue that is otherwise due, such as granting

19 tax credits or deductions from taxable in20 come,

21 ‘‘(iii) providing goods or services,

22 other than general infrastructure, or

23 ‘‘(iv) purchasing goods.
246

1 ‘‘(E) BENEFIT CONFERRED.—A benefit

2 shall normally be treated as conferred where

3 there is a benefit to the recipient, including—

4 ‘‘(i) in the case of an equity infusion,

5 if the investment decision is inconsistent

6 with the usual investment practice of pri7 vate investors, including the practice re8 garding the provision of risk capital, in the

9 country in which the equity infusion is

10 made,

11 ‘‘(ii) in the case of a loan, if there is

12 a difference between the amount the recipi13 ent of the loan pays on the loan and the

14 amount the recipient would pay on a com15 parable commercial loan that the recipient

16 could actually obtain on the market,

17 ‘‘(iii) in the case of a loan guarantee,

18 if there is a difference, after adjusting for

19 any difference in guarantee fees, between

20 the amount the recipient of the guarantee

21 pays on the guaranteed loan and the

22 amount the recipient would pay for a com23 parable commercial loan if there were no

24 guarantee by the authority, and
247

1 ‘‘(iv) in the case where goods or serv2 ices are provided, if such goods or services

3 are provided for less than adequate remu4 neration, and in the case where goods are

5 purchased, if such goods are purchased for

6 more than adequate remuneration.

7 For purposes of clause (iv), the adequacy of re8 muneration shall be determined in relation to

9 prevailing market conditions for the good or

10 service being provided or the goods being pur11 chased in the country which is subject to the in12 vestigation or review. Prevailing market condi13 tions include price, quality, availability, market14 ability, transportation, and other conditions of

15 purchase or sale.

16 ‘‘(F) CHANGE IN OWNERSHIP.—A change

17 in ownership of all or part of a foreign enter18 prise or the productive assets of a foreign enter19 prise does not by itself require a determination

20 by the administering authority that a past

21 countervailable subsidy received by the enter22 prise no longer continues to be countervailable,

23 even if the change in ownership is accomplished

24 through an arm’s length transaction.

25 ‘‘(5A) SPECIFICITY.—
248

1 ‘‘(A) IN GENERAL.—A subsidy is specific if

2 it is an export subsidy described in subpara3 graph (B) or an import substitution subsidy de4 scribed in subparagraph (C), or if it is deter5 mined to be specific pursuant to subparagraph

6 (D).

7 ‘‘(B) EXPORT SUBSIDY.—An export sub8 sidy is a subsidy that is, in law or in fact, con9 tingent upon export performance, alone or as 1

10 of 2 or more conditions.

11 ‘‘(C) IMPORT SUBSTITUTION SUBSIDY.—

12 An import substitution subsidy is a subsidy that

13 is contingent upon the use of domestic goods

14 over imported goods, alone or as 1 of 2 or more

15 conditions.

16 ‘‘(D) DOMESTIC SUBSIDY.—In determining

17 whether a subsidy (other than a subsidy de18 scribed in subparagraph (B) or (C)) is a spe19 cific subsidy, in law or in fact, to an enterprise

20 or industry within the jurisdiction of the au21 thority providing the subsidy, the following

22 guidelines shall apply:

23 ‘‘(i) Where the authority providing the

24 subsidy, or the legislation pursuant to

25 which the authority operates, expressly
249

1 limits access to the subsidy to an enter2 prise or industry, the subsidy is specific as

3 a matter of law.

4 ‘‘(ii) Where the authority providing

5 the subsidy, or the legislation pursuant to

6 which the authority operates, establishes

7 objective criteria or conditions governing

8 the eligibility for, and the amount of, a

9 subsidy, the subsidy is not specific as a

10 matter of law, if—

11 ‘‘(I) eligibility is automatic,

12 ‘‘(II) the criteria or conditions

13 for eligibility are strictly followed, and

14 ‘‘(III) the criteria or conditions

15 are clearly set forth in the relevant

16 statute, regulation, or other official

17 document so as to be capable of ver18 ification.

19 For purposes of this clause, the term ‘ob20 jective criteria or conditions’ means criteria

21 or conditions that are neutral and that do

22 not favor one enterprise or industry over

23 another.

24 ‘‘(iii) Where there are reasons to be25 lieve that a subsidy may be specific as a
250

1 matter of fact, the subsidy is specific if one

2 or more of the following factors exist:

3 ‘‘(I) The actual recipients of the

4 subsidy, whether considered on an en5 terprise or industry basis, are limited

6 in number.

7 ‘‘(II) An enterprise or industry is

8 a predominant user of the subsidy.

9 ‘‘(III) An enterprise or industry

10 receives a disproportionately large

11 amount of the subsidy.

12 ‘‘(IV) The manner in which the

13 authority providing the subsidy has

14 exercised discretion in the decision to

15 grant the subsidy indicates that an

16 enterprise or industry is favored over

17 others.

18 In evaluating the factors set forth in

19 subclauses (I), (II), (III), and (IV), the ad20 ministering authority shall take into ac21 count the extent of diversification of eco22 nomic activities within the jurisdiction of

23 the authority providing the subsidy, and

24 the length of time during which the sub25 sidy program has been in operation.
251

1 ‘‘(iv) Where a subsidy is limited to an

2 enterprise or industry located within a des3 ignated geographical region within the ju4 risdiction of the authority providing the

5 subsidy, the subsidy is specific.

6 For purposes of this paragraph and paragraph (5B),

7 any reference to an enterprise or industry is a ref8 erence to a foreign enterprise or foreign industry

9 and includes a group of such enterprises or indus10 tries.

11 ‘‘(5B) CATEGORIES OF NONCOUNTERVAILABLE

12 SUBSIDIES.—

13 ‘‘(A) IN GENERAL.—Notwithstanding the

14 provisions of paragraphs (5) and (5A), in the

15 case of merchandise imported from a Subsidies

16 Agreement country, a subsidy shall be treated

17 as noncountervailable if the administering au18 thority determines in an investigation under

19 subtitle A or a review under subtitle C that the

20 subsidy meets all of the criteria described in

21 subparagraph (B), (C), or (D), as the case may

22 be, or the provisions of subparagraph (E)(i)

23 apply.

24 ‘‘(B) RESEARCH SUBSIDY.—
252

1 ‘‘(i) IN GENERAL.—Except for a sub2 sidy provided on the manufacture, produc3 tion, or export of civil aircraft, a subsidy

4 for research activities conducted by a per5 son, or by a higher education or research

6 establishment on a contract basis with a

7 person, shall be treated as

8 noncountervailable, if the subsidy covers

9 not more than 75 percent of the costs of

10 industrial research or not more than 50

11 percent of the costs of precompetitive de12 velopment activity, and such subsidy is

13 limited exclusively to—

14 ‘‘(I) the costs of researchers,

15 technicians, and other supporting

16 staff employed exclusively in the re17 search activity,

18 ‘‘(II) the costs of instruments,

19 equipment, land, or buildings that are

20 used exclusively and permanently (ex21 cept when disposed of on a commer22 cial basis) for the research activity,

23 ‘‘(III) the costs of consultancy

24 and equivalent services used exclu25 sively for the research activity, includ-
253

1 ing costs for bought-in research, tech2 nical knowledge, and patents,

3 ‘‘(IV) additional overhead costs

4 incurred directly as a result of the re5 search activity, and

6 ‘‘(V) other operating costs (such

7 as materials and supplies) incurred di8 rectly as a result of the research activ9 ity.

10 ‘‘(ii) DEFINITIONS.—For purposes of

11 this subparagraph—

12 ‘‘(I) INDUSTRIAL RESEARCH.—

13 The term ‘industrial research’ means

14 planned search or critical investiga15 tion aimed at the discovery of new

16 knowledge, with the objective that

17 such knowledge may be useful in de18 veloping new products, processes, or

19 services, or in bringing about a sig20 nificant improvement to existing prod21 ucts, processes, or services.

22 ‘‘(II) PRECOMPETITIVE DEVEL23 OPMENT ACTIVITY.—The term

24 ‘precompetitive development activity’

25 means the translation of industrial re-
254

1 search findings into a plan, blueprint,

2 or design for new, modified, or im3 proved products, processes, or serv4 ices, whether intended for sale or use,

5 including the creation of a first proto6 type that would not be capable of

7 commercial use. The term also may

8 include the conceptual formulation

9 and design of products, processes, or

10 services alternatives and initial dem11 onstration or pilot projects, if these

12 same projects cannot be converted or

13 used for industrial application or com14 mercial exploitation. The term does

15 not include routine or periodic alter16 ations to existing products, production

17 lines, manufacturing processes, serv18 ices, or other ongoing operations even

19 if those alterations may represent im20 provements.

21 ‘‘(iii) CALCULATION RULES.—

22 ‘‘(I) IN GENERAL.—In the case

23 of a research activity that spans both

24 industrial research and precompetitive

25 development activity, the allowable
255

1 level of the noncountervailable subsidy

2 shall not exceed 62.5 percent of the

3 costs set forth in subclauses (I), (II),

4 (III), (IV), and (V) of clause (i).

5 ‘‘(II) TOTAL ELIGIBLE COSTS.—

6 The allowable level of a

7 noncountervailable subsidy described

8 in clause (i) shall be based on the

9 total eligible costs incurred over the

10 duration of a particular project.

11 ‘‘(C) SUBSIDY TO DISADVANTAGED RE12 GIONS.—

13 ‘‘(i) IN GENERAL.—A subsidy pro14 vided, pursuant to a general framework of

15 regional development, to a person located

16 in a disadvantaged region within a country

17 shall be treated as noncountervailable, if it

18 is not specific (within the meaning of para19 graph (5A)) within eligible regions and if

20 the following conditions are met:

21 ‘‘(I) Each region identified as

22 disadvantaged within the territory of

23 a country is a clearly designated, con24 tiguous geographical area with a de-
256

1 finable economic and administrative

2 identity.

3 ‘‘(II) Each region is considered a

4 disadvantaged region on the basis of

5 neutral and objective criteria indicat6 ing that the region is disadvantaged

7 because of more than temporary cir8 cumstances, and such criteria are

9 clearly stated in the relevant statute,

10 regulation, or other official document

11 so as to be capable of verification.

12 ‘‘(III) The criteria described in

13 subclause (II) include a measurement

14 of economic development.

15 ‘‘(IV) Programs provided within

16 a general framework of regional devel17 opment include ceilings on the amount

18 of assistance that can be granted to a

19 subsidized project. Such ceilings are

20 differentiated according to the dif21 ferent levels of development of as22 sisted regions, and are expressed in

23 terms of investment costs or costs of

24 job creation. Within such ceilings, the

25 distribution of assistance is suffi-
257

1 ciently broad and even to avoid the

2 predominant use of a subsidy by, or

3 the provision of disproportionately

4 large amounts of a subsidy to, an en5 terprise or industry as described in

6 paragraph (5A)(D).

7 ‘‘(ii) MEASUREMENT OF ECONOMIC

8 DEVELOPMENT.—For purposes of clause

9 (i), the measurement of economic develop10 ment shall be based on one or more of the

11 following factors:

12 ‘‘(I) Per capita income, house13 hold per capita income, or per capita

14 gross domestic product that does not

15 exceed 85 percent of the average for

16 the country subject to investigation or

17 review.

18 ‘‘(II) An unemployment rate that

19 is at least 110 percent of the average

20 unemployment rate for the country

21 subject to investigation or review.

22 The measurement of economic development

23 shall cover a 3-year period, but may be a

24 composite measurement and may include
258

1 factors other than those set forth in this

2 clause.

3 ‘‘(iii) DEFINITIONS.—For purposes of

4 this subparagraph—

5 ‘‘(I) GENERAL FRAMEWORK OF

6 REGIONAL DEVELOPMENT.—The term

7 ‘general framework of regional devel8 opment’ means that the regional sub9 sidy programs are part of an inter10 nally consistent and generally applica11 ble regional development policy, and

12 that regional development subsidies

13 are not granted in isolated geographi14 cal points having no, or virtually no,

15 influence on the development of a re16 gion.

17 ‘‘(II) NEUTRAL AND OBJECTIVE

18 CRITERIA.—The term ‘neutral and ob19 jective criteria’ means criteria that do

20 not favor certain regions beyond what

21 is appropriate for the elimination or

22 reduction of regional disparities within

23 the framework of the regional develop24 ment policy.
259

1 ‘‘(D) SUBSIDY FOR ADAPTATION OF EXIST2 ING FACILITIES TO NEW ENVIRONMENTAL RE3 QUIREMENTS.—

4 ‘‘(i) IN GENERAL.—A subsidy that is

5 provided to promote the adaptation of ex6 isting facilities to new environmental re7 quirements that are imposed by statute or

8 by regulation, and that result in greater

9 constraints and financial burdens on the

10 recipient of the subsidy, shall be treated as

11 noncountervailable, if the subsidy—

12 ‘‘(I) is a one-time nonrecurring

13 measure,

14 ‘‘(II) is limited to 20 percent of

15 the cost of adaptation,

16 ‘‘(III) does not cover the cost of

17 replacing and operating the subsidized

18 investment, a cost that must be fully

19 borne by the recipient,

20 ‘‘(IV) is directly linked and pro21 portionate to the recipient’s planned

22 reduction of nuisances and pollution,

23 and does not cover any manufacturing

24 cost savings that may be achieved,

25 and
260

1 ‘‘(V) is available to all persons

2 that can adopt the new equipment or

3 production processes.

4 ‘‘(ii) EXISTING FACILITIES.—For pur5 poses of this subparagraph, the term ‘ex6 isting facilities’ means facilities that have

7 been in operation for at least 2 years be8 fore the date on which the new environ9 mental requirements are imposed.

10 ‘‘(E) NOTIFIED SUBSIDY PROGRAM.—

11 ‘‘(i) GENERAL RULE.—If a subsidy is

12 provided pursuant to a program that has

13 been notified in accordance with Article

14 8.3 of the Subsidies Agreement, the sub15 sidy shall be treated as noncountervailable

16 and shall not be subject to investigation or

17 review under this title.

18 ‘‘(ii) EXCEPTION.—Notwithstanding

19 clause (i), a subsidy shall be treated as

20 countervailable if—

21 ‘‘(I) the Trade Representative

22 notifies the administering authority

23 that a determination has been made

24 pursuant to Article 8.4 or 8.5 of the

25 Subsidies Agreement that the subsidy,
261

1 or the program pursuant to which the

2 subsidy was provided, does not satisfy

3 the conditions and criteria of Article

4 8.2 of the Subsidies Agreement; and

5 ‘‘(II) the subsidy is specific with6 in the meaning of paragraph (5A).

7 ‘‘(F) CERTAIN SUBSIDIES ON AGRICUL8 TURAL PRODUCTS.—Domestic support meas9 ures that are provided with respect to products

10 listed in Annex 1 to the Agreement on Agri11 culture, and that the administering authority

12 determines conform fully to the provisions of

13 Annex 2 to that Agreement, shall be treated as

14 noncountervailable. Upon request by the admin15 istering authority, the Trade Representative

16 shall provide advice regarding the interpretation

17 and application of Annex 2.

18 ‘‘(G) PROVISIONAL APPLICATION.—

19 ‘‘(i) Subparagraphs (B), (C), (D), and

20 (E) shall not apply on or after the first

21 day of the month that is 66 months after

22 the WTO Agreement enters into force, un23 less the provisions of such subparagraphs

24 are extended pursuant to section 282(c) of

25 the Uruguay Round Agreements Act.
262

1 ‘‘(ii) Subparagraph (F) shall not

2 apply to imports from a WTO member

3 country at the end of the 9-year period be4 ginning on January 1, 1995. The Trade

5 Representative shall determine the precise

6 termination date for each WTO member

7 country in accordance with paragraph (i)

8 of Article 1 of the Agreement on Agri9 culture and such date shall be notified to

10 the administering authority.’’.

11 (b) NET COUNTERVAILABLE SUBSIDY.—Section

12 771(6) (19 U.S.C. 1677(6)) is amended by inserting

13 ‘‘countervailable’’ before ‘‘subsidy’’ each place it appears

14 in the text and in the heading.

15 PART 2—REPEAL OF SECTION 303 AND

16 CONFORMING AMENDMENTS

17 SEC. 261. REPEAL OF SECTION 303.

18 (a) IN GENERAL.—Section 303 of the Tariff Act of

19 1930 (19 U.S.C. 1303) is repealed effective on the effec20 tive date of this title.

21 (b) SAVINGS PROVISIONS.—

22 (1) CONTINUING EFFECT OF LEGAL DOCU23 MENTS.—All orders, determinations, and other ad24 ministrative actions—
263

1 (A) which have been issued pursuant to an

2 investigation conducted under section 303 of

3 the Tariff Act of 1930, and

4 (B) which are in effect on the effective

5 date of this title, or were final before such date

6 and are to become effective on or after such

7 date,

8 shall continue in effect according to their terms until

9 modified, terminated, superseded, set aside, or re10 voked in accordance with law by the administering

11 authority, the International Trade Commission, or a

12 court of competent jurisdiction, or by operation of

13 law. Except as provided in paragraph (3), such or14 ders or determinations shall be subject to review

15 under section 751 of the Tariff Act of 1930 and, to

16 the extent applicable, investigation under section

17 753 of such Act (as added by this title).

18 (2) PROCEEDINGS NOT AFFECTED.—The provi19 sions of subsection (a) shall not affect any proceed20 ings, including notices of proposed rulemaking,

21 pending before the administering authority or the

22 International Trade Commission on the effective

23 date of this title with respect to such section 303.

24 Orders shall be issued in such proceedings, appeals

25 shall be taken therefrom, and payments shall be
264

1 made pursuant to such orders, in accordance with

2 such section 303 as in effect on the day before the

3 effective date of this title and, except as provided in

4 paragraph (3), shall be subject to review under sec5 tion 751 of the Tariff Act of 1930 and, to the extent

6 applicable, investigation under section 753 of such

7 Act. Orders issued in any such proceedings shall

8 continue in effect until modified, terminated, super9 seded, set aside, or revoked in accordance with law

10 by the administering authority, a court of competent

11 jurisdiction, or by operation of law. Nothing in this

12 section shall be deemed to prohibit the discontinu13 ance or modification of any such proceeding under

14 the same terms and conditions and to the same ex15 tent that such proceeding could have been discon16 tinued or modified if this section had not been en17 acted.

18 (3) SUITS NOT AFFECTED.—The provisions of

19 subsection (a) shall not affect the review pursuant to

20 section 516A of the Tariff Act of 1930 of a counter21 vailing duty order issued pursuant to an investiga22 tion conducted under section 303 of such Act or a

23 review of a countervailing duty order issued under

24 section 751 of such Act, if such review is pending
265

1 or the time for filing such review has not expired on

2 the effective date of this title.

3 (c) DEFINITION OF ADMINISTERING AUTHORITY.—

4 For purposes of this section, the term ‘‘administering au5 thority’’ has the meaning given such term by section

6 771(1) of the Tariff Act of 1930.

7 (d) CONFORMING AMENDMENTS.—

8 (1) IN GENERAL.—

9 (A) AMENDMENTS TO TRADE ACT OF

10 1974.—

11 (i) Section 331(d)(3) of the Trade Act

12 of 1974 (19 U.S.C. 1303 note) is repealed.

13 (ii) Section 152(a)(2) of the Trade

14 Act of 1974 (19 U.S.C. 2192(a)(2)) is

15 amended by striking ‘‘(A) in the case of’’

16 and all that follows through ‘‘(B)’’.

17 (iii) Section 154(a) of the Trade Act

18 of 1974 (19 U.S.C. 2194(a)) is amended

19 by striking ‘‘or section 303(e) of the Tariff

20 Act of 1930,’’.

21 (B) AMENDMENTS TO TARIFF ACT OF

22 1930.—The following sections of the Tariff Act

23 of 1930 are amended:

24 (i) Section 315(d) (19 U.S.C.

25 1315(d)) is amended by inserting ‘‘(as in
266

1 effect on the day before the effective date

2 of title II of the Uruguay Round Agree3 ments Act) or section 701’’ after ‘‘section

4 303’’.

5 (ii) Section 337(b)(3) (19 U.S.C.

6 1337(b)(3)) is amended—

7 (I) by striking ‘‘of section 303 or

8 subtitle B of title VII of the Tariff

9 Act of 1930’’ and inserting ‘‘of sub10 title B of title VII of this Act’’,

11 (II) by striking ‘‘section 303,

12 671, or 673’’ and inserting ‘‘section

13 701 or 731’’,

14 (III) by striking ‘‘section 303,

15 701,’’ and inserting ‘‘section 701’’,

16 (IV) by striking ‘‘of the Secretary

17 under section 303 of this Act or’’, and

18 (V) by striking ‘‘matter within

19 such section 303, 701, or’’ and insert20 ing ‘‘matter within such section 701

21 or’’.

22 (iii) Section 701 (19 U.S.C. 1671) is

23 amended by striking subsection (f).
267

1 (iv) Section 780(c)(1) (19 U.S.C.

2 1677i(c)(1)) is amended by striking ‘‘,

3 732(a), or 303’’ and inserting ‘‘or 732(a)’’.

4 (C) OTHER REFERENCES.—Any reference

5 to section 303 in any other Federal law, Execu6 tive order, rule, or regulation shall be treated as

7 a reference to section 303 of the Tariff Act of

8 1930 as in effect on the day before the effective

9 date of title II of this Act.

10 (2) EFFECTIVE DATE.—The amendments made

11 by this subsection shall take effect on the effective

12 date of this title.

13 SEC. 262. IMPOSITION OF COUNTERVAILING DUTIES.

14 Section 701 (a), (b), and (c) (19 U.S.C. 1671 (a),

15 (b), and (c)) are amended to read as follows:

16 ‘‘(a) GENERAL RULE.—If—

17 ‘‘(1) the administering authority determines

18 that the government of a country or any public en19 tity within the territory of a country is providing, di20 rectly or indirectly, a countervailable subsidy with

21 respect to the manufacture, production, or export of

22 a class or kind of merchandise imported, or sold (or

23 likely to be sold) for importation, into the United

24 States, and
268

1 ‘‘(2) in the case of merchandise imported from

2 a Subsidies Agreement country, the Commission de3 termines that—

4 ‘‘(A) an industry in the United States—

5 ‘‘(i) is materially injured, or

6 ‘‘(ii) is threatened with material in7 jury, or

8 ‘‘(B) the establishment of an industry in

9 the United States is materially retarded,

10 by reason of imports of that merchandise or by rea11 son of sales (or the likelihood of sales) of that mer12 chandise for importation,

13 then there shall be imposed upon such merchandise a

14 countervailing duty, in addition to any other duty imposed,

15 equal to the amount of the net countervailable subsidy.

16 For purposes of this subsection and section 705(b)(1), a

17 reference to the sale of merchandise includes the entering

18 into of any leasing arrangement regarding the merchan19 dise that is equivalent to the sale of the merchandise.

20 ‘‘(b) SUBSIDIES AGREEMENT COUNTRY.—For pur21 poses of this title, the term ‘Subsidies Agreement country’

22 means—

23 ‘‘(1) a WTO member country,

24 ‘‘(2) a country which the President has deter25 mined has assumed obligations with respect to the
269

1 United States which are substantially equivalent to

2 the obligations under the Subsidies Agreement, or

3 ‘‘(3) a country with respect to which the Presi4 dent determines that—

5 ‘‘(A) there is an agreement in effect be6 tween the United States and that country

7 which—

8 ‘‘(i) was in force on the date of the

9 enactment of the Uruguay Round Agree10 ments Act, and

11 ‘‘(ii) requires unconditional most-fa12 vored-nation treatment with respect to ar13 ticles imported into the United States, and

14 ‘‘(B) the agreement described in subpara15 graph (A) does not expressly permit—

16 ‘‘(i) actions required or permitted by

17 the GATT 1947 or GATT 1994, as de18 fined in section 2(1) of the Uruguay

19 Round Agreements Act, or required by the

20 Congress, or

21 ‘‘(ii) nondiscriminatory prohibitions or

22 restrictions on importation which are de23 signed to prevent deceptive or unfair prac24 tices.
270

1 ‘‘(c) COUNTERVAILING DUTY INVESTIGATIONS IN2 VOLVING IMPORTS NOT ENTITLED TO A MATERIAL IN3 JURY DETERMINATION.—In the case of any article or

4 merchandise imported from a country which is not a Sub5 sidies Agreement country—

6 ‘‘(1) no determination by the Commission under

7 section 703(a), 704, or 705(b) shall be required,

8 ‘‘(2) an investigation may not be suspended

9 under section 704(c) or 704(l),

10 ‘‘(3) no determination as to the presence of

11 critical circumstances shall be made under section

12 703(e) or 705(a)(2),

13 ‘‘(4) section 706(c) shall not apply,

14 ‘‘(5) any reference to a determination described

15 in paragraph (1) or (3), or to the suspension of an

16 investigation under section 704(c) or 704(l), shall be

17 disregarded, and

18 ‘‘(6) section 751(c) shall not apply.’’.

19 SEC. 263. DE MINIMIS COUNTERVAILABLE SUBSIDY.

20 (a) PRELIMINARY DETERMINATIONS.—Section

21 703(b) (19 U.S.C. 1671b(b)) is amended by adding at the

22 end the following new paragraph:

23 ‘‘(4) DE MINIMIS COUNTERVAILABLE SUB24 SIDY.—
271

1 ‘‘(A) GENERAL RULE.—In making a deter2 mination under this subsection, the administer3 ing authority shall disregard any de minimis

4 countervailable subsidy. For purposes of the

5 preceding sentence, a countervailable subsidy is

6 de minimis if the administering authority deter7 mines that the aggregate of the net

8 countervailable subsidies is less than 1 percent

9 ad valorem or the equivalent specific rate for

10 the subject merchandise.

11 ‘‘(B) EXCEPTION FOR DEVELOPING COUN12 TRIES.—In the case of subject merchandise im13 ported from a Subsidies Agreement country

14 (other than a country to which subparagraph

15 (C) applies) designated by the Trade Represent16 ative as a developing country in accordance

17 with section 771(36), a countervailable subsidy

18 is de minimis if the administering authority de19 termines that the aggregate of the net

20 countervailable subsidies does not exceed 2 per21 cent ad valorem or the equivalent specific rate

22 for the subject merchandise.

23 ‘‘(C) CERTAIN OTHER DEVELOPING COUN24 TRIES.—In the case of subject merchandise im-
272

1 ported from a Subsidies Agreement country

2 that is—

3 ‘‘(i) a least developed country, as de4 termined by the Trade Representative in

5 accordance with section 771(36), or

6 ‘‘(ii) a developing country with respect

7 to which the Trade Representative has no8 tified the administering authority that the

9 country has eliminated its export subsidies

10 on an expedited basis within the meaning

11 of Article 27.11 of the Subsidies Agree12 ment,

13 subparagraph (B) shall be applied by substitut14 ing ‘3 percent’ for ‘2 percent’.

15 ‘‘(D) LIMITATIONS ON APPLICATION OF

16 SUBPARAGRAPH (C).—

17 ‘‘(i) IN GENERAL.—In the case of a

18 country described in subparagraph (C)(i),

19 the provisions of subparagraph (C) shall

20 not apply after the date that is 8 years

21 after the date the WTO Agreement enters

22 into force.

23 ‘‘(ii) SPECIAL RULE FOR SUBPARA24 GRAPH (C)(ii) COUNTRIES.—In the case of

25 a country described in subparagraph
273

1 (C)(ii), the provisions of subparagraph (C)

2 shall not apply after the earlier of—

3 ‘‘(I) the date that is 8 years after

4 the date the WTO Agreement enters

5 into force, or

6 ‘‘(II) the date on which the

7 Trade Representative notifies the ad8 ministering authority that such coun9 try is providing an export subsidy.’’.

10 (b) FINAL DETERMINATIONS.—Section 705(a) (19

11 U.S.C. 1671d(a)) is amended by adding at the end the

12 following new paragraph:

13 ‘‘(3) DE MINIMIS COUNTERVAILABLE SUB14 SIDY.—In making a determination under this sub15 section, the administering authority shall disregard

16 any countervailable subsidy that is de minimis as de17 fined in section 703(b)(4).’’.

18 SEC. 264. DETERMINATION OF COUNTERVAILABLE SUB19 SIDY RATE.

20 (a) PRELIMINARY DETERMINATION.—Section 703(d)

21 (19 U.S.C. 1673b(d)) is amended—

22 (1) by striking paragraph (2);

23 (2) by redesignating paragraph (1), as amended

24 by section 215(a)(1), as paragraph (2);
274

1 (3) by inserting ‘‘and’’ at the end of paragraph

2 (2), as so redesignated; and

3 (4) by inserting before such paragraph (2) the

4 following new paragraph:

5 ‘‘(1)(A) shall—

6 ‘‘(i) determine an estimated individual

7 countervailable subsidy rate for each exporter

8 and producer individually investigated, and, in

9 accordance with section 705(c)(5), an estimated

10 all-others rate for all exporters and producers

11 not individually investigated and for new ex12 porters and producers within the meaning of

13 section 751(a)(2)(B), or

14 ‘‘(ii) if section 777A(e)(2)(B) applies, de15 termine a single estimated country-wide subsidy

16 rate, applicable to all exporters and producers,

17 and

18 ‘‘(B) shall order the posting of a cash deposit,

19 bond, or other security, as the administering author20 ity deems appropriate, for each entry of the subject

21 merchandise in an amount based on the estimated

22 individual countervailable subsidy rate, the estimated

23 all-others rate, or the estimated country-wide sub24 sidy rate, whichever is applicable,’’.

25 (b) FINAL DETERMINATION.—
275

1 (1) IN GENERAL.—Section 705(c)(1) (19

2 U.S.C. 1671d(c)(1)) is amended—

3 (A) in subparagraph (B)—

4 (i) by redesignating such subpara5 graph as subparagraph (C); and

6 (ii) by striking ‘‘under paragraphs (1)

7 and (2)’’ and all that follows through ‘‘se8 curity’’ and inserting ‘‘the suspension of

9 liquidation under paragraph (2) of section

10 703(d)’’;

11 (B) by striking ‘‘and’’ at the end of sub12 paragraph (A); and

13 (C) by inserting after subparagraph (A)

14 the following new subparagraph:

15 ‘‘(B)(i) the administering authority shall—

16 ‘‘(I) determine an estimated individual

17 countervailable subsidy rate for each ex18 porter and producer individually inves19 tigated, and, in accordance with paragraph

20 (5), an estimated all-others rate for all ex21 porters and producers not individually in22 vestigated and for new exporters and pro23 ducers within the meaning of section

24 751(a)(2)(B), or
276

1 ‘‘(II) if 777A(e)(2)(B) applies, deter2 mine a single estimated country-wide sub3 sidy rate, applicable to all exporters and

4 producers,

5 ‘‘(ii) shall order the posting of a cash de6 posit, bond, or other security, as the admin7 istering authority deems appropriate, for each

8 entry of the subject merchandise in an amount

9 based on the estimated individual

10 countervailable subsidy rate, the estimated all11 others rate, or the estimated country-wide sub12 sidy rate, whichever is applicable, and’’.

13 (2) METHOD FOR DETERMINING

14 COUNTERVAILABLE SUBSIDY RATE.—Section 705(c)

15 (19 U.S.C. 1671d(c)) is amended by adding at the

16 end the following new paragraph:

17 ‘‘(5) METHOD FOR DETERMINING THE ALL18 OTHERS RATE AND THE COUNTRY-WIDE SUBSIDY

19 RATE.—

20 ‘‘(A) ALL-OTHERS RATE.—

21 ‘‘(i) GENERAL RULE.—For purposes

22 of this subsection and section 703(d), the

23 all-others rate shall be an amount equal to

24 the weighted average countervailable sub25 sidy rates established for exporters and
277

1 producers individually investigated, exclud2 ing any zero and de minimis

3 countervailable subsidy rates, and any

4 rates determined entirely under section

5 776.

6 ‘‘(ii) EXCEPTION.—If the

7 countervailable subsidy rates established

8 for all exporters and producers individually

9 investigated are zero or de minimis rates,

10 or are determined entirely under section

11 776, the administering authority may use

12 any reasonable method to establish an all13 others rate for exporters and producers not

14 individually investigated, including averag15 ing the weighted average countervailable

16 subsidy rates determined for the exporters

17 and producers individually investigated.

18 ‘‘(B) COUNTRY-WIDE SUBSIDY RATE.—The

19 administering authority may calculate a single

20 country-wide subsidy rate, applicable to all ex21 porters and producers, if the administering au22 thority limits its examination pursuant to sec23 tion 777A(e)(2)(B). The estimated country-wide

24 rate determined under section 703(d)(1)(A)(ii)

25 or paragraph (1)(B)(i)(II) of this subsection
278

1 shall be based on industry-wide data regarding

2 the use of subsidies determined to be

3 countervailable.’’.

4 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

5 (1) Section 703(b)(2) is amended—

6 (A) by striking ‘‘subsection (b)(1)’’ and in7 serting ‘‘paragraph (1)’’,

8 (B) by striking ‘‘subsection 702(b)(3)’’ and

9 inserting ‘‘section 702(b)(3)’’,

10 (C) by striking ‘‘subsection 703(b)(1)’’ and

11 inserting ‘‘paragraph (1)’’, and

12 (D) by striking ‘‘section 703(c)’’ and in13 serting ‘‘subsection (c) of this section’’.

14 (2) Section 703(e)(2) is amended by striking

15 ‘‘subsection (d)(1)’’ and inserting ‘‘subsection

16 (d)(2)’’.

17 (3) Section 704(f)(2)(A) is amended—

18 (A) in clause (i), by striking ‘‘section

19 703(d)(1)’’ and inserting ‘‘section 703(d)(2)’’;

20 and

21 (B) in clause (iii), by striking ‘‘section

22 703(d)(1)’’ and inserting ‘‘section

23 703(d)(1)(B)’’.

24 (4) Section 704(f)(2)(B) is amended—
279

1 (A) by striking ‘‘section 703(d)(1)’’ and in2 serting ‘‘section 703(d)(2)’’; and

3 (B) by striking ‘‘section 703(d)(2)’’ and

4 inserting ‘‘section 703(d)(1)(B)’’.

5 (5) Section 704(h)(3) is amended—

6 (A) in subparagraph (A), by striking ‘‘sec7 tion 703(d)(1)’’ and inserting ‘‘section

8 703(d)(2)’’; and

9 (B) in subparagraph (B), by striking ‘‘sec10 tion 703(d)(2)’’ and inserting ‘‘section

11 703(d)(1)(B)’’.

12 (6) Section 704(i)(1)(A) is amended by striking

13 ‘‘section 703(d)(1)’’ and inserting ‘‘section

14 703(d)(2)’’.

15 (7) Section 705(c)(2) is amended—

16 (A) in subparagraph (A), by striking ‘‘sec17 tion 703(d)(1)’’ and inserting ‘‘section

18 703(d)(2)’’; and

19 (B) in subparagraph (B), by striking ‘‘sec20 tion 703(d)(2)’’ and inserting ‘‘section

21 703(d)(1)(B)’’.

22 (8) Section 705(c)(3)(B) is amended by striking

23 ‘‘section 703(d)(2)’’ and inserting ‘‘section

24 703(d)(1)(B)’’.
280

1 (9) Section 706(b)(1) is amended by striking

2 ‘‘section 703(d)(1)’’ each place it appears and in3 serting ‘‘section 703(d)(2)’’.

4 (10) Section 707(a) is amended—

5 (A) by striking ‘‘section 703(d)(2)’’ and in6 serting ‘‘section 703(d)(1)(B)’’, and

7 (B) by striking ‘‘Section 703(d)(2)’’ in the

8 heading and inserting ‘‘Section 703(d)(1)(B)’’.

9 (11) Section 708 is amended by striking ‘‘sec10 tion 703(d)(2)’’ and inserting ‘‘section

11 703(d)(1)(B)’’.

12 SEC. 265. ASSESSMENT OF COUNTERVAILING DUTY.

13 Section 706(a) (19 U.S.C. 1671e(a)) is amended—

14 (1) by striking paragraph (2); and

15 (2) by redesignating paragraphs (3) and (4) as

16 paragraphs (2) and (3), respectively.

17 SEC. 266. NATURE OF COUNTERVAILABLE SUBSIDY.

18 Section 771(7)(E)(i) (19 U.S.C. 1677(7)(E)(i)) is

19 amended to read as follows:

20 ‘‘(i) NATURE OF COUNTERVAILABLE

21 SUBSIDY.—In determining whether there is

22 a threat of material injury, the Commis23 sion shall consider information provided to

24 it by the administering authority regarding

25 the nature of the countervailable subsidy
281

1 granted by a foreign country (particularly

2 whether the countervailable subsidy is a

3 subsidy described in Article 3 or 6.1 of the

4 Subsidies Agreement) and the effects likely

5 to be caused by the countervailable sub6 sidy.’’.

7 SEC. 267. DEFINITION OF DEVELOPING AND LEAST-DEVEL8 OPED COUNTRY.

9 Section 771 (19 U.S.C. 1677), as amended, is

10 amended by adding at the end the following new para11 graph:

12 ‘‘(36) DEVELOPING AND LEAST DEVELOPED

13 COUNTRY.—

14 ‘‘(A) DEVELOPING COUNTRY.—The term

15 ‘developing country’ means a country des16 ignated as a developing country by the Trade

17 Representative.

18 ‘‘(B) LEAST DEVELOPED COUNTRY.—The

19 term ‘least developed country’ means a country

20 which the Trade Representative determines is—

21 ‘‘(i) a country referred to as a least

22 developed country within the meaning of

23 paragraph (a) of Annex VII to the Sub24 sidies Agreement, or
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1 ‘‘(ii) any other country listed in Annex

2 VII to the Subsidies Agreement, but only

3 if the country has a per capita gross na4 tional product of less than $1,000 per

5 annum as measured by the most recent

6 data available from the World Bank.

7 ‘‘(C) PUBLICATION OF LIST.—The Trade

8 Representative shall publish in the Federal Reg9 ister, and update as necessary, a list of—

10 ‘‘(i) developing countries that have

11 eliminated their export subsidies on an ex12 pedited basis within the meaning of Article

13 27.11 of the Subsidies Agreement, and

14 ‘‘(ii) countries determined by the

15 Trade Representative to be least developed

16 or developing countries.

17 ‘‘(D) FACTORS TO CONSIDER.—In deter18 mining whether a country is a developing coun19 try under subparagraph (A), the Trade Rep20 resentative shall consider such economic, trade,

21 and other factors which the Trade Representa22 tive considers appropriate, including the level of

23 economic development of such country (the as24 sessment of which shall include a review of the
283

1 country’s per capita gross national product)

2 and the country’s share of world trade.

3 ‘‘(E) LIMITATION ON DESIGNATION.—A

4 determination that a country is a developing or

5 least developed country pursuant to this para6 graph shall be for purposes of this title only

7 and shall not affect the determination of a

8 country’s status as a developing or least devel9 oped country with respect to any other law.’’.

10 SEC. 268. UPSTREAM SUBSIDIES.

11 Section 771A(a) (19 U.S.C. 1677–1(a)) is amend12 ed—

13 (1) by striking the matter preceding paragraph

14 (1) and paragraph (1) and inserting the following:

15 ‘‘(a) DEFINITION.—The term ‘upstream subsidy’

16 means any countervailable subsidy, other than an export

17 subsidy, that—

18 ‘‘(1) is paid or bestowed by an authority (as de19 fined in section 771(5)) with respect to a product

20 (hereafter in this section referred to as an ‘input

21 product’) that is used in the same country as the au22 thority in the manufacture or production of mer23 chandise which is the subject of a countervailing

24 duty proceeding;’’, and
284

1 (2) in the flush sentence at the end thereof, by

2 inserting ‘‘countervailable’’ before ‘‘subsidy’’.

3 SEC. 269. DETERMINATION OF COUNTERVAILABLE SUB4 SIDY RATE.

5 (a) IN GENERAL.—Section 777A (19 U.S.C. 1677f–

6 1), as amended by section 229, is amended by adding at

7 the end the following new subsection:

8 ‘‘(e) DETERMINATION OF COUNTERVAILABLE SUB9 SIDY RATE.—

10 ‘‘(1) GENERAL RULE.—In determining

11 countervailable subsidy rates under section 703(d),

12 705(c), or 751(a), the administering authority shall

13 determine an individual countervailable subsidy rate

14 for each known exporter or producer of the subject

15 merchandise.

16 ‘‘(2) EXCEPTION.—If the administering author17 ity determines that it is not practicable to determine

18 individual countervailable subsidy rates under para19 graph (1) because of the large number of exporters

20 or producers involved in the investigation or review,

21 the administering authority may—

22 ‘‘(A) determine individual countervailable

23 subsidy rates for a reasonable number of ex24 porters or producers by limiting its examination

25 to—
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1 ‘‘(i) a sample of exporters or produc2 ers that the administering authority deter3 mines is statistically valid based on the in4 formation available to the administering

5 authority at the time of selection, or

6 ‘‘(ii) exporters and producers account7 ing for the largest volume of the subject

8 merchandise from the exporting country

9 that the administering authority deter10 mines can be reasonably examined; or

11 ‘‘(B) determine a single country-wide sub12 sidy rate to be applied to all exporters and pro13 ducers.

14 The individual countervailable subsidy rates deter15 mined under subparagraph (A) shall be used to de16 termine the all-others rate under section 705(c)(5).’’.

17 (b) CONFORMING AMENDMENTS.—

18 (1) The heading for section 777A, as amended

19 by section 229, is amended by inserting ‘‘AND

20 COUNTERVAILABLE SUBSIDY RATE’’ after

21 ‘‘MARGIN’’.

22 (2) The table of contents for title VII is amend23 ed by inserting ‘‘; determination of weighted average

24 dumping margin and countervailable subsidy rate’’
286

1 after ‘‘averaging’’ in the item relating to section

2 777A.

3 SEC. 270. CONFORMING AMENDMENTS.

4 (a) COUNTERVAILABLE SUBSIDY.—

5 (1) Except as provided in paragraph (2), each

6 of the following sections is amended by striking

7 ‘‘subsidy’’ each place it appears in the text and in

8 the heading and inserting ‘‘countervailable subsidy’’:

9 (A) Section 702(e) (19 U.S.C. 1671a(e)).

10 (B) Section 703(b)(1) (19 U.S.C.

11 1671b(b)(1)).

12 (C) Section 703(b)(2) (19 U.S.C.

13 1671b(b)(2)).

14 (D) Section 703(c)(1)(B)(i)(I) (19 U.S.C.

15 1671b(c)(1)(B)(i)(I)).

16 (E) Section 704 (19 U.S.C. 1671c).

17 (F) Section 705(a)(1) (19 U.S.C.

18 1671d(a)(1)).

19 (G) Section 705(a)(2) (19 U.S.C.

20 1671d(a)(2)).

21 (H) Section 706(a)(1) (19 U.S.C.

22 1671e(a)(1)).

23 (I) Section 761 (19 U.S.C. 1676).

24 (J) Section 762 (19 U.S.C. 1676a).
287

1 (K) Section 771A(b) (19 U.S.C. 1677–

2 1(b)).

3 (L) Section 771A(c) (19 U.S.C. 1677–

4 1(c)).

5 (M) Section 780(d)(1)(A)(ii) (19 U.S.C.

6 1677i(d)(1)(A)(ii)).

7 (N) Section 516A(a)(2)(B)(iv) (19 U.S.C.

8 1516a(a)(2)(B)(iv)).

9 (2)(A) The heading for section 704(b) (19

10 U.S.C. 1671c(b)) is amended by striking ‘‘Subsidy’’

11 and inserting ‘‘Countervailable Subsidy’’.

12 (B) The heading for section 771(A)(c) (19

13 U.S.C. 1677–1(c)) is amended by striking ‘‘Subsidy’’

14 and inserting ‘‘Countervailable Subsidy’’.

15 (b) COUNTERVAILABLE SUBSIDIES.—

16 (1) Except as provided in paragraph (2), each

17 of the following sections is amended by striking

18 ‘‘subsidies’’ each place it appears in the text and in

19 the heading and inserting ‘‘countervailable sub20 sidies’’:

21 (A) Section 701(d) (19 U.S.C. 1671(d)).

22 (B) Section 703(c)(1)(B)(i)(III) (19

23 U.S.C. 1671b(c)(1)(B)(i)(III)).

24 (C) Section 761 (19 U.S.C. 1676).

25 (D) Section 771B (19 U.S.C. 1677–2).
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1 (2) The heading for section 761(a) and section

2 771B (19 U.S.C. 1676(a) and 1677–2) are each

3 amended by striking ‘‘Subsidies’’ and inserting

4 ‘‘Countervailable Subsidies’’.

5 (c) OTHER CONFORMING AMENDMENTS.—

6 (1) The heading for section 704(b) (19 U.S.C.

7 1671c(b)) is amended by striking ‘‘Subsidized Mer8 chandise’’ and inserting ‘‘Subject Merchandise’’.

9 (2) Subparagraphs (C) and (D) of section

10 771(4) (19 U.S.C. 1677(4) (C) and (D)) are amend11 ed by striking ‘‘subsidized or’’ each place it appears

12 and inserting ‘‘or imports of merchandise benefiting

13 from a countervailable subsidy’’ after ‘‘imports’’.

14 (3) Section 771A (19 U.S.C. 1677–1), as

15 amended, is amended in subsection (c), by striking

16 ‘‘subsidization’’ and inserting ‘‘the countervailable

17 subsidy’’.

18 (4) The table of contents for title VII is amend19 ed—

20 (A) in the item relating to section 771B,

21 by inserting ‘‘countervailable’’ before ‘‘sub22 sidies’’, and

23 (B) in the item relating to section 775, by

24 striking ‘‘Subsidy’’ and inserting

25 ‘‘Countervailable subsidy’’.
289

1 (d) SUBSIDIES AGREEMENT.—Section 702(e) (19

2 U.S.C. 1671a(e)) is amended by striking ‘‘Agreement’’

3 and inserting ‘‘Subsidies Agreement’’.

4 (e) SUBSIDIES AGREEMENT AND AGREEMENT ON

5 AGRICULTURE.—Section 771(8) (19 U.S.C. 1677(8)) is

6 amended to read as follows:

7 ‘‘(8) SUBSIDIES AGREEMENT; AGREEMENT ON

8 AGRICULTURE.—

9 ‘‘(A) SUBSIDIES AGREEMENT.—The term

10 ‘Subsidies Agreement’ means the Agreement on

11 Subsidies and Countervailing Measures referred

12 to in section 101(d)(12) of the Uruguay Round

13 Agreements Act.

14 ‘‘(B) AGREEMENT ON AGRICULTURE.—The

15 term ‘Agreement on Agriculture’ means the

16 Agreement on Agriculture referred to in section

17 101(d)(2) of the Uruguay Round Agreements

18 Act.’’.

19 PART 3—SECTION 303 INJURY INVESTIGATIONS

20 SEC. 271. SPECIAL RULES FOR INJURY INVESTIGATIONS

21 FOR CERTAIN SECTION 303 COUNTERVAILING

22 DUTY ORDERS AND INVESTIGATIONS.

23 (a) IN GENERAL.—Chapter 1 of subtitle C of title

24 VII, as amended, is amended by inserting after section

25 752 the following new section:
290

1 ‘‘SEC. 753. SPECIAL RULES FOR INJURY INVESTIGATIONS

2 FOR CERTAIN SECTION 303 COUNTERVAILING

3 DUTY ORDERS AND INVESTIGATIONS.

4 ‘‘(a) IN GENERAL.—

5 ‘‘(1) INVESTIGATION BY THE COMMISSION

6 UPON REQUEST.—In the case of a countervailing

7 duty order described in paragraph (2), which—

8 ‘‘(A) applies to merchandise that is the

9 product of a Subsidies Agreement country, and

10 ‘‘(B)(i) is in effect on the date on which

11 such country becomes a Subsidies Agreement

12 country, or

13 ‘‘(ii) is issued on a date that is after the

14 date described in clause (i) pursuant to a court

15 order in an action brought under section 516A,

16 the Commission, upon receipt of a request from an

17 interested party described in section 771(9) (C),

18 (D), (E), (F), or (G) for an injury investigation with

19 respect to such order, shall initiate an investigation

20 and shall determine whether an industry in the

21 United States is likely to be materially injured by

22 reason of imports of the subject merchandise if the

23 order is revoked.

24 ‘‘(2) DESCRIPTION OF COUNTERVAILING DUTY

25 ORDERS.—A countervailing duty order described in

26 this paragraph is an order issued under section 303
291

1 with respect to which the requirement of an affirma2 tive determination of material injury under section

3 303(a)(2) was not applicable at the time such order

4 was issued.

5 ‘‘(3) REQUIREMENTS OF REQUEST FOR INVES6 TIGATION.—A request for an investigation under

7 this subsection shall be submitted—

8 ‘‘(A) in the case of an order described in

9 paragraph (1)(B)(i), within 6 months after the

10 date on which the country described in para11 graph (1)(A) becomes a Subsidies Agreement

12 country, or

13 ‘‘(B) in the case of an order described in

14 paragraph (1)(B)(ii), within 6 months after the

15 date the order is issued.

16 ‘‘(4) SUSPENSION OF LIQUIDATION.—With re17 spect to entries of subject merchandise made on or

18 after—

19 ‘‘(A) in the case of an order described in

20 paragraph (1)(B)(i), the date on which the

21 country described in paragraph (1)(A) becomes

22 a Subsidies Agreement country, or

23 ‘‘(B) in the case of an order described in

24 paragraph (1)(B)(ii), the date on which the

25 order is issued,
292

1 liquidation shall be suspended at the cash deposit

2 rate in effect on the date described in subparagraph

3 (A) or (B) (whichever is applicable).

4 ‘‘(b) INVESTIGATION PROCEDURE AND SCHEDULE.—

5 ‘‘(1) COMMISSION PROCEDURE.—

6 ‘‘(A) IN GENERAL.—Except as otherwise

7 provided in this section, the provisions of this

8 title regarding evidence in and procedures for

9 investigations conducted under subtitle A shall

10 apply to investigations conducted by the Com11 mission under this section.

12 ‘‘(B) TIME FOR COMMISSION DETERMINA13 TION.—Except as otherwise provided in sub14 paragraph (C), the Commission shall issue its

15 determination under subsection (a)(1), to the

16 extent possible, not later than 1 year after the

17 date on which the investigation is initiated

18 under this section.

19 ‘‘(C) SPECIAL RULE TO PERMIT ADMINIS20 TRATIVE FLEXIBILITY.—In the case of requests

21 for investigations received under this section

22 within 1 year after the date on which the WTO

23 Agreement enters into force with respect to the

24 United States, the Commission may, after con25 sulting with the administering authority, initi-
293

1 ate its investigations in a manner that results

2 in determinations being made in all such inves3 tigations during the 4-year period beginning on

4 such date.

5 ‘‘(2) NET COUNTERVAILABLE SUBSIDY; NATURE

6 OF SUBSIDY.—

7 ‘‘(A) NET COUNTERVAILABLE SUBSIDY.—

8 The administering authority shall provide to the

9 Commission the net countervailable subsidy

10 that is likely to prevail if the order which is the

11 subject of the investigation is revoked. The ad12 ministering authority normally shall choose a

13 net countervailable subsidy that was determined

14 under section 705 or subsection (a) or (b)(1) of

15 section 751. If the Commission considers the

16 magnitude of the net countervailable subsidy in

17 making its determination under this section, the

18 Commission shall use the net countervailable

19 subsidy provided by the administering author20 ity.

21 ‘‘(B) NATURE OF SUBSIDY.—The admin22 istering authority shall inform the Commission

23 of, and the Commission, in making its deter24 mination under this section, shall consider, the

25 nature of the countervailable subsidy and
294

1 whether the countervailable subsidy is a subsidy

2 described in Article 3 or Article 6.1 of the Sub3 sidies Agreement.

4 ‘‘(3) EFFECT OF COMMISSION DETERMINA5 TION.—

6 ‘‘(A) AFFIRMATIVE DETERMINATION.—

7 Upon being notified by the Commission that it

8 has made an affirmative determination under

9 subsection (a)(1)—

10 ‘‘(i) the administering authority shall

11 order the termination of the suspension of

12 liquidation required pursuant to subsection

13 (a)(4), and

14 ‘‘(ii) the countervailing duty order

15 shall remain in effect until revoked, in

16 whole or in part, under section 751(d).

17 For purposes of section 751(c), a countervailing

18 duty order described in this section shall be

19 treated as issued on the date of publication of

20 the Commission’s determination under this sub21 section.

22 ‘‘(B) NEGATIVE DETERMINATION.—

23 ‘‘(i) IN GENERAL.—Upon being noti24 fied by the Commission that it has made a

25 negative determination under subsection
295

1 (a)(1), the administering authority shall

2 revoke the countervailing duty order, and

3 shall refund, with interest, any estimated

4 countervailing duties collected during the

5 period liquidation was suspended pursuant

6 to subsection (a)(4).

7 ‘‘(ii) LIMITATION ON NEGATIVE DE8 TERMINATION.—A determination by the

9 Commission that revocation of the order is

10 not likely to result in material injury to an

11 industry by reason of imports of the sub12 ject merchandise shall not be based, in

13 whole or in part, on any export taxes, du14 ties, or other charges levied on the export

15 of the subject merchandise to the United

16 States that were specifically intended to

17 offset the countervailable subsidy received.

18 ‘‘(4) COUNTERVAILING DUTY ORDERS WITH RE19 SPECT TO WHICH NO REQUEST FOR INJURY INVES20 TIGATION IS MADE.—If, with respect to a counter21 vailing duty order described in subsection (a), a re22 quest for an investigation is not made within the

23 time required by subsection (a)(3), the Commission

24 shall notify the administering authority that a nega25 tive determination has been made under subsection
296

1 (a) and the provisions of paragraph (3)(B) shall

2 apply with respect to the order.

3 ‘‘(c) PENDING AND SUSPENDED COUNTERVAILING

4 DUTY INVESTIGATIONS.—If, on the date on which a coun5 try becomes a Subsidies Agreement country, there is a

6 countervailing duty investigation in progress or suspended

7 under section 303 that applies to merchandise which is

8 a product of that country and with respect to which the

9 requirement of an affirmative determination of material

10 injury under section 303(a)(2) was not applicable at the

11 time the investigation was initiated, the Commission

12 shall—

13 ‘‘(1) in the case of an investigation in progress,

14 make a final determination under section 705(b)

15 within 75 days after the date of an affirmative final

16 determination, if any, by the administering author17 ity,

18 ‘‘(2) in the case of a suspended investigation to

19 which section 704(i)(1)(B) applies, make a final de20 termination under section 705(b) within 120 days

21 after receiving notice from the administering author22 ity of the resumption of the investigation pursuant

23 to section 704(i), or within 45 days after the date

24 of an affirmative final determination, if any, by the

25 administering authority, whichever is later, or
297

1 ‘‘(3) in the case of a suspended investigation to

2 which section 704(i)(1)(C) applies, treat the counter3 vailing duty order issued pursuant to such section as

4 if it were—

5 ‘‘(A) an order issued under subsection

6 (a)(1)(B)(ii) for purposes of subsection (a)(3);

7 and

8 ‘‘(B) an order issued under subsection

9 (a)(1)(B)(i) for purposes of subsection (a)(4).

10 ‘‘(d) PUBLICATION IN FEDERAL REGISTER.—The

11 administering authority or the Commission, as the case

12 may be, shall publish in the Federal Register a notice of

13 the initiation of any investigation, and a notice of any de14 termination or revocation, made pursuant to this section.

15 ‘‘(e) REQUEST FOR SIMULTANEOUS EXPEDITED RE16 VIEW UNDER SECTION 751(c).—

17 ‘‘(1) GENERAL RULE.—

18 ‘‘(A) REQUESTS FOR REVIEWS.—Notwith19 standing section 751(c)(6)(A) and except as

20 provided in subparagraph (B), an interested

21 party may request a review of an order under

22 section 751(c) at the same time the party re23 quests an investigation under subsection (a), if

24 the order involves the same or comparable sub25 ject merchandise. Upon receipt of such request,
298

1 the administering authority, after consulting

2 with the Commission, shall initiate a review of

3 the order under section 751(c). The Commis4 sion shall combine such review with the inves5 tigation under this section.

6 ‘‘(B) EXCEPTION.—If the administering

7 authority determines that the interested party

8 who requested an investigation under this sec9 tion is a related party or an importer within the

10 meaning of section 771(4)(B), the administer11 ing authority may decline a request by such

12 party to initiate a review of an order under sec13 tion 751(c) which involves the same or com14 parable subject merchandise.

15 ‘‘(2) CUMULATION.—If a review under section

16 751(c) is initiated under paragraph (1), such review

17 shall be treated as having been initiated on the same

18 day as the investigation under this section, and the

19 Commission may, in accordance with section

20 771(7)(G), cumulatively assess the volume and effect

21 of imports of the subject merchandise from all coun22 tries with respect to which such investigations are

23 treated as initiated on the same day.

24 ‘‘(3) TIME AND PROCEDURE FOR COMMISSION

25 DETERMINATION.—The Commission shall render its
299

1 determination in the investigation conducted under

2 this section at the same time as the Commission’s

3 determination is made in the review under section

4 751(c) that is initiated pursuant to this subsection.

5 The Commission shall in all other respects apply the

6 procedures and standards set forth in section 751(c)

7 to such section 751(c) reviews.’’.

8 (b) REVIEW OF DETERMINATIONS.—Section

9 516A(a)(2) (19 U.S.C. 1516a(a)(2)) is amended—

10 (1) in subparagraph (A)(i)(I), by striking ‘‘or

11 (v)’’ and inserting ‘‘(v), or (viii)’’, and

12 (2) in subparagraph (B), by adding at the end

13 the following:

14 ‘‘(viii) A determination by the Com15 mission under section 753(a)(1).’’.

16 (c) CONFORMING AMENDMENT.—The table of con17 tents for title VII, as amended, is amended by inserting

18 after the item relating to section 752 the following new

19 item:

‘‘Sec. 753. Special rules for injury investigations for certain section 303 countervailing duty orders and investigations.’’.

20 PART 4—ENFORCEMENT OF UNITED STATES

21 RIGHTS UNDER THE SUBSIDIES AGREEMENT

22 SEC. 281. SUBSIDIES ENFORCEMENT.

23 (a) ASSISTANCE REGARDING MULTILATERAL SUB24 SIDY REMEDIES.—The administering authority shall pro-
300

1 vide information to the public upon request, and, to the

2 extent feasible, assistance and advice to interested parties

3 concerning—

4 (1) remedies and benefits available under rel5 evant provisions of the Subsidies Agreement, and

6 (2) the procedures relating to such remedies

7 and benefits.

8 (b) PROHIBITED SUBSIDIES.—

9 (1) NOTIFICATION OF TRADE REPRESENTA10 TIVE.—If the administering authority determines

11 pursuant to title VII of the Tariff Act of 1930 that

12 a class or kind of merchandise is benefiting from a

13 subsidy which is prohibited under Article 3 of the

14 Subsidies Agreement, the administering authority

15 shall notify the Trade Representative and shall pro16 vide the Trade Representative with the information

17 upon which the administering authority based its de18 termination.

19 (2) REQUEST BY INTERESTED PARTY REGARD20 ING PROHIBITED SUBSIDY.—An interested party

21 may request that the administering authority deter22 mine if there is reason to believe that merchandise

23 produced in a WTO member country is benefiting

24 from a subsidy which is prohibited under Article 3

25 of the Subsidies Agreement. The request shall con-
301

1 tain such information as the administering authority

2 may require to support the allegations contained in

3 the request. If the administering authority, after

4 analyzing the request and other information reason5 ably available to the administering authority, deter6 mines that there is reason to believe that such mer7 chandise is benefiting from a subsidy which is pro8 hibited under Article 3 of the Subsidies Agreement,

9 the administering authority shall so notify the Trade

10 Representative, and shall include supporting infor11 mation with the notification.

12 (c) SUBSIDIES ACTIONABLE UNDER THE AGREE13 MENT.—

14 (1) IN GENERAL.—If the administering author15 ity determines pursuant to title VII of the Tariff Act

16 of 1930 that a class or kind of merchandise is bene17 fiting from a subsidy described in Article 6.1 of the

18 Subsidies Agreement, the administering authority

19 shall notify the Trade Representative, and shall pro20 vide the Trade Representative with the information

21 upon which the administering authority based its de22 termination.

23 (2) REQUEST BY INTERESTED PARTY REGARD24 ING ADVERSE EFFECTS.—An interested party may

25 request the administering authority to determine if
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1 there is reason to believe that a subsidy which is ac2 tionable under the Subsidies Agreement is causing

3 adverse effects. The request shall contain such infor4 mation as the administering authority may require

5 to support the allegations contained in the request.

6 At the request of the administering authority, the

7 Commission shall assist the administering authority

8 in analyzing the information pertaining to the exist9 ence of such adverse effects. If the administering au10 thority, after analyzing the request and other infor11 mation reasonably available to the administering au12 thority, determines that there is reason to believe

13 that a subsidy which is actionable under the Sub14 sidies Agreement is causing adverse effects, the ad15 ministering authority shall so notify the Trade Rep16 resentative, and shall include supporting information

17 with the notification.

18 (d) INITIATION OF SECTION 301 INVESTIGATION.—

19 On the basis of the notification and information provided

20 by the administering authority pursuant to subsection (b)

21 or (c), such other information as the Trade Representative

22 may have or obtain, and where applicable, after consulta23 tion with an interested party referred to in subsection

24 (b)(2) or (c)(2), the Trade Representative shall, unless

25 such interested party objects, determine as expeditiously
303

1 as possible, in accordance with the procedures in section

2 302(b)(1) of the Trade Act of 1974 (19 U.S.C.

3 2412(b)(1)), whether to initiate an investigation pursuant

4 to title III of that Act (19 U.S.C. 2411 et seq.). At the

5 request of the Trade Representative, the administering au6 thority and the Commission shall assist the Trade Rep7 resentative in an investigation initiated pursuant to this

8 subsection.

9 (e) NONACTIONABLE SUBSIDIES.—

10 (1) COMPLIANCE WITH ARTICLE 8 OF THE SUB11 SIDIES AGREEMENT.—

12 (A) MONITORING.—In order to monitor

13 whether a subsidy meets the conditions and cri14 teria described in Article 8.2 of the Subsidies

15 Agreement and is nonactionable, the Trade

16 Representative shall provide the administering

17 authority on a timely basis with any informa18 tion submitted or report made pursuant to Arti19 cle 8.3 or 8.4 of the Subsidies Agreement re20 garding a notified subsidy program. The admin21 istering authority shall review such information

22 and reports, and where appropriate, shall rec23 ommend to the Trade Representative that the

24 Trade Representative seek pursuant to Article

25 8.3 or 8.4 of the Subsidies Agreement addi-
304

1 tional information regarding the notified sub2 sidy program or a subsidy granted pursuant to

3 the notified subsidy program. If the administer4 ing authority has reason to believe that a viola5 tion of Article 8 of the Subsidies Agreement ex6 ists, the administering authority shall so notify

7 the Trade Representative, and shall include

8 supporting information with the notification.

9 (B) REQUEST BY INTERESTED PARTY RE10 GARDING VIOLATION OF ARTICLE 8.—An inter11 ested party may request the administering au12 thority to determine if there is reason to believe

13 that a violation of Article 8 of the Subsidies

14 Agreement exists. The request shall contain

15 such information as the administering authority

16 may require to support the allegations con17 tained in the request. If the administering au18 thority, after analyzing the request and other

19 information reasonably available to the admin20 istering authority, determines that additional

21 information is needed, the administering au22 thority shall recommend to the Trade Rep23 resentative that the Trade Representative seek,

24 pursuant to Article 8.3 or 8.4 of the Subsidies

25 Agreement, additional information regarding
305

1 the particular notified subsidy program or a

2 subsidy granted pursuant to the notified sub3 sidy program. If the administering authority de4 termines that there is reason to believe that a

5 violation of Article 8 of the Subsidies Agree6 ment exists, the administering authority shall

7 so notify the Trade Representative, and shall

8 include supporting information with the notifi9 cation.

10 (C) ACTION BY TRADE REPRESENTA11 TIVE.—

12 (i) If the Trade Representative, on the

13 basis of the notification and information

14 provided by the administering authority

15 pursuant to subparagraph (A) or (B), and

16 such other information as the Trade Rep17 resentative may have or obtain, and after

18 consulting with the interested party re19 ferred to in subparagraph (B) and appro20 priate domestic industries, determines that

21 there is reason to believe that a violation

22 of Article 8 of the Subsidies Agreement ex23 ists, the Trade Representative shall invoke

24 the procedures of Article 8.4 or 8.5 of the

25 Subsidies Agreement.
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1 (ii) For purposes of clause (i), the

2 Trade Representative shall determine that

3 there is reason to believe that a violation

4 of Article 8 exists in any case in which the

5 Trade Representative determines that a

6 notified subsidy program or a subsidy

7 granted pursuant to a notified subsidy pro8 gram does not satisfy the conditions and

9 criteria required for a nonactionable sub10 sidy program under this Act, the Subsidies

11 Agreement, and the statement of adminis12 trative action approved under section

13 101(a).

14 (D) NOTIFICATION OF ADMINISTERING AU15 THORITY.—The Trade Representative shall no16 tify the administering authority whenever a vio17 lation of Article 8 of the Subsidies Agreement

18 has been found to exist pursuant to Article 8.4

19 or 8.5 of that Agreement.

20 (2) SERIOUS ADVERSE EFFECTS.—

21 (A) REQUEST BY INTERESTED PARTY.—

22 An interested party may request the admin23 istering authority to determine if there is rea24 son to believe that serious adverse effects re25 sulting from a program referred to in Article
307

1 8.2 of the Subsidies Agreement exist. The re2 quest shall contain such information as the ad3 ministering authority may require to support

4 the allegations contained in the request.

5 (B) ACTION BY ADMINISTERING AUTHOR6 ITY.—Within 90 days after receipt of the re7 quest described in subparagraph (A), the ad8 ministering authority, after analyzing the re9 quest and other information reasonably avail10 able to the administering authority, shall deter11 mine if there is reason to believe that serious

12 adverse effects resulting from a program re13 ferred to in Article 8.2 of the Subsidies Agree14 ment exist. If the determination of the admin15 istering authority is affirmative, it shall so no16 tify the Trade Representative and shall include

17 supporting information with the notification.

18 The Commission shall assist the administering

19 authority in analyzing the information pertain20 ing to the existence of such serious adverse ef21 fects if the administering authority requests the

22 Commission’s assistance. If the subsidy pro23 gram that is alleged to result in serious adverse

24 effects has been the subject of a countervailing

25 duty investigation or review under subtitle A or
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1 C of title VII of the Tariff Act of 1930, the ad2 ministering authority shall take into account

3 the determinations made by the administering

4 authority and the Commission in such inves5 tigation or review and the administering au6 thority shall complete its analysis as expedi7 tiously as possible.

8 (C) ACTION BY TRADE REPRESENTA9 TIVE.—The Trade Representative, on the basis

10 of the notification and information provided by

11 the administering authority pursuant to sub12 paragraph (B), and such other information as

13 the Trade Representative may have or obtain,

14 shall determine as expeditiously as possible, but

15 not later than 30 days after receipt of the noti16 fication provided by the administering author17 ity, if there is reason to believe that serious ad18 verse effects exist resulting from the subsidy

19 program which is the subject of the administer20 ing authority’s notification. The Trade Rep21 resentative shall make an affirmative deter22 mination regarding the existence of such serious

23 adverse effects unless the Trade Representative

24 finds that the notification of the administering

25 authority is not supported by the facts.
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1 (D) CONSULTATIONS.—If the Trade Rep2 resentative determines that there is reason to

3 believe that serious adverse effects resulting

4 from the subsidy program exist, the Trade Rep5 resentative, unless the interested party referred

6 to in subparagraph (A) objects, shall invoke the

7 procedures of Article 9 of the Subsidies Agree8 ment, and shall request consultations pursuant

9 to Article 9.2 of the Subsidies Agreement with

10 respect to such serious adverse effects. If such

11 consultations have not resulted in a mutually

12 acceptable solution within 60 days after the re13 quest is made for such consultations, the Trade

14 Representative shall refer the matter to the

15 Subsidies Committee pursuant to Article 9.3 of

16 the Subsidies Agreement.

17 (E) DETERMINATION BY SUBSIDIES COM18 MITTEE.—If the Trade Representative deter19 mines that—

20 (i) the Subsidies Committee has been

21 prevented from making an affirmative de22 termination regarding the existence of seri23 ous adverse effects under Article 9 of the

24 Subsidies Agreement by reason of the re25 fusal of the WTO member country with re-
310

1 spect to which the consultations have been

2 invoked to join in an affirmative consen3 sus—

4 (I) that such serious adverse ef5 fects exist, or

6 (II) regarding a recommendation

7 to such WTO member country to

8 modify the subsidy program in such a

9 way as to remove the serious adverse

10 effects, or

11 (ii) the Subsidies Committee has not

12 presented its conclusions regarding the ex13 istence of such serious adverse effects

14 within 120 days after the date the matter

15 was referred to it, as required by Article

16 9.4 of the Subsidies Agreement,

17 the Trade Representative shall, within 30 days

18 after such determination, make a determination

19 under section 304(a)(1) of the Trade Act of

20 1974 (19 U.S.C. 2414(a)(1)) regarding what

21 action to take under section 301(a)(1)(A) of

22 that Act.

23 (F) NONCOMPLIANCE WITH COMMITTEE

24 RECOMMENDATION.—In the event that the Sub25 sidies Committee makes a recommendation
311

1 under Article 9.4 of the Subsidies Agreement

2 and the WTO member country with respect to

3 which such recommendation is made does not

4 comply with such recommendation within 6

5 months after the date of the recommendation,

6 the Trade Representative shall make a deter7 mination under section 304(a)(1) of the Trade

8 Act of 1974 (19 U.S.C. 2414(a)(1)) regarding

9 what action to take under section 301(a) of

10 that Act.

11 (f) NOTIFICATION, CONSULTATION, AND PUBLICA12 TION.—

13 (1) NOTIFICATION OF CONGRESS.—The Trade

14 Representative shall submit promptly to the Com15 mittee on Ways and Means of the House of Rep16 resentatives, the Committee on Finance of the Sen17 ate, and other appropriate committees of the Con18 gress any information submitted or report made pur19 suant to Article 8.3 or 8.4 of the Subsidies Agree20 ment regarding a notified subsidy program.

21 (2) PUBLICATION IN THE FEDERAL REG22 ISTER.—The administering authority shall publish

23 regularly in the Federal Register a summary notice

24 of any information submitted or report made pursu-
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1 ant to Article 8.3 or 8.4 of the Subsidies Agreement

2 regarding notified subsidy programs.

3 (3) CONSULTATIONS WITH CONGRESS AND PRI4 VATE SECTOR.—The Trade Representative and the

5 administering authority promptly shall consult with

6 the committees referred to in paragraph (1), and

7 with interested representatives of the private sector,

8 regarding all information submitted or reports made

9 pursuant to Article 8.3 or 8.4 of the Subsidies

10 Agreement regarding a notified subsidy program.

11 (4) ANNUAL REPORT.—Not later than Feb12 ruary 1 of each year beginning in 1996, the Trade

13 Representative and the administering authority shall

14 issue a joint report to the Congress detailing—

15 (A) the subsidies practices of major trad16 ing partners of the United States, including

17 subsidies that are prohibited, are causing seri18 ous prejudice, or are nonactionable, under the

19 Subsidies Agreement, and

20 (B) the monitoring and enforcement activi21 ties of the Trade Representative and the admin22 istering authority during the preceding calendar

23 year which relate to subsidies practices.

24 (g) COOPERATION OF OTHER AGENCIES.—All agen25 cies, departments, and independent agencies of the Fed-
313

1 eral Government shall cooperate fully with one another in

2 carrying out the provisions of this section, and, upon the

3 request of the administering authority, shall furnish to the

4 administering authority all records, papers, and informa5 tion in their possession which relate to the requirements

6 of this section.

7 (h) DEFINITIONS.—For purposes of this section—

8 (1) ADVERSE EFFECTS.—The term ‘‘adverse ef9 fects’’ has the meaning given that term in Articles

10 5(a) and 5(c) of the Subsidies Agreement.

11 (2) ADMINISTERING AUTHORITY.—The term

12 ‘‘administering authority’’ has the meaning given

13 that term in section 771(1) of the Tariff Act of

14 1930 (19 U.S.C. 1677(1)).

15 (3) COMMISSION.—The term ‘‘Commission’’

16 means the United States International Trade Com17 mission.

18 (4) INTERESTED PARTY.—The term ‘‘interested

19 party’’ means a party described in subparagraph

20 (C), (D), (E), (F), or (G) of section 771(9) of the

21 Tariff Act of 1930 (19 U.S.C. 1677(9) (A), (C),

22 (D), (E), (F), or (G)).

23 (5) NONACTIONABLE SUBSIDY.—The term

24 ‘‘nonactionable subsidy’’ means a subsidy described

25 in Article 8.1(b) of the Subsidies Agreement.
314

1 (6) NOTIFIED SUBSIDY PROGRAM.—The term

2 ‘‘notified subsidy program’’ means a subsidy pro3 gram which has been notified pursuant to Article 8.3

4 of the Subsidies Agreement.

5 (7) SERIOUS ADVERSE EFFECTS.—The term

6 ‘‘serious adverse effects’’ has the meaning given that

7 term in Article 9.1 of the Subsidies Agreement.

8 (8) SUBSIDIES AGREEMENT.—The term ‘‘Sub9 sidies Agreement’’ means the Agreement on Sub10 sidies and Countervailing Measures described in sec11 tion 771(8) of the Tariff Act of 1930 (19 U.S.C.

12 1677(8)).

13 (9) SUBSIDIES COMMITTEE.—The term ‘‘Sub14 sidies Committee’’ means the committee established

15 pursuant to Article 24 of the Subsidies Agreement.

16 (10) SUBSIDY.—The term ‘‘subsidy’’ has the

17 meaning given that term in Article 1 of the Sub18 sidies Agreement.

19 (11) TRADE REPRESENTATIVE.—The term

20 ‘‘Trade Representative’’ means the United States

21 Trade Representative.

22 (12) VIOLATION OF ARTICLE 8.—The term

23 ‘‘violation of Article 8’’ means the failure of a noti24 fied subsidy program or an individual subsidy grant25 ed pursuant to a notified subsidy program to meet
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1 the applicable conditions and criteria described in

2 Article 8.2 of the Subsidies Agreement.

3 (i) TREATMENT OF PROPRIETARY INFORMATION.—

4 Notwithstanding any other provision of law, the admin5 istering authority may provide the Trade Representative

6 with a copy of proprietary information submitted to, or

7 obtained by, the administering authority that the Trade

8 Representative considers relevant in carrying out its re9 sponsibilities under this part. The Trade Representative

10 shall protect from public disclosure proprietary informa11 tion obtained from the administering authority under this

12 part.

13 SEC. 282. REVIEW OF SUBSIDIES AGREEMENT.

14 (a) GENERAL OBJECTIVES.—The general objectives

15 of the United States under this part are—

16 (1) to ensure that parts II and III of the

17 Agreement on Subsidies and Countervailing Meas18 ures referred to in section 101(d)(12) (hereafter in

19 this section referred to as the ‘‘Subsidies Agree20 ment’’) are effective in disciplining the use of sub21 sidies and in remedying the adverse effects of sub22 sidies, and

23 (2) to ensure that part IV of the Subsidies

24 Agreement does not undermine the benefits derived

25 from any other part of that Agreement.
316

1 (b) SPECIFIC OBJECTIVE.—The specific objective of

2 the United States under this part shall be to create a

3 mechanism which will provide for an ongoing review of the

4 operation of part IV of the Subsidies Agreement.

5 (c) SUNSET OF NONCOUNTERVAILABLE SUBSIDIES

6 PROVISIONS.—

7 (1) IN GENERAL.—Subparagraphs (B), (C),

8 (D), and (E) of section 771(5B) of the Tariff Act

9 of 1930 shall cease to apply as provided in subpara10 graph (G)(i) of such section, unless, before the date

11 referred to in such subparagraph (G)(i)—

12 (A) the Subsidies Committee determines to

13 extend Articles 6.1, 8, and 9 of the Subsidies

14 Agreement as in effect on the date on which the

15 Subsidies Agreement enters into force or in a

16 modified form, in accordance with Article 31 of

17 such Agreement,

18 (B) the President consults with the Con19 gress in accordance with paragraph (2), and

20 (C) an implementing bill is submitted and

21 enacted into law in accordance with paragraphs

22 (3) and (4).

23 (2) CONSULTATION WITH CONGRESS BEFORE

24 SUBSIDIES COMMITTEE AGREES TO EXTEND.—Be25 fore a determination is made by the Subsidies Com-
317

1 mittee to extend Articles 6.1, 8, and 9 of the Sub2 sidies Agreement, the President shall consult with

3 the Committee on Ways and Means of the House of

4 Representatives and the Committee on Finance of

5 the Senate regarding such extension.

6 (3) IMPLEMENTATION OF EXTENSION.—

7 (A) NOTIFICATION AND SUBMISSION.—Any

8 extension of subparagraphs (B), (C), (D), and

9 (E) of section 771(5B) of the Tariff Act of

10 1930 shall take effect if (and only if)—

11 (i) after the Subsidies Committee de12 termines to extend Articles 6.1, 8, and 9 of

13 the Subsidies Agreement, the President

14 submits to the committees referred to in

15 paragraph (2) a copy of the document de16 scribing the terms of such extension, to17 gether with—

18 (I) a draft of an implementing

19 bill,

20 (II) a statement of any adminis21 trative action proposed to implement

22 the extension, and

23 (III) the supporting information

24 described in subparagraph (C); and
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1 (ii) the implementing bill is enacted

2 into law.

3 (B) IMPLEMENTING BILL.—The imple4 menting bill referred to in subparagraph (A)

5 shall contain only those provisions that are nec6 essary or appropriate to implement an extension

7 of the provisions of section 771(5B) (B), (C),

8 (D), and (E) of the Tariff Act of 1930 as in

9 effect on the day before the date of the enact10 ment of the implementing bill or as modified to

11 reflect the determination of the Subsidies Com12 mittee to extend Articles 6.1, 8, and 9 of the

13 Subsidies Agreement.

14 (C) SUPPORTING INFORMATION.—The sup15 porting information required under subpara16 graph (A)(i)(III) consists of—

17 (i) an explanation as to how the im18 plementing bill and proposed administra19 tive action will change or affect existing

20 law; and

21 (ii) a statement regarding—

22 (I) how the extension serves the

23 interests of United States commerce,

24 and
319

1 (II) why the implementing bill

2 and proposed administrative action is

3 required or appropriate to carry out

4 the extension.

5 (4) APPLICATION OF CONGRESSIONAL ‘‘FAST

6 TRACK’’ PROCEDURES TO IMPLEMENTING BILL.—

7 Section 151 of the Trade Act of 1974 (19 U.S.C.

8 2191) is amended—

9 (A) in subsection (b)(1)—

10 (i) by inserting ‘‘, or with respect to

11 an extension described in section 282(c)(3)

12 of the Uruguay Round Agreements Act,’’

13 after ‘‘trade agreements’’,

14 (ii) by striking ‘‘or section 1103(a)(1)

15 of the Omnibus Trade and Competitiveness

16 Act of 1988’’ and inserting ‘‘, section

17 1103(a)(1) of the Omnibus Trade and

18 Competitiveness Act of 1988, or section

19 282 of the Uruguay Round Agreements

20 Act’’, and

21 (iii) by inserting ‘‘or such extension’’

22 in subparagraphs (A) and (C) after

23 ‘‘agreements’’ each place it appears, and

24 (B) in subsection (c)(1)—
320

1 (i) by inserting ‘‘or section 282 of the

2 Uruguay Round Agreements Act’’ after

3 ‘‘section 102’’, and

4 (ii) by inserting ‘‘or extension’’ after

5 ‘‘agreement’’ each place it appears.

6 (5) REPORT BY THE TRADE REPRESENTA7 TIVE.—Not later than the date referred to in section

8 771 (5B) (G)(i) of the Tariff Act of 1930, the Trade

9 Representative shall submit to the Congress a report

10 setting forth the provisions of law which were en11 acted to implement Articles 6.1, 8, and 9 of the Sub12 sidies Agreement and should be repealed or modified

13 if such provisions are not extended.

14 (d) REVIEW OF THE OPERATION OF THE SUBSIDIES

15 AGREEMENT.—The Secretary of Commerce, in consulta16 tion with other appropriate departments and agencies of

17 the Federal Government, shall undertake an ongoing re18 view of the operation of the Subsidies Agreement. The re19 view shall address—

20 (1) the effectiveness of part II of the Subsidies

21 Agreement in disciplining the use of subsidies which

22 are prohibited under Article 3 of the Agreement,

23 (2) the effectiveness of part III and, in particu24 lar, Article 6.1 of the Subsidies Agreement, in rem-
321

1 edying the adverse effects of subsidies which are ac2 tionable under the Agreement, and

3 (3) the extent to which the provisions of part

4 IV of the Subsidies Agreement may have under5 mined the benefits derived from other parts of the

6 Agreement, and, in particular—

7 (A) the extent to which WTO member

8 countries have cooperated in reviewing and im9 proving the operation of part IV of the Sub10 sidies Agreement,

11 (B) the extent to which the provisions of

12 Articles 8.4 and 8.5 of the Subsidies Agreement

13 have been effective in identifying and remedying

14 violations of the conditions and criteria de15 scribed in Article 8.2 of the Agreement, and

16 (C) the extent to which the provisions of

17 Article 9 of the Subsidies Agreement have been

18 effective in remedying the serious adverse ef19 fects of subsidy programs described in Article

20 8.2 of the Agreement.

21 Not later than 4 years and 6 months after the date

22 of the enactment of this Act, the Secretary of Com23 merce shall submit to the Congress a report on the

24 review required under this subsection.
322

1 SEC. 283. AMENDMENTS TO TITLE VII OF THE TARIFF ACT

2 OF 1930.

3 (a) PRELIMINARY DETERMINATION BY ADMINISTER4 ING AUTHORITY.—Section 703(b) of the Tariff Act of

5 1930 (19 U.S.C. 1671b(b)), as amended, is amended by

6 adding at the end the following new paragraph:

7 ‘‘(5) NOTIFICATION OF ARTICLE 8 VIOLA8 TION.—If the only subsidy under investigation is a

9 subsidy with respect to which the administering au10 thority received notice from the Trade Representa11 tive of a violation of Article 8 of the Subsidies

12 Agreement, paragraph (1) shall be applied by sub13 stituting ‘60 days’ for ‘65 days’.’’.

14 (b) SUBSIDY PRACTICE DISCOVERED DURING A PRO15 CEEDING.—Section 775 of the Tariff Act of 1930 (19

16 U.S.C. 1677d) is amended to read as follows:

17 ‘‘SEC. 775. COUNTERVAILABLE SUBSIDY PRACTICES DIS18 COVERED DURING A PROCEEDING.

19 ‘‘If, in the course of a proceeding under this title,

20 the administering authority discovers a practice which ap21 pears to be a countervailable subsidy, but was not included

22 in the matters alleged in a countervailing duty petition,

23 or if the administering authority receives notice from the

24 Trade Representative that a subsidy or subsidy program

25 is in violation of Article 8 of the Subsidies Agreement,

26 then the administering authority—
323

1 ‘‘(1) shall include the practice, subsidy, or sub2 sidy program in the proceeding if the practice, sub3 sidy, or subsidy program appears to be a

4 countervailable subsidy with respect to the merchan5 dise which is the subject of the proceeding, or

6 ‘‘(2) shall transfer the information (other than

7 confidential information) concerning the practice,

8 subsidy, or subsidy program to the library main9 tained under section 777(a)(1), if the practice, sub10 sidy, or subsidy program appears to be a

11 countervailable subsidy with respect to any other

12 merchandise.’’.

13 (c) ADMINISTRATIVE REVIEWS.—Section 751 of the

14 Tariff Act of 1930 (19 U.S.C. 1675), as amended, is

15 amended by redesignating subsection (g) as subsection (h)

16 and by inserting after subsection (f) the following new

17 subsection:

18 ‘‘(g) REVIEWS TO IMPLEMENT RESULTS OF SUB19 SIDIES ENFORCEMENT PROCEEDING.—

20 ‘‘(1) VIOLATIONS OF ARTICLE 8 OF THE SUB21 SIDIES AGREEMENT.—If—

22 ‘‘(A) the administering authority receives

23 notice from the Trade Representative of a viola24 tion of Article 8 of the Subsidies Agreement,
324

1 ‘‘(B) the administering authority has rea2 son to believe that merchandise subject to an

3 existing countervailing duty order or suspended

4 investigation is benefiting from the subsidy or

5 subsidy program found to have been in violation

6 of Article 8 of the Subsidies Agreement, and

7 ‘‘(C) no review pursuant to subsection

8 (a)(1) is in progress,

9 the administering authority shall conduct a review of

10 the order or suspended investigation to determine

11 whether the subject merchandise benefits from the

12 subsidy or subsidy program found to have been in

13 violation of Article 8 of the Subsidies Agreement. If

14 the administering authority determines that the sub15 ject merchandise is benefiting from the subsidy or

16 subsidy program, it shall make appropriate adjust17 ments in the estimated duty to be deposited or ap18 propriate revisions to the terms of the suspension

19 agreement.

20 ‘‘(2) WITHDRAWAL OF SUBSIDY OR IMPOSITION

21 OF COUNTERMEASURES.—If the Trade Representa22 tive notifies the administering authority that, pursu23 ant to Article 4 or Article 7 of the Subsidies Agree24 ment—
325

1 ‘‘(A)(i) the United States has imposed

2 countermeasures, and

3 ‘‘(ii) such countermeasures are based on

4 the effects in the United States of imports of

5 merchandise that is the subject of a countervail6 ing duty order, or

7 ‘‘(B) a WTO member country has with8 drawn a countervailable subsidy provided with

9 respect to merchandise subject to a countervail10 ing duty order,

11 the administering authority shall conduct a review to

12 determine if the amount of the estimated duty to be

13 deposited should be adjusted or the order should be

14 revoked.

15 ‘‘(3) EXPEDITED REVIEW.—The administering

16 authority shall conduct reviews under this subsection

17 on an expedited basis, and shall publish the results

18 of such reviews in the Federal Register.’’.

19 Subtitle C—Effective Date

20 SEC. 291. EFFECTIVE DATE.

21 (a) IN GENERAL.—Except as provided in section 261,

22 the amendments made by this title shall take effect on

23 the date described in subsection (b) and apply with respect

24 to—

25 (1) investigations initiated—
326

1 (A) on the basis of petitions filed under

2 section 702(b), 732(b), or 783(b) of the Tariff

3 Act of 1930 after the date described in sub4 section (b), or

5 (B) by the administering authority under

6 section 702(a) or 732(a) of such Act after such

7 date,

8 (2) reviews initiated under section 751 of such

9 Act—

10 (A) by the administering authority or the

11 Commission on their own initiative after such

12 date, or

13 (B) pursuant to a request filed after such

14 date,

15 (3) investigations initiated under section 753 of

16 such Act after such date,

17 (4) petitions filed under section 780 of such Act

18 after such date, and

19 (5) inquiries initiated under section 781 of such

20 Act—

21 (A) by the administering authority on its

22 own initiative after such date, or

23 (B) pursuant to a request filed after such

24 date.
327

1 (b) DATE DESCRIBED.—The date described in this

2 subsection is the date on which the WTO Agreement (as

3 defined in section 2(9)) enters into force with respect to

4 the United States.

5 TITLE III—ADDITIONAL IMPLE6 MENTATION OF AGREEMENTS

7 Subtitle A—Safeguards

8 SEC. 301. INVESTIGATIONS, DETERMINATIONS, AND REC9 OMMENDATIONS BY INTERNATIONAL TRADE

10 COMMISSION.

11 (a) TREATMENT OF CONFIDENTIAL INFORMATION.—

12 Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C.

13 2252(a)(8)) is amended by adding at the end the follow14 ing: ‘‘The Commission may request that parties providing

15 confidential business information furnish nonconfidential

16 summaries thereof or, if such parties indicate that the in17 formation in the submission cannot be summarized, the

18 reasons why a summary cannot be provided. If the Com19 mission finds that a request for confidentiality is not war20 ranted and if the party concerned is either unwilling to

21 make the information public or to authorize its disclosure

22 in generalized or summarized form, the Commission may

23 disregard the submission.’’.
328

1 (b) ADMINISTRATIVE PROTECTIVE ORDERS.—Sec2 tion 202 of the Trade Act of 1974 (19 U.S.C. 2252) is

3 amended by adding at the end the following:

4 ‘‘(i) LIMITED DISCLOSURE OF CONFIDENTIAL BUSI5 NESS INFORMATION UNDER PROTECTIVE ORDER..—The

6 Commission shall promulgate regulations to provide access

7 to confidential business information under protective order

8 to authorized representatives of interested parties who are

9 parties to an investigation under this section.’’.

10 (c) NOTICE OF PROCEEDINGS.—Section 202(b) of

11 the Trade Act of 1974 (19 U.S.C. 2252(b)) is amended

12 by striking paragraphs (3) and (4) and inserting the fol13 lowing:

14 ‘‘(3) The Commission shall publish notice of the

15 commencement of any proceeding under this sub16 section in the Federal Register and shall, within a

17 reasonable time thereafter, hold public hearings at

18 which the Commission shall afford interested parties

19 and consumers an opportunity to be present, to

20 present evidence, to comment on the adjustment

21 plan, if any, submitted under subsection (a), to re22 spond to the presentations of other parties and con23 sumers, and otherwise to be heard.’’.

24 (d) CRITICAL CIRCUMSTANCES.—
329

1 (1) IN GENERAL.—Section 202(d)(2) of the

2 Trade Act of 1974 (19 U.S.C. 2252(d)(2)) is

3 amended to read as follows:

4 ‘‘(2)(A) When a petition filed under subsection

5 (a) alleges that critical circumstances exist and re6 quests that provisional relief be provided under this

7 subsection with respect to imports of the article

8 identified in the petition, the Commission shall, not

9 later than 60 days after the petition containing the

10 request was filed, determine, on the basis of avail11 able information, whether—

12 ‘‘(i) there is clear evidence that increased

13 imports (either actual or relative to domestic

14 production) of the article are a substantial

15 cause of serious injury, or the threat thereof, to

16 the domestic industry producing an article like

17 or directly competitive with the imported arti18 cle; and

19 ‘‘(ii) delay in taking action under this

20 chapter would cause damage to that industry

21 that would be difficult to repair.

22 ‘‘(B) If the determinations under subparagraph

23 (A)(i) and (ii) are affirmative, the Commission shall

24 find the amount or extent of provisional relief that

25 is necessary to prevent or remedy the serious injury.
330

1 In carrying out this subparagraph, the Commission

2 shall give preference to increasing or imposing a

3 duty on imports, if such form of relief is feasible and

4 would prevent or remedy the serious injury.

5 ‘‘(C) The Commission shall immediately report

6 to the President its determinations under subpara7 graph (A)(i) and (ii) and, if the determinations are

8 affirmative, the finding under subparagraph (B).

9 ‘‘(D) Within 30 days after receiving a report

10 from the Commission under subparagraph (C) con11 taining an affirmative determination under subpara12 graph (A)(i) and (ii), the President, if he considers

13 provisional relief to be warranted and after taking

14 into account the finding of the Commission under

15 subparagraph (B), shall proclaim, for a period not to

16 exceed 200 days, such provisional relief that the

17 President considers necessary to prevent or remedy

18 the serious injury. Such relief shall take the form of

19 an increase in, or the imposition of, a duty on im20 ports, if such form of relief is feasible and would

21 prevent or remedy the serious injury.’’.

22 (2) TIME LIMITS FOR DETERMINATIONS.—Sec23 tion 202 of the Trade Act of 1974 (19 U.S.C. 2252)

24 is amended—

25 (A) in subsection (b)(2)—
331

1 (i) in subparagraph (A) by inserting

2 ‘‘(180 days if the petition alleges that criti3 cal circumstances exist)’’ after ‘‘120 days’’;

4 and

5 (ii) in subparagraph (B) by inserting

6 ‘‘(210 days if the petition alleges that criti7 cal circumstances exist)’’ after ‘‘150 days’’;

8 and

9 (B) in subsection (f)(1) by inserting ‘‘(240

10 days if the petition alleges that critical cir11 cumstances exist)’’ after ‘‘180 days’’.

12 (3) ACTION BY THE PRESIDENT.—Section

13 203(a)(4) of the Trade Act of 1974 (19 U.S.C.

14 2253(a)(4)) is amended—

15 (A) by striking ‘‘The’’ and inserting ‘‘(A)

16 Subject to subparagraph (B), the’’;

17 (B) by inserting after ‘‘60 days’’ the fol18 lowing: ‘‘(50 days if the President has pro19 claimed provisional relief under section

20 202(d)(2)(D) with respect to the article con21 cerned)’’; and

22 (C) by striking ‘‘; except that’’ and all that

23 follows through ‘‘received.’’ and inserting a pe24 riod and the following:
332

1 ‘‘(B) If a supplemental report is requested

2 under paragraph (5), the President shall take action

3 under paragraph (1) within 30 days after the sup4 plemental report is received, except that, in a case

5 in which the President has proclaimed provisional

6 relief under section 202(d)(2)(D) with respect to the

7 article concerned, action by the President under

8 paragraph (1) may not be taken later than the

9 200th day after the provisional relief was pro10 claimed.’’.

11 (4) CONFORMING AMENDMENTS.—Section

12 202(d) of the Trade Act of 1974 (19 U.S.C.

13 2252(d)) is amended—

14 (A) in paragraph (3)—

15 (i) by striking ‘‘(2)(B)’’ and inserting

16 ‘‘(2)(D)’’; and

17 (ii) by striking ‘‘subsection (b)(1)’’

18 and inserting ‘‘paragraph (2)(A)’’; and

19 (B) in paragraph (4)(A)(i) by inserting ‘‘or

20 (2)(D)’’ after ‘‘(1)(G)’’.

21 (e) FACTORS IN MAKING DETERMINATIONS.—Sec22 tion 202(c) of the Trade Act of 1974 (19 U.S.C. 2252(c))

23 is amended—

24 (1) in paragraph (1)(B)(i) by inserting ‘‘pro25 ductivity,’’ after ‘‘wages,’’; and
333

1 (2) in paragraph (6)—

2 (A) by amending subparagraph (A) to read

3 as follows:

4 ‘‘(A)(i) The term ‘domestic industry’

5 means, with respect to an article, the producers

6 as a whole of the like or directly competitive ar7 ticle or those producers whose collective produc8 tion of the like or directly competitive article

9 constitutes a major proportion of the total do10 mestic production of such article.

11 ‘‘(ii) The term ‘domestic industry’ includes

12 producers located in the United States insular

13 possessions.’’; and

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

15 ‘‘(C) The term ‘serious injury’ means a

16 significant overall impairment in the position of

17 a domestic industry.

18 ‘‘(D) The term ‘threat of serious injury’

19 means serious injury that is clearly imminent.

20 (f) LIMITATIONS ON INVESTIGATIONS.—Section

21 202(h) of the Trade Act of 1974 (19 U.S.C. 2252(h)) is

22 amended by adding at the end the following:

23 ‘‘(3)(A) Not later than the date on which the

24 Textiles Agreement enters into force with respect to

25 the United States, the Secretary of Commerce shall
334

1 publish in the Federal Register a list of all articles

2 that are subject to the Textiles Agreement. An in3 vestigation may be conducted under this section con4 cerning imports of any article that is subject to the

5 Textiles Agreement only if the United States has in6 tegrated that article into GATT 1994 pursuant to

7 the Textiles Agreement, as set forth in notices pub8 lished in the Federal Register by the Secretary of

9 Commerce, including the notice published under sec10 tion 331 of the Uruguay Round Agreements Act.

11 ‘‘(B) For purposes of this paragraph:

12 ‘‘(i) The term ‘Textiles Agreement’ means

13 the Agreement on Textiles and Clothing re14 ferred to in section 101(d)(4) of the Uruguay

15 Round Agreements Act.

16 ‘‘(ii) The term ‘GATT 1994’ has the

17 meaning given that term in section 2(1)(B) of

18 the Uruguay Round Agreements Act.’’.

19 SEC. 302. ACTION BY PRESIDENT AFTER DETERMINATION

20 OF IMPORT INJURY.

21 (a) AUTHORITY TO ENTER INTO INTERNATIONAL

22 AGREEMENTS.—Section 203 of the Trade Act of 1974 (19

23 U.S.C. 2253) is amended—

24 (1) in subsection (a)(3)(E) by striking ‘‘orderly

25 marketing’’;
335

1 (2) in subsection (d)(1) by striking ‘‘orderly

2 marketing agreements’’ and inserting ‘‘agreements

3 described in subsection (a)(3)(E)’’;

4 (3) in subsection (f)—

5 (A) in the subsection heading by striking

6 ‘‘ORDERLY MARKETING AND OTHER’’ and in7 serting ‘‘CERTAIN’’;

8 (B) in paragraph (1)—

9 (i) by striking ‘‘orderly marketing

10 agreements’’ the first place it appears and

11 inserting ‘‘agreements of the type de12 scribed in subsection (a)(3)(E)’’; and

13 (ii) by striking ‘‘orderly marketing

14 agreements with foreign countries’’ and in15 serting ‘‘agreements of the type described

16 in subsection (a)(3)(E)’’; and

17 (C) in paragraph (2) by striking ‘‘orderly

18 marketing agreement implemented under sub19 section (a)’’ and inserting ‘‘agreement imple20 mented under subsection (a)(3)(E)’’; and

21 (4) in subsection (g)(2)—

22 (A) in the first sentence by striking ‘‘or23 derly marketing or other’’; and

24 (B) in the second sentence—
336

1 (i) by striking ‘‘orderly marketing

2 agreement’’ and inserting ‘‘agreement of

3 the type described in subsection (a)(3)(E)

4 that is’’; and

5 (ii) by striking ‘‘agreements’’ and in6 serting ‘‘agreement’’.

7 (b) LIMITATIONS ON ACTIONS.—

8 (1) DURATION OF ACTIONS.—Section 203(e)(1)

9 of the Trade Act of 1974 (19 U.S.C. 2253(e)(1)) is

10 amended to read as follows:

11 ‘‘(1)(A) Subject to subparagraph (B), the dura12 tion of the period in which an action taken under

13 this section may be in effect shall not exceed 4

14 years. Such period shall include the period, if any,

15 in which provisional relief under section 202(d) was

16 in effect.

17 ‘‘(B)(i) Subject to clause (ii), the President,

18 after receiving an affirmative determination from the

19 Commission under section 204(c) (or, if the Com20 mission is equally divided in its determination, a de21 termination which the President considers to be an

22 affirmative determination of the Commission), may

23 extend the effective period of any action under this

24 section if the President determines that—
337

1 ‘‘(I) the action continues to be necessary to

2 prevent or remedy the serious injury; and

3 ‘‘(II) there is evidence that the domestic

4 industry is making a positive adjustment to im5 port competition.

6 ‘‘(ii) The effective period of any action under

7 this section, including any extensions thereof, may

8 not, in the aggregate, exceed 8 years.’’.

9 (2) LIMITATION ON QUANTITATIVE RESTRIC10 TIONS.—Section 203(e)(4) of the Trade Act of 1974

11 (19 U.S.C. 2253(e)(4)) is amended to read as fol12 lows:

13 ‘‘(4) Any action taken under this section pro14 claiming a quantitative restriction shall permit the

15 importation of a quantity or value of the article

16 which is not less than the average quantity or value

17 of such article entered into the United States in the

18 most recent 3 years that are representative of im19 ports of such article and for which data are avail20 able, unless the President finds that the importation

21 of a different quantity or value is clearly justified in

22 order to prevent or remedy the serious injury.’’.

23 (3) PHASING-DOWN OF ACTIONS.—Section

24 203(e)(5) of the Trade Act of 1974 (19 U.S.C.

25 2253(e)(5)) is amended to read as follows:
338

1 ‘‘(5) An action described in subsection

2 (a)(3)(A), (B), or (C) that has an effective period of

3 more than 1 year shall be phased down at regular

4 intervals during the period in which the action is in

5 effect.’’.

6 (4) LIMITATIONS ON NEW ACTIONS AND INVES7 TIGATIONS OF SAME ARTICLE.—(A) Section 203(e)

8 of the Trade Act of 1974 (19 U.S.C. 2253(e)) is

9 amended by adding at the end the following:

10 ‘‘(7)(A) If an article was the subject of an ac11 tion under subparagraph (A), (B), (C), or (E) of

12 subsection (a)(3), no new action may be taken under

13 any of those subparagraphs with respect to such ar14 ticle for—

15 ‘‘(i) a period beginning on the date on

16 which the previous action terminates that is

17 equal to the period in which the previous action

18 was in effect, or

19 ‘‘(ii) a period of 2 years beginning on the

20 date on which the previous action terminates,

21 whichever is greater.

22 ‘‘(B) Notwithstanding subparagraph (A), if the

23 previous action under subparagraph (A), (B), (C), or

24 (E) of subsection (a)(3) with respect to an article

25 was in effect for a period of 180 days or less, the
339

1 President may take a new action under any of those

2 subparagraphs with respect to such article if—

3 ‘‘(i) at least 1 year has elapsed since the

4 previous action went into effect; and

5 ‘‘(ii) an action described in any of those

6 subparagraphs has not been taken with respect

7 to such article more than twice in the 5-year

8 period immediately preceding the date on which

9 the new action with respect to such article first

10 becomes effective.’’.

11 (B) Section 202(h)(2) of the Trade Act of 1974

12 (19 U.S.C. 2252(h)(2)) is amended to read as fol13 lows:

14 ‘‘(2) No new investigation shall be conducted

15 with respect to an article that is or has been the

16 subject of an action under section 203(a)(3)(A), (B),

17 (C), or (E) if the last day on which the President

18 could take action under section 203 in the new in19 vestigation is a date earlier than that permitted

20 under section 203(e)(7).’’.

21 (c) REPORTS ON MONITORING.—Section 204(a) of

22 the Trade Act of 1974 (19 U.S.C. 2354(a)) is amended—

23 (1) by amending paragraph (2) to read as fol24 lows:
340

1 ‘‘(2) If the initial period during which the ac2 tion taken under section 203 is in effect exceeds 3

3 years, or if an extension of such action exceeds 3

4 years, the Commission shall submit a report on the

5 results of the monitoring under paragraph (1) to the

6 President and to the Congress not later than the

7 date that is the mid-point of the initial period, and

8 of each such extension, during which the action is in

9 effect.’’; and

10 (2) in paragraph (4) by striking ‘‘extension,’’.

11 (d) INVESTIGATION OF EXTENSION OF ACTION.—

12 Section 204 of the Trade Act of 1974 (19 U.S.C. 2254)

13 is amended—

14 (1) by redesignating subsections (c) and (d) as

15 subsections (d) and (e), respectively; and

16 (2) by inserting after subsection (b) the follow17 ing:

18 ‘‘(c) EXTENSION OF ACTION.—

19 ‘‘(1) Upon request of the President, or upon pe20 tition on behalf of the industry concerned filed with

21 the Commission not earlier than the date which is

22 9 months, and not later than the date which is 6

23 months, before the date any action taken under sec24 tion 203 is to terminate, the Commission shall inves25 tigate to determine whether action under section 203
341

1 continues to be necessary to prevent or remedy seri2 ous injury and whether there is evidence that the in3 dustry is making a positive adjustment to import

4 competition.

5 ‘‘(2) The Commission shall publish notice of the

6 commencement of any proceeding under this sub7 section in the Federal Register and shall, within a

8 reasonable time thereafter, hold a public hearing at

9 which the Commission shall afford interested parties

10 and consumers an opportunity to be present, to

11 present evidence, and to respond to the presen12 tations of other parties and consumers, and other13 wise to be heard.

14 ‘‘(3) The Commission shall transmit to the

15 President a report on its investigation and deter16 mination under this subsection not later than 60

17 days before the action under section 203 is to termi18 nate, unless the President specifies a different

19 date.’’.

20 SEC. 303. MISCELLANEOUS AMENDMENTS.

21 Title II of the Trade Act of 1974 is amended as fol22 lows:

23 (1) Section 202(a)(2)(B)(ii) (19 U.S.C.

24 2252(a)(2)(B)(ii)) is amended by striking ‘‘, or at
342

1 any time before the 150th day after the date of fil2 ing be amended to request,’’.

3 (2) Section 202(b)(1)(A) (19 U.S.C.

4 2252(b)(1)(A)) is amended by striking ‘‘(b)’’ and in5 serting ‘‘(a)’’.

6 (3) Section 202(d)(1) (19 U.S.C. 2252(d)(1)) is

7 amended—

8 (A) in subparagraph (C)(i) by striking

9 ‘‘paragraph (2)’’ and inserting ‘‘subparagraph

10 (B)’’; and

11 (B) by striking ‘‘or threat thereof’’ each

12 place it appears in subparagraphs (E) and (G).

13 (4) Section 202(d)(4)(A)(i) (19 U.S.C.

14 2252(d)(4)(A)(i) is amended by striking ‘‘203(a)’’

15 and inserting ‘‘202(b)’’.

16 (5) Section 202(c)(6) (19 U.S.C. 2252(c)(6)) is

17 amended by striking ‘‘subsection’’ and inserting

18 ‘‘section’’.

19 (6) Section 202(f)(2)(G)(ii) (19 U.S.C.

20 2252(f)(2)(G)(ii)) is amended by striking ‘‘is’’ and

21 inserting ‘‘are’’.

22 (7) Section 203(a)(2)(C) (19 U.S.C.

23 2253(a)(2)(C)) is amended by striking ‘‘201(b)’’ and

24 inserting ‘‘202(a)’’.
343

1 (8) Section 203(c) (19 U.S.C. 2253(c)) is

2 amended by striking ‘‘(c)(2)’’ and inserting

3 ‘‘(d)(2)’’.

4 (9) Section 203(e)(2) (19 U.S.C. 2253(e)(2)) is

5 amended—

6 (A) by striking ‘‘may be taken under sub7 section (a)(1)(A), (B), or (C) or under section

8 202(d)(2)(B)’’ and inserting ‘‘of a type de9 scribed in subsection (a)(3)(A), (B), or (C) may

10 be taken under subsection (a)(1), under section

11 202(d)(1)(G), or under section 202(d)(2)(D)’’;

12 and

13 (B) by striking ‘‘or threat thereof’’.

14 (10) Section 203(e)(6)(B) (19 U.S.C.

15 2253(e)(6)(B)) is amended—

16 (A) by striking ‘‘203(c)’’ and inserting

17 ‘‘202(e)’’; and

18 (B) by striking ‘‘203(a)’’ and inserting

19 ‘‘202(b)’’.

20 SEC. 304. EFFECTIVE DATE.

21 (a) IN GENERAL.—Except as provided in subsection

22 (b), this subtitle and the amendments made by this sub23 title take effect on the date on which the WTO Agreement

24 enters into force with respect to the United States.
344

1 (b) SECTION 301(b).—The amendment made by sec2 tion 301(b) takes effect on the date of the enactment of

3 this Act.

4 Subtitle B—Foreign Trade Barriers

5 and Unfair Trade Practices

6 SEC. 311. IDENTIFICATION OF FOREIGN ANTICOMPETITIVE

7 PRACTICES.

8 (a) REPORT TO CONGRESS.—

9 (1) CONTENTS OF REPORT.—Section 181(b)(2)

10 of the Trade Act of 1974 (19 U.S.C. 2241(b)(2)) is

11 amended—

12 (A) in subparagraph (A) by striking ‘‘or’’

13 after the comma;

14 (B) in subparagraph (B) by striking the

15 period and inserting ‘‘, or’’; and

16 (C) by adding after subparagraph (B) the

17 following:

18 ‘‘(C) a section on foreign anticompetitive

19 practices, the toleration of which by foreign

20 governments is adversely affecting exports of

21 United States goods or services.’’.

22 (2) ASSISTANCE OF OTHER AGENCIES.—Section

23 181(c) of the Trade Act of 1974 (19 U.S.C.

24 2241(c)) is amended by adding at the end of para25 graph (1) the following: ‘‘In preparing the section of
345

1 the report required by subsection (b)(2)(C), the

2 Trade Representative shall consult in particular with

3 the Attorney General.’’.

4 SEC. 312. CONSULTATION WITH COMMITTEES.

5 Section 181(b)(3) of the Trade Act of 1974 (19

6 U.S.C. 2241(b)(3)) is amended by adding at the end the

7 following: ‘‘After the submission of the report required by

8 paragraph (1), the Trade Representative shall also consult

9 periodically with, and take into account the views of, the

10 committees described in that paragraph regarding means

11 to address the foreign trade barriers identified in the re12 port, including the possible initiation of investigations

13 under section 302 or other trade actions.’’.

14 SEC. 313. IDENTIFICATION OF COUNTRIES THAT DENY PRO15 TECTION OF INTELLECTUAL PROPERTY

16 RIGHTS.

17 Section 182 of the Trade Act of 1974 (19 U.S.C.

18 2242) is amended—

19 (1) in subsection (b) by adding at the end the

20 following:

21 ‘‘(4) In identifying foreign countries under

22 paragraphs (1) and (2) of subsection (a), the Trade

23 Representative shall take into account—

24 ‘‘(A) the history of intellectual property

25 laws and practices of the foreign country, in-
346

1 cluding any previous identification under sub2 section (a)(2), and

3 ‘‘(B) the history of efforts of the United

4 States, and the response of the foreign country,

5 to achieve adequate and effective protection and

6 enforcement of intellectual property rights.’’;

7 and

8 (2) in subsection (d)—

9 (A) in paragraph (3) by amending the

10 matter preceding subparagraph (A) to read as

11 follows:

12 ‘‘(3) A foreign country denies fair and equitable

13 market access if the foreign country effectively de14 nies access to a market for a product protected by

15 a copyright or related right, patent, trademark,

16 mask work, trade secret, or plant breeder’s right,

17 through the use of laws, procedures, practices, or

18 regulations which—’’; and

19 (B) by adding at the end the following:

20 ‘‘(4) A foreign country may be determined to

21 deny adequate and effective protection of intellectual

22 property rights, notwithstanding the fact that the

23 foreign country may be in compliance with the spe24 cific obligations of the Agreement on Trade-Related

25 Aspects of Intellectual Property Rights referred to in
347

1 section 101(d)(15) of the Uruguay Round Agree2 ments Act.’’; and

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

4 ‘‘(g) ANNUAL REPORT.—The Trade Representative

5 shall, by not later than the date by which countries are

6 identified under subsection (a), transmit to the Committee

7 on Ways and Means of the House of Representatives and

8 the Committee on Finance of the Senate, a report on ac9 tions taken under this section during the 12 months pre10 ceding such report, and the reasons for such actions, in11 cluding a description of progress made in achieving im12 proved intellectual property protection and market access

13 for persons relying on intellectual property rights.’’.

14 SEC. 314. AMENDMENTS TO TITLE III OF THE TRADE ACT

15 OF 1974.

16 (a) SCOPE OF AUTHORITY.—

17 (1) IN GENERAL.—Subsections (a)(1) and

18 (b)(2) of section 301 of the Trade Act of 1974 (19

19 U.S.C. 2411(a)(1) and (b)(2)) are each amended by

20 adding the following sentence at the end:

21 ‘‘Actions may be taken that are within the power of the

22 President with respect to trade in any goods or services,

23 or with respect to any other area of pertinent relations

24 with the foreign country.’’.
348

1 (2) IMPORT RESTRICTIONS.—Section 301(c)(5)

2 of the Trade Act of 1974 (19 U.S.C. 2411(c)(5)) is

3 amended by striking the matter preceding subpara4 graph (B) and inserting the following:

5 ‘‘(5) If the Trade Representative determines

6 that actions to be taken under subsection (a) or (b)

7 are to be in the form of import restrictions, the

8 Trade Representative shall—

9 ‘‘(A) give preference to the imposition of

10 duties over the imposition of other import re11 strictions, and’’.

12 (b) RELATIONSHIP WITH OTHER AUTHORITIES.—

13 Section 301(c) of the Trade Act of 1974 (19 U.S.C.

14 2411(c)) is amended—

15 (1) in paragraph (1)—

16 (A) in subparagraph (B), by striking ‘‘or’’

17 after the semicolon at the end;

18 (B) by redesignating subparagraph (C) as

19 subparagraph (D); and

20 (C) by inserting after subparagraph (B)

21 the following:

22 ‘‘(C) in a case in which the act, policy, or

23 practice also fails to meet the eligibility criteria

24 for receiving duty-free treatment under sub25 sections (b) and (c) of section 502 of this Act,
349

1 subsections (b) and (c) of section 212 of the

2 Caribbean Basin Economic Recovery Act (19

3 U.S.C. 2702(b) and (c)), or subsections (c) and

4 (d) of section 203 of the Andean Trade Pref5 erence Act (19 U.S.C. 3202(c) and (d)), with6 draw, limit, or suspend such treatment under

7 such provisions, notwithstanding the provisions

8 of subsection (a)(3) of this section; or’’.

9 (c) DEFINITION OF AN UNREASONABLE ACT, POL10 ICY, OR PRACTICE.—Section 301(d)(3) of the Trade Act

11 of 1974 (19 U.S.C. 2411(d)(3)) is amended—

12 (1) in subparagraph (B)(i) by striking

13 subclauses (II) and (III) and inserting the following:

14 ‘‘(II) provision of adequate and effec15 tive protection of intellectual property

16 rights notwithstanding the fact that the

17 foreign country may be in compliance with

18 the specific obligations of the Agreement

19 on Trade-Related Aspects of Intellectual

20 Property Rights referred to in section

21 101(d)(15) of the Uruguay Round Agree22 ments Act,

23 ‘‘(III) nondiscriminatory market ac24 cess opportunities for United States per-
350

1 sons that rely upon intellectual property

2 protection, or

3 ‘‘(IV) market opportunities, including

4 the toleration by a foreign government of

5 systematic anticompetitive activities by en6 terprises or among enterprises in the for7 eign country that have the effect of re8 stricting, on a basis that is inconsistent

9 with commercial considerations, access of

10 United States goods or services to a for11 eign market,’’; and

12 (2) by adding at the end the following:

13 ‘‘(F)(i) For the purposes of subparagraph

14 (B)(i)(II), adequate and effective protection of intel15 lectual property rights includes adequate and effec16 tive means under the laws of the foreign country for

17 persons who are not citizens or nationals of such

18 country to secure, exercise, and enforce rights and

19 enjoy commercial benefits relating to patents, trade20 marks, copyrights and related rights, mask works,

21 trade secrets, and plant breeder’s rights.

22 ‘‘(ii) For purposes of subparagraph (B)(i)(IV),

23 the denial of fair and equitable nondiscriminatory

24 market access opportunities includes restrictions on

25 market access related to the use, exploitation, or en-
351

1 joyment of commercial benefits derived from exercis2 ing intellectual property rights in protected works or

3 fixations or products embodying protected works.’’.

4 (d) TIME LIMITS FOR DETERMINATIONS OF UNFAIR

5 TRADE PRACTICES.—Section 304(a) of the Trade Act of

6 1974 (19 U.S.C. 2414(a)) is amended—

7 (1) in subparagraph (A) of paragraph (2), by

8 striking ‘‘(other than the agreement on subsidies

9 and countervailing measures described in section

10 2(c)(5) of the Trade Agreements Act of 1979)’’,

11 (2)(A) in subparagraph (A) of paragraph (3),

12 by inserting ‘‘does not consider that a trade agree13 ment, including the Agreement on Trade-Related As14 pects of Intellectual Property (referred to in section

15 101(d)(15) of the Uruguay Round Agreements Act),

16 is involved or’’ after ‘‘the Trade Representative’’ the

17 first place it appears, and

18 (B) in subparagraph (B) of paragraph (3), in

19 the matter preceding clause (i), by striking ‘‘any in20 vestigation initiated by reason of section 302(b)(2)’’

21 and inserting ‘‘an investigation initiated by reason of

22 section 302(b)(2) (other than an investigation in23 volving a trade agreement)’’, and

24 (3) in paragraph (4), by striking ‘‘(other than

25 the agreement on subsidies and countervailing meas-
352

1 ures described in section 2(c)(5) of the Trade Agree2 ments Act of 1979)’’.

3 (e) MONITORING OF FOREIGN COMPLIANCE.—Sub4 sections (a) and (b) of section 306 of the Trade Act of

5 1974 (19 U.S.C. 2416) are amended to read as follows:

6 ‘‘(a) IN GENERAL.—The Trade Representative shall

7 monitor the implementation of each measure undertaken,

8 or agreement that is entered into, by a foreign country

9 to provide a satisfactory resolution of a matter subject to

10 investigation under this chapter or subject to dispute set11 tlement proceedings to enforce the rights of the United

12 States under a trade agreement providing for such pro13 ceedings.

14 ‘‘(b) FURTHER ACTION.—

15 ‘‘(1) IN GENERAL.—If, on the basis of the mon16 itoring carried out under subsection (a), the Trade

17 Representative considers that a foreign country is

18 not satisfactorily implementing a measure or agree19 ment referred to in subsection (a), the Trade Rep20 resentative shall determine what further action the

21 Trade Representative shall take under section

22 301(a). For purposes of section 301, any such deter23 mination shall be treated as a determination made

24 under section 304(a)(1).’’.
353

1 ‘‘(2) WTO DISPUTE SETTLEMENT REC2 OMMENDATIONS.—If the measure or agreement re3 ferred to in subsection (a) concerns the implementa4 tion of a recommendation made pursuant to dispute

5 settlement proceedings under the World Trade Orga6 nization, and the Trade Representative considers

7 that the foreign country has failed to implement it,

8 the Trade Representative shall make the determina9 tion in paragraph (1) no later than 30 days after the

10 expiration of the reasonable period of time provided

11 for such implementation under paragraph 21 of the

12 Understanding on Rules and Procedures Governing

13 the Settlement of Disputes that is referred to in sec14 tion 101(d)(16) of the Uruguay Round Agreements

15 Act.’’.

16 (f) EXTENSION OF SECTION 310 OF THE TRADE ACT

17 OF 1974.—Section 310 of the Trade Act of 1974 (19

18 U.S.C. 2420) is amended to read as follows:

19 ‘‘SEC. 310. IDENTIFICATION OF TRADE EXPANSION PRIOR20 ITIES.

21 ‘‘(a) IDENTIFICATION.—

22 ‘‘(1) Within 180 days after the submission in

23 calendar year 1995 of the report required by section

24 181(b), the Trade Representative shall—
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1 ‘‘(A) review United States trade expansion

2 priorities,

3 ‘‘(B) identify priority foreign country prac4 tices, the elimination of which is likely to have

5 the most significant potential to increase Unit6 ed States exports, either directly or through the

7 establishment of a beneficial precedent, and

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

9 of the Senate and the Committee on Ways and

10 Means of the House of Representatives and

11 publish in the Federal Register a report on the

12 priority foreign country practices identified.

13 ‘‘(2) In identifying priority foreign country

14 practices under paragraph (1) of this section, the

15 Trade Representative shall take into account all rel16 evant factors, including—

17 ‘‘(A) the major barriers and trade distort18 ing practices described in the National Trade

19 Estimate Report required under section 181(b);

20 ‘‘(B) the trade agreements to which a for21 eign country is a party and its compliance with

22 those agreements;

23 ‘‘(C) the medium- and long-term implica24 tions of foreign government procurement plans;

25 and
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1 ‘‘(D) the international competitive position

2 and export potential of United States products

3 and services.

4 ‘‘(3) The Trade Representative may include in

5 the report, if appropriate—

6 ‘‘(A) a description of foreign country prac7 tices that may in the future warrant identifica8 tion as priority foreign country practices; and

9 ‘‘(B) a statement about other foreign coun10 try practices that were not identified because

11 they are already being addressed by provisions

12 of United States trade law, by existing bilateral

13 trade agreements, or as part of trade negotia14 tions with other countries and progress is being

15 made toward the elimination of such practices.

16 ‘‘(b) INITIATION OF INVESTIGATIONS.—By no later

17 than the date which is 21 days after the date on which

18 a report is submitted to the appropriate congressional

19 committees under subsection (a)(1), the Trade Represent20 ative shall initiate under section 302(b)(1) investigations

21 under this chapter with respect to all of the priority for22 eign country practices identified.

23 ‘‘(c) AGREEMENTS FOR THE ELIMINATION OF BAR24 RIERS.—In the consultations with a foreign country that

25 the Trade Representative is required to request under sec-
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1 tion 303(a) with respect to an investigation initiated by

2 reason of subsection (b), the Trade Representative shall

3 seek to negotiate an agreement that provides for the elimi4 nation of the practices that are the subject of the inves5 tigation as quickly as possible or, if elimination of the

6 practices is not feasible, an agreement that provides for

7 compensatory trade benefits.

8 ‘‘(d) REPORTS.—The Trade Representative shall in9 clude in the semiannual report required by section 309

10 a report on the status of any investigations initiated pur11 suant to subsection (b) and, where appropriate, the extent

12 to which such investigations have led to increased opportu13 nities for the export of products and services of the United

14 States.’’.

15 SEC. 315. OBJECTIVES IN INTELLECTUAL PROPERTY.

16 It is the objective of the United States—

17 (1) to accelerate the implementation of the

18 Agreement on Trade-Related Aspects of Intellectual

19 Property Rights referred to in section 101(d)(15),

20 (2) to seek enactment and effective implementa21 tion by foreign countries of laws to protect and en22 force intellectual property rights that supplement

23 and strengthen the standards of the Agreement on

24 Trade-Related Aspects of Intellectual Property

25 Rights referred to in section 101(d)(15) and the
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1 North American Free Trade Agreement and, in par2 ticular—

3 (A) to conclude bilateral and multilateral

4 agreements that create obligations to protect

5 and enforce intellectual property rights that

6 cover new and emerging technologies and new

7 methods of transmission and distribution, and

8 (B) to prevent or eliminate discrimination

9 with respect to matters affecting the availabil10 ity, acquisition, scope, maintenance, use, and

11 enforcement of intellectual property rights,

12 (3) to secure fair, equitable, and nondiscrim13 inatory market access opportunities for United

14 States persons that rely upon intellectual property

15 protection,

16 (4) to take an active role in the development of

17 the intellectual property regime under the World

18 Trade Organization to ensure that it is consistent

19 with other United States objectives, and

20 (5) to take an active role in the World Intellec21 tual Property Organization (WIPO) to develop a co22 operative and mutually supportive relationship be23 tween the World Trade Organization and WIPO.
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1 SEC. 316. EFFECTIVE DATE.

2 (a) IN GENERAL.—Except as provided in subsection

3 (b), this subtitle and the amendments made by this sub4 title take effect on the date on which the WTO Agreement

5 enters into force with respect to the United States.

6 (b) SECTION 314(f).—The amendment made by sec7 tion 314(f) takes effect on the date of the enactment of

8 this Act.

9 Subtitle C—Unfair Practices in

10 Import Trade

11 SEC. 321. UNFAIR PRACTICES IN IMPORT TRADE.

12 (a) AMENDMENTS TO SECTION 337 OF THE TARIFF

13 ACT OF 1930.—Section 337 of the Tariff Act of 1930 (19

14 U.S.C. 1337) is amended as follows:

15 (1) INVESTIGATION.—Subsection (b) is amend16 ed—

17 (A) by striking ‘‘; TIME LIMITS’’ in the

18 heading;

19 (B) in paragraph (1) by striking all that

20 follows the second sentence and inserting the

21 following: ‘‘The Commission shall conclude any

22 such investigation and make its determination

23 under this section at the earliest practicable

24 time after the date of publication of notice of

25 such investigation. To promote expeditious ad26 judication, the Commission shall, within 45
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1 days after an investigation is initiated, establish

2 a target date for its final determination.’’; and

3 (C) in paragraph (3)—

4 (i) in the first sentence—

5 (I) by striking ‘‘the Tariff Act of

6 1930’’ and inserting ‘‘this Act’’; and

7 (II) by striking ‘‘such Act’’ and

8 inserting ‘‘such subtitle’’; and

9 (ii) by striking the fifth sentence.

10 (2) DETERMINATION; REVIEW.—Subsection (c)

11 is amended—

12 (A) in the first sentence by striking ‘‘a set13 tlement agreement’’ and inserting ‘‘an agree14 ment between the private parties to the inves15 tigation, including an agreement to present the

16 matter for arbitration’’;

17 (B) by inserting the following after the

18 third sentence: ‘‘A respondent may raise any

19 counterclaim in a manner prescribed by the

20 Commission. Immediately after a counterclaim

21 is received by the Commission, the respondent

22 raising such counterclaim shall file a notice of

23 removal with a United States district court in

24 which venue for any of the counterclaims raised

25 by the party would exist under section 1391 of
360

1 title 28, United States Code. Any counterclaim

2 raised pursuant to this section shall relate back

3 to the date of the original complaint in the pro4 ceeding before the Commission. Action on such

5 counterclaim shall not delay or affect the pro6 ceeding under this section, including the legal

7 and equitable defenses that may be raised

8 under this subsection.’’; and

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

10 ‘‘Determinations by the Commission under sub11 sections (e), (f), and (j) with respect to forfeit12 ure of bonds and under subsection (h) with re13 spect to the imposition of sanctions for abuse of

14 discovery or abuse of process shall also be

15 reviewable in accordance with section 706 of

16 title 5, United States Code.’’.

17 (3) ENTRY UNDER BOND.—Subsection (e) is

18 amended—

19 (A) in the last sentence of paragraph (1)

20 by striking ‘‘determined by the Commission’’

21 and all that follows through the end of the sen22 tence and inserting ‘‘prescribed by the Sec23 retary in an amount determined by the Com24 mission to be sufficient to protect the complain25 ant from any injury. If the Commission later
361

1 determines that the respondent has violated the

2 provisions of this section, the bond may be for3 feited to the complainant.’’;

4 (B) by adding at the end of paragraph (2)

5 the following: ‘‘If the Commission later deter6 mines that the respondent has not violated the

7 provisions of this section, the bond may be for8 feited to the respondent.’’; and

9 (C) by adding at the end the following new

10 paragraph:

11 ‘‘(4) The Commission shall prescribe the terms and

12 conditions under which bonds may be forfeited under

13 paragraphs (1) and (2).’’.

14 (4) CEASE AND DESIST ORDERS.—Subsection

15 (f)(1) is amended by adding at the end the follow16 ing: ‘‘If a temporary cease and desist order is issued

17 in addition to, or in lieu of, an exclusion order under

18 subsection (e), the Commission may require the com19 plainant to post a bond, in an amount determined

20 by the Commission to be sufficient to protect the re21 spondent from any injury, as a prerequisite to the

22 issuance of an order under this subsection. If the

23 Commission later determines that the respondent

24 has not violated the provisions of this section, the

25 bond may be forfeited to the respondent. The Com-
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1 mission shall prescribe the terms and conditions

2 under which the bonds may be forfeited under this

3 paragraph.’’.

4 (5) CONDITIONS APPLICABLE FOR GENERAL

5 EXCLUSION ORDERS.—(A) Subsection (d) is amend6 ed—

7 (i) by inserting ‘‘(1)’’ before ‘‘If’’;

8 (ii) in the first sentence by striking ‘‘there

9 is violation’’ and inserting ‘‘there is a viola10 tion’’; and

11 (iii) by adding at the end the following new

12 paragraph:

13 ‘‘(2) The authority of the Commission to order an

14 exclusion from entry of articles shall be limited to persons

15 determined by the Commission to be violating this section

16 unless the Commission determines that—

17 ‘‘(A) a general exclusion from entry of articles

18 is necessary to prevent circumvention of an exclusion

19 order limited to products of named persons; or

20 ‘‘(B) there is a pattern of violation of this sec21 tion and it is difficult to identify the source of in22 fringing products.’’.

23 (B) Subsection (g)(2) is amended—

24 (i) by striking ‘‘and’’ at the end of sub25 paragraph (A);
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1 (ii) by striking the period at the end of

2 subparagraph (B) and inserting ‘‘, and’’; and

3 (iii) by adding after subparagraph (B) the

4 following:

5 ‘‘(C) the requirements of subsection (d)(2) are

6 met.’’.

7 (6) ENTRY UNDER BOND AFTER REFERRAL TO

8 THE PRESIDENT.—Subsection (j)(3) is amended by

9 striking ‘‘shall be entitled to entry under bond’’ and

10 all that follows through the end of the sentence and

11 inserting ‘‘shall, until such determination becomes

12 final, be entitled to entry under bond prescribed by

13 the Secretary in an amount determined by the Com14 mission to be sufficient to protect the complainant

15 from any injury. If the determination becomes final,

16 the bond may be forfeited to the complainant. The

17 Commission shall prescribe the terms and conditions

18 under which bonds may be forfeited under this para19 graph.’’.

20 (7) ACCESS TO CONFIDENTIAL INFORMATION.—

21 Subsection (n)(2) is amended—

22 (A) by amending subparagraph (A) to read

23 as follows:

24 ‘‘(A) an officer or employee of the Commission

25 who is directly concerned with—
364

1 ‘‘(i) carrying out the investigation or relat2 ed proceeding in connection with which the in3 formation is submitted,

4 ‘‘(ii) the administration of a bond posted

5 pursuant to subsection (e), (f), or (j),

6 ‘‘(iii) the administration or enforcement of

7 an exclusion order issued pursuant to sub8 section (d), (e), or (g), a cease and desist order

9 issued pursuant to subsection (f), or a consent

10 order issued pursuant to subsection (c),

11 ‘‘(iv) proceedings for the modification or

12 rescission of a temporary or permanent order

13 issued under subsection (d), (e), (f), (g), or (i),

14 or a consent order issued under this section, or

15 ‘‘(v) maintaining the administrative record

16 of the investigation or related proceeding,’’; and

17 (B) by amending subparagraph (C) to read

18 as follows:

19 ‘‘(C) an officer or employee of the United

20 States Customs Service who is directly involved in

21 administering an exclusion from entry under sub22 section (d), (e), or (g) resulting from the investiga23 tion or related proceeding in connection with which

24 the information is submitted.’’.
365

1 (8) TECHNICAL AMENDMENT.—Subsection (l) is

2 amended by striking ‘‘Claims Court’’ and inserting

3 ‘‘Court of Federal Claims’’.

4 (b) AMENDMENTS TO TITLE 28, UNITED STATES

5 CODE.—

6 (1) STAY OF ACTIONS.—

7 (A) IN GENERAL.—Chapter 111 of title

8 28, United States Code, is amended by adding

9 at the end the following new section:

10 ‘‘§ 1659. Stay of certain actions pending disposition of

11 related proceedings before the United

12 States International Trade Commission

13 ‘‘(a) STAY.—In a civil action involving parties that

14 are also parties to a proceeding before the United States

15 International Trade Commission under section 337 of the

16 Tariff Act of 1930, at the request of a party to the civil

17 action that is also a respondent in the proceeding before

18 the Commission, the district court shall stay, until the de19 termination of the Commission becomes final, proceedings

20 in the civil action with respect to any claim that involves

21 the same issues involved in the proceeding before the Com22 mission, but only if such request is made within—

23 ‘‘(1) 30 days after the party is named as a re24 spondent in the proceeding before the Commission,

25 or
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1 ‘‘(2) 30 days after the district court action is

2 filed,

3 whichever is later.

4 ‘‘(b) USE OF COMMISSION RECORD.—Notwithstand5 ing section 337(n)(1) of the Tariff Act of 1930, after dis6 solution of a stay under subsection (a), the record of the

7 proceeding before the United States International Trade

8 Commission shall be transmitted to the district court and

9 shall be admissible in the civil action, subject to such pro10 tective order as the district court determines necessary,

11 to the extent permitted under the Federal Rules of Evi12 dence and the Federal Rules of Civil Procedure.’’.

13 (B) CLERICAL AMENDMENT.—The table of

14 sections for chapter 111 of title 28, United

15 States Code, is amended by adding at the end

16 the following new item:

‘‘1659. Stay of certain actions pending disposition of related proceedings before

the United States International Trade Commission.’’.

17 (2) COUNTERCLAIMS.—Section 1446 of title 28,

18 United States Code, is amended by adding at the

19 end the following:

20 ‘‘(f) With respect to any counterclaim removed to a

21 district court pursuant to section 337(c) of the Tariff Act

22 of 1930, the district court shall resolve such counterclaim

23 in the same manner as an original complaint under the

24 Federal Rules of Civil Procedure, except that the payment
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1 of a filing fee shall not be required in such cases and the

2 counterclaim shall relate back to the date of the original

3 complaint in the proceeding before the International

4 Trade Commission under section 337 of that Act.’’.

5 (3) JURISDICTION.—

6 (A) IN GENERAL.—Chapter 85 of title 28,

7 United States Code, is amended by adding at

8 the end the following:

9 ‘‘§ 1368. Counterclaims in unfair practices in inter10 national trade.

11 ‘‘The district courts shall have original jurisdiction

12 of any civil action based on a counterclaim raised pursuant

13 to section 337(c) of the Tariff Act of 1930, to the extent

14 that it arises out of the transaction or occurrence that is

15 the subject matter of the opposing party’s claim in the

16 proceeding under section 337(a) of that Act.’’.

17 (B) CLERICAL AMENDMENT.—The table of

18 sections for chapter 85 of title 28, United

19 States Code, is amended by adding at the end

20 the following:

‘‘1368. Counterclaims in unfair practices in international trade.’’.

21 SEC. 322. EFFECTIVE DATE.

22 The amendments made by this subtitle apply—

23 (1) with respect to complaints filed under sec24 tion 337 of the Tariff Act of 1930 on or after the
368

1 date on which the WTO Agreement enters into force

2 with respect to the United States, or

3 (2) in cases under such section 337 in which no

4 complaint is filed, with respect to investigations ini5 tiated under such section on or after such date.

6 Subtitle D—Textiles

7 SEC. 331. TEXTILE PRODUCT INTEGRATION.

8 Not later than 120 days after the date that the WTO

9 Agreement, as defined in section 2(9) of the Uruguay

10 Round Implementation Act, enters into force with respect

11 to the United States, the Secretary of Commerce shall

12 publish in the Federal Register a notice containing the list

13 of products to be integrated in each stage set out in Article

14 2(8) of the Agreement on Textiles and Clothing referred

15 to in section 101(d)(4). After publication of such list, the

16 list may not be changed unless otherwise required by stat17 ute or the international obligations of the United States,

18 to correct technical errors, or to reflect reclassifications.

19 Within 30 days after the publication of such list, the

20 Trade Representative shall notify the list to the Textiles

21 Monitoring Body established under Article 8 of the Agree22 ment on Textiles and Clothing.
369

1 SEC. 332. AMENDMENT TO SECTION 204 OF THE AGRICUL2 TURAL ACT OF 1956.

3 Section 204 of the Agricultural Act of 1956 (7 U.S.C.

4 1854) is amended by amending the second sentence to

5 read as follows: ‘‘In addition, if a multilateral agreement,

6 including but not limited to the Agreement on Textiles and

7 Clothing referred to in section 101(d)(4) of the Uruguay

8 Round Implementation Act, has been or is concluded

9 under the authority of this section among countries ac10 counting for a significant part of world trade in the arti11 cles with respect to which the agreement was concluded,

12 the President may also issue, in order to carry out such

13 agreement, regulations governing the entry or withdrawal

14 from warehouse of the same articles which are the prod15 ucts of countries not parties to the agreement, or countries

16 to which the United States does not apply the agree17 ment.’’.

18 SEC. 333. TEXTILE TRANSSHIPMENTS.

19 Part V of title IV of the Tariff Act of 1930 is amend20 ed by inserting after section 592 the following:

21 ‘‘SEC. 592A. SPECIAL PROVISIONS REGARDING CERTAIN

22 VIOLATIONS.

23 ‘‘(a) PUBLICATION OF NAMES OF CERTAIN VIOLA24 TORS.—

25 ‘‘(1) PUBLICATION.—The Secretary of the

26 Treasury is authorized to publish in the Federal
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1 Register a list of the name of any producer, manu2 facturer, supplier, seller, exporter, or other person

3 located outside the customs territory of the United

4 States—

5 ‘‘(A) against whom the Customs Service

6 has issued a penalty claim under section 592,

7 and

8 ‘‘(B) if a petition with respect to that

9 claim has been filed under section 618, against

10 whom a final decision has been issued under

11 such section after exhaustion of administrative

12 remedies,

13 citing any of the violations of the customs laws re14 ferred to in paragraph (2). Such list shall be pub15 lished not later than March 31 and September 30 of

16 each year.

17 ‘‘(2) VIOLATIONS.—. The violations of the cus18 toms laws referred to in paragraph (1) are the fol19 lowing:

20 ‘‘(A) Using documentation, or providing

21 documentation subsequently used by the im22 porter of record, which indicates a false or

23 fraudulent country of origin or source of textile

24 or apparel products.
371

1 ‘‘(B) Using counterfeit visas, licenses, per2 mits, bills of lading, or similar documentation,

3 or providing counterfeit visas, licenses, permits,

4 bills of lading, or similar documentation that is

5 subsequently used by the importer of record,

6 with respect to the entry into the customs terri7 tory of the United States of textile or apparel

8 products.

9 ‘‘(C) Manufacturing, producing, supplying,

10 or selling textile or apparel products which are

11 falsely or frauduently labelled as to country of

12 origin or source.

13 ‘‘(D) Engaging in practices which aid or

14 abet the transshipment, through a country

15 other than the country of origin, of textile or

16 apparel products in a manner which conceals

17 the true origin of the textile or apparel products

18 or permits the evasion of quotas on, or vol19 untary restraint agreements with respect to, im20 ports of textile or apparel products.

21 ‘‘(3) REMOVAL FROM LIST.—Any person whose

22 name has been included in a list published under

23 paragraph (1) may petition the Secretary to be re24 moved from such list. If the Secretary finds that

25 such person has not committed any violations de-
372

1 scribed in paragraph (2) for a period of not less

2 than 3 years after the date on which the person’s

3 name was so published, the Secretary shall remove

4 such person from the list as of the next publication

5 of the list under paragraph (2).

6 ‘‘(4) REASONABLE CARE REQUIRED FOR SUBSE7 QUENT IMPORTS.—

8 ‘‘(A) RESPONSIBILITY OF IMPORTERS AND

9 OTHERS.—After the name of a person has been

10 published under paragraph (1), the Secretary of

11 the Treasury shall require any importer of

12 record entering, introducing, or attempting to

13 introduce into the commerce of the United

14 States textile or apparel products that were ei15 ther directly or indirectly produced, manufac16 tured, supplied, sold, exported, or transported

17 by such named person to show, to the satisfac18 tion of the Secretary, that such importer has

19 exercised reasonable care to ensure that the tex20 tile or apparel products are accompanied by

21 documentation, packaging, and labelling that

22 are accurate as to its origin. Such reasonable

23 care shall not include reliance solely on a source

24 of information which is the named person.
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1 ‘‘(B) FAILURE TO EXERCISE REASONABLE

2 CARE.—If the Customs Service determines that

3 merchandise is not from the country claimed on

4 the documentation accompanying the merchan5 dise, the failure to exercise reasonable care de6 scribed in subparagraph (A) shall be considered

7 when the Customs Service determines whether

8 the importer of record is in violation of section

9 484(a).

10 ‘‘(b) LIST OF HIGH RISK COUNTRIES.—

11 ‘‘(1) LIST.—The President or his designee,

12 upon the advice of the Secretaries of Commerce and

13 Treasury, and the heads of other appropriate de14 partments and agencies, is authorized to publish a

15 list of countries in which illegal activities have oc16 curred involving transshipped textile or apparel

17 products or activities designed to evade quotas of the

18 United States on textile or apparel products, if those

19 countries fail to demonstrate a good faith effort to

20 cooperate with United States authorities in ceasing

21 such activities. Such list shall be published in the

22 Federal Register not later than March 31 of each

23 year. Any country that is on the list and that subse24 quently demonstrates a good faith effort to cooper25 ate with United States authorities in ceasing illegal
374

1 activities described in the first sentence shall be re2 moved from the list, and such removal shall be pub3 lished in the Federal Register as soon as practicable.

4 ‘‘(2) REASONABLE CARE REQUIRED FOR SUBSE5 QUENT IMPORTS.—

6 ‘‘(A) RESPONSIBILITY OF IMPORTERS OF

7 RECORD.—The Secretary of the Treasury shall

8 require any importer of record entering, intro9 ducing, or attempting to introduce into the

10 commerce of the United States textile or ap11 parel products indicated, on the documentation,

12 packaging, or labelling accompanying such

13 products, to be from any country on the list

14 published under paragraph (1) to show, to the

15 satisfaction of the Secretary, that such im16 porter, consignee, or purchaser has exercised

17 reasonable care to ascertain the true country of

18 origin of the textile or apparel products.

19 ‘‘(B) FAILURE TO EXERCISE REASONABLE

20 CARE.—If the Customs Service determines that

21 merchandise is not from the country claimed on

22 the documentation accompanying the merchan23 dise, the failure to exercise reasonable care de24 scribed in subparagraph (A) shall be considered

25 when the Customs Service determines whether
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1 the importer of record is in violation of section

2 484(a).

3 ‘‘(3) DEFINITION.—For purposes of this sub4 section, the term ‘country’ means a foreign country

5 or territory, including any overseas dependent terri6 tory or possession of a foreign country.’’.

7 SEC. 334. RULES OF ORIGIN FOR TEXTILE AND APPAREL

8 PRODUCTS.

9 (a) REGULATORY AUTHORITY.—The Secretary of the

10 Treasury shall prescribe rules implementing the principles

11 contained in subsection (b) for determining the origin of

12 textiles and apparel products. Such rules shall be promul13 gated in final form not later than July 1, 1995.

14 (b) PRINCIPLES.—

15 (1) IN GENERAL.—Except as otherwise pro16 vided for by statute, a textile or apparel product, for

17 purposes of the customs laws and the administration

18 of quantitative restrictions, originates in a country,

19 territory, or insular possession, and is the growth,

20 product, or manufacture of that country, territory,

21 or insular possession, if—

22 (A) the product is wholly obtained or pro23 duced in that country, territory, or possession;

24 (B) the product is a yarn, thread, twine,

25 cordage, rope, cable, or braiding and—
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1 (i) the constituent staple fibers are

2 spun in that country, territory, or posses3 sion, or

4 (ii) the continuous filament is ex5 truded in that country, territory, or posses6 sion,

7 (C) the product is a fabric, including a

8 fabric classified under chapter 59 of the HTS,

9 and the constituent fibers, filaments, or yarns

10 are woven, knitted, needled, tufted, felted, en11 tangled, or transformed by any other fabric12 making process in that country, territory, or

13 possession; or

14 (D) the product is any other textile or ap15 parel product that is wholly assembled in that

16 country, territory, or possession from its compo17 nent pieces.

18 (2) SPECIAL RULES.—Notwithstanding para19 graph (1)(D)—

20 (A) the origin of a good that is classified

21 under one of the following HTS headings or

22 subheadings shall be determined under subpara23 graph (A), (B), or (C) of paragraph (1), as ap24 propriate: 5609, 5807, 5811, 6209.20.50.40,
377

1 6213, 6214, 6301, 6302, 6303, 6304, 6305,

2 6306, 6307.10, 6307.90, 6308, or 9404.90; and

3 (B) a textile or apparel product which is

4 knit to shape shall be considered to originate in,

5 and be the growth, product, or manufacture of,

6 the country, territory, or possession in which it

7 is knit.

8 (3) MULTICOUNTRY RULE.—If the origin of a

9 good cannot be determined under paragraph (1) or

10 (2), then that good shall be considered to originate

11 in, and be the growth, product, or manufacture of—

12 (A) the country, territory, or possession in

13 which the most important assembly or manufac14 turing process occurs, or

15 (B) if the origin of the good cannot be de16 termined under subparagraph (A), the last

17 country, territory, or possession in which impor18 tant assembly or manufacturing occurs.

19 (4) COMPONENTS CUT IN THE UNITED

20 STATES.—(A) The value of a component that is cut

21 to shape (but not to length, width, or both) in the

22 United States from foreign fabric and exported to

23 another country, territory, or insular possession for

24 assembly into an article that is then returned to the

25 United States—
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1 (i) shall not be included in the dutiable

2 value of such article, and

3 (ii) may be applied toward determining the

4 percentage referred to in General Note

5 7(b)(i)(B) of the HTS, subject to the limitation

6 provided in that note.

7 (B) No article (except a textile or apparel prod8 uct) assembled in whole of components described in

9 subparagraph (A), or of such components and com10 ponents that are products of the United States, in

11 a beneficiary country as defined in General Note

12 7(a) of the HTS shall be treated as a foreign article,

13 or as subject to duty if—

14 (i) the components after exportation from

15 the United States, and

16 (ii) the article itself before importation into

17 the United States

18 do not enter into the commerce of any foreign coun19 try other than such a beneficiary country.

20 (5) EXCEPTION FOR UNITED STATES-ISRAEL

21 FREE TRADE AGREEMENT.—This section shall not

22 affect, for purposes of the customs laws and admin23 istration of quantitative restrictions, the status of

24 goods that, under rulings and administrative prac25 tices in effect immediately before the enactment of
379

1 this Act, would have originated in, or been the

2 growth, product, or manufacture of, a country that

3 is a party to an agreement with the United States

4 establishing a free trade area, which entered into

5 force before January 1, 1987. For such purposes,

6 such rulings and administrative practices that were

7 applied, immediately before the enactment of this

8 Act, to determine the origin of textile and apparel

9 products covered by such agreement shall continue

10 to apply after the enactment of this Act, and on and

11 after the effective date described in subsection (c),

12 unless such rulings and practices are modified by

13 the mutual consent of the parties to the agreement.

14 (c) EFFECTIVE DATE.—This section shall apply to

15 goods entered, or withdrawn from warehouse, for con16 sumption on or after July 1, 1996, except that this section

17 shall not apply to goods if—

18 (1) the contract for the sale of such goods to

19 the United States is entered into before July 20,

20 1994;

21 (2) all of the material terms of sale in such con22 tract, including the price and quantity of the goods,

23 are fixed and determinable before July 20, 1994;

24 (3) a copy of the contract is filed with the Com25 missioner of Customs within 60 days after the date
380

1 of the enactment of this Act, together with a certifi2 cation that the contract meets the requirements of

3 paragraphs (1) and (2); and

4 (4) the goods are entered, or withdrawn from

5 warehouse, for consumption on or before January 1,

6 1998.

7 The origin of goods to which this section does not apply

8 shall be determined in accordance with the applicable rules

9 in effect on July 20, 1994.

10 SEC. 335. EFFECTIVE DATE.

11 Except as provided in section 334, this subtitle and

12 the amendments made by this subtitle take effect on the

13 date on which the WTO Agreement enters into force with

14 respect to the United States.

15 Subtitle E—Government

16 Procurement

17 SEC. 341. MONITORING AND ENFORCEMENT OF THE

18 AGREEMENT ON GOVERNMENT PROCURE19 MENT.

20 (a) IN GENERAL.—Section 305(f)(2) of the Trade

21 Agreements Act of 1979 (19 U.S.C. 2515(f)(2)) is amend22 ed—

23 (1) in the matter preceding subparagraph (A),

24 by striking ‘‘a year’’ and inserting ‘‘the 18 months’’,
381

1 (2) by striking ‘‘or’’ at the end of subparagraph

2 (B),

3 (3) by redesignating subparagraph (C) as sub4 paragraph (D), and

5 (4) by inserting after subparagraph (B), the

6 following new subparagraph:

7 ‘‘(C) the procedures result in a determina8 tion providing a specific period of time for the

9 other participant to bring its practices into

10 compliance with the Agreement, or’’.

11 (b) SANCTIONS AFTER DISPUTE RESOLUTION

12 FAILS.—

13 (1) SANCTIONS.—Paragraph (3) of section

14 305(f) of such Act (19 U.S.C. 2515(f)(3)) is amend15 ed to read as follows:

16 ‘‘(3) SANCTIONS AFTER DISPUTE RESOLUTION

17 FAILS.—

18 ‘‘(A) FAILURES RESULTING IN SANC19 TIONS.—If—

20 ‘‘(i) within 18 months from the date

21 dispute settlement procedures are initiated

22 with a signatory country pursuant to this

23 section—

24 ‘‘(I) such procedures are not con25 cluded, or
382

1 ‘‘(II) the country has not met the

2 requirements of subparagraph (A) or

3 (B) of paragraph (2), or

4 ‘‘(ii) the period of time provided for

5 pursuant to paragraph (2)(C) has expired

6 and procedures for suspending concessions

7 under the Agreement have been completed,

8 then the sanctions described in subparagraph

9 (B) shall be imposed.

10 ‘‘(B) SANCTIONS.—

11 ‘‘(i) IN GENERAL.—If subparagraph

12 (A) applies to any signatory country—

13 ‘‘(I) the signatory country shall

14 be considered as a signatory not in

15 good standing of the Agreement and

16 the prohibition on procurement con17 tained in section 4 of the Act of

18 March 3, 1933 (41 U.S.C. 10b–1)

19 shall apply to such country, and

20 ‘‘(II) the President shall revoke

21 the waiver of discriminatory purchas22 ing requirements granted to the signa23 tory country pursuant to section

24 301(a).
383

1 ‘‘(ii) TIME SANCTIONS ARE IM2 POSED.—Any sanction—

3 ‘‘(I) described in clause (i)(I)

4 shall apply from the date that is the

5 last day of the 18-month period de6 scribed in subparagraph (A)(i) or, in

7 the case of paragraph (2)(C), from

8 the date procedures for suspending

9 concessions under the Agreement have

10 been completed, and

11 ‘‘(II) described in clause (i)(II)

12 shall apply beginning on the day after

13 the date described in subclause (I).’’.

14 (2) CONFORMING AMENDMENT.—Paragraph (4)

15 of section 305(f) of such Act (19 U.S.C. 2515(f)(4))

16 is amended by striking ‘‘subparagraph (A) or (B) of

17 paragraph (3)’’ and inserting ‘‘subclause (I) or (II)

18 of paragraph (3)(B)(i)’’.

19 (c) REPORT TO CONGRESS.—

20 (1) Section 305(d)(2) of the Trade Agreements

21 Act of 1979 (19 U.S.C. 2515(d)(2)) is amended by

22 adding at the end the following new subparagraphs:

23 ‘‘(D)(i) are not signatories to the Agree24 ment;
384

1 ‘‘(ii) fail to apply transparent and competi2 tive procedures to its government procurement

3 equivalent to those in the Agreement; and

4 ‘‘(iii) whose products or services are ac5 quired in significant amounts by the United

6 States Government; or

7 ‘‘(E)(i) are not signatories to the Agree8 ment;

9 ‘‘(ii) fail to maintain and enforce effective

10 prohibitions on bribery and other corrupt prac11 tices in connection with government procure12 ment; and

13 ‘‘(iii) whose products or services are ac14 quired in significant amounts by the United

15 States Government.’’.

16 (2) Section 305(d)(3)(C) of the Trade Agree17 ments Act of 1979 (19 U.S.C. 2515(d)(3)(C)) is

18 amended by adding before the period at the end the

19 following: ‘‘, including the failure to maintain and

20 enforce effective prohibitions on bribery and other

21 corrupt practices in connection with government pro22 curement’’.

23 SEC. 342. CONFORMING AMENDMENTS.

24 (a) WAIVER OF DISCRIMINATORY PURCHASING RE25 QUIREMENTS REGARDING PURCHASES OF CIVIL AIR-
385

1 CRAFT.—Section 303 of the Trade Agreements Act of

2 1979 (19 U.S.C. 2513) is amended by inserting ‘‘referred

3 to in section 2(c) and approved under section 2(a)’’ after

4 ‘‘Civil Aircraft’’.

5 (b) EXPANSION OF COVERAGE OF THE AGREE6 MENT.—Section 304 of the Trade Agreements Act of 1979

7 (19 U.S.C. 2514) is amended—

8 (1) in subsections (a) and (c) by striking ‘‘part

9 IX, paragraph 6’’ and inserting ‘‘article XXIV(7);

10 (2) in subsection (c) by striking ‘‘part VI, para11 graph 9’’ and inserting ‘‘article XIX(5)’’; and

12 (3) in subsection (e) by striking ‘‘date of enact13 ment of this Act’’ and inserting ‘‘date it enters into

14 force with respect to the United States’’.

15 (c) ANNUAL REPORT ON FOREIGN DISCRIMINA16 TION.—Section 305(d) of the Trade Agreements Act of

17 1979 (19 U.S.C. 2515(d)) is amended by striking out

18 ‘‘April 30, 1990, and annually on April 30 thereafter,’’

19 and inserting ‘‘April 30 of each year,’’.

20 (d) LABOR SURPLUS AREA STUDIES.—Section 306

21 of the Trade Agreements Act of 1979 (19 U.S.C. 2516),

22 and the item relating to such section in the table of con23 tents for such Act, are repealed.

24 (e) AVAILABILITY OF INFORMATION TO CONGRES25 SIONAL ADVISORS.—Section 307 of the Trade Agreements
386

1 Act of 1979 (19 U.S.C. 2517) is amended by striking

2 ‘‘part VI, paragraph 9,’’ and inserting ‘‘article XIX(5)’’.

3 (f) DEFINITIONS.—Section 308 of the Trade Agree4 ments Act of 1979 (19 U.S.C. 2518) is amended—

5 (1) in paragraph (1) by striking ‘‘section 2(c)

6 of this Act’’ and inserting ‘‘section 101(d)(17) of the

7 Uruguay Round Agreements Act’’; and

8 (2) in paragraph (4)—

9 (A) in subparagraph (C) by striking ‘‘hav10 ing a contract value’’ and all that follows

11 through the end of the subparagraph and in12 serting ‘‘for which the United States is obli13 gated to waive Buy National restrictions

14 under—

15 ‘‘(i) the Agreement on the Establish16 ment of a Free Trade Area between the

17 Government of the United States of Amer18 ica and the Government of Israel, regard19 less of the thresholds provided for in the

20 Agreement (as defined in paragraph (1)),

21 or

22 ‘‘(ii) any subsequent agreement be23 tween the United States and Israel which

24 lowers on a reciprocal basis the applicable
387

1 threshold for entities covered by the Agree2 ment.’’; and

3 (B) in subparagraph (D) by striking

4 ‘‘GATT’’ the first place it appears and all that

5 follows through the end of the subparagraph

6 and inserting ‘‘the Agreement (as defined in

7 paragraph (1)), but for the thresholds provided

8 for in the Agreement.’’.

9 (g) CONFORMING AMENDMENTS.—Section 401 of the

10 Rural Electrification Act of 1938 (7 U.S.C. 903 note) is

11 amended—

12 (1) by striking ‘‘, Mexico, or Canada’’ each

13 place that it appears and inserting ‘‘or in any eligi14 ble country’’; and

15 (2) by adding at the end the following: ‘‘For

16 purposes of this section, an ‘eligible country’ is any

17 country that applies with respect to the United

18 States an agreement ensuring reciprocal access for

19 United States products and services and United

20 States suppliers to the markets of that country, as

21 determined by the United States Trade Representa22 tive.’’.
388

1 SEC. 343. RECIPROCAL COMPETITIVE PROCUREMENT

2 PRACTICES.

3 (a) APPLICABILITY.—Section 302(a) of the Trade

4 Agreements Act of 1979 (19 U.S.C. 2512(a)) is amended

5 to read as follows:

6 ‘‘(a) AUTHORITY TO BAR PROCUREMENT FROM

7 NON-DESIGNATED COUNTRIES.—

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

9 the President, in order to encourage additional coun10 tries to become parties to the Agreement and to pro11 vide appropriate reciprocal competitive government

12 procurement opportunities to United States products

13 and suppliers of such products—

14 ‘‘(A) shall, with respect to procurement

15 covered by the Agreement, prohibit the procure16 ment, after the date on which any waiver under

17 section 301(a) first takes effect, of products—

18 ‘‘(i) which are products of a foreign

19 country or instrumentality which is not

20 designated pursuant to section 301(b), and

21 ‘‘(ii) which would otherwise be eligible

22 products; and

23 ‘‘(B) may, with respect to procurement

24 covered by the Agreement, take such other ac25 tions within the President’s authority as the

26 President deems necessary.
389

1 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

2 apply in the case of procurements for which—

3 ‘‘(A) there are no offers of products or

4 services of the United States or of eligible prod5 ucts; or

6 ‘‘(B) the offers of products or services of

7 the United States or of eligible products are in8 sufficient to fulfill the requirements of the Unit9 ed States Government.’’.

10 (b) ADDITIONAL WAIVER AUTHORITY.—Section

11 302(b) of the Trade Agreements Act of 1979 (19 U.S.C.

12 2512(b)) is amended—

13 (1) by amending paragraph (1) to read as fol14 lows:

15 ‘‘(1) waive the prohibition required by sub16 section (a)(1) on procurement of products of a for17 eign country or instrumentality which has not yet

18 become a party to the Agreement but—

19 ‘‘(A) has agreed to apply transparent and

20 competitive procedures to its government pro21 curement equivalent to those in the Agreement,

22 and

23 ‘‘(B) maintains and enforces effective pro24 hibitions on bribery and other corrupt practices
390

1 in connection with its government procure2 ment;’’; and

3 (2) by adding after paragraph (3) the following:

4 ‘‘Before exercising the waiver authority under paragraph

5 (1), the President shall consult with the appropriate pri6 vate sector advisory committees established under section

7 135 of the Trade Act of 1974 and with the appropriate

8 committees of the Congress.’’.

9 (c) CONFORMING AMENDMENT.—Section 305(g) of

10 the Trade Agreements Act of 1979 (19 U.S.C. 2515(g))

11 is amended—

12 (1) in paragraph (1)—

13 (A) by striking ‘‘(B) or (C)’’ and inserting

14 ‘‘(B), (C), (D), or (E)’’; and

15 (B) by striking ‘‘their discriminatory pro16 curement practices’’ and inserting ‘‘the prac17 tices regarding government procurement identi18 fied under subparagraph (B)(ii), (C)(ii), (D)(ii),

19 or (E)(ii) (as the case may be)’’; and

20 (2) in paragraph (3) by striking ‘‘discrimination

21 identified pursuant to subsection (d)(2)(B) or (C)’’

22 and inserting ‘‘the practices regarding government

23 procurement identified under subparagraph (B)(ii),

24 (C)(ii), (D)(ii), or (E)(ii) (as the case may be)’’.
391

1 SEC. 344. EFFECTIVE DATE.

2 (a) IN GENERAL.—Except as provided in subsection

3 (b), the amendments made by this subtitle take effect on

4 the date on which the Agreement on Government Procure5 ment referred to in section 101(d)(17) enters into force

6 with respect to the United States.

7 (b) SECTION 342(g).—The amendments made by sec8 tion 342(g) take effect on the date on which the WTO

9 Agreement enters into force with respect to the United

10 States.

11 Subtitle F—Technical Barriers to

12 Trade

13 SEC. 351. TECHNICAL BARRIERS TO TRADE.

14 (a) REFERENCES.—All references in this section are

15 to title IV of the Trade Agreements Act of 1979 (19

16 U.S.C. 2531 et seq.) unless otherwise specified.

17 (b) SECTION 401.—Section 401 is amended—

18 (1) by striking ‘‘Nothing’’ and inserting ‘‘(b)

19 UNNECESSARY OBSTACLES.—Nothing’’; and

20 (2) by inserting after the section heading the

21 following:

22 ‘‘(a) NO BAR TO ENGAGING IN STANDARDS ACTIV23 ITY.—Nothing in this title may be construed—

24 ‘‘(1) to prohibit a Federal agency from engag25 ing in activity related to standards-related measures,

26 including any such measure relating to safety, the
392

1 protection of human, animal, or plant life or health,

2 the environment, or consumers; or

3 ‘‘(2) to limit the authority of a Federal agency

4 to determine the level it considers appropriate of

5 safety or of protection of human, animal, or plant

6 life or health, the environment, or consumers.’’.

7 (c) SECTION 402.—Section 402(4) is amended—

8 (1) by striking ‘‘CERTIFICATION ACCESS’’ in the

9 paragraph heading and inserting ‘‘ACCESS’’;

10 (2) by striking ‘‘certification system’’ and in11 serting ‘‘conformity assessment procedure’’; and

12 (3) by striking ‘‘certification under that sys13 tem’’ and inserting ‘‘an assessment of conformity

14 and the mark of the system, if any’’.

15 (d) SECTION 414.—Section 414(b)(1) is amended—

16 (1) by inserting ‘‘(A)’’ after ‘‘relating to’’;

17 (2) by striking ‘‘certification systems’’ and in18 serting ‘‘technical regulations, conformity assess19 ment procedures,’’;

20 (3) by striking ‘‘such standards, systems’’ and

21 inserting ‘‘such standards, technical regulations,

22 conformity assessment procedures,’’; and

23 (4) after ‘‘local’’ by inserting ‘‘and (B) the

24 membership and participation of Federal, State, or

25 local government bodies or private bodies in the
393

1 United States in international and regional stand2 ardizing bodies and conformity assessment systems,

3 as well as in bilateral and multilateral arrangements

4 concerning standards-related activities’’.

5 (e) DEFINITIONS.—Section 451 is amended—

6 (1) so that paragraph (1) reads as follows:

7 ‘‘(1) AGREEMENT.—The term ‘Agreement’

8 means the Agreement on Technical Barriers to

9 Trade referred to in section 101(d)(5) of the Uru10 guay Round Agreements Act.’’;

11 (2) so that paragraph (2) reads as follows:

12 ‘‘(2) CONFORMITY ASSESSMENT PROCEDURE.—

13 The term ‘conformity assessment procedure’ means

14 any procedure used, directly or indirectly, to deter15 mine that relevant requirements in technical regula16 tions or standards are fulfilled.’’;

17 (3) in paragraph (4), by striking ‘‘certification

18 system’’ and inserting ‘‘conformity assessment pro19 cedure’’ each place it occurs;

20 (4) so that paragraph (6)(A) reads as follows:

21 ‘‘(A) the membership of which is open to

22 representatives, whether public or private, of

23 the United States and at least all Members.’’;
394

1 (5) in paragraph (7), by striking ‘‘certification

2 system’’ and inserting ‘‘conformity assessment pro3 cedure’’;

4 (6) so that paragraph (8) reads as follows:

5 ‘‘(8) MEMBER.—The term ‘Member’ means a

6 WTO member as defined in section 2(10) of the

7 Uruguay Round Agreements Act.’’;

8 (7) so that paragraph (13) reads as follows:

9 ‘‘(13) STANDARD.—The term ‘standard’ means

10 a document approved by a recognized body, that

11 provides, for common and repeated use, rules, guide12 lines, or characteristics for products or related proc13 esses and production methods, with which compli14 ance is not mandatory. Such term may also include

15 or deal exclusively with terminology, symbols, pack16 aging, marking, or labeling requirements as they

17 apply to a product, process, or production method.’’;

18 (8) in paragraph (14), by striking ‘‘or any cer19 tification system’’ and inserting ‘‘, technical regula20 tion, or conformity assessment procedure’’; and

21 (9) by redesignating paragraph (17) as para22 graph (18) and inserting after paragraph (16) the

23 following:

24 ‘‘(17) TECHNICAL REGULATION.—The term

25 ‘technical regulation’ means a document which lays
395

1 down product characteristics or their related proc2 esses and production methods, including the applica3 ble administrative provisions, with which compliance

4 is mandatory. Such term may also include or deal

5 exclusively with terminology, symbols, packaging,

6 marking, or labeling requirements as they apply to

7 a product, process, or production method.’’.

8 (f) REPORTS TO CONGRESS.—Section 453 is amend9 ed by inserting ‘‘through 2001’’ after ‘‘succeeding 3-year

10 period’’.

11 (g) EFFECTIVE DATE.—Title IV of the Trade Agree12 ments Act of 1979 (19 U.S.C. 2531 et seq.) is amended

13 by striking section 454.

14 SEC. 352. EFFECTIVE DATE.

15 This subtitle and the amendments made by this sub16 title take effect on the date on which the WTO Agreement

17 enters into force with respect to the United States.

18 TITLE IV—AGRICULTURE19 RELATED PROVISIONS

20 Subtitle A—Agriculture

21 PART I—MARKET ACCESS

22 SEC. 401. SECTION 22 AMENDMENTS.

23 (a) AMENDMENT TO SECTION 22.—

24 (1) GENERALLY.—Subsection (f) of section 22

25 of the Agricultural Adjustment Act (7 U.S.C.
396

1 624(f)), reenacted with amendments by the Agricul2 tural Marketing Agreement Act of 1937, is amended

3 to read as follows:

4 ‘‘(f) No quantitative limitation or fee shall be imposed

5 under this section with respect to any article that is the

6 product of a WTO member (as defined in section 2(10)

7 of the Uruguay Round Agreements Act).’’.

8 (2) EFFECTIVE DATE.—The amendment made

9 by paragraph (1) shall take effect on the date of

10 entry into force of the WTO Agreement with respect

11 to the United States, except that with respect to

12 wheat, that amendment shall take effect on the later

13 of such date or September 12, 1995.

14 (b) CONFORMING AMENDMENTS.—

15 (1) SECTION 202 OF THE AGRICULTURAL ACT

16 OF 1956.—Section 202 of the Agricultural Act of

17 1956 (7 U.S.C. 1852) is amended—

18 (A) by striking subsection (a); and

19 (B) in subsection (b), by striking ‘‘(b)’’.

20 (2) COTTON IMPORT QUOTAS.—Section 103B of

21 the Agricultural Act of 1949 (7 U.S.C. 1444–2) is

22 amended—

23 (A) in subsection (a)(5)(F)(i)—
397

1 (i) by striking ‘‘this section’’ and in2 serting ‘‘the Uruguay Round Agreements

3 Act’’; and

4 (ii) by striking ‘‘limited global’’;

5 (B) in subsection (a)(5)(F)(iv), by striking

6 ‘‘special quota period has’’ and inserting ‘‘quota

7 period has’’;

8 (C) by adding at the end of subsection

9 (a)(5)(F) the following:

10 ‘‘(v) PREFERENTIAL TARIFF TREAT11 MENT.—The quantity under a special im12 port quota shall be considered to be an in13 quota quantity for purposes of section

14 213(d) of the Caribbean Basin Economic

15 Recovery Act (19 U.S.C. 2703(d)), section

16 204 of the Andean Trade Preference Act

17 (19 U.S.C. 3203), section 503(d) of the

18 Trade Act of 1974 (19 U.S.C. 2463(d)),

19 and General Note 3(a)(iv) to the HTS.

20 ‘‘(vi) DEFINITION.—As used in this

21 subparagraph, the term ‘special import

22 quota’ means a quantity of imports that is

23 not subject to the over-quota tariff rate of

24 a tariff-rate quota.’’; and

25 (D) in subsection (n)—
398

1 (i) in the subsection heading, by strik2 ing ‘‘SPECIAL’’;

3 (ii) in paragraph (1), by striking ‘‘this

4 section’’ and inserting ‘‘the Uruguay

5 Round Agreements Act’’;

6 (iii) in paragraph (1), by striking

7 ‘‘special’’ each place it appears;

8 (iv) by redesignating paragraph

9 (1)(C) as paragraph (1)(D);

10 (v) by inserting after subparagraph

11 (B) of paragraph (1) the following:

12 ‘‘(C) PREFERENTIAL TARIFF TREAT13 MENT.—The quantity under a limited global

14 import quota shall be considered to be an in15 quota quantity for purposes of section 213(d) of

16 the Caribbean Basin Economic Recovery Act

17 (19 U.S.C. 2703(d)), section 204 of the Andean

18 Trade Preference Act (19 U.S.C. 3203), section

19 503(d) of the Trade Act of 1974 (19 U.S.C.

20 2463(d)), and General Note 3(a)(iv) to the

21 HTS.’’; and

22 (vi) in paragraph (1)(D) (as redesig23 nated by clause (iv)), by adding at the end

24 the following:
399

1 ‘‘(iii) LIMITED GLOBAL IMPORT

2 QUOTA.—As used in this subsection, the

3 term ‘limited global import quota’ means a

4 quantity of imports that is not subject to

5 the over-quota tariff rate of a tariff-rate

6 quota.’’; and

7 (vii) in paragraph (2), by striking

8 ‘‘special quota period may’’ and inserting

9 ‘‘quota period may’’.

10 SEC. 402. CHEESE AND CHOCOLATE CRUMB IMPORTS.

11 (a) REPEAL OF SECTIONS 701 AND 703.—Sections

12 701 and 703 of the Trade Agreements Act of 1979 (93

13 Stat. 268) are hereby repealed.

14 (b) PRESIDENTIAL ACTION.—Section 702(d)(1) (93

15 Stat. 268) of the Trade Agreements Act of 1979 is amend16 ed to read as follows:

17 ‘‘(1) IN GENERAL.—Not later than 7 days after

18 receiving a report under subsection (c)(3) with re19 spect to an article of cheese subject to an in-quota

20 rate of duty (or not later than 3 days after receiving

21 a report under paragraph (2) in any case in which

22 such paragraph applies), the President shall pro23 claim the imposition of a fee on the importation of

24 such article from the country involved in such

25 amount (not to exceed the amount of the subsidy de-
400

1 termined under subsection (b)(2)(B)) as may be nec2 essary to ensure that the duty-paid wholesale price

3 of such article will not be less than the domestic

4 wholesale market price of similar articles produced

5 in the United States, and shall direct the Commis6 sioner of Customs to administer and enforce such

7 fee. Any such fee imposed shall be in addition to any

8 customs duty or other fee imposed by law.’’.

9 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

10 (1) Section 702 of the Trade Agreements Act

11 of 1979 is amended by striking ‘‘of quota cheese’’

12 each place it appears and inserting ‘‘of cheese sub13 ject to an in-quota rate of duty’’.

14 (2) Section 702(c)(2) of such Act is amended—

15 (A) by striking ‘‘the Special Representative

16 for Trade Negotiations’’ and inserting ‘‘the

17 United States Trade Representative’’, and

18 (B) by striking ‘‘The Special Representa19 tive’’ and inserting ‘‘The United States Trade

20 Representative’’.

21 (3) Subsections (c)(3)(B) and (e) of section 702

22 of such Act are each amended by striking ‘‘or quan23 titative limitation’’.

24 (4) Section 702(f) of such Act is amended—
401

1 (A) by inserting ‘‘(as in effect on the day

2 before the effective date of title II of the Uru3 guay Round Agreements Act)’’ after ‘‘Tariff

4 Act of 1930’’, and

5 (B) by striking ‘‘under title I of this Act’’

6 and inserting ‘‘under title VII of the Tariff Act

7 of 1930’’.

8 (5) Section 702(g)(2) of such Act is amended

9 by striking ‘‘or quantitative limitations’’.

10 (6) Section 702(h) of such Act is amended by

11 adding at the end the following new paragraphs:

12 ‘‘(4) CHEESE SUBJECT TO AN IN-QUOTA RATE

13 OF DUTY.—The term ‘cheese subject to an in-quota

14 rate of duty’ means the articles and the quantities

15 of such articles provided for in the Additional U. S.

16 Notes 14 through 23 of chapter 4 of Schedule XX

17 (as defined in section 2(5) of the Uruguay Round

18 Agreements Act).

19 ‘‘(5) SECRETARY.—The term ‘Secretary’ means

20 the Secretary of Agriculture.’’.

21 SEC. 403. MEAT IMPORT ACT.

22 The Meat Import Act of 1979 (19 U.S.C. 2253 note)

23 is repealed.
402

1 SEC. 404. ADMINISTRATION OF TARIFF-RATE QUOTAS.

2 (a) ORDERLY MARKETING.—In implementing the

3 tariff-rate quotas set out in Schedule XX for the entry,

4 or withdrawal from warehouse, for consumption of goods

5 in the United States, the President shall take such action

6 as may be necessary to ensure that imports of agricultural

7 products do not disrupt the orderly marketing of commod8 ities in the United States.

9 (b) INADEQUATE SUPPLY.—Where imports of an ag10 ricultural product are subject to a tariff-rate quota, and

11 where the President determines and proclaims that the

12 supply of the same or directly competitive or substitutable

13 agricultural product will be inadequate, because of a natu14 ral disaster, disease, or major national market disruption,

15 to meet domestic demand at reasonable prices, the Presi16 dent may temporarily increase the quantity of imports of

17 the agricultural product that is subject to the in-quota

18 rate of duty established under the tariff-rate quota.

19 (c) MONITORING.—The Secretary of Agriculture shall

20 monitor the domestic supply of agricultural products sub21 ject to a tariff-rate quota as the Secretary considers ap22 propriate and shall advise the President when the domestic

23 supply of the products and substitutable products com24 bined with the estimated imports of the products under

25 the tariff-rate quota may be inadequate to meet domestic

26 demand at reasonable prices.
403

1 (d) COVERAGE OF TARIFF-RATE QUOTAS.—

2 (1) EXCLUSIONS.—The President may, subject

3 to terms and conditions determined appropriate by

4 the President, provide that the entry, or withdrawal

5 from warehouse, for consumption in the United

6 States of an agricultural product shall not be subject

7 to the over-quota rate of duty established under a

8 tariff-rate quota if the agricultural product—

9 (A) is imported by, or for the account of,

10 any agency of the United States or of any for11 eign embassy;

12 (B) is imported as a sample for taking or13 ders, for the personal use of the importer, or

14 for the testing of equipment;

15 (C) is a commercial sample or is entered

16 for exhibition, display, or sampling at a trade

17 fair or for research; or

18 (D) is a blended syrup provided for in sub19 headings 1702.20.28, 1702.30.28, 1702.40.28,

20 1702.60.28, 1702.90.58, 1806.20.92,

21 1806.20.93, 1806.90.38, 1806.90.40,

22 2101.10.38, 2101.20.38, 2106.90.38, or

23 2106.90.67 of Schedule XX, if entered from a

24 foreign trade zone by a foreign trade zone user

25 whose facilities were in operation on June 1,
404

1 1990, to the extent that the annual quantity

2 entered into the customs territory from such

3 zone does not contain a quantity of sugar of

4 nondomestic origin greater than the quantity

5 authorized by the Foreign Trade Zones Board

6 for processing in that zone during calendar year

7 1985.

8 (2) RECLASSIFICATION.—Subject to the con9 sultation and layover requirements of section 115,

10 the President may proclaim a modification to the

11 coverage of a tariff-rate quota for any agricultural

12 product if the President determines the modification

13 is necessary or appropriate to conform the tariff-rate

14 quota to Schedule XX as a result of a reclassifica15 tion of any item by the Secretary of the Treasury.

16 (3) ALLOCATION.—The President may allocate

17 the in-quota quantity of a tariff-rate quota for any

18 agricultural product among supplying countries or

19 customs areas and may modify any allocation as de20 termined appropriate by the President.

21 (4) BILATERAL AGREEMENT.—The President

22 may proclaim an increase in the tariff-rate quota for

23 beef if the President determines that an increase is

24 necessary to implement—
405

1 (A) the March 24, 1994, agreement be2 tween the United States and Argentina; or

3 (B) the March 9, 1994, agreement between

4 the United States and Uruguay.

5 (5) CONTINUATION OF SUGAR HEADNOTE.—

6 The President is authorized to proclaim additional

7 United States note 3 to chapter 17 of the HTS, and

8 to proclaim the modifications to the note, as deter9 mined appropriate by the President to reflect Sched10 ule XX.

11 (e) CONFORMING AMENDMENTS.—

12 (1) SECTION 213 OF THE CARIBBEAN BASIN

13 ECONOMIC RECOVERY ACT.—Section 213(d) of the

14 Caribbean Basin Economic Recovery Act (19 U.S.C.

15 2703(d)) is amended to read as follows:

16 ‘‘(d) TARIFF-RATE QUOTAS.—No quantity of an ag17 ricultural product subject to a tariff-rate quota that ex18 ceeds the in-quota quantity shall be eligible for duty-free

19 treatment under this title.’’.

20 (2) SECTION 204 OF THE ANDEAN TRADE PREF21 ERENCE ACT.—Section 204 of the Andean Trade

22 Preference Act (19 U.S.C. 3203) is amended by

23 adding at the end the following new subsection:

24 ‘‘(g) TARIFF-RATE QUOTAS.—No quantity of an ag25 ricultural product subject to a tariff-rate quota that ex-
406

1 ceeds the in-quota quantity shall be eligible for duty-free

2 treatment under this Act.’’.

3 (3) GSP.—Section 503 of the Trade Act of

4 1974 (19 U.S.C. 2463) is amended by adding at the

5 end the following new subsection:

6 ‘‘(d) TARIFF-RATE QUOTAS.—No quantity of an ag7 ricultural product subject to a tariff-rate quota that ex8 ceeds the in-quota quantity shall be eligible for duty-free

9 treatment under this title.’’.

10 (4) GENERAL NOTE 3(a) TO THE HTS.—Gen11 eral Note 3(a)(iv) to the HTS is amended by adding

12 at the end the following:

13 ‘‘(F) No quantity of an agricultural prod14 uct that is subject to a tariff-rate quota that ex15 ceeds the in-quota quantity shall be eligible for

16 duty-free treatment under this paragraph.’’.

17 (5) DUTY DRAWBACK.—

18 (A) GENERALLY.—Section 313 of the Tar19 iff Act of 1930 (19 U.S.C. 1313) is amended by

20 adding at the end the following new subsection:

21 ‘‘(w) LIMITED APPLICABILITY FOR CERTAIN AGRI22 CULTURAL PRODUCTS.—No drawback shall be available

23 with respect to an agricultural product subject to the over24 quota rate of duty established under a tariff-rate quota,

25 except pursuant to subsection (j)(1).’’.
407

1 (B) EFFECTIVE DATE.—The amendment

2 made by subparagraph (A) shall take effect on

3 the earlier of the date of entry into force of the

4 WTO Agreement with respect to the United

5 States or January 1, 1995.

6 (6) RESTRICTIONS ON IMPORTED PEANUTS.—

7 Paragraph (6) of section 358e(f) of the Agricultural

8 Adjustment Act of 1938 (7 U.S.C. 1359a(f)(6)) is

9 amended by inserting after ‘‘issues a proclamation’’

10 the following: ‘‘under section 404(b) of the Uruguay

11 Round Agreements Act expanding the quantity of

12 peanuts subject to the in-quota rate of duty under

13 a tariff-rate quota, or’’.

14 SEC. 405. SPECIAL AGRICULTURAL SAFEGUARD AUTHOR15 ITY.

16 (a) DETERMINATION OF TRIGGER LEVELS.—Con17 sistent with Article 5 as determined by the President, the

18 President shall cause to be published in the Federal Reg19 ister—

20 (1) the list of special safeguard agricultural

21 goods not later than the date of entry into force of

22 the WTO Agreement with respect to the United

23 States; and

24 (2) for each special safeguard agricultural

25 good—
408

1 (A) the trigger level specified in subpara2 graph 1(a) of Article 5, on an annual basis;

3 (B) the trigger price specified in subpara4 graph 1(b) of Article 5; and

5 (C) the relevant period.

6 (b) DETERMINATION OF SAFEGUARD.—If the Presi7 dent determines with respect to a special safeguard agri8 cultural good that it is appropriate to impose—

9 (1) the price-based safeguard in accordance

10 with subparagraph 1(a) of Article 5; or

11 (2) the volume-based safeguard in accordance

12 with subparagraph 1(b) of Article 5,

13 the President shall, consistent with Article 5 as deter14 mined by the President, determine the amount of the duty

15 to be imposed, the period such duty shall be in effect, and

16 any other terms and conditions applicable to the duty.

17 (c) IMPOSITION OF SAFEGUARD.—The President

18 shall direct the Secretary of the Treasury to impose a duty

19 on a special safeguard agricultural good entered, or with20 drawn from warehouse, for consumption in the United

21 States in accordance with a determination made under

22 subsection (b).

23 (d) NO SIMULTANEOUS SAFEGUARD.—A duty may

24 not be in effect for a special safeguard agricultural good

25 pursuant to this section during any period in which such
409

1 good is the subject of any action proclaimed pursuant to

2 section 202 or 203 of the Trade Act of 1974 (19 U.S.C.

3 2252 or 2253).

4 (e) EXCLUSION OF NAFTA COUNTRIES.—The Presi5 dent may exempt from any duty imposed under this sec6 tion any good originating in a NAFTA country (as deter7 mined in accordance with section 202 of the North Amer8 ican Free Trade Agreement Implementation Act (19

9 U.S.C. 3332)).

10 (f) ADVICE OF SECRETARY OF AGRICULTURE.—The

11 Secretary of Agriculture shall advise the President on the

12 implementation of this section.

13 (g) TERMINATION DATE.—This section shall cease to

14 be effective on the date, as determined by the President,

15 that the special safeguard provisions of Article 5 are no

16 longer in force with respect to the United States.

17 (h) DEFINITIONS.—For purposes of this section—

18 (1) the term ‘‘Article 5’’ means Article 5 of the

19 Agreement on Agriculture described in section

20 101(d)(2);

21 (2) the term ‘‘relevant period’’ means the pe22 riod determined by the President to be applicable to

23 a special safeguard agricultural good for purposes of

24 applying this section; and
410

1 (3) the term ‘‘special safeguard agricultural

2 good’’ means an agricultural good on which an addi3 tional duty may be imposed pursuant to the special

4 safeguard provisions of Article 5.

5 PART II—EXPORTS

6 SEC. 411. EXPORT PROGRAMS.

7 (a) EXPORT ENHANCEMENT PROGRAM.—

8 (1) SHORT TITLE.—This subsection may be

9 cited as the ‘‘Export Enhancement Program Amend10 ments of 1994’’.

11 (2) TITLE HEADING.—Title III of the Agricul12 tural Trade Act of 1978 (7 U.S.C. 5651 et seq.) is

13 amended by striking the title heading and inserting

14 the following:

15 ‘‘TITLE III—EXPORT

16 ENHANCEMENT PROGRAM’’.

17 (3) GENERAL AUTHORITY.—Subsection (a) of

18 section 301 of such Act (7 U.S.C. 5651(a)) is

19 amended to read as follows:

20 ‘‘(a) IN GENERAL.—The Commodity Credit Corpora21 tion shall carry out an export enhancement program in

22 accordance with this section to encourage the commercial

23 sale of United States agricultural commodities in world

24 markets at competitive prices. The program shall be car25 ried out in a market sensitive manner. Activities under
411

1 the program shall not be limited to responses to unfair

2 trade practices.’’.

3 (4) FUNDING.—Section 301 of such Act (7

4 U.S.C. 5651) is amended—

5 (A) in subsection (e), by striking ‘‘1995’’

6 and inserting ‘‘2001’’; and

7 (B) by adding at the end the following:

8 ‘‘(g) CONSISTENCY WITH INTERNATIONAL OBLIGA9 TIONS.—Notwithstanding any other provision of this sec10 tion, the Commodity Credit Corporation shall administer

11 and carry out the program authorized by this section in

12 a manner consistent, as determined by the President, with

13 the obligations undertaken by the United States set forth

14 in the Uruguay Round Agreements.’’.

15 (b) DAIRY EXPORT INCENTIVE PROGRAM.—Section

16 153(a) of the Food Security Act of 1985 (15 U.S.C. 713a–

17 14) is amended by striking ‘‘1995’’ and inserting ‘‘2001’’.

18 (c) EXPORT SALES OF DAIRY PRODUCTS.—Sub19 section (a) of section 1163 of the Food Security Act of

20 1985 (Public Law 99–198; 7 U.S.C. 1731 note) is amend21 ed to read as follows:

22 ‘‘(a) In each fiscal year, the Secretary of Agriculture

23 may sell dairy products for export, at such prices as the

24 Secretary determines appropriate, in a quantity and allo25 cated as determined by the Secretary, consistent with the
412

1 obligations undertaken by the United States set forth in

2 the Uruguay Round Agreements, if the disposition of the

3 commodities will not interfere with the usual marketings

4 of the United States nor disrupt world prices of agricul5 tural commodities and patterns of commercial trade.’’.

6 (d) MARKET PROMOTION PROGRAM.—(1) Section

7 203(c) of the Agricultural Trade Act of 1978 (7 U.S.C.

8 5623(c)) is amended—

9 (A) by striking paragraph (2);

10 (B) by striking ‘‘PARTICIPATION.—’’ and all

11 that follows through ‘‘To’’ in paragraph (1) and in12 serting ‘‘PARTICIPATION.—To’’;

13 (C) by redesignating subparagraphs (A), (B),

14 and (C) as paragraphs (1), (2), and (3), respectively;

15 and

16 (D) by aligning the margins of paragraphs (1),

17 (2), and (3) (as so redesignated) so as to align with

18 the margin of paragraph (1) of subsection (d).

19 (2) Section 203(f)(2) of such Act (7 U.S.C.

20 5623(f)(2)) is amended—

21 (A) by striking subparagraph (D);

22 (B) by inserting ‘‘or’’ at the end of subpara23 graph (C); and

24 (C) by redesignating subparagraph (E) as sub25 paragraph (D).
413

1 (e) FOOD AID.—

2 (1) POLICY.—In light of the Uruguay Round

3 Agreement on Agriculture and the Ministerial Deci4 sion on Measures Concerning the Possible Negative

5 Effects of the Reform Program on Least-Developed

6 and Net-Food Importing Developing Countries, the

7 United States reaffirms the commitment of the

8 United States to providing food aid to developing

9 countries.

10 (2) SENSE OF CONGRESS.—It is the sense of

11 Congress that—

12 (A) the President should initiate consulta13 tions with other donor nations to consider ap14 propriate levels of food aid commitments to

15 meet the legitimate needs of developing coun16 tries; and

17 (B) the United States should increase its

18 contribution of bona fide food assistance to de19 veloping countries consistent with the Agree20 ment on Agriculture.

21 SEC. 412. OTHER CONFORMING AMENDMENTS.

22 (a) PUBLIC LAW 98–332.—Section 106 of Public

23 Law 98–332 (98 Stat. 287), is repealed.

24 (b) AGRICULTURE, RURAL DEVELOPMENT, AND RE25 LATED AGENCIES APPROPRIATIONS ACT, 1984.—Section
414

1 625(A) of the Agriculture, Rural Development, and Relat2 ed Agencies Appropriations Act, 1984, as given the force

3 of law by section 101(d) of Public Law 98–151 (97 Stat.

4 1853), is repealed.

5 (c) AGRICULTURAL ACT OF 1956.—Section 203 of the

6 Agriculture Act of 1956 (7 U.S.C. 1853) is repealed.

7 PART III—OTHER PROVISIONS

8 SEC. 421. AUTHORITY FOR CERTAIN ACTIONS UNDER ARTI9 CLE XXVIII.

10 (a) IN GENERAL.—In the application of section

11 125(c) of the Trade Act of 1974 (19 U.S.C. 2135) with

12 respect to any item provided for in subheadings

13 2401.10.60, 2401.20.30, 2401.20.80, 2401.30.30,

14 2401.30.60, 2401.30.90, 2403.10.00, 2403.91.40, or

15 2403.99.00 of the HTS, ‘‘350’’ shall be substituted for

16 ‘‘20’’ where it appears in such section.

17 (b) EFFECTIVE DATE.—This section shall take effect

18 on the date of the enactment of this Act.

19 SEC. 422. TOBACCO IMPORTS.

20 (a) DOMESTIC MARKETING ASSESSMENT.—Section

21 320C of the Agricultural Adjustment Act of 1938 (7

22 U.S.C. 1314i) is amended by adding at the end the follow23 ing new subsection:

24 ‘‘(g) EFFECTIVE DATE.—This section shall be effec25 tive only for calendar year 1994.’’.
415

1 (b) BUDGET DEFICIT ASSESSMENT.—

2 (1) IMPORTER ASSESSMENTS.—Section 106(g)

3 of the Agricultural Act of 1949 (7 U.S.C. 1445(g))

4 is amended—

5 (A) by striking paragraph (1) and insert6 ing the following new paragraph:

7 ‘‘(1) Effective only for each of the 1994

8 through 1998 crops of tobacco for which price sup9 port is made available under this Act, each producer

10 and purchaser of such tobacco, and each importer of

11 the same kind of tobacco, shall remit to the Com12 modity Credit Corporation a nonrefundable market13 ing assessment in an amount equal to—

14 ‘‘(A) in the case of a producer or pur15 chaser of domestic tobacco, .5 percent of the

16 national price support level for each such crop;

17 and

18 ‘‘(B) in the case of an importer of tobacco,

19 1 percent of the national support price for the

20 same kind of tobacco;

21 as provided for in this section.’’; and

22 (B) in paragraph (2), by striking ‘‘assess23 ments and purchaser’’ and inserting ‘‘, pur24 chaser, and importer’’.
416

1 (2) CONFORMING AMENDMENT.—Section 106

2 of such Act (7 U.S.C. 1445) is amended by striking

3 subsection (h).

4 (c) WAIVER AUTHORITY.—The President may waive

5 the application to imported tobacco of section 106(g),

6 106A, or 106B of the Agricultural Act of 1949 (7 U.S.C.

7 1445(g), 1445–1, or 1445–2) or the amendment made in

8 subsection (c) of section 1106 of the Omnibus Budget

9 Reconciliation Act of 1993 (Public Law 103–66; 107 Stat.

10 323) if the President determines that the waiver is nec11 essary or appropriate pursuant to an international agree12 ment entered into by the United States.

13 (d) DUTY DRAWBACK.—Section 313(w) of the Tariff

14 Act of 1930 (19 U.S.C. 1313) (as added by section

15 404(d)(5)) is further amended—

16 (1) by striking ‘‘PRODUCTS.—No’’ and insert17 ing ‘‘PRODUCTS.—

18 ‘‘(1) IN GENERAL.—No’’; and

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

20 paragraph:

21 ‘‘(2) APPLICATION TO TOBACCO.—Notwith22 standing paragraph (1), drawback shall also be

23 available pursuant to subsection (a) with respect to

24 any tobacco subject to the over-quota rate of duty

25 established under a tariff-rate quota.’’.
417

1 (e) EFFECTIVE DATE.—This section and the amend2 ments made by this section shall be effective beginning

3 on the effective date of the Presidential proclamation, au4 thorized under section 421, establishing a tariff-rate quota

5 pursuant to Article XXVIII of the GATT 1947 or the

6 GATT 1994 with respect to tobacco.

7 SEC. 423. TOBACCO PROCLAMATION AUTHORITY.

8 (a) IN GENERAL.—The President, after consultation

9 with the Committee on Ways and Means of the House of

10 Representatives and with the Committee on Finance of the

11 Senate, may proclaim the reduction or elimination of any

12 duty with respect to cigar binder and filler tobacco, wrap13 per tobacco, or oriental tobacco set forth in Schedule XX.

14 (b) EFFECTIVE DATE.—This section shall take effect

15 on the date of the enactment of this Act.

16 SEC. 424. REPORT TO CONGRESS ON ACCESS TO CANADIAN

17 DAIRY AND POULTRY MARKETS.

18 The President, not later than 6 months after the date

19 of entry into force of the WTO Agreement with respect

20 to the United States, shall submit a report to the Congress

21 on the extent to which Canada is complying with its obli22 gations under the Uruguay Round Agreements with re23 spect to dairy and poultry products and with its related

24 obligations under the North American Free Trade Agree25 ment.
418

1 SEC. 425. STUDY OF MILK MARKETING ORDER SYSTEM.

2 The Secretary of Agriculture shall conduct a study

3 to determine the effects of the Uruguay Round Agree4 ments on the Federal milk marketing order system. Not

5 later than 6 months after the date of entry into force of

6 the WTO Agreement with respect to the United States,

7 the Secretary of Agriculture shall report to the Congress

8 on the results of the study.

9 SEC. 426. ADDITIONAL PROGRAM FUNDING.

10 (a) USE OF ADDITIONAL FUNDS.—Consistent, as de11 termined by the President, with the obligations under12 taken by the United States set forth in the Uruguay

13 Round Agreements, the Commodity Credit Corporation

14 shall use, in addition to any other funds appropriated or

15 made available for such purposes, any funds made avail16 able under subsection (b) for authorized export promotion,

17 foreign market development, export credit financing, and

18 promoting the development, commercialization, and mar19 keting of products resulting from alternative uses of agri20 cultural commodities.

21 (b) AMOUNT OF ADDITIONAL FUNDS.—Amounts

22 shall be credited to the Commodity Credit Corporation in

23 fiscal year 1995 equal to the lesser of the dollar amount

24 of—

25 (1) the fiscal year 1995 Pay-As-You-Go sav26 ings; and
419

1 (2) the 5-year Pay-As-You-Go savings;

2 under section 252 of the Balanced Budget and Emergency

3 Deficit Control Act of 1985, resulting from the enactment

4 of the Federal Crop Insurance Reform Act of 1994.

5 (c) EFFECTIVE DATE.—This section shall take effect

6 on the date of the enactment of this section.

7 Subtitle B—Sanitary and

8 Phytosanitary Measures

9 SEC. 431. SANITARY AND PHYTOSANITARY MEASURES.

10 (a) TRADE AGREEMENTS ACT OF 1979.—Section

11 414 of the Trade Agreements Act of 1979 (19 U.S.C.

12 2544) is amended by adding at the end the following:

13 ‘‘(c) SANITARY AND PHYTOSANITARY MEASURES.—

14 ‘‘(1) PUBLIC INFORMATION.—The standards in15 formation center shall, in addition to the functions

16 specified under subsection (b), make available to the

17 public relevant documents, at such reasonable fees

18 as the Secretary of Commerce may prescribe, and

19 information regarding—

20 ‘‘(A) any sanitary or phytosanitary meas21 ure of general application, including any inspec22 tion procedure or approval procedure proposed,

23 adopted, or maintained by a Federal agency or

24 agency of a State or local government;
420

1 ‘‘(B) the procedures of a Federal agency or

2 an agency of a State or local government for

3 risk assessment and factors the agency consid4 ers in conducting the assessment;

5 ‘‘(C) the determination of the levels of pro6 tection that a Federal agency or an agency of

7 a State or local government considers appro8 priate; and

9 ‘‘(D) the membership and participation of

10 the Federal Government and State and local

11 governments in international and regional sani12 tary and phytosanitary organizations and sys13 tems, and in bilateral and multilateral arrange14 ments regarding sanitary and phytosanitary

15 measures, and the provisions of those systems

16 and arrangements.

17 ‘‘(2) DEFINITIONS.—The definitions in section

18 463 apply for purposes of this subsection.’’.

19 (b) RAILWAY CAR INSPECTION.—Subsection (a) of

20 the Act of January 31, 1942 (56 Stat. 40, chapter 31;

21 7 U.S.C. 149), is amended by striking ‘‘from Mexico’’.

22 (c) FEDERAL PLANT PEST ACT.—The Federal Plant

23 Pest Act (7 U.S.C. 150aa et seq.) is amended—

24 (1) so that section 103 (7 U.S.C. 150bb) reads

25 as follows:
421

1 ‘‘SEC. 103. MOVEMENT OF PESTS PROHIBITED.

2 ‘‘(a) IN GENERAL.—No person shall import or enter

3 any plant pest into the United States, or move any plant

4 pest interstate, or accept delivery of any plant pest moving

5 from any foreign country into or through the United

6 States, or interstate, unless the movement is made in ac7 cordance with such regulations as the Secretary may pro8 mulgate to prevent the dissemination into the United

9 States, or interstate, of plant pests.

10 ‘‘(b) REGULATIONS.—The regulations promulgated

11 by the Secretary to implement subsection (a) may include

12 regulations requiring that a plant pest moving into or

13 through the United States, or interstate—

14 ‘‘(1) be accompanied by a permit issued by the

15 Secretary prior to the movement of the plant pest;

16 or

17 ‘‘(2) be accompanied by a certificate of inspec18 tion issued, in a manner and form required by the

19 Secretary, by appropriate officials of the country or

20 State from which the plant pest is to be moved.’’;

21 and

22 (2) in section 104 (7 U.S.C. 150cc)—

23 (A) so that subsection (a) reads as follows:

24 ‘‘(a) Any letter, parcel, box, or other package contain25 ing any plant pest, whether sealed as letter-rate postal

26 matter or not, is nonmailable, and shall not knowingly be
422

1 conveyed in the mail or delivered from any post office or

2 by any mail carrier, unless it is mailed in conformance

3 with such regulations as the Secretary may promulgate

4 to prevent the dissemination into the United States, or

5 interstate, of plant pests.’’;

6 (B) by striking subsection (b); and

7 (C) by redesignating subsections (c) and

8 (d) as subsections (b) and (c), respectively.

9 (d) PLANT QUARANTINE ACT.—The Act of August

10 20, 1912 (37 Stat. 315, chapter 308; 7 U.S.C. 151 et seq.)

11 (commonly known as the ‘‘Plant Quarantine Act’’) is

12 amended—

13 (1) so that the first section (7 U.S.C. 151)

14 reads as follows:

15 ‘‘SECTION 1. IMPORTATION OF NURSERY STOCK.

16 ‘‘(a) IN GENERAL.—No person shall—

17 ‘‘(1) import or enter into the United States any

18 nursery stock; or

19 ‘‘(2) accept delivery of any nursery stock mov20 ing from any foreign country into or through the

21 United States;

22 unless the movement is made in accordance with such reg23 ulations as the Secretary of Agriculture may promulgate

24 to prevent dissemination into the United States of plant

25 pests, plant diseases, or insect pests.
423

1 ‘‘(b) REGULATIONS.—The regulations promulgated

2 by the Secretary of Agriculture to implement subsection

3 (a) may include regulations requiring that nursery stock

4 moving into or though the United States—

5 ‘‘(1) be accompanied by a permit issued by the

6 Secretary of Agriculture prior to the movement of

7 the nursery stock;

8 ‘‘(2) be accompanied by a certificate of inspec9 tion issued, in a manner and form required by the

10 Secretary of Agriculture, by appropriate officials of

11 the country or State from which the nursery stock

12 is to be moved;

13 ‘‘(3) be grown under postentry quarantine con14 ditions by or under the supervision of the Secretary

15 of Agriculture for the purposes of determining

16 whether the nursery stock may be infested with

17 plant pests or insect pests, or infected with plant

18 diseases, not discernible by port-of-entry inspection;

19 and

20 ‘‘(4) if the nursery stock is found to be infested

21 with plant pests or insect pests or infected with

22 plant diseases, be subject to remedial measures the

23 Secretary of Agriculture determines to be necessary

24 to prevent the spread of plant pests, insect pests, or

25 plant diseases.’’; and
424

1 (2) so that the last sentence of section 2 (7

2 U.S.C. 156) reads as follows: ‘‘This section does not

3 apply to nursery stock that is imported or entered

4 from a country or a region of a country that the

5 Secretary of Agriculture designates, pursuant to pro6 cedures set forth in such regulations as the Sec7 retary may promulgate, as exempt from the require8 ments of this section.’’.

9 (e) HONEYBEE IMPORTATION.—The first section of

10 the Act of August 31, 1922 (42 Stat. 833, chapter 301;

11 7 U.S.C. 281) (commonly known as the ‘‘Honeybee Act’’),

12 is amended to read as follows:

13 ‘‘SECTION 1. HONEYBEE IMPORTATION.

14 ‘‘(a) IN GENERAL.—The Secretary of Agriculture is

15 authorized to prohibit or restrict the importation or entry

16 of honeybees and honeybee semen into or through the

17 United States in order to prevent the introduction and

18 spread of diseases and parasites harmful to honeybees, the

19 introduction of genetically undesirable germ plasm of hon20 eybees, or the introduction and spread of undesirable spe21 cies or subspecies of honeybees and the semen of honey22 bees.

23 ‘‘(b) REGULATIONS.—The Secretary of Agriculture

24 and the Secretary of the Treasury are each authorized to
425

1 prescribe such regulations as the respective Secretary de2 termines necessary to carry out this section.

3 ‘‘(c) ENFORCEMENT.—Honeybees or honeybee semen

4 offered for importation into, intercepted entering, or hav5 ing entered the United States, other than in accordance

6 with regulations promulgated by the Secretary of Agri7 culture and the Secretary of the Treasury, shall be de8 stroyed or immediately exported.

9 ‘‘(d) DEFINITION.—As used in this Act, the term

10 ‘honeybee’ means all life stages and the germ plasm of

11 honeybees of the genus Apis, except honeybee semen.’’.

12 (f) FEDERAL NOXIOUS WEED ACT OF 1974.—Sec13 tion 4 of the Federal Noxious Weed Act of 1974 (7 U.S.C.

14 2803) is amended so that subsections (a) through (b) read

15 as follows:

16 ‘‘(a) No person shall import or enter any noxious

17 weed identified in a regulation promulgated by the Sec18 retary into or through the United States or move any nox19 ious weed interstate, unless the movement is in accordance

20 with such conditions as the Secretary may prescribe by

21 regulation under this Act to prevent the dissemination into

22 the United States, or interstate, of such noxious weeds.

23 ‘‘(b) The regulations prescribed by the Secretary to

24 implement subsection (a) may include regulations requir25 ing that any noxious weed imported or entered into the
426

1 United States or moving interstate be accompanied by a

2 permit issued by the Secretary prior to the movement of

3 the noxious weed.’’.

4 (g) TARIFF ACT OF 1930.—Section 306(b) of the

5 Tariff Act of 1930 (19 U.S.C. 1306(b)) is amended by

6 inserting before the period at the end the following: ‘‘, or

7 is, and is likely to remain, a region of low prevalence of

8 rinderpest and foot-and-mouth disease’’.

9 (h) IMPORTATION OF ANIMALS.—Section 6 of the Act

10 of August 30, 1890 (26 Stat. 416, chapter 839; 21 U.S.C.

11 104), is amended to read as follows:

12 ‘‘SEC. 6. IMPORTATION OF ANIMALS.

13 ‘‘(a) IN GENERAL.—The Secretary of Agriculture

14 may by regulation prohibit or restrict the importation or

15 entry of any cattle, sheep, or other ruminants, or swine,

16 that are diseased or infected with any disease, or that have

17 been exposed to an infection, into or through the United

18 States to prevent the dissemination into the United States

19 of a disease.

20 ‘‘(b) PENALTIES.—

21 ‘‘(1) CRIMINAL.—Any person who knowingly

22 violates any regulation promulgated by the Secretary

23 pursuant to this section, or any provision of sections

24 7 through 10 or any regulation promulgated by the

25 Secretary pursuant to such sections, shall be fined
427

1 under title 18, United States Code, or imprisoned

2 not more than 1 year, or both.

3 ‘‘(2) CIVIL.—Any person who violates any such

4 provision or any such regulation may be assessed a

5 civil penalty by the Secretary of Agriculture not ex6 ceeding $1,000. The Secretary may issue an order

7 assessing the civil penalty only after notice and an

8 opportunity for an agency hearing on the record.

9 The order shall be treated as a final order

10 reviewable under chapter 158 of title 28, United

11 States Code. The validity of the order may not be

12 reviewed in an action to collect such civil penalty.’’.

13 (i) INSPECTION OF ANIMALS.—Section 10 of the Act

14 of August 30, 1890 (26 Stat. 417, chapter 839; 21 U.S.C.

15 105), is amended—

16 (1) in subsection (a)—

17 (A) by striking ‘‘(a) IN GENERAL.—Except

18 as provided in subsection (b), the’’ and insert19 ing ‘‘The’’;

20 (B) in the first sentence, by striking ‘‘shall

21 cause careful inspection to be made by a suit22 able officer of all’’ and inserting ‘‘may cause

23 careful inspection of any’’; and

24 (C) in the third sentence, by striking ‘‘they

25 shall not be allowed to be placed’’ and inserting
428

1 ‘‘the Secretary may prohibit or restrict their

2 placement’’; and

3 (2) by striking subsection (b).

4 (j) INTERNATIONAL ANIMAL QUARANTINE STA5 TION.—The 6th sentence in the first section of Public Law

6 91–239 (21 U.S.C. 135) is amended—

7 (1) by striking ‘‘North American’’; and

8 (2) by striking ‘‘within the United States’’.

9 (k) POULTRY PRODUCTS INSPECTION ACT.—Section

10 17(d) of the Poultry Products Inspection Act (21 U.S.C.

11 466) is amended—

12 (1) by amending paragraph (1) to read as fol13 lows:

14 ‘‘(1) Notwithstanding any other provision of law, all

15 poultry, or parts or products of poultry, capable of use

16 as human food offered for importation into the United

17 States shall—

18 ‘‘(A) be subject to inspection, sanitary, quality,

19 species verification, and residue standards that

20 achieve a level of sanitary protection equivalent to

21 that achieved under United States standards; and

22 ‘‘(B) have been processed in facilities and under

23 conditions that achieve a level of sanitary protection

24 equivalent to that achieved under United States

25 standards.’’; and
429

1 (2) in paragraph (2)—

2 (A) by amending subparagraph (A) to read

3 as follows:

4 ‘‘(A) The Secretary may treat as equivalent to a

5 United States standard a standard of an exporting coun6 try described in paragraph (1) if the exporting country

7 provides the Secretary with scientific evidence or other in8 formation, in accordance with risk assessment methodolo9 gies determined appropriate by the Secretary, to dem10 onstrate that the standard of the exporting country

11 achieves the level of sanitary protection achieved under the

12 United States standard. For the purposes of this sub13 section, the term ‘sanitary protection’ means protection to

14 safeguard public health.’’;

15 (B) by striking subparagraph (B); and

16 (C) by redesignating subparagraph (C) as

17 subparagraph (B).

18 (l) FEDERAL MEAT INSPECTION ACT.—Section 20(e)

19 of the Federal Meat Inspection Act (21 U.S.C. 620(e))

20 is amended—

21 (1) so that subparagraphs (A) through (B) of

22 paragraph (1) read as follows:

23 ‘‘(A) A certification by the Secretary that for24 eign plants exporting carcasses or meat or meat

25 products referred to in subsection (a) have complied
430

1 with requirements that achieve a level of sanitary

2 protection equivalent to that achieved under United

3 States requirements with regard to all inspection,

4 building construction standards, and all other provi5 sions of this Act and regulations issued under this

6 Act.

7 ‘‘(B) The Secretary may treat as equivalent to

8 a United States requirement a requirement de9 scribed in subparagraph (A) if the exporting country

10 provides the Secretary with scientific evidence or

11 other information, in accordance with risk assess12 ment methodologies determined appropriate by the

13 Secretary, to demonstrate that the requirement

14 achieves the level of sanitary protection achieved

15 under the United States requirement. For the pur16 poses of this subsection, the term ‘sanitary protec17 tion’ means protection to safeguard public health.’’;

18 (2) by striking paragraph (2); and

19 (3) by redesignating paragraphs (3) through

20 (7) as paragraphs (2) through (6), respectively.

21 SEC. 432. INTERNATIONAL STANDARD-SETTING ACTIVITIES.

22 Title IV of the Trade Agreements Act of 1979 (19

23 U.S.C. 2531 et seq.) is amended by adding at the end

24 the following new subtitle:
431

1 ‘‘Subtitle F—International

2 Standard-Setting Activities

3 ‘‘SEC. 491. NOTICE OF UNITED STATES PARTICIPATION IN

4 INTERNATIONAL STANDARD-SETTING ACTIVI5 TIES.

6 ‘‘(a) IN GENERAL.—The President shall designate an

7 agency to be responsible for informing the public of the

8 sanitary and phytosanitary standard-setting activities of

9 each international standard-setting organization.

10 ‘‘(b) NOTIFICATION.—Not later than June 1 of each

11 year, the agency designated under subsection (a) with re12 spect to each international standard-setting organization

13 shall publish notice in the Federal Register of the informa14 tion specified in subsection (c) with respect to that organi15 zation. The notice shall cover the period ending on June

16 1 of the year in which the notice is published, and begin17 ning on the date of the preceding notice under this sub18 section, except that the first such notice shall cover the

19 1-year period ending on the date of the notice.

20 ‘‘(c) REQUIRED INFORMATION.—The information to

21 be provided in the notice under subsection (b) is—

22 ‘‘(1) the sanitary or phytosanitary standards

23 under consideration or planned for consideration by

24 that organization;
432

1 ‘‘(2) for each sanitary or phytosanitary stand2 ard specified in paragraph (1)—

3 ‘‘(A) a description of the consideration or

4 planned consideration of the standard;

5 ‘‘(B) whether the United States is partici6 pating or plans to participate in the consider7 ation of the standard;

8 ‘‘(C) the agenda for the United States par9 ticipation, if any; and

10 ‘‘(D) the agency responsible for represent11 ing the United States with respect to the stand12 ard.

13 ‘‘(d) PUBLIC COMMENT.—The agency specified in

14 subsection (c)(2)(D) shall provide an opportunity for pub15 lic comment with respect to the standards for which the

16 agency is responsible and shall take the comments into

17 account in participating in the consideration of the stand18 ards and in proposing matters to be considered by the or19 ganization.

20 ‘‘SEC. 492. EQUIVALENCE DETERMINATIONS.

21 ‘‘(a) IN GENERAL.—An agency may not determine

22 that a sanitary or phytosanitary measure of a foreign

23 country is equivalent to a sanitary or phytosanitary meas24 ure established under the authority of Federal law unless

25 the agency determines that the sanitary or phytosanitary
433

1 measure of the foreign country provides at least the same

2 level of sanitary or phytosanitary protection as the com3 parable sanitary or phytosanitary measure established

4 under the authority of Federal law.

5 ‘‘(b) FDA DETERMINATION.—If the Commissioner

6 proposes to issue a determination of the equivalency of a

7 sanitary or phytosanitary measure of a foreign country to

8 a measure that is required to be promulgated as a rule

9 under the Federal Food, Drug, and Cosmetic Act (21

10 U.S.C. 301 et seq.) or other statute administered by the

11 Food and Drug Administration, the Commissioner shall

12 issue a proposed regulation to incorporate such determina13 tion and shall include in the notice of proposed rulemaking

14 the basis for the determination that the sanitary or

15 phytosanitary measure of a foreign country provides at

16 least the same level of sanitary or phytosanitary protection

17 as the comparable Federal sanitary or phytosanitary

18 measure. The Commissioner shall provide opportunity for

19 interested persons to comment on the proposed regulation.

20 The Commissioner shall not issue a final regulation based

21 on the proposal without taking into account the comments

22 received.

23 ‘‘(c) NOTICE.—If the Commissioner proposes to issue

24 a determination of the equivalency of a sanitary or

25 phytosanitary measure of a foreign country to a sanitary
434

1 or phystosanitary measure of the Food and Drug Adminis2 tration that is not required to be promulgated as a rule

3 under the Federal Food, Drug, and Cosmetic Act or other

4 statute administered by the Food and Drug Administra5 tion, the Commissioner shall publish a notice in the Fed6 eral Register that identifies the basis for the determina7 tion that the measure provides at least the same level of

8 sanitary or phytosanitary protection as the comparable

9 Federal sanitary or phytosanitary measure. The Commis10 sioner shall provide opportunity for interested persons to

11 comment on the notice. The Commissioner shall not issue

12 a final determination on the issue of equivalency without

13 taking into account the comments received.

14 ‘‘SEC. 493. DEFINITIONS.

15 ‘‘(a) IN GENERAL.—As used in this subtitle:

16 ‘‘(1) AGENCY.—The term ‘agency’ means a

17 Federal department or agency (or combination of

18 Federal departments or agencies).

19 ‘‘(2) COMMISSIONER.—The term ‘Commis20 sioner’ means the Commissioner of Food and Drugs.

21 ‘‘(3) INTERNATIONAL STANDARD-SETTING OR22 GANIZATION.—The term ‘international standard-set23 ting organization’ means an organization consisting

24 of representatives of 2 or more countries, the pur-
435

1 pose of which is to negotiate, develop, promulgate, or

2 amend an international standard.

3 ‘‘(4) SANITARY OR PHYTOSANITARY STAND4 ARD.—The term ‘sanitary or phytosanitary stand5 ard’ means a standard intended to form a basis for

6 a sanitary or phytosanitary measure.

7 ‘‘(5) INTERNATIONAL STANDARD.—The term

8 ‘international standard’ means a standard, guideline,

9 or recommendation—

10 ‘‘(A) regarding food safety, adopted by the

11 Codex Alimentarius Commission, including a

12 standard, guideline, or recommendation regard13 ing decomposition elaborated by the Codex

14 Committee on Fish and Fishery Products, food

15 additives, contaminants, hygienic practice, and

16 methods of analysis and sampling;

17 ‘‘(B) regarding animal health and

18 zoonoses, developed under the auspices of the

19 International Office of Epizootics;

20 ‘‘(C) regarding plant health, developed

21 under the auspices of the Secretariat of the

22 International Plant Protection Convention in

23 cooperation with the North American Plant

24 Protection Organization; or
436

1 ‘‘(D) established by or developed under any

2 other international organization agreed to by

3 the NAFTA countries (as defined in section

4 2(4) of the North American Free Trade Agree5 ment Implementation Act) or by the WTO

6 members (as defined in section 2(10) of the

7 Uruguay Round Agreements Act).

8 ‘‘(b) OTHER DEFINITIONS.—The definitions set forth

9 in section 463 apply for purposes of this subtitle except

10 that in applying paragraph (7) of section 463 with respect

11 to a sanitary or phytosanitary measure of a foreign coun12 try, any reference in such paragraph to the United States

13 shall be deemed to be a reference to that foreign coun14 try.’’.

15 Subtitle C—Standards

16 SEC. 441. THE FEDERAL SEED ACT.

17 The Federal Seed Act (7 U.S.C. 1551 et seq.) is

18 amended—

19 (1) in section 301(a) (7 U.S.C. 1581(a))—

20 (A) by striking ‘‘(a)’’;

21 (B) in paragraph (1), by striking ‘‘, or is

22 required to be stained and is not so stained,

23 under the terms of this title,’’;

24 (C) by striking paragraph (3); and
437

1 (D) by redesignating paragraphs (4) and

2 (5) as paragraphs (3) and (4), respectively;

3 (2) in section 302 (7 U.S.C. 1582)—

4 (A) in subsection (a), by striking ‘‘stain5 ing,’’ both places it appears; and

6 (B) by striking subsection (e);

7 (3) by striking section 303 (7 U.S.C. 1585) and

8 inserting the following new section:

9 ‘‘SEC. 303. CERTAIN SEEDS NOT ADAPTED FOR GENERAL

10 AGRICULTURAL USE.

11 ‘‘Whenever the Secretary of Agriculture, after a pub12 lic hearing, determines that seed of alfalfa or red clover

13 from any foreign country is not adapted for general agri14 cultural use in the United States, the Secretary shall pub15 lish the determination and the reasons for the determina16 tion.’’; and

17 (4) in section 304 (7 U.S.C. 1586)—

18 (A) in subsection (a)—

19 (i) by inserting ‘‘or’’ at the end of

20 paragraph (2);

21 (ii) by striking the semicolon at the

22 end of paragraph (3) and inserting a pe23 riod; and

24 (iii) by striking paragraphs (4)

25 through (7);
438

1 (B) by striking subsection (b); and

2 (C) by redesignating subsection (c) as sub3 section (b).

4 Subtitle D—General Effective Date

5 SEC. 451. GENERAL EFFECTIVE DATE.

6 Except as otherwise provided in this title, this title,

7 and the amendments made by this title, shall take effect

8 on the date of entry into force of the WTO Agreement

9 with respect to the United States.

10 TITLE V—INTELLECTUAL

11 PROPERTY

12 SEC. 501. DEFINITION.

13 For purposes of this title—

14 (1) the term ‘‘WTO Agreement’’ has the mean15 ing given that term in section 2(9) of the Uruguay

16 Round Agreements Act; and

17 (2) the term ‘‘WTO member country’’ has the

18 meaning given that term in section 2(10) of the

19 Uruguay Round Agreements Act.

20 Subtitle A—Copyright Provisions

21 SEC. 511. RENTAL RIGHTS IN COMPUTER PROGRAMS.

22 Section 804(c) of the Computer Software Rental

23 Amendments Act of 1990 (17 U.S.C. 109 note; 104 Stat.

24 5136) is amended by striking the first sentence.
439

1 SEC. 512. CIVIL PENALTIES FOR UNAUTHORIZED FIXATION

2 OF AND TRAFFICKING IN SOUND RECORD3 INGS AND MUSIC VIDEOS OF LIVE MUSICAL

4 PERFORMANCES.

5 (a) IN GENERAL.—Title 17, United States Code, is

6 amended by adding at the end the following new chapter:

7 ‘‘CHAPTER 11—SOUND RECORDINGS AND MUSIC

8 VIDEOS

‘‘Sec.

‘‘1101. Unauthorized fixation and trafficking in sound recordings and music videos.

9 ‘‘§ 1101. Unauthorized fixation and trafficking in

10 sound recordings and music videos

11 ‘‘(a) UNAUTHORIZED ACTS.—Anyone who, without

12 the consent of the performer or performers involved—

13 ‘‘(1) fixes the sounds or sounds and images of

14 a live musical performance in a copy or phonorecord,

15 or reproduces copies or phonorecords of such a per16 formance from an unauthorized fixation,

17 ‘‘(2) transmits or otherwise communicates to

18 the public the sounds or sounds and images of a live

19 musical performance, or

20 ‘‘(3) distributes or offers to distribute, sells or

21 offers to sell, rents or offers to rent, or traffics in

22 any copy or phonorecord fixed as described in para-
440

1 graph (1), regardless of whether the fixations oc2 curred in the United States,

3 shall be subject to the remedies provided in sections 502

4 through 505, to the same extent as an infringer of copy5 right.

6 ‘‘(b) DEFINITION.—As used in this section, the term

7 ‘traffic in’ means transport, transfer, or otherwise dispose

8 of, to another, as consideration for anything of value, or

9 make or obtain control of with intent to transport, trans10 fer, or dispose of.

11 ‘‘(c) APPLICABILITY.—This section shall apply to any

12 act or acts that occur on or after the date of the enactment

13 of the Uruguay Round Agreements Act.

14 ‘‘(d) STATE LAW NOT PREEMPTED.—Nothing in this

15 section may be construed to annul or limit any rights or

16 remedies under the common law or statutes of any

17 State.’’.

18 (b) CONFORMING AMENDMENT.—The table of chap19 ters for title 17, United States Code, is amended by add20 ing at the end the following:

‘‘11. Sound Recordings and Music Videos ................................ 1101’’.
441

1 SEC. 513. CRIMINAL PENALTIES FOR UNAUTHORIZED FIXA2 TION OF AND TRAFFICKING IN SOUND RE3 CORDINGS AND MUSIC VIDEOS OR LIVE MU4 SICAL PERFORMANCES.

5 (a) IN GENERAL.—Chapter 113 of title 18, United

6 States Code, is amended by inserting after section 2319

7 the following:

8 ‘‘§ 2319A. Unauthorized fixation of and trafficking in

9 sound recordings and music videos of

10 live musical performances

11 ‘‘(a) OFFENSE.—Whoever, without the consent of the

12 performer or performers involved, knowingly and for pur13 poses of commercial advantage or private financial gain—

14 ‘‘(1) fixes the sounds or sounds and images of

15 a live musical performance in a copy or phonorecord,

16 or reproduces copies or phonorecords of such a per17 formance from an unauthorized fixation;

18 ‘‘(2) transmits or otherwise communicates to

19 the public the sounds or sounds and images of a live

20 musical performance; or

21 ‘‘(3) distributes or offers to distribute, sells or

22 offers to sell, rents or offers to rent, or traffics in

23 any copy or phonorecord fixed as described in para24 graph (1), regardless of whether the fixations oc25 curred in the United States;
442

1 shall be imprisoned for not more than 5 years or fined

2 in the amount set forth in this title, or both, or if the

3 offense is a second or subsequent offense, shall be impris4 oned for not more than 10 years or fined in the amount

5 set forth in this title, or both.

6 ‘‘(b) FORFEITURE AND DESTRUCTION.—When a per7 son is convicted of a violation of subsection (a), the court

8 shall order the forfeiture and destruction of any copies or

9 phonorecords created in violation thereof, as well as any

10 plates, molds, matrices, masters, tapes, and film negatives

11 by means of which such copies or phonorecords may be

12 made. The court may also, in its discretion, order the for13 feiture and destruction of any other equipment by means

14 of which such copies or phonorecords may be reproduced,

15 taking into account the nature, scope, and proportionality

16 of the use of the equipment in the offense.

17 ‘‘(c) SEIZURE AND FORFEITURE.—If copies or

18 phonorecords of sounds or sounds and images of a live

19 musical performance are fixed outside of the United States

20 without the consent of the performer or performers in21 volved, such copies or phonorecords are subject to seizure

22 and forfeiture in the United States in the same manner

23 as property imported in violation of the customs laws. The

24 Secretary of the Treasury shall, not later than 60 days

25 after the date of the enactment of the Uruguay Round
443

1 Agreements Act, issue regulations to carry out this sub2 section, including regulations by which any performer

3 may, upon payment of a specified fee, be entitled to notifi4 cation by the United States Customs Service of the impor5 tation of copies or phonorecords that appear to consist of

6 unauthorized fixations of the sounds or sounds and images

7 of a live musical performance.

8 ‘‘(d) DEFINITIONS.—As used in this section—

9 ‘‘(1) the terms ‘copy’, ‘fixed’, ‘musical work’,

10 ‘phonorecord’, ‘reproduce’, ‘sound recordings’, and

11 ‘transmit’ mean those terms within the meaning of

12 title 17; and

13 ‘‘(2) the term ‘traffic in’ means transport,

14 transfer, or otherwise dispose of, to another, as con15 sideration for anything of value, or make or obtain

16 control of with intent to transport, transfer, or dis17 pose of.

18 ‘‘(e) APPLICABILITY.—This section shall apply to any

19 Act or Acts that occur on or after the date of the enact20 ment of the Uruguay Round Agreements Act.’’.

21 (b) CONFORMING AMENDMENT.—The table of sec22 tions for chapter 113 of title 18, United States Code, is

23 amended by inserting after the item relating to section

24 2319 the following:

‘‘2319A. Unauthorized fixation of and trafficking in sound recordings and music

videos of live musical performances.’’.
444

1 SEC. 514. RESTORED WORKS.

2 (a) IN GENERAL.—Section 104A of title 17, United

3 States Code, is amended to read as follows:

4 ‘‘§ 104A. Copyright in restored works

5 ‘‘(a) AUTOMATIC PROTECTION AND TERM.—

6 ‘‘(1) TERM.—

7 ‘‘(A) Copyright subsists, in accordance

8 with this section, in restored works, and vests

9 automatically on the date of restoration.

10 ‘‘(B) Any work in which copyright is re11 stored under this section shall subsist for the

12 remainder of the term of copyright that the

13 work would have otherwise been granted in the

14 United States if the work never entered the

15 public domain in the United States.

16 ‘‘(2) EXCEPTION.—Any work in which the

17 copyright was ever owned or administered by the

18 Alien Property Custodian and in which the restored

19 copyright would be owned by a government or in20 strumentality thereof, is not a restored work.

21 ‘‘(b) OWNERSHIP OF RESTORED COPYRIGHT.—A re22 stored work vests initially in the author or initial

23 rightholder of the work as determined by the law of the

24 source country of the work.

25 ‘‘(c) FILING OF NOTICE OF INTENT TO ENFORCE

26 RESTORED COPYRIGHT AGAINST RELIANCE PARTIES.—
445

1 On or after the date of restoration, any person who owns

2 a copyright in a restored work or an exclusive right therein

3 may file with the Copyright Office a notice of intent to

4 enforce that person’s copyright or exclusive right or may

5 serve such a notice directly on a reliance party. Acceptance

6 of a notice by the Copyright Office is effective as to any

7 reliance parties but shall not create a presumption of the

8 validity of any of the facts stated therein. Service on a

9 reliance party is effective as to that reliance party and

10 any other reliance parties with actual knowledge of such

11 service and of the contents of that notice.

12 ‘‘(d) REMEDIES FOR INFRINGEMENT OF RESTORED

13 COPYRIGHTS.—

14 ‘‘(1) ENFORCEMENT OF COPYRIGHT IN RE15 STORED WORKS IN THE ABSENCE OF A RELIANCE

16 PARTY.—As against any party who is not a reliance

17 party, the remedies provided in chapter 5 of this

18 title shall be available on or after the date of res19 toration of a restored copyright with respect to an

20 act of infringement of the restored copyright that is

21 commenced on or after the date of restoration.

22 ‘‘(2) ENFORCEMENT OF COPYRIGHT IN RE23 STORED WORKS AS AGAINST RELIANCE PARTIES.—

24 As against a reliance party, except to the extent pro25 vided in paragraphs (3) and (4), the remedies pro-
446

1 vided in chapter 5 of this title shall be available,

2 with respect to an act of infringement of a restored

3 copyright, on or after the date of restoration of the

4 restored copyright if the requirements of either of

5 the following subparagraphs are met:

6 ‘‘(A)(i) The owner of the restored copy7 right (or such owner’s agent) or the owner of

8 an exclusive right therein (or such owner’s

9 agent) files with the Copyright Office, during

10 the 24-month period beginning on the date of

11 restoration, a notice of intent to enforce the re12 stored copyright; and

13 ‘‘(ii)(I) the act of infringement commenced

14 after the end of the 12-month period beginning

15 on the date of publication of the notice in the

16 Federal Register;

17 ‘‘(II) the act of infringement commenced

18 before the end of the 12-month period described

19 in subclause (I) and continued after the end of

20 that 12-month period, in which case remedies

21 shall be available only for infringement occur22 ring after the end of that 12-month period; or

23 ‘‘(III) copies or phonorecords of a work in

24 which copyright has been restored under this
447

1 section are made after publication of the notice

2 of intent in the Federal Register.

3 ‘‘(B)(i) The owner of the restored copy4 right (or such owner’s agent) or the owner of

5 an exclusive right therein (or such owner’s

6 agent) serves upon a reliance party a notice of

7 intent to enforce a restored copyright; and

8 ‘‘(ii)(I) the act of infringement commenced

9 after the end of the 12-month period beginning

10 on the date the notice of intent is received;

11 ‘‘(II) the act of infringement commenced

12 before the end of the 12-month period described

13 in subclause (I) and continued after the end of

14 that 12-month period, in which case remedies

15 shall be available only for the infringement oc16 curring after the end of that 12-month period;

17 or

18 ‘‘(III) copies or phonorecords of a work in

19 which copyright has been restored under this

20 section are made after receipt of the notice of

21 intent.

22 In the event that notice is provided under both sub23 paragraphs (A) and (B), the 12-month period re24 ferred to in such subparagraphs shall run from the

25 earlier of publication or service of notice.
448

1 ‘‘(3) EXISTING DERIVATIVE WORKS.—(A) In

2 the case of a derivative work that is based upon a

3 restored work and is created—

4 ‘‘(i) before the date of the enactment of

5 the Uruguay Round Agreements Act, if the

6 source country of the derivative work is an eli7 gible country on such date, or

8 ‘‘(ii) before the date of adherence or proc9 lamation, if the source country of the derivative

10 work is not an eligible country on such date of

11 enactment,

12 a reliance party may continue to exploit that work

13 for the duration of the restored copyright if the reli14 ance party pays to the owner of the restored copy15 right reasonable compensation for conduct which

16 would be subject to a remedy for infringement but

17 for the provisions of this paragraph.

18 ‘‘(B) In the absence of an agreement between

19 the parties, the amount of such compensation shall

20 be determined by an action in United States district

21 court, and shall reflect any harm to the actual or po22 tential market for or value of the restored work from

23 the reliance party’s continued exploitation of the

24 work, as well as compensation for the relative con-
449

1 tributions of expression of the author of the restored

2 work and the reliance party to the derivative work.

3 ‘‘(4) COMMENCEMENT OF INFRINGEMENT FOR

4 RELIANCE PARTIES.—For purposes of section 412,

5 in the case of reliance parties, infringement shall be

6 deemed to have commenced before registration when

7 acts which would have constituted infringement had

8 the restored work been subject to copyright were

9 commenced before the date of restoration.

10 ‘‘(e) NOTICES OF INTENT TO ENFORCE A RESTORED

11 COPYRIGHT.—

12 ‘‘(1) NOTICES OF INTENT FILED WITH THE

13 COPYRIGHT OFFICE.—(A)(i) A notice of intent filed

14 with the Copyright Office to enforce a restored copy15 right shall be signed by the owner of the restored

16 copyright or the owner of an exclusive right therein,

17 who files the notice under subsection (d)(2)(A)(i)

18 (hereafter in this paragraph referred to as the

19 ‘owner’), or by the owner’s agent, shall identify the

20 title of the restored work, and shall include an Eng21 lish translation of the title and any other alternative

22 titles known to the owner by which the restored

23 work may be identified, and an address and tele24 phone number at which the owner may be contacted.

25 If the notice is signed by an agent, the agency rela-
450

1 tionship must have been constituted in a writing

2 signed by the owner before the filing of the notice.

3 The Copyright Office may specifically require in reg4 ulations other information to be included in the no5 tice, but failure to provide such other information

6 shall not invalidate the notice or be a basis for re7 fusal to list the restored work in the Federal Reg8 ister.

9 ‘‘(ii) If a work in which copyright is restored

10 has no formal title, it shall be described in the notice

11 of intent in detail sufficient to identify it.

12 ‘‘(iii) Minor errors or omissions may be cor13 rected by further notice at any time after the notice

14 of intent is filed. Notices of corrections for such

15 minor errors or omissions shall be accepted after the

16 period established in subsection (d)(2)(A)(i). Notices

17 shall be published in the Federal Register pursuant

18 to subparagraph (B).

19 ‘‘(B)(i) The Register of Copyrights shall publish

20 in the Federal Register, commencing not later than

21 4 months after the date of restoration for a particu22 lar nation and every 4 months thereafter for a pe23 riod of 2 years, lists identifying restored works and

24 the ownership thereof if a notice of intent to enforce

25 a restored copyright has been filed.
451

1 ‘‘(ii) Not less than 1 list containing all notices

2 of intent to enforce shall be maintained in the Public

3 Information Office of the Copyright Office and shall

4 be available for public inspection and copying during

5 regular business hours pursuant to sections 705 and

6 708. Such list shall also be published in the Federal

7 Register on an annual basis for the first 2 years

8 after the applicable date of restoration.

9 ‘‘(C) The Register of Copyrights is authorized

10 to fix reasonable fees based on the costs of receipt,

11 processing, recording, and publication of notices of

12 intent to enforce a restored copyright and correc13 tions thereto.

14 ‘‘(D)(i) Not later than 90 days before the date

15 the Agreement on Trade-Related Aspects of Intellec16 tual Property referred to in section 101(d)(15) of

17 the Uruguay Round Agreements Act enters into

18 force with respect to the United States, the Copy19 right Office shall issue and publish in the Federal

20 Register regulations governing the filing under this

21 subsection of notices of intent to enforce a restored

22 copyright.

23 ‘‘(ii) Such regulations shall permit owners of re24 stored copyrights to file simultaneously for registra25 tion of the restored copyright.
452

1 ‘‘(2) NOTICES OF INTENT SERVED ON A RELI2 ANCE PARTY.—(A) Notices of intent to enforce a re3 stored copyright may be served on a reliance party

4 at any time after the date of restoration of the re5 stored copyright.

6 ‘‘(B) Notices of intent to enforce a restored

7 copyright served on a reliance party shall be signed

8 by the owner or the owner’s agent, shall identify the

9 restored work and the work in which the restored

10 work is used, if any, in detail sufficient to identify

11 them, and shall include an English translation of the

12 title, any other alternative titles known to the owner

13 by which the work may be identified, the use or uses

14 to which the owner objects, and an address and tele15 phone number at which the reliance party may con16 tact the owner. If the notice is signed by an agent,

17 the agency relationship must have been constituted

18 in writing and signed by the owner before service of

19 the notice.

20 ‘‘(3) EFFECT OF MATERIAL FALSE STATE21 MENTS.—Any material false statement knowingly

22 made with respect to any restored copyright identi23 fied in any notice of intent shall make void all claims

24 and assertions made with respect to such restored

25 copyright.
453

1 ‘‘(f) IMMUNITY FROM WARRANTY AND RELATED LI2 ABILITY.—

3 ‘‘(1) IN GENERAL.—Any person who warrants,

4 promises, or guarantees that a work does not violate

5 an exclusive right granted in section 106 shall not

6 be liable for legal, equitable, arbitral, or administra7 tive relief if the warranty, promise, or guarantee is

8 breached by virtue of the restoration of copyright

9 under this section, if such warranty, promise, or

10 guarantee is made before January 1, 1995.

11 ‘‘(2) PERFORMANCES.—No person shall be re12 quired to perform any act if such performance is

13 made infringing by virtue of the restoration of copy14 right under the provisions of this section, if the obli15 gation to perform was undertaken before January 1,

16 1995.

17 ‘‘(g) PROCLAMATION OF COPYRIGHT RESTORA18 TION.—Whenever the President finds that a particular

19 foreign nation extends, to works by authors who are na20 tionals or domiciliaries of the United States, restored

21 copyright protection on substantially the same basis as

22 provided under this section, the President may by procla23 mation extend restored protection provided under this sec24 tion to any work—
454

1 ‘‘(1) of which one or more of the authors is, on

2 the date of first publication, a national, domiciliary,

3 or sovereign authority of that nation; or

4 ‘‘(2) which was first published in that nation.

5 The President may revise, suspend, or revoke any such

6 proclamation or impose any conditions or limitations on

7 protection under such a proclamation.

8 ‘‘(h) DEFINITIONS.—For purposes of this section and

9 section 109(a):

10 ‘‘(1) The term ‘date of adherence or proclama11 tion’ means the earlier of the date on which a for12 eign nation which, as of the date the WTO Agree13 ment enters into force with respect to the United

14 States, is not a nation adhering to the Berne Con15 vention or a WTO member country, becomes—

16 ‘‘(A) a nation adhering to the Berne Con17 vention or a WTO member country; or

18 ‘‘(B) subject to a Presidential proclamation

19 under subsection (g).

20 ‘‘(2) The ‘date of restoration’ of a restored

21 copyright is the later of—

22 ‘‘(A) the date on which the Agreement on

23 Trade-Related Aspects of Intellectual Property

24 referred to in section 101(d)(15) of the Uru25 guay Round Agreements Act enters into force
455

1 with respect to the United States, if the source

2 country of the restored work is a nation adher3 ing to the Berne Convention or a WTO member

4 country on such date; or

5 ‘‘(B) the date of adherence or proclama6 tion, in the case of any other source country of

7 the restored work.

8 ‘‘(3) The term ‘eligible country’ means a nation,

9 other than the United States, that is a WTO mem10 ber country, adheres to the Berne Convention, or is

11 subject to a proclamation under section 104A(g).

12 ‘‘(4) The term ‘reliance party’ means any per13 son who—

14 ‘‘(A) with respect to a particular work, en15 gages in acts, before the source country of that

16 work becomes an eligible country, which would

17 have violated section 106 if the restored work

18 had been subject to copyright protection, and

19 who, after the source country becomes an eligi20 ble country, continues to engage in such acts;

21 ‘‘(B) before the source country of a par22 ticular work becomes an eligible country, makes

23 or acquires 1 or more copies or phonorecords of

24 that work; or
456

1 ‘‘(C) as the result of the sale or other dis2 position of a derivative work covered under sub3 section (d)(3), or significant assets of a person

4 described in subparagraph (A) or (B), is a suc5 cessor, assignee, or licensee of that person.

6 ‘‘(5) The term ‘restored copyright’ means copy7 right in a restored work under this section.

8 ‘‘(6) The term ‘restored work’ means an origi9 nal work of authorship that—

10 ‘‘(A) is protected under subsection (a);

11 ‘‘(B) is not in the public domain in its

12 source country through expiration of term of

13 protection;

14 ‘‘(C) is in the public domain in the United

15 States due to—

16 ‘‘(i) noncompliance with formalities

17 imposed at any time by United States

18 copyright law, including failure of renewal,

19 lack of proper notice, or failure to comply

20 with any manufacturing requirements;

21 ‘‘(ii) lack of subject matter protection

22 in the case of sound recordings fixed before

23 February 15, 1972; or

24 ‘‘(iii) lack of national eligibility; and
457

1 ‘‘(D) has at least one author or rightholder

2 who was, at the time the work was created, a

3 national or domiciliary of an eligible country,

4 and if published, was first published in an eligi5 ble country and not published in the United

6 States during the 30-day period following publi7 cation in such eligible country.

8 ‘‘(7) The term ‘rightholder’ means the person—

9 ‘‘(A) who, with respect to a sound record10 ing, first fixes a sound recording with author11 ization, or

12 ‘‘(B) who has acquired rights from the per13 son described in subparagraph (A) by means of

14 any conveyance or by operation of law.

15 ‘‘(8) The ‘source country’ of a restored work

16 is—

17 ‘‘(A) a nation other than the United

18 States;

19 ‘‘(B) in the case of an unpublished work—

20 ‘‘(i) the eligible country in which the

21 author or rightholder is a national or

22 domiciliary, or, if a restored work has more

23 than 1 author or rightholder, the majority

24 of foreign authors or rightholders are na-
458

1 tionals or domiciliaries of eligible countries;

2 or

3 ‘‘(ii) if the majority of authors or

4 rightholders are not foreign, the nation

5 other than the United States which has the

6 most significant contacts with the work;

7 and

8 ‘‘(C) in the case of a published work—

9 ‘‘(i) the eligible country in which the

10 work is first published, or

11 ‘‘(ii) if the restored work is published

12 on the same day in 2 or more eligible

13 countries, the eligible country which has

14 the most significant contacts with the

15 work.

16 ‘‘(9) The terms ‘WTO Agreement’ and ‘WTO

17 member country’ have the meanings given those

18 terms in paragraphs (9) and (10), respectively, of

19 section 2 of the Uruguay Round Agreements Act.’’.

20 (b) LIMITATION.—Section 109(a) of title 17, United

21 States Code, is amended by adding at the end the follow22 ing: ‘‘Notwithstanding the preceding sentence, copies or

23 phonorecords of works subject to restored copyright under

24 section 104A that are manufactured before the date of

25 restoration of copyright or, with respect to reliance par-
459

1 ties, before publication or service of notice under section

2 104A(e), may be sold or otherwise disposed of without the

3 authorization of the owner of the restored copyright for

4 purposes of direct or indirect commercial advantage only

5 during the 12-month period beginning on—

6 ‘‘(1) the date of the publication in the Federal

7 Register of the notice of intent filed with the Copy8 right Office under section 104A(d)(2)(A), or

9 ‘‘(2) the date of the receipt of actual notice

10 served under section 104A(d)(2)(B),

11 whichever occurs first.’’.

12 (c) CONFORMING AMENDMENT.—The item relating

13 to section 104A in the table of sections for chapter 1 of

14 title 17, United States Code, is amended to read as fol15 lows:

‘‘104A. Copyright in restored works.’’.

16 Subtitle B—Trademark Provisions

17 SEC. 521. DEFINITION OF ‘‘ABANDONED’’.

18 Section 45 of the Act entitled ‘‘An Act to provide for

19 the registration and protection of trade-marks used in

20 commerce, to carry out the provisions of certain inter21 national conventions, and for other purposes’’, approved

22 July 5, 1946 (15 U.S.C. 1127) (hereafter in this title re23 ferred to as the ‘‘Trademark Act of 1946’’), is amended

24 by amending the paragraph defining ‘‘abandoned’’ to read

25 as follows:
460

1 ‘‘A mark shall be deemed to be ‘abandoned’ if either

2 of the following occurs:

3 ‘‘(1) When its use has been discontinued with

4 intent not to resume such use. Intent not to resume

5 may be inferred from circumstances. Nonuse for 3

6 consecutive years shall be prima facie evidence of

7 abandonment. ‘Use’ of a mark means the bona fide

8 use of such mark made in the ordinary course of

9 trade, and not made merely to reserve a right in a

10 mark.

11 ‘‘(2) When any course of conduct of the owner,

12 including acts of omission as well as commission,

13 causes the mark to become the generic name for the

14 goods or services on or in connection with which it

15 is used or otherwise to lose its significance as a

16 mark. Purchaser motivation shall not be a test for

17 determining abandonment under this paragraph.’’.

18 SEC. 522. NONREGISTRABILITY OF MISLEADING GEO19 GRAPHIC INDICATIONS FOR WINES AND SPIR20 ITS.

21 Subsection (a) of section 2 of the Trademark Act of

22 1946 (15 U.S.C. 1052(a)) is amended to read as follows:

23 ‘‘(a) Consists of or comprises immoral, deceptive, or

24 scandalous matter; or matter which may disparage or

25 falsely suggest a connection with persons, living or dead,
461

1 institutions, beliefs, or national symbols, or bring them

2 into contempt, or disrepute; or a geographical indication

3 which, when used on or in connection with wines or spirits,

4 identifies a place other than the origin of the goods and

5 is first used on or in connection with wines or spirits by

6 the applicant on or after one year after the date on which

7 the WTO Agreement (as defined in section 2(9) of the

8 Uruguay Round Agreements Act) enters into force with

9 respect to the United States.’’.

10 SEC. 523. EFFECTIVE DATE.

11 The amendments made by this subtitle take effect

12 one year after the date on which the WTO Agreement en13 ters into force with respect to the United States.

14 Subtitle C—Patent Provisions

15 SEC. 531. TREATMENT OF INVENTIVE ACTIVITY.

16 (a) IN GENERAL.—Section 104 of title 35, United

17 States Code, is amended to read as follows:

18 ‘‘§ 104. Invention made abroad

19 ‘‘(a) IN GENERAL.—

20 ‘‘(1) PROCEEDINGS.—In proceedings in the

21 Patent and Trademark Office, in the courts, and be22 fore any other competent authority, an applicant for

23 a patent, or a patentee, may not establish a date of

24 invention by reference to knowledge or use thereof,

25 or other activity with respect thereto, in a foreign
462

1 country other than a NAFTA country or a WTO

2 member country, except as provided in sections 119

3 and 365 of this title.

4 ‘‘(2) RIGHTS.—If an invention was made by a

5 person, civil or military—

6 ‘‘(A) while domiciled in the United States,

7 and serving in any other country in connection

8 with operations by or on behalf of the United

9 States,

10 ‘‘(B) while domiciled in a NAFTA country

11 and serving in another country in connection

12 with operations by or on behalf of that NAFTA

13 country, or

14 ‘‘(C) while domiciled in a WTO member

15 country and serving in another country in con16 nection with operations by or on behalf of that

17 WTO member country,

18 that person shall be entitled to the same rights of

19 priority in the United States with respect to such in20 vention as if such invention had been made in the

21 United States, that NAFTA country, or that WTO

22 member country, as the case may be.

23 ‘‘(3) USE OF INFORMATION.—To the extent

24 that any information in a NAFTA country or a

25 WTO member country concerning knowledge, use, or
463

1 other activity relevant to proving or disproving a

2 date of invention has not been made available for

3 use in a proceeding in the Patent and Trademark

4 Office, a court, or any other competent authority to

5 the same extent as such information could be made

6 available in the United States, the Commissioner,

7 court, or such other authority shall draw appropriate

8 inferences, or take other action permitted by statute,

9 rule, or regulation, in favor of the party that re10 quested the information in the proceeding.

11 ‘‘(b) DEFINITIONS.—As used in this section—

12 ‘‘(1) the term ‘NAFTA country’ has the mean13 ing given that term in section 2(4) of the North

14 American Free Trade Agreement Implementation

15 Act; and

16 ‘‘(2) the term ‘WTO member country’ has the

17 meaning given that term in section 2(10) of the

18 Uruguay Round Agreements Act.’’.

19 (b) EFFECTIVE DATE.—

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendment made by this section shall

22 apply to all patent applications that are filed on or

23 after the date that is 12 months after the date of

24 entry into force of the WTO Agreement with respect

25 to the United States.
464

1 (2) ESTABLISHMENT OF DATE.—An applicant

2 for a patent, or a patentee, may not establish a date

3 of invention for purposes of title 35, United States

4 Code, that is earlier than 12 months after the date

5 of entry into force of the WTO Agreement with re6 spect to the United States by reference to knowledge

7 or use, or other activity, in a WTO member country,

8 except as provided in sections 119 and 365 of such

9 title.

10 SEC. 532. PATENT TERM AND INTERNAL PRIORITY.

11 (a) PATENT RIGHTS.—

12 (1) CONTENTS AND TERM OF PATENT.—Section

13 154 of title 35, United States Code, is amended to

14 read as follows:

15 ‘‘§ 154. Contents and term of patent

16 ‘‘(a) IN GENERAL.—

17 ‘‘(1) CONTENTS.—Every patent shall contain a

18 short title of the invention and a grant to the pat19 entee, his heirs or assigns, of the right to exclude

20 others from making, using, offering for sale, or sell21 ing the invention throughout the United States or

22 importing the invention into the United States, and,

23 if the invention is a process, of the right to exclude

24 others from using, offering for sale or selling

25 throughout the United States, or importing into the
465

1 United States, products made by that process, refer2 ring to the specification for the particulars thereof.

3 ‘‘(2) TERM.—Subject to the payment of fees

4 under this title, such grant shall be for a term be5 ginning on the date on which the patent issues and

6 ending 20 years from the date on which the applica7 tion for the patent was filed in the United States or,

8 if the application contains a specific reference to an

9 earlier filed application or applications under section

10 120, 121, or 365(c) of this title, from the date on

11 which the earliest such application was filed.

12 ‘‘(3) PRIORITY.—Priority under section 119,

13 365(a), or 365(b) of this title shall not be taken into

14 account in determining the term of a patent.

15 ‘‘(4) SPECIFICATION AND DRAWING.—A copy of

16 the specification and drawing shall be annexed to

17 the patent and be a part of such patent.

18 ‘‘(b) TERM EXTENSION.—

19 ‘‘(1) INTERFERENCE DELAY OR SECRECY OR20 DERS.—If the issue of an original patent is delayed

21 due to a proceeding under section 135(a) of this

22 title, or because the application for patent is placed

23 under an order pursuant to section 181 of this title,

24 the term of the patent shall be extended for the pe25 riod of delay, but in no case more than 5 years.
466

1 ‘‘(2) EXTENSION FOR APPELLATE REVIEW.—If

2 the issue of a patent is delayed due to appellate re3 view by the Board of Patent Appeals and Inter4 ferences or by a Federal court and the patent is is5 sued pursuant to a decision in the review reversing

6 an adverse determination of patentability, the term

7 of the patent shall be extended for a period of time

8 but in no case more than 5 years. A patent shall not

9 be eligible for extension under this paragraph if it

10 is subject to a terminal disclaimer due to the issue

11 of another patent claiming subject matter that is not

12 patentably distinct from that under appellate review.

13 ‘‘(3) LIMITATIONS.—The period of extension re14 ferred to in paragraph (2)—

15 ‘‘(A) shall include any period beginning on

16 the date on which an appeal is filed under sec17 tion 134 or 141 of this title, or on which an ac18 tion is commenced under section 145 of this

19 title, and ending on the date of a final decision

20 in favor of the applicant;

21 ‘‘(B) shall be reduced by any time attrib22 utable to appellate review before the expiration

23 of 3 years from the filing date of the applica24 tion for patent; and
467

1 ‘‘(C) shall be reduced for the period of

2 time during which the applicant for patent did

3 not act with due diligence, as determined by the

4 Commissioner.

5 ‘‘(4) LENGTH OF EXTENSION.—The total dura6 tion of all extensions of a patent under this sub7 section shall not exceed 5 years.

8 ‘‘(c) CONTINUATION.—

9 ‘‘(1) DETERMINATION.—The term of a patent

10 that is in force on or that results from an applica11 tion filed before the date that is 6 months after the

12 date of the enactment of the Uruguay Round Agree13 ments Act shall be the greater of the 20-year term

14 as provided in subsection (a), or 17 years from

15 grant, subject to any terminal disclaimers.

16 ‘‘(2) REMEDIES.—The remedies of sections

17 283, 284, and 285 of this title shall not apply to

18 Acts which—

19 ‘‘(A) were commenced or for which sub20 stantial investment was made before the date

21 that is 6 months after the date of the enact22 ment of the Uruguay Round Agreements Act;

23 and

24 ‘‘(B) became infringing by reason of para25 graph (1).
468

1 ‘‘(3) REMUNERATION.—The acts referred to in

2 paragraph (2) may be continued only upon the pay3 ment of an equitable remuneration to the patentee

4 that is determined in an action brought under chap5 ter 28 and chapter 29 (other than those provisions

6 excluded by paragraph (2)) of this title.’’.

7 (2) PROVISION OF FURTHER LIMITED REEXAM8 INATION AND CONDITIONS OF RESTRICTION RE9 QUIREMENTS.—(A) The Commissioner of Patents

10 and Trademarks shall prescribe regulations to pro11 vide for further limited reexamination of applications

12 that have been pending for 2 years or longer as of

13 the effective date of section 154(a)(2) of title 35,

14 United States Code, as added by paragraph (1) of

15 this subsection, taking into account any reference

16 made in such application to any earlier filed applica17 tion under section 120, 121, or 365(c) of such title.

18 The Commissioner may establish appropriate fees

19 for such further limited reexamination.

20 (B) The Commissioner of Patents and Trade21 marks shall prescribe regulations to provide for the

22 examination of more than 1 independent and dis23 tinct invention in an application that has been pend24 ing for 3 years or longer as of the effective date of

25 section 154(a)(2) of title 35, United States Code, as
469

1 added by paragraph (1) of this subsection, taking

2 into account any reference made in such application

3 to any earlier filed application under section 120,

4 121, or 365(c) of such title. The Commissioner may

5 establish appropriate fees for such examination.

6 (b) ESTABLISHMENT OF A DOMESTIC PRIORITY SYS7 TEM.—

8 (1) IN GENERAL.—Section 119 of title 35,

9 United States Code, is amended—

10 (A) by amending the section caption to

11 read as follows:

12 ‘‘§ 119. Benefit of earlier filing date; right of priority’’;

13 (B) by designating the undesignated para14 graphs as subsections (a), (b), (c), and (d), re15 spectively; and

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

17 ‘‘(e)(1) An application for patent filed under section

18 111(a) or section 363 of this title for an invention dis19 closed in the manner provided by the first paragraph of

20 section 112 of this title in a provisional application filed

21 under section 111(b) of this title, by an inventor or inven22 tors named in the provisional application, shall have the

23 same effect, as to such invention, as though filed on the

24 date of the provisional application filed under section

25 111(b) of this title, if the application for patent filed under
470

1 section 111(a) or section 363 of this title is filed not later

2 than 12 months after the date on which the provisional

3 application was filed and if it contains or is amended to

4 contain a specific reference to the provisional application.

5 ‘‘(2) A provisional application filed under section

6 111(b) of this title may not be relied upon in any proceed7 ing in the Patent and Trademark Office unless the fee

8 set forth in subparagraph (A) or (C) of section 41(a)(1)

9 of this title has been paid and the provisional application

10 was pending on the filing date of the application for patent

11 under section 111(a) or section 363 of this title.’’.

12 (2) FEES.—Section 41(a)(1) of title 35, United

13 States Code, is amended by adding at the end the

14 following:

15 ‘‘(C) On filing each provisional application for

16 an original patent, $150.’’.

17 (3) APPLICATIONS.—Section 111 of title 35,

18 United States Code, is amended to read as follows:

19 ‘‘§ 111. Application

20 ‘‘(a) IN GENERAL.—

21 ‘‘(1) WRITTEN APPLICATION.—An application

22 for patent shall be made, or authorized to be made,

23 by the inventor, except as otherwise provided in this

24 title, in writing to the Commissioner.
471

1 ‘‘(2) CONTENTS.—Such application shall in2 clude—

3 ‘‘(A) a specification as prescribed by sec4 tion 112 of this title;

5 ‘‘(B) a drawing as prescribed by section

6 113 of this title; and

7 ‘‘(C) an oath by the applicant as pre8 scribed by section 115 of this title.

9 ‘‘(3) FEE AND OATH.—The application must be

10 accompanied by the fee required by law. The fee and

11 oath may be submitted after the specification and

12 any required drawing are submitted, within such pe13 riod and under such conditions, including the pay14 ment of a surcharge, as may be prescribed by the

15 Commissioner.

16 ‘‘(4) FAILURE TO SUBMIT.—Upon failure to

17 submit the fee and oath within such prescribed pe18 riod, the application shall be regarded as abandoned,

19 unless it is shown to the satisfaction of the Commis20 sioner that the delay in submitting the fee and oath

21 was unavoidable or unintentional. The filing date of

22 an application shall be the date on which the speci23 fication and any required drawing are received in the

24 Patent and Trademark Office.

25 ‘‘(b) PROVISIONAL APPLICATION.—
472

1 ‘‘(1) AUTHORIZATION.—A provisional applica2 tion for patent shall be made or authorized to be

3 made by the inventor, except as otherwise provided

4 in this title, in writing to the Commissioner. Such

5 application shall include—

6 ‘‘(A) a specification as prescribed by the

7 first paragraph of section 112 of this title; and

8 ‘‘(B) a drawing as prescribed by section

9 113 of this title.

10 ‘‘(2) CLAIM.—A claim, as required by the sec11 ond through fifth paragraphs of section 112, shall

12 not be required in a provisional application.

13 ‘‘(3) FEE.—(A) The application must be ac14 companied by the fee required by law.

15 ‘‘(B) The fee may be submitted after the speci16 fication and any required drawing are submitted,

17 within such period and under such conditions, in18 cluding the payment of a surcharge, as may be pre19 scribed by the Commissioner.

20 ‘‘(C) Upon failure to submit the fee within such

21 prescribed period, the application shall be regarded

22 as abandoned, unless it is shown to the satisfaction

23 of the Commissioner that the delay in submitting

24 the fee was unavoidable or unintentional.
473

1 ‘‘(4) FILING DATE.—The filing date of a provi2 sional application shall be the date on which the

3 specification and any required drawing are received

4 in the Patent and Trademark Office.

5 ‘‘(5) ABANDONMENT.—The provisional applica6 tion shall be regarded as abandoned 12 months after

7 the filing date of such application and shall not be

8 subject to revival thereafter.

9 ‘‘(6) OTHER BASIS FOR PROVISIONAL APPLICA10 TION.—Subject to all the conditions in this sub11 section and section 119(e) of this title, and as pre12 scribed by the Commissioner, an application for pat13 ent filed under subsection (a) may be treated as a

14 provisional application for patent.

15 ‘‘(7) NO RIGHT OF PRIORITY OR BENEFIT OF

16 EARLIEST FILING DATE.—A provisional application

17 shall not be entitled to the right of priority of any

18 other application under section 119 or 365(a) of this

19 title or to the benefit of an earlier filing date in the

20 United States under section 120, 121, or 365(c) of

21 this title.

22 ‘‘(8) APPLICABLE PROVISIONS.—The provisions

23 of this title relating to applications for patent shall

24 apply to provisional applications for patent, except

25 as otherwise provided, and except that provisional
474

1 applications for patent shall not be subject to sec2 tions 115, 131, 135, and 157 of this title.’’.

3 (c) CONFORMING CHANGES.—

4 (1) Section 156(a)(2) of title 35, United States

5 Code, is amended by inserting ‘‘under subsection

6 (e)(1) of this section’’ after ‘‘extended’’.

7 (2) Section 172 of title 35, United States Code,

8 is amended—

9 (A) by striking ‘‘section 119’’ and insert10 ing ‘‘subsections (a) through (d) of section

11 119’’; and

12 (B) by inserting at the end the following

13 new sentence:

14 ‘‘The right of priority provided for by section 119(e) of

15 this title shall not apply to designs.’’.

16 (3) Section 173 of title 35, United States Code,

17 is amended by inserting ‘‘from the date of grant’’

18 after ‘‘years’’.

19 (4) Section 365 of title 35, United States Code,

20 is amended—

21 (A) in subsection (a), by striking ‘‘section

22 119’’ and inserting ‘‘subsections (a) through (d)

23 of section 119’’; and
475

1 (B) in subsection (b), by striking ‘‘the first

2 paragraph of section 119’’ and inserting ‘‘sec3 tion 119(a)’’.

4 (5) Section 373 of title 35, United States Code,

5 is amended by striking ‘‘section 119’’ and inserting

6 ‘‘subsections (a) through (d) of section 119’’.

7 (6) The table of sections for chapter 11 of title

8 35, United States Code, is amended—

9 (A) by striking the item relating to section

10 111 and inserting the following:

‘‘111. Application.’’;

11 and

12 (B) by striking the item relating to section

13 119 and inserting the following:

‘‘119. Benefit of earlier filing date; right of priority.’’.

14 SEC. 533. PATENT RIGHTS.

15 (a) DEFINITION OF INFRINGEMENT.—Section 271 of

16 title 35, United States Code, is amended—

17 (1) in subsection (a)—

18 (A) by inserting ‘‘, offers to sell,’’ after

19 ‘‘uses’’; and

20 (B) by inserting ‘‘or imports into the Unit21 ed States any patented invention’’ after ‘‘the

22 United States’’;
476

1 (2) in subsection (c), by striking ‘‘sells’’ and in2 serting ‘‘offers to sell or sells within the United

3 States or imports into the United States’’;

4 (3) in subsection (e)—

5 (A) in paragraph (1), by striking ‘‘or sell’’

6 and inserting ‘‘offer to sell, or sell within the

7 United States or import into the United

8 States’’;

9 (B) in paragraph (3), by striking ‘‘or sell10 ing’’ and inserting ‘‘offering to sell, or selling

11 within the United States or importing into the

12 United States’’;

13 (C) in paragraph (4)(B), by striking ‘‘or

14 sale’’ and inserting ‘‘offer to sell, or sale within

15 the United States or importation into the Unit16 ed States’’; and

17 (D) in paragraph (4)(C), by striking ‘‘or

18 sale’’ and inserting ‘‘offer to sell, or sale within

19 the United States or importation into the Unit20 ed States’’;

21 (4) in subsection (g)—

22 (A) by striking ‘‘sells’’ and inserting ‘‘of23 fers to sell, sells,’’;

24 (B) by striking ‘‘importation, sale,’’ and

25 inserting ‘‘importation, offer to sell, sale,’’; and
477

1 (C) by striking ‘‘other use or’’ and insert2 ing ‘‘other use, offer to sell, or’’; and

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

4 ‘‘(i) As used in this section, an ‘offer for sale’ or an

5 ‘offer to sell’ by a person other than the patentee, or any

6 designee of the patentee, is that in which the sale will

7 occur before the expiration of the term of the patent.’’.

8 (b) CONFORMING AMENDMENTS.—

9 (1) Paragraph (2) of section 41(c) of title 35,

10 United States Code, is amended to read as follows:

11 ‘‘(2) A patent, the term of which has been maintained

12 as a result of the acceptance of a payment of a mainte13 nance fee under this subsection, shall not abridge or affect

14 the right of any person or that person’s successors in busi15 ness who made, purchased, offered to sell, or used any16 thing protected by the patent within the United States,

17 or imported anything protected by the patent into the

18 United States after the 6-month grace period but prior

19 to the acceptance of a maintenance fee under this sub20 section, to continue the use of, to offer for sale, or to sell

21 to others to be used, offered for sale, or sold, the specific

22 thing so made, purchased, offered for sale, used, or im23 ported. The court before which such matter is in question

24 may provide for the continued manufacture, use, offer for

25 sale, or sale of the thing made, purchased, offered for sale,
478

1 or used within the United States, or imported into the

2 United States, as specified, or for the manufacture, use,

3 offer for sale, or sale in the United States of which sub4 stantial preparation was made after the 6-month grace pe5 riod but before the acceptance of a maintenance fee under

6 this subsection, and the court may also provide for the

7 continued practice of any process that is practiced, or for

8 the practice of which substantial preparation was made,

9 after the 6-month grace period but before the acceptance

10 of a maintenance fee under this subsection, to the extent

11 and under such terms as the court deems equitable for

12 the protection of investments made or business com13 menced after the 6-month grace period but before the ac14 ceptance of a maintenance fee under this subsection.’’.

15 (2) The second undesignated paragraph of sec16 tion 252 of title 35, United States Code, is amended

17 to read as follows:

18 ‘‘A reissued patent shall not abridge or affect the

19 right of any person or that person’s successors in business

20 who, prior to the grant of a reissue, made, purchased, of21 fered to sell, or used within the United States, or imported

22 into the United States, anything patented by the reissued

23 patent, to continue the use of, to offer to sell, or to sell

24 to others to be used, offered for sale, or sold, the specific

25 thing so made, purchased, offered for sale, used, or im-
479

1 ported unless the making, using, offering for sale, or sell2 ing of such thing infringes a valid claim of the reissued

3 patent which was in the original patent. The court before

4 which such matter is in question may provide for the con5 tinued manufacture, use, offer for sale, or sale of the thing

6 made, purchased, offered for sale, used, or imported as

7 specified, or for the manufacture, use, offer for sale, or

8 sale in the United States of which substantial preparation

9 was made before the grant of the reissue, and the court

10 may also provide for the continued practice of any process

11 patented by the reissue that is practiced, or for the prac12 tice of which substantial preparation was made, before the

13 grant of the reissue, to the extent and under such terms

14 as the court deems equitable for the protection of invest15 ments made or business commenced before the grant of

16 the reissue.’’.

17 (3) Section 262 of title 35, United States Code,

18 is amended—

19 (A) by striking ‘‘use or sell’’ and inserting

20 ‘‘use, offer to sell, or sell’’; and

21 (B) by inserting ‘‘within the United States,

22 or import the patented invention into the

23 United States,’’ after ‘‘invention’’.
480

1 (4) Section 272 of title 35, United States Code,

2 is amended by striking ‘‘not sold’’ and inserting ‘‘not

3 offered for sale or sold’’.

4 (5) Section 287 of title 35, United States Code,

5 is amended—

6 (A) in subsection (a)—

7 (i) by striking ‘‘making or selling’’

8 and inserting ‘‘making, offering for sale, or

9 selling within the United States’’; and

10 (ii) by inserting ‘‘or importing any

11 patented article into the United States,’’

12 after ‘‘under them,’’; and

13 (B) in subsection (b)—

14 (i) in paragraph (1)(C), by striking

15 ‘‘use, or sale’’ and inserting ‘‘use, offer for

16 sale, or sale’’;

17 (ii) in paragraph (4)(A), by striking

18 ‘‘sold or’’ and inserting ‘‘sold, offered for

19 sale, or’’ in the matter preceding clause (i);

20 (iii) in paragraph (4)(A)(ii), by strik21 ing ‘‘use, or sale’’ and inserting ‘‘use, offer

22 for sale, or sale’’;

23 (iv) in paragraph (4)(C), by striking

24 ‘‘have been sold’’ and inserting ‘‘have been

25 offered for sale or sold’’; and
481

1 (v) in paragraph (4)(C), by striking

2 ‘‘United States before’’ and inserting

3 ‘‘United States, or imported by the person

4 into the United States, before’’.

5 (6) Section 292(a) of title 35, United States

6 Code, is amended—

7 (A) by striking ‘‘used, or sold by him’’ and

8 inserting ‘‘used, offered for sale, or sold by such

9 person within the United States, or imported by

10 the person into the United States’’; and

11 (B) by striking ‘‘made or sold’’ and insert12 ing ‘‘made, offered for sale, sold, or imported

13 into the United States’’.

14 (7) Section 295 of title 35, United States Code,

15 is amended by striking ‘‘sale, or use’’ and inserting

16 ‘‘sale, offer for sale, or use’’.

17 (8) Section 307(b) of title 35, United States

18 Code, is amended by striking ‘‘used anything’’ and

19 inserting ‘‘used within the United States, or im20 ported into the United States, anything’’.

21 SEC. 534. EFFECTIVE DATES AND APPLICATION.

22 (a) IN GENERAL.—Subject to subsection (b), the

23 amendments made by this subtitle take effect on the date

24 that is one year after the date on which the WTO Agree25 ment enters into force with respect to the United States.
482

1 (b) PATENT APPLICATIONS.—

2 (1) IN GENERAL.—Subject to paragraph (2),

3 the amendments made by section 532 take effect on

4 the date that is 6 months after the date of the en5 actment of this Act and shall apply to all patent ap6 plications filed in the United States on or after the

7 effective date.

8 (2) SECTION 154(a)(1).—Section 154(a)(1) of

9 title 35, United States Code, as amended by section

10 532(a)(1) of this Act, shall take effect on the effec11 tive date described in subsection (a).

12 (3) EARLIEST FILING.—The term of a patent

13 granted on a application that is filed on or after the

14 effective date described in subsection (a) and that

15 contains a specific reference to an earlier application

16 filed under the provisions of section 120, 121, or

17 365(c) of title 35, United States Code, shall be

18 measured from the filing date of the earliest filed

19 application.

20 TITLE VI—RELATED PROVISIONS

21 Subtitle A—Expiring Provisions

22 SEC. 601. GENERALIZED SYSTEM OF PREFERENCES.

23 (a) EXTENSION OF DUTY-FREE TREATMENT UNDER

24 SYSTEM.—Section 505(a) of the Trade Act of 1974 (19
483

1 U.S.C. 2465(a)) is amended by striking ‘‘September 30,

2 1994’’ and inserting ‘‘July 31, 1995’’.

3 (b) RETROACTIVE APPLICATION FOR CERTAIN LIQ4 UIDATIONS AND RELIQUIDATIONS.—

5 (1) IN GENERAL.—Notwithstanding section 514

6 of the Tariff Act of 1930 or any other provision of

7 law and subject to paragraph (2), the entry—

8 (A) of any article to which duty-free treat9 ment under title V of the Trade Act of 1974

10 would have applied if the entry had been made

11 on September 30, 1994, and

12 (B) that was made after September 30,

13 1994, and before such date of enactment,

14 shall be liquidated or reliquidated as free of duty,

15 and the Secretary of the Treasury shall refund any

16 duty paid with respect to such entry. As used in this

17 subsection, the term ‘‘entry’’ includes a withdrawal

18 from warehouse for consumption.

19 (2) REQUESTS.—Liquidation or reliquidation

20 may be made under paragraph (1) with respect to

21 an entry only if a request therefor is filed with the

22 Customs Service, within 180 days after the date of

23 the enactment of this Act, that contains sufficient

24 information to enable the Customs Service—

25 (A) to locate the entry; or
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1 (B) to reconstruct the entry if it cannot be

2 located.

3 SEC. 602. U.S. INSULAR POSSESSIONS.

4 (a) EXTENSION OF VERIFICATION AND CERTIFICATE

5 ISSUANCE PROVISIONS.—Additional U.S. Note 5(h)(i) to

6 chapter 91 of the HTS is amended by striking ‘‘and before

7 January 1, 1995,’’ and inserting ‘‘and before January 1,

8 2007,’’.

9 (b) EXTENSION OF CERTIFICATE NUMBER PIC–EV–

10 89.—Notwithstanding any other provision of law, the pro11 duction incentive certificate, number PIC–EV–89, issued

12 jointly by the Secretary of Commerce and the Secretary

13 of the Interior, pursuant to paragraph (h)(i)(B) of Addi14 tional U.S. Note 5 to chapter 91 of the HTS (formerly

15 paragraph (h)(i)(II) of headnote 6 of schedule 7, part 2,

16 subpart E of the Tariff Schedules of the United States),

17 shall be deemed to have been reissued on the date of the

18 enactment of this Act in the amount of the balance re19 maining on such certificate, and shall expire on the date

20 that is 1 year after such date of enactment.
485

1 Subtitle B—Certain Customs

2 Provisions

3 SEC. 611. REIMBURSEMENTS FROM CUSTOMS USER FEE

4 ACCOUNT.

5 (a) IN GENERAL.—Subclause (II) of section

6 13031(f)(3)(A)(i) of the Consolidated Omnibus Budget

7 Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3)(A)(i)(II))

8 is amended to read as follows:

9 ‘‘(II) paying premium pay under section

10 5(b) of the Act of February 13, 1911, but the

11 amount for which reimbursement may be made

12 under this subclause may not, for any fiscal

13 year, exceed the difference between the total

14 cost of all the premium pay for such year cal15 culated under section 5(b) and the cost of the

16 night and holiday premium pay that the Cus17 toms Service would have incurred for the same

18 inspectional work on the day before the effective

19 date of section 13813 of the Omnibus Budget

20 Reconciliation Act of 1993,’’.

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

22 this section shall apply to customs inspectional services

23 performed on or after January 1, 1994.
486

1 SEC. 612. MERCHANDISE PROCESSING FEES.

2 (a) IN GENERAL.—Section 13031 of the Consolidated

3 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.

4 58c) is amended—

5 (1) in subsection (a)(9)—

6 (A) in subparagraph (A), by striking

7 ‘‘0.17’’ and inserting ‘‘0.21’’,

8 (B) in subparagraph (B)(i), by striking

9 ‘‘(but not to a rate of more than 0.19 percent

10 nor less than 0.15 percent) that would’’ and in11 serting ‘‘(but not to a rate of more than 0.21

12 percent nor less than 0.15 percent) and the

13 amounts specified in subsection (b)(8)(A)(i)

14 (but not to more than $485 nor less than $21)

15 to rates and amounts which would’’, and

16 (C) in subparagraph (B)(ii), by striking

17 ‘‘section 613A of the Tariff Act of 1930’’ and

18 inserting ‘‘subsection (f)’’

19 (2) in subsection (a)(10)—

20 (A) in subparagraph (C), by striking

21 ‘‘entry or release.’’ and inserting ‘‘entry or re22 lease,’’,

23 (B) in clause (ii), by striking ‘‘$5’’ and in24 serting ‘‘$6’’, and

25 (C) in clause (iii), by striking ‘‘$8’’ and in26 serting ‘‘$9’’, and
487

1 (3) in subsection (b)(8)(A)(i), by striking

2 ‘‘$400 or be less than $21’’, and inserting ‘‘$485 or

3 be less than $25, unless adjusted pursuant to sub4 section (a)(9)(B)’’.

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

6 this section apply to articles entered, or withdrawn from

7 warehouse for consumption, on or after January 1, 1995.

8 Subtitle C—Conforming

9 Amendments

10 SEC. 621. CONFORMING AMENDMENTS.

11 (a) TRADE LAWS.—

12 (1) Section 1317(a)(1) of the Omnibus Trade

13 and Competitiveness Act of 1988 (19 U.S.C.

14 1677k(a)(1)) is amended—

15 (A) by inserting ‘‘(A)’’ after ‘‘(1)’’;

16 (B) by striking ‘‘General Agreement on

17 Tariffs and Trade’’ and inserting ‘‘GATT

18 1994’’; and

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

20 ‘‘(B) The term ‘GATT 1994’ has the meaning

21 given that term in section 2(1)(B) of the Uruguay

22 Round Agreements Act.’’.

23 (2) Section 212(c)(4) of the Caribbean Basin

24 Economic Recovery Act (19 U.S.C. 2702(c)(4)) is

25 amended by striking ‘‘General’’ and all that follows
488

1 through ‘‘1979’’ and inserting ‘‘WTO Agreement

2 and the multilateral trade agreements (as such

3 terms are defined in paragraphs (9) and (4), respec4 tively, of section 2 of the Uruguay Round Agree5 ments Act)’’.

6 (3) Section 203(d)(4) of the Andean Trade

7 Preference Act (19 U.S.C. 3202(d)(4)) is amended

8 by striking ‘‘General’’ and all that follows through

9 ‘‘1979’’ and inserting ‘‘WTO Agreement and the

10 multilateral trade agreements (as such terms are de11 fined in paragraphs (9) and (4), respectively, of sec12 tion 2 of the Uruguay Round Agreements Act)’’.

13 (4) Section 1106 of the Omnibus Trade and

14 Competitiveness Act of 1988 (19 U.S.C. 2905) is

15 amended—

16 (A) in subsection (a), by striking ‘‘the

17 GATT’’ and inserting ‘‘the GATT 1947, or to

18 the WTO Agreement,’’;

19 (B) in subsections (b) and (c), by inserting

20 after ‘‘the GATT’’ each place it appears ‘‘1947

21 or the WTO Agreement’’;

22 (C) by adding at the end the following new

23 subsection:

24 ‘‘(e) DEFINITIONS.—For purposes of this section:—
489

1 ‘‘(1) The term ‘GATT 1947’ has the meaning

2 given that term in section 2(1)(A) of the Uruguay

3 Round Agreements Act.

4 ‘‘(2) The term ‘WTO Agreement’ means the

5 Agreement Establishing the World Trade Organiza6 tion entered into on April 15, 1994 and the multilat7 eral trade agreements (as such term is defined in

8 section 2(4) of the Uruguay Round Agreements

9 Act).’’; and

10 (D) by inserting after ‘‘GENERAL AGREE11 MENT ON TARIFFS AND TRADE’’ in the heading

12 ‘‘FOR THE WTO’’.

13 (5) Section 1107(a)(3) of the Omnibus Trade

14 and Competitiveness Act of 1988 (19 U.S.C.

15 2906(3)) is amended by striking ‘‘the General

16 Agreement on Tariffs and Trade’’ and inserting ‘‘the

17 GATT 1947 (as defined in section 2(1)(A) of the

18 Uruguay Round Agreements Act)’’.

19 (6) Section 1378(2) of the Omnibus Trade and

20 Competitiveness Act of 1988 (19 U.S.C. 3107(2)) is

21 amended by striking ‘‘the General Agreement on

22 Tariffs and Trade’’ and inserting ‘‘the WTO Agree23 ment and the multilateral trade agreements (as such

24 terms are defined in paragraphs (8) and (4), respec-
490

1 tively, of section 2 of the Uruguay Round Agree2 ments Act)’’.

3 (7) Section 1382 of the Omnibus Trade and

4 Competitiveness Act of 1988 (19 U.S.C. 3111) is

5 amended by striking ‘‘the General Agreement on

6 Tariffs and Trade’’ and inserting ‘‘the WTO Agree7 ment and the multilateral trade agreements (as such

8 terms are defined in paragraphs (9) and (4), respec9 tively, of section 2 of the Uruguay Round Agree10 ments Act)’’.

11 (8) Section 141(c)(1) of the Trade Act of 1974

12 (19 U.S.C. 2171(c)(1)) is amended—

13 (A) in subparagraph (C) by inserting ‘‘all

14 negotiations on any matter considered under

15 the auspices of the World Trade Organization,’’

16 after ‘‘including’’; and

17 (B) in subparagraph (D) by inserting ‘‘,

18 including any matter considered under the aus19 pices of the World Trade Organization,’’ after

20 ‘‘functions’’.

21 (9) Section 301(a)(2)(A) of the Trade Act of

22 1974 (19 U.S.C. 2411(a)(2)(A)) is amended by

23 striking ‘‘the Contracting Parties’’ and all that fol24 lows through ‘‘Parties,’’ and inserting ‘‘the Dispute

25 Settlement Body (as defined in section 121(5) of the
491

1 Uruguay Round Agreements Act) has adopted a re2 port,’’.

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

4 this section shall take effect on the date on which the

5 WTO Agreement enters into force with respect to the

6 United States.

7 TITLE VII—REVENUE

8 PROVISIONS

9 SEC. 700. AMENDMENT OF 1986 CODE AND TABLE OF CON10 TENTS.

11 (a) AMENDMENT OF 1986 CODE.—Except as other12 wise expressly provided, whenever in this title an amend13 ment or repeal is expressed in terms of an amendment

14 to, or repeal of, a section or other provision, the reference

15 shall be considered to be made to a section or other provi16 sion of the Internal Revenue Code of 1986.

17 (b) TABLE OF CONTENTS.—

TITLE VII—REVENUE PROVISIONS

Sec. 700. Amendment of 1986 Code and table of contents.

Subtitle A—Withholding Tax Provisions

Sec. 701. Withholding on distributions of Indian casino profits to tribal members.

Sec. 702. Voluntary withholding on certain Federal payments and on unemployment compensation.

Subtitle B—Provisions Relating to Estimated Taxes and Payments and

Deposits of Taxes

Sec. 711. Treatment of subpart F and section 936 income of taxpayers using

annualized method for estimated tax.

Sec. 712. Time for payments and deposits of certain taxes.

Sec. 713. Reduction in rate of interest paid on certain corporate overpayments.

Subtitle C—Earned Income Tax Credit
492

Sec. 721. Extension of earned income tax credit to military personnel stationed

outside the United States.

Sec. 722. Certain nonresident aliens ineligible for earned income tax credit.

Sec. 723. Income of prisoners disregarded in determining earned income tax

credit.

Subtitle D—Provisions Relating To Retirement Benefits

Sec. 731. Treatment of excess pension assets used for retiree health benefits.

Sec. 732. Rounding rules for cost-of-living adjustments.

Sec. 733. Increase in inclusion of social security benefits paid to nonresidents.

Subtitle E—Other Provisions

Sec. 741. Partnership distributions of marketable securities.

Sec. 742. Taxpayer identification numbers required at birth.

Sec. 743. Extension of Internal Revenue Service user fees.

Sec. 744. Modification of substantial understatement penalty for corporations

participating in tax shelters.

Sec. 745. Modification of authority to set terms and conditions for savings

bonds.

Subtitle F—Pension Plan Funding and Premiums

Sec. 750. Short title.

PART I—PENSION PLAN FUNDING

SUBPART A—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 751. Minimum funding requirements.

Sec. 752. Limitation on changes in current liability assumptions.

Sec. 753. Anticipation of bargained benefit increases.

Sec. 754. Modification of quarterly contribution requirement.

Sec. 755. Exceptions to excise tax on nondeductible contributions.

SUBPART B—AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME

SECURITY ACT OF 1974

Sec. 761. Minimum funding requirements.

Sec. 762. Limitation on changes in current liability assumptions.

Sec. 763. Anticipation of bargained benefit increases.

Sec. 764. Modification of quarterly contribution requirement.

SUBPART C—OTHER FUNDING PROVISIONS

Sec. 766. Prohibition on benefit increases where plan sponsor is in bankruptcy.

Sec. 767. Single sum distributions.

Sec. 768. Adjustments to lien for missed minimum funding contributions.

Sec. 769. Special funding rules for certain plans.

PART II—AMENDMENTS RELATED TO TITLE IV OF THE EMPLOYEE

RETIREMENT INCOME SECURITY ACT OF 1974

Sec. 771. Reportable events.

Sec. 772. Certain information required to be furnished to PBGC.

Sec. 773. Enforcement of minimum funding requirements.

Sec. 774. Computation of additional PBGC premium.

Sec. 775. Disclosure to participants.
493

Sec. 776. Missing participants.

Sec. 777. Modification of maximum guarantee for disability benefits.

Sec. 778. Procedures to facilitate distribution of termination benefits.

PART III—EFFECTIVE DATES

Sec. 781. Effective dates.

1 Subtitle A—Withholding Tax

2 Provisions

3 SEC. 701. WITHHOLDING ON DISTRIBUTIONS OF INDIAN CA4 SINO PROFITS TO TRIBAL MEMBERS.

5 (a) IN GENERAL.—Section 3402 (relating to income

6 tax collected at source) is amended by inserting after sub7 section (q) the following new subsection:

8 ‘‘(r) EXTENSION OF WITHHOLDING TO CERTAIN

9 TAXABLE PAYMENTS OF INDIAN CASINO PROFITS.—

10 ‘‘(1) IN GENERAL.—Every person, including an

11 Indian tribe, making a payment to a member of an

12 Indian tribe from the net revenues of any class II

13 or class III gaming activity conducted or licensed by

14 such tribe shall deduct and withhold from such pay15 ment a tax in an amount equal to such payment’s

16 proportionate share of the annualized tax.

17 ‘‘(2) EXCEPTION.—The tax imposed by para18 graph (1) shall not apply to any payment to the ex19 tent that the payment, when annualized, does not

20 exceed an amount equal to the sum of—
494

1 ‘‘(A) the basic standard deduction (as de2 fined in section 63(c)) for an individual to

3 whom section 63(c)(2)(C) applies, and

4 ‘‘(B) the exemption amount (as defined in

5 section 151(d)).

6 ‘‘(3) ANNUALIZED TAX.—For purposes of para7 graph (1), the term ‘annualized tax’ means, with re8 spect to any payment, the amount of tax which

9 would be imposed by section 1(c) (determined with10 out regard to any rate of tax in excess of 31 per11 cent) on an amount of taxable income equal to the

12 excess of—

13 ‘‘(A) the annualized amount of such pay14 ment, over

15 ‘‘(B) the amount determined under para16 graph (2).

17 ‘‘(4) CLASSES OF GAMING ACTIVITIES, ETC.—

18 For purposes of this subsection, terms used in para19 graph (1) which are defined in section 4 of the In20 dian Gaming Regulatory Act (25 U.S.C. 2701 et

21 seq.), as in effect on the date of the enactment of

22 this subsection, shall have the respective meanings

23 given such terms by such section.
495

1 ‘‘(5) ANNUALIZATION.—Payments shall be

2 placed on an annualized basis under regulations pre3 scribed by the Secretary.

4 ‘‘(6) ALTERNATE WITHHOLDING PROCE5 DURES.—At the election of an Indian tribe, the tax

6 imposed by this subsection on any payment made by

7 such tribe shall be determined in accordance with

8 such tables or computational procedures as may be

9 specified in regulations prescribed by the Secretary

10 (in lieu of in accordance with paragraphs (2) and

11 (3)).

12 ‘‘(7) COORDINATION WITH OTHER SECTIONS.—

13 For purposes of this chapter and so much of subtitle

14 F as relates to this chapter, payments to any person

15 which are subject to withholding under this sub16 section shall be treated as if they were wages paid

17 by an employer to an employee.’’

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

19 this section shall apply to payments made after December

20 31, 1994.
496

1 SEC. 702. VOLUNTARY WITHHOLDING ON CERTAIN FED2 ERAL PAYMENTS AND ON UNEMPLOYMENT

3 COMPENSATION.

4 (a) IN GENERAL.—Subsection (p) of section 3402

5 (relating to voluntary withholding agreements) is amended

6 to read as follows:

7 ‘‘(p) VOLUNTARY WITHHOLDING AGREEMENTS.—

8 ‘‘(1) CERTAIN FEDERAL PAYMENTS.—

9 ‘‘(A) IN GENERAL.—If, at the time a speci10 fied Federal payment is made to any person, a

11 request by such person is in effect that such

12 payment be subject to withholding under this

13 chapter, then for purposes of this chapter and

14 so much of subtitle F as relates to this chapter,

15 such payment shall be treated as if it were a

16 payment of wages by an employer to an em17 ployee.

18 ‘‘(B) AMOUNT WITHHELD.—The amount

19 to be deducted and withheld under this chapter

20 from any payment to which any request under

21 subparagraph (A) applies shall be an amount

22 equal to the percentage of such payment speci23 fied in such request. Such a request shall apply

24 to any payment only if the percentage specified

25 is 7, 15, 28, or 31 percent or such other per-
497

1 centage as is permitted under regulations pre2 scribed by the Secretary.

3 ‘‘(C) SPECIFIED FEDERAL PAYMENTS.—

4 For purposes of this paragraph, the term ‘spec5 ified Federal payment’ means—

6 ‘‘(i) any payment of a social security

7 benefit (as defined in section 86(d)),

8 ‘‘(ii) any payment referred to in the

9 second sentence of section 451(d) which is

10 treated as insurance proceeds,

11 ‘‘(iii) any amount which is includible

12 in gross income under section 77(a), and

13 ‘‘(iv) any other payment made pursu14 ant to Federal law which is specified by

15 the Secretary for purposes of this para16 graph.

17 ‘‘(D) REQUESTS FOR WITHHOLDING.—

18 Rules similar to the rules that apply to annu19 ities under subsection (o)(4) shall apply to re20 quests under this paragraph and paragraph (2).

21 ‘‘(2) VOLUNTARY WITHHOLDING ON UNEM22 PLOYMENT BENEFITS.—If, at the time a payment of

23 unemployment compensation (as defined in section

24 85(b)) is made to any person, a request by such per25 son is in effect that such payment be subject to
498

1 withholding under this chapter, then for purposes of

2 this chapter and so much of subtitle F as relates to

3 this chapter, such payment shall be treated as if it

4 were a payment of wages by an employer to an em5 ployee. The amount to be deducted and withheld

6 under this chapter from any payment to which any

7 request under this paragraph applies shall be an

8 amount equal to 15 percent of such payment.

9 ‘‘(3) AUTHORITY FOR OTHER VOLUNTARY

10 WITHHOLDING.—The Secretary is authorized by reg11 ulations to provide for withholding—

12 ‘‘(A) from remuneration for services per13 formed by an employee for the employee’s em14 ployer which (without regard to this paragraph)

15 does not constitute wages, and

16 ‘‘(B) from any other type of payment with

17 respect to which the Secretary finds that with18 holding would be appropriate under the provi19 sions of this chapter,

20 if the employer and employee, or the person making

21 and the person receiving such other type of payment,

22 agree to such withholding. Such agreement shall be

23 in such form and manner as the Secretary may by

24 regulations prescribe. For purposes of this chapter

25 (and so much of subtitle F as relates to this chap-
499

1 ter), remuneration or other payments with respect to

2 which such agreement is made shall be treated as if

3 they were wages paid by an employer to an employee

4 to the extent that such remuneration is paid or other

5 payments are made during the period for which the

6 agreement is in effect.’’

7 (b) STATE LAW MUST PERMIT VOLUNTARY WITH8 HOLDING OF FEDERAL INCOME TAX FROM UNEMPLOY9 MENT COMPENSATION.—Section 3304(a) is amended by

10 striking ‘‘and’’ at the end of paragraph (17), by redesig11 nating paragraph (18) as paragraph (19), and by insert12 ing after paragraph (17) the following new paragraph:

13 ‘‘(18) Federal individual income tax from un14 employment compensation is to be deducted and

15 withheld if an individual receiving such compensa16 tion voluntarily requests such deduction and with17 holding; and’’.

18 (c) WITHHOLDING FROM UNEMPLOYMENT COM19 PENSATION OF FEDERAL, STATE, AND LOCAL INCOME

20 TAXES PERMITTED.—

21 (1) Subparagraph (C) of section 3304(a)(4) is

22 amended by inserting after ‘‘health insurance’’ the

23 following: ‘‘, or the withholding of Federal, State, or

24 local individual income tax,’’.
500

1 (2) Subsection (f) of section 3306 is amended

2 by redesignating paragraphs (3) and (4) as para3 graphs (4) and (5), respectively, and by inserting

4 after paragraph (2) the following new paragraph:

5 ‘‘(3) nothing in this subsection shall be con6 strued to prohibit deducting any amount from unem7 ployment compensation otherwise payable to an indi8 vidual and using the amount so deducted to pay for

9 health insurance, or the withholding of Federal,

10 State, or local individual income tax, if the individ11 ual elected to have such deduction made and such

12 deduction was made under a program approved by

13 the Secretary of Labor;’’.

14 (3) Paragraph (5) of section 303(a) of the So15 cial Security Act is amended by inserting after

16 ‘‘health insurance’’ the following: ‘‘, or the withhold17 ing of Federal, State, or local individual income

18 tax,’’.

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

20 this section shall apply to payments made after December

21 31, 1996.
501

1 Subtitle B—Provisions Relating to

2 Estimated Taxes and Payments

3 and Deposits of Taxes

4 SEC. 711. TREATMENT OF SUBPART F AND SECTION 936 IN5 COME OF TAXPAYERS USING ANNUALIZED

6 METHOD FOR ESTIMATED TAX.

7 (a) CORPORATIONS.—Section 6655(e) (relating to

8 lower required installment where annualized income in9 stallment is less) is amended by adding at the end the

10 following new paragraph:

11 ‘‘(4) TREATMENT OF SUBPART F AND SECTION

12 936 INCOME.—

13 ‘‘(A) IN GENERAL.—Any amounts required

14 to be included in gross income under section

15 936(h) or 951(a) (and credits properly allocable

16 thereto) shall be taken into account in comput17 ing any annualized income installment under

18 paragraph (2) in a manner similar to the man19 ner under which partnership income inclusions

20 (and credits properly allocable thereto) are

21 taken into account.

22 ‘‘(B) PRIOR YEAR SAFE HARBOR.—

23 ‘‘(i) IN GENERAL.—If a taxpayer

24 elects to have this subparagraph apply for

25 any taxable year—
502

1 ‘‘(I) subparagraph (A) shall not

2 apply, and

3 ‘‘(II) for purposes of computing

4 any annualized income installment for

5 such taxable year, the taxpayer shall

6 be treated as having received ratably

7 during such taxable year items of in8 come and credit described in subpara9 graph (A) in an amount equal to 115

10 percent of the amount of such items

11 shown on the return of the taxpayer

12 for the preceding taxable year (the

13 second preceding taxable year in the

14 case of the first and second required

15 installments for such taxable year).

16 ‘‘(ii) SPECIAL RULE FOR

17 NONCONTROLLING SHAREHOLDER.—

18 ‘‘(I) IN GENERAL.—If a taxpayer

19 making the election under clause (i) is

20 a noncontrolling shareholder of a cor21 poration, clause (i)(II) shall be ap22 plied with respect to items of such

23 corporation by substituting ‘100 per24 cent’ for ‘115 percent’.
503

1 ‘‘(II) NONCONTROLLING SHARE2 HOLDER.—For purposes of subclause

3 (I), the term ‘noncontrolling share4 holder’ means, with respect to any

5 corporation, a shareholder which (as

6 of the beginning of the taxable year

7 for which the installment is being

8 made) does not own (within the mean9 ing of section 958(a)), and is not

10 treated as owning (within the meaning

11 of section 958(b)), more than 50 per12 cent (by vote or value) of the stock in

13 the corporation.’’

14 (b) INDIVIDUALS.—Section 6654(d)(2) (relating to

15 lower required installment where annualized income in16 stallment is less) is amended by adding at the end the

17 following new subparagraph:

18 ‘‘(D) TREATMENT OF SUBPART F AND

19 SECTION 936 INCOME.—

20 ‘‘(i) IN GENERAL.—Any amounts re21 quired to be included in gross income

22 under section 936(h) or 951(a) (and cred23 its properly allocable thereto) shall be

24 taken into account in computing any

25 annualized income installment under sub-
504

1 paragraph (B) in a manner similar to the

2 manner under which partnership income

3 inclusions (and credits properly allocable

4 thereto) are taken into account.

5 ‘‘(ii) PRIOR YEAR SAFE HARBOR.—If

6 a taxpayer elects to have this clause apply

7 to any taxable year—

8 ‘‘(I) clause (i) shall not apply,

9 and

10 ‘‘(II) for purposes of computing

11 any annualized income installment for

12 such taxable year, the taxpayer shall

13 be treated as having received ratably

14 during such taxable year items of in15 come and credit described in clause (i)

16 in an amount equal to the amount of

17 such items shown on the return of the

18 taxpayer for the preceding taxable

19 year (the second preceding taxable

20 year in the case of the first and sec21 ond required installments for such

22 taxable year).’’

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

24 this section shall apply for purposes of determining under-
505

1 payments of estimated tax for taxable years beginning

2 after December 31, 1994.

3 SEC. 712. TIME FOR PAYMENTS AND DEPOSITS OF CERTAIN

4 TAXES.

5 (a) DEPOSITS REQUIRED FOR SEMIMONTHLY PERI6 ODS.—Subsection (f) of section 6302 (relating to collec7 tion authority) is amended to read as follows:

8 ‘‘(f) TIME FOR DEPOSIT OF CERTAIN EXCISE

9 TAXES.—

10 ‘‘(1) GENERAL RULE.—Except as otherwise

11 provided in this subsection and subsection (e), if any

12 person is required under regulations to make depos13 its of taxes under subtitle D with respect to semi14 monthly periods, such person shall make deposits of

15 such taxes for the period beginning on September 16

16 and ending on September 26 not later than Septem17 ber 29. In the case of taxes imposed by sections

18 4261 and 4271, this paragraph shall not apply to

19 periods before January 1, 1997.

20 ‘‘(2) TAXES ON OZONE DEPLETING CHEMI21 CALS.—If any person is required under regulations

22 to make deposits of taxes under subchapter D of

23 chapter 38 with respect to semimonthly periods, in

24 lieu of paragraph (1), such person shall make depos25 its of such taxes for—
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1 ‘‘(A) the second semimonthly period in Au2 gust, and

3 ‘‘(B) the period beginning on September 1

4 and ending on September 11,

5 not later than September 29.

6 ‘‘(3) TAXPAYERS NOT REQUIRED TO USE ELEC7 TRONIC FUNDS TRANSFER.—In the case of deposits

8 not required to be made by electronic funds transfer,

9 paragraphs (1) and (2) shall be applied by substitut10 ing ‘September 25’ for ‘September 26’, ‘September

11 10’ for ‘September 11’, and ‘September 28’ for ‘Sep12 tember 29’.

13 ‘‘(4) SPECIAL RULE WHERE DUE DATE ON SAT14 URDAY OR SUNDAY.—If, but for this paragraph, the

15 due date under paragraph (1), (2), or (3) would fall

16 on a Saturday or Sunday, such due date shall be

17 deemed to be—

18 ‘‘(A) in the case of Saturday, the preceding

19 day, and

20 ‘‘(B) in the case of Sunday, the following

21 day.’’

22 (b) TAXES ON DISTILLED SPIRITS, WINES, AND

23 BEER.—

24 (1) Subsection (d) of section 5061 is amended

25 by redesignating paragraph (4) as paragraph (5)
507

1 and by inserting after paragraph (3) the following

2 new paragraph:

3 ‘‘(4) SPECIAL RULE FOR TAX DUE IN SEPTEM4 BER.—

5 ‘‘(A) IN GENERAL.—Notwithstanding the

6 preceding provisions of this subsection, the

7 taxes on distilled spirits, wines, and beer for the

8 period beginning on September 16 and ending

9 on September 26 shall be paid not later than

10 September 29.

11 ‘‘(B) SAFE HARBOR.—The requirement of

12 subparagraph (A) shall be treated as met if the

13 amount paid not later than September 29 is not

less than 11 14 ⁄15 of the taxes on distilled spirits,

15 wines, and beer for the period beginning on

16 September 1 and ending on September 15.

17 ‘‘(C) TAXPAYERS NOT REQUIRED TO USE

18 ELECTRONIC FUNDS TRANSFER.—In the case of

19 payments not required to be made by electronic

20 funds transfer, subparagraphs (A) and (B)

21 shall be applied by substituting ‘September 25’

22 for ‘September 26’, ‘September 28’ for ‘September 29’, and ‘2⁄3’ for ‘11 23 ⁄15’.’’

24 (2) Section 5061(d)(5), as redesignated by

25 paragraph (1), is amended—
508

1 (A) by inserting ‘‘(or the immediately fol2 lowing day where the due date described in

3 paragraph (4) falls on a Sunday)’’ before the

4 period at the end, and

5 (B) by striking ‘‘14TH DAY’’ in the heading

6 and inserting ‘‘DUE DATE’’.

7 (c) TOBACCO PRODUCTS AND CIGARETTE PAPERS

8 AND TUBES.—

9 (1) Paragraph (2) of section 5703(b) is amend10 ed by redesignating subparagraph (D) as subpara11 graph (E) and by inserting after subparagraph (C)

12 the following new subparagraph:

13 ‘‘(D) SPECIAL RULE FOR TAX DUE IN SEP14 TEMBER.—

15 ‘‘(i) IN GENERAL.—Notwithstanding

16 the preceding provisions of this paragraph,

17 the taxes on tobacco products and cigarette

18 papers and tubes for the period beginning

19 on September 16 and ending on September

20 26 shall be paid not later than September

21 29.

22 ‘‘(ii) SAFE HARBOR.—The require23 ment of clause (i) shall be treated as met

24 if the amount paid not later than September 29 is not less than 11 25 ⁄15 of the taxes
509

1 on tobacco products and cigarette papers

2 and tubes for the period beginning on Sep3 tember 1 and ending on September 15.

4 ‘‘(iii) TAXPAYERS NOT REQUIRED TO

5 USE ELECTRONIC FUNDS TRANSFER.—In

6 the case of payments not required to be

7 made by electronic funds transfer, clauses

8 (i) and (ii) shall be applied by substituting

9 ‘September 25’ for ‘September 26’, ‘September 28’ for ‘September 29’, and ‘2 10 ⁄3’ for

‘11 11 ⁄15’.’’

12 (2) Section 5703(b)(2)(E), as redesignated by

13 paragraph (1), is amended—

14 (A) by inserting ‘‘(or the immediately fol15 lowing day where the due date described in sub16 paragraph (D) falls on a Sunday)’’ before the

17 period at the end, and

18 (B) by striking ‘‘14TH DAY’’ in the heading

19 and inserting ‘‘DUE DATE’’.

20 (d) COMMUNICATION SERVICES AND AIRLINE TICK21 ETS.—Subsection (e) of section 6302 is amended to read

22 as follows:

23 ‘‘(e) TIME FOR DEPOSIT OF TAXES ON COMMUNICA24 TIONS SERVICES AND AIRLINE TICKETS.—
510

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), if, under regulations prescribed by the

3 Secretary, a person is required to make deposits of

4 any tax imposed by section 4251 or subsection (a)

5 or (b) of section 4261 with respect to amounts con6 sidered collected by such person during any semi7 monthly period, such deposit shall be made not later

8 than the 3rd day (not including Saturdays, Sundays,

9 or legal holidays) after the close of the 1st week of

10 the 2nd semimonthly period following the period to

11 which such amounts relate.

12 ‘‘(2) SPECIAL RULE FOR TAX DUE IN SEPTEM13 BER.—

14 ‘‘(A) AMOUNTS CONSIDERED COL15 LECTED.—In the case of a person required to

16 make deposits of the tax imposed by—

17 ‘‘(i) section 4251, or

18 ‘‘(ii) effective on January 1, 1997,

19 section 4261 or 4271,

20 with respect to amounts considered collected by

21 such person during any semimonthly period, the

22 amount of such tax included in bills rendered or

23 tickets sold during the period beginning on Sep24 tember 1 and ending on September 11 shall be

25 deposited not later than September 29.
511

1 ‘‘(B) SPECIAL RULE WHERE SEPTEMBER

2 29 IS ON SATURDAY OR SUNDAY.—If September

3 29 falls on a Saturday or Sunday, the due date

4 under subparagraph (A) shall be—

5 ‘‘(i) in the case of Saturday, the pre6 ceding day, and

7 ‘‘(ii) in the case of Sunday, the follow8 ing day.

9 ‘‘(C) TAXPAYERS NOT REQUIRED TO USE

10 ELECTRONIC FUNDS TRANSFER.—In the case of

11 deposits not required to be made by electronic

12 funds transfer, subparagraphs (A) and (B)

13 shall be applied by substituting ‘September 10’

14 for ‘September 11’ and ‘September 28’ for

15 ‘September 29’.’’

16 (e) EFFECTIVE DATE.—The amendments made by

17 this section shall take effect on January 1, 1995.

18 SEC. 713. REDUCTION IN RATE OF INTEREST PAID ON CER19 TAIN CORPORATE OVERPAYMENTS.

20 (a) IN GENERAL.—Paragraph (1) of section 6621(a)

21 (defining overpayment rate) is amended by adding at the

22 end the following new flush sentence:

23 ‘‘To the extent that an overpayment of tax by a cor24 poration for any taxable period (as defined in sub25 section (c)(3)) exceeds $10,000, subparagraph (B)
512

1 shall be applied by substituting ‘0.5 percentage

2 point’ for ‘2 percentage points’.’’

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

4 this section shall apply for purposes of determining inter5 est for periods after December 31, 1994.

6 Subtitle C—Earned Income Tax

7 Credit

8 SEC. 721. EXTENSION OF EARNED INCOME TAX CREDIT TO

9 MILITARY PERSONNEL STATIONED OUTSIDE

10 THE UNITED STATES.

11 (a) IN GENERAL.—Subsection (c) of section 32 (re12 lating to earned income credit) is amended by adding at

13 the end the following new paragraph:

14 ‘‘(4) TREATMENT OF MILITARY PERSONNEL

15 STATIONED OUTSIDE THE UNITED STATES.—For

16 purposes of paragraphs (1)(A)(ii)(I) and (3)(E), the

17 principal place of abode of a member of the Armed

18 Forces of the United States shall be treated as in

19 the United States during any period during which

20 such member is stationed outside the United States

21 while serving on extended active duty (as defined in

22 section 1034(h)(3)) with the Armed Forces of the

23 United States.’’

24 (b) REPORTING OF MILITARY EARNED INCOME.—

25 Subsection (a) of section 6051 (relating to receipts for em-
513

1 ployees) is amended by striking ‘‘and’’ at the end of para2 graph (8), by striking the period at the end of paragraph

3 (9) and by inserting ‘‘, and’’, and by inserting after para4 graph (9) the following new paragraph:

5 ‘‘(10) in the case of an employee who is a mem6 ber of the Armed Forces of the United States, such

7 employee’s earned income as determined for pur8 poses of section 32 (relating to earned income cred9 it).’’

10 (c) ADVANCE PAYMENT OF EARNED INCOME CREDIT

11 BASED ON MILITARY EARNED INCOME.—Paragraph (1)

12 of section 3507(c) (defining earned income advance

13 amount) is amended by adding at the end the following

14 new sentence:

15 ‘‘In the case of an employee who is a member of the

16 Armed Forces of the United States, the earned in17 come advance amount shall be determined by taking

18 into account such employee’s earned income as de19 termined for purposes of section 32.’’

20 (d) EFFECTIVE DATES.—

21 (1) SUBSECTION (a).—The amendment made

22 by subsection (a) shall apply to taxable years begin23 ning after December 31, 1994.
514

1 (2) SUBSECTIONS (b) AND (c).—The amend2 ments made by subsections (b) and (c) shall apply

3 to remuneration paid after December 31, 1994.

4 SEC. 722. CERTAIN NONRESIDENT ALIENS INELIGIBLE FOR

5 EARNED INCOME TAX CREDIT.

6 (a) IN GENERAL.—Paragraph (1) of section 32(c)

7 (defining eligible individual) is amended by adding at the

8 end the following new subparagraph:

9 ‘‘(E) LIMITATION ON ELIGIBILITY OF NON10 RESIDENT ALIENS.—The term ‘eligible individ11 ual’ shall not include any individual who is a

12 nonresident alien individual for any portion of

13 the taxable year unless such individual is treat14 ed for such taxable year as a resident of the

15 United States for purposes of this chapter by

16 reason of an election under subsection (g) or

17 (h) of section 6013.’’

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

19 subsection (a) shall apply to taxable years beginning after

20 December 31, 1994.

21 SEC. 723. INCOME OF PRISONERS DISREGARDED IN DETER22 MINING EARNED INCOME TAX CREDIT.

23 (a) IN GENERAL.—Subparagraph (B) of section

24 32(c)(2) (defining earned income) is amended by striking

25 ‘‘and’’ at the end of clause (ii), by striking the period at
515

1 the end of clause (iii) and inserting ‘‘, and’’, and by adding

2 at the end the following new clause:

3 ‘‘(iv) no amount received for services

4 provided by an individual while the individ5 ual is an inmate at a penal institution shall

6 be taken into account.’’

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

8 subsection (a) shall apply to taxable years beginning after

9 December 31, 1993.

10 Subtitle D—Provisions Relating To

11 Retirement Benefits

12 SEC. 731. TREATMENT OF EXCESS PENSION ASSETS USED

13 FOR RETIREE HEALTH BENEFITS.

14 (a) 5-YEAR EXTENSION.—Paragraph (5) of section

15 420(b) (defining qualified transfer) is amended by striking

16 ‘‘1995’’ and inserting ‘‘2000’’.

17 (b) MINIMUM BENEFIT REQUIREMENTS.—Para18 graph (3) of section 420(c) (relating to requirements of

19 plans transferring assets) is amended to read as follows:

20 ‘‘(3) MAINTENANCE OF BENEFIT REQUIRE21 MENTS.—

22 ‘‘(A) IN GENERAL.—The requirements of

23 this paragraph are met if each group health

24 plan or arrangement under which applicable

25 health benefits are provided provides that the
516

1 applicable health benefits provided by the em2 ployer during each taxable year during the ben3 efit maintenance period are substantially the

4 same as the applicable health benefits provided

5 by the employer during the taxable year imme6 diately preceding the taxable year of the quali7 fied transfer.

8 ‘‘(B) ELECTION TO APPLY SEPARATELY.—

9 An employer may elect to have this paragraph

10 applied separately with respect to individuals el11 igible for benefits under title XVIII of the So12 cial Security Act at any time during the taxable

13 year and with respect to individuals not so eligi14 ble.

15 ‘‘(C) BENEFIT MAINTENANCE PERIOD.—

16 For purposes of this paragraph, the term ‘bene17 fit maintenance period’ means the period of 5

18 taxable years beginning with the taxable year in

19 which the qualified transfer occurs. If a taxable

20 year is in 2 or more benefit maintenance peri21 ods, this paragraph shall be applied by taking

22 into account the highest level of benefits re23 quired to be provided under subparagraph (A)

24 for such taxable year.’’

25 (c) CONFORMING AMENDMENTS.—
517

1 (1) Clause (iii) of section 420(b)(1)(C) is

2 amended by striking ‘‘cost’’ and inserting ‘‘benefits’’.

3 (2) Subparagraph (B) of section 420(e)(1) is

4 amended to read as follows:

5 ‘‘(B) REDUCTIONS FOR AMOUNTS PRE6 VIOUSLY SET ASIDE.—The amount determined

7 under subparagraph (A) shall be reduced by the

8 amount which bears the same ratio to such

9 amount as—

10 ‘‘(i) the value (as of the close of the

11 plan year preceding the year of the quali12 fied transfer) of the assets in all health

13 benefits accounts or welfare benefit funds

14 (as defined in section 419(e)(1)) set aside

15 to pay for the qualified current retiree

16 health liability, bears to

17 ‘‘(ii) the present value of the qualified

18 current retiree health liabilities for all plan

19 years (determined without regard to this

20 subparagraph).’’

21 (3) Subparagraph (D) of section 420(e)(1) is

22 amended by striking ‘‘or in calculating applicable

23 employer cost under subsection (c)(3)(B)’’ and in24 serting ‘‘and shall not be subject to the minimum

25 benefit requirements of subsection (c)(3)’’.
518

1 (4)(A) Section 101(e)(3) of the Employee Re2 tirement Income Security Act of 1974 (29 U.S.C.

3 1021(e)(3)) is amended by striking ‘‘1991’’ and in4 serting ‘‘1995’’.

5 (B) Section 403(c)(1) of such Act (29 U.S.C.

6 1103(c)(1)) is amended by striking ‘‘1991’’ and in7 serting ‘‘1995’’.

8 (C) Paragraph (13) of section 408(b) of such

9 Act (29 U.S.C. 1108(b)(13)) is amended—

10 (i) by striking ‘‘1996’’ and inserting

11 ‘‘2001’’, and

12 (ii) by striking ‘‘1991’’ and inserting

13 ‘‘1995’’.

14 (d) EFFECTIVE DATES.—

15 (1) EXTENSION.—The amendments made by

16 subsections (a) and (c)(3) shall apply to taxable

17 years beginning after December 31, 1995.

18 (2) BENEFITS.—The amendments made by

19 subsections (b) and (c)(1) and (2) shall apply to

20 qualified transfers occurring after the date of the

21 enactment of this Act.
519

1 SEC. 732. ROUNDING RULES FOR COST-OF-LIVING ADJUST2 MENTS.

3 (a) COST-OF-LIVING ADJUSTMENT FOR COMPENSA4 TION LIMIT.—Section 401(a)(17)(B) is amended to read

5 as follows:

6 ‘‘(B) COST-OF-LIVING ADJUSTMENT.—The

7 Secretary shall adjust annually the $150,000

8 amount in subparagraph (A) for increases in

9 the cost-of-living at the same time and in the

10 same manner as adjustments under section

11 415(d); except that the base period shall be the

12 calendar quarter beginning October 1, 1993,

13 and any increase which is not a multiple of

14 $10,000 shall be rounded to the next lowest

15 multiple of $10,000.’’

16 (b) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM

17 DEFINED BENEFIT AMOUNT AND MAXIMUM ANNUAL AD18 DITION.—

19 (1) IN GENERAL.—Section 415(d) is amended

20 to read as follows:

21 ‘‘(d) COST-OF-LIVING ADJUSTMENTS.—

22 ‘‘(1) IN GENERAL.—The Secretary shall adjust

23 annually—

24 ‘‘(A) the $90,000 amount in subsection

25 (b)(1)(A),
520

1 ‘‘(B) in the case of a participant who sepa2 rated from service, the amount taken into ac3 count under subsection (b)(1)(B), and

4 ‘‘(C) the $30,000 amount in subsection

5 (c)(1)(A),

6 for increases in the cost-of-living in accordance with

7 regulations prescribed by the Secretary.

8 ‘‘(2) METHOD.—The regulations prescribed

9 under paragraph (1) shall provide for—

10 ‘‘(A) an adjustment with respect to any

11 calendar year based on the increase in the ap12 plicable index for the calendar quarter ending

13 September 30 of the preceding calendar year

14 over such index for the base period, and

15 ‘‘(B) adjustment procedures which are

16 similar to the procedures used to adjust benefit

17 amounts under section 215(i)(2)(A) of the So18 cial Security Act.

19 ‘‘(3) BASE PERIOD.—For purposes of para20 graph (2)—

21 ‘‘(A) $90,000 AMOUNT.—The base period

22 taken into account for purposes of paragraph

23 (1)(A) is the calendar quarter beginning Octo24 ber 1, 1986.
521

1 ‘‘(B) SEPARATIONS AFTER DECEMBER 31,

2 1994.—The base period taken into account for

3 purposes of paragraph (1)(B) with respect to

4 individuals separating from service with the em5 ployer after December 31, 1994, is the calendar

6 quarter beginning July 1 of the calendar year

7 preceding the calendar year in which such sepa8 ration occurs.

9 ‘‘(C) SEPARATIONS BEFORE JANUARY 1,

10 1995.—The base period taken into account for

11 purposes of paragraph (1)(B) with respect to

12 individuals separating from service with the em13 ployer before January 1, 1995, is the calendar

14 quarter beginning October 1 of the calendar

15 year preceding the calendar year in which such

16 separation occurs.

17 ‘‘(D) $30,000 AMOUNT.—The base period

18 taken into account for purposes of paragraph

19 (1)(C) is the calendar quarter beginning Octo20 ber 1, 1993.

21 ‘‘(4) ROUNDING.—Any increase under subpara22 graph (A) or (C) of paragraph (1) which is not a

23 multiple of $5,000 shall be rounded to the next low24 est multiple of $5,000.’’
522

1 (2) CONFORMING AMENDMENT.—Section

2 415(c)(1)(A) is amended by striking ‘‘(or, if greater,

1 3 ⁄4 of the dollar limitation in effect under subsection

4 (b)(1)(A))’’.

5 (c) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM

6 SALARY DEFERRAL.—Section 402(g)(5) is amended by

7 inserting before the period ‘‘; except that any increase

8 under this paragraph which is not a multiple of $500 shall

9 be rounded to the next lowest multiple of $500’’.

10 (d) COST-OF-LIVING ADJUSTMENT FOR ELIGIBILITY

11 FOR SIMPLIFIED EMPLOYEE PENSIONS.—Section

12 408(k)(8) is amended by inserting before the period ‘‘; ex13 cept that any increase in the $300 amount which is not

14 a multiple of $50 shall be rounded to the next lowest mul15 tiple of $50’’.

16 (e) EFFECTIVE DATES.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendments made by this section

19 shall apply to years beginning after December 31,

20 1994.

21 (2) ROUNDING NOT TO RESULT IN DE22 CREASES.—The amendments made by this section

23 providing for the rounding of indexed amounts shall

24 not apply to any year to the extent the rounding

25 would require the indexed amount to be reduced
523

1 below the amount in effect for years beginning in

2 1994.

3 SEC. 733. INCREASE IN INCLUSION OF SOCIAL SECURITY

4 BENEFITS PAID TO NONRESIDENTS.

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

6 871(a)(3) (relating to taxation of Social Security benefits)

7 is amended by striking ‘‘one-half’’ and inserting ‘‘85 per8 cent’’.

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

10 subsection (a) shall apply to benefits paid after December

11 31, 1994, in taxable years ending after such date.

12 Subtitle E—Other Provisions

13 SEC. 741. PARTNERSHIP DISTRIBUTIONS OF MARKETABLE

14 SECURITIES.

15 (a) IN GENERAL.—Section 731 (relating to extent of

16 recognition of gain or loss on distribution) is amended by

17 redesignating subsection (c) as subsection (d) and by in18 serting after subsection (b) the following new subsection:

19 ‘‘(c) TREATMENT OF MARKETABLE SECURITIES.—

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

21 (a)(1) and section 737—

22 ‘‘(A) the term ‘money’ includes marketable

23 securities, and
524

1 ‘‘(B) such securities shall be taken into ac2 count at their fair market value as of the date

3 of the distribution.

4 ‘‘(2) MARKETABLE SECURITIES.—For purposes

5 of this subsection:

6 ‘‘(A) IN GENERAL.—The term ‘marketable

7 securities’ means financial instruments and for8 eign currencies which are, as of the date of the

9 distribution, actively traded (within the mean10 ing of section 1092(d)(1)).

11 ‘‘(B) OTHER PROPERTY.—Such term in12 cludes—

13 ‘‘(i) any interest in—

14 ‘‘(I) a common trust fund, or

15 ‘‘(II) a regulated investment

16 company which is offering for sale or

17 has outstanding any redeemable secu18 rity (as defined in section 2(a)(32) of

19 the Investment Company Act of 1940)

20 of which it is the issuer,

21 ‘‘(ii) any financial instrument which,

22 pursuant to its terms or any other ar23 rangement, is readily convertible into, or

24 exchangeable for, money or marketable se25 curities,
525

1 ‘‘(iii) any financial instrument the

2 value of which is determined substantially

3 by reference to marketable securities,

4 ‘‘(iv) except to the extent provided in

5 regulations prescribed by the Secretary,

6 any interest in a precious metal which, as

7 of the date of the distribution, is actively

8 traded (within the meaning of section

9 1092(d)(1)) unless such metal was pro10 duced, used, or held in the active conduct

11 of a trade or business by the partnership,

12 ‘‘(v) except as otherwise provided in

13 regulations prescribed by the Secretary, in14 terests in any entity if substantially all of

15 the assets of such entity consist (directly

16 or indirectly) of marketable securities,

17 money, or both, and

18 ‘‘(vi) to the extent provided in regula19 tions prescribed by the Secretary, any in20 terest in an entity not described in clause

21 (v) but only to the extent of the value of

22 such interest which is attributable to mar23 ketable securities, money, or both.

24 ‘‘(C) FINANCIAL INSTRUMENT.—The term

25 ‘financial instrument’ includes stocks and other
526

1 equity interests, evidences of indebtedness, op2 tions, forward or futures contracts, notional

3 principal contracts, and derivatives.

4 ‘‘(3) EXCEPTIONS.—

5 ‘‘(A) IN GENERAL.—Paragraph (1) shall

6 not apply to the distribution from a partnership

7 of a marketable security to a partner if—

8 ‘‘(i) the security was contributed to

9 the partnership by such partner, except to

10 the extent that the value of the distributed

11 security is attributable to marketable secu12 rities or money contributed (directly or in13 directly) to the entity to which the distrib14 uted security relates,

15 ‘‘(ii) to the extent provided in regula16 tions prescribed by the Secretary, the prop17 erty was not a marketable security when

18 acquired by such partnership, or

19 ‘‘(iii) such partnership is an invest20 ment partnership and such partner is an

21 eligible partner thereof.

22 ‘‘(B) LIMITATION ON GAIN RECOGNIZED.—

23 In the case of a distribution of marketable secu24 rities to a partner, the amount taken into ac-
527

1 count under paragraph (1) shall be reduced

2 (but not below zero) by the excess (if any) of—

3 ‘‘(i) such partner’s distributive share

4 of the net gain which would be recognized

5 if all of the marketable securities of the

6 same class and issuer as the distributed se7 curities held by the partnership were sold

8 (immediately before the transaction to

9 which the distribution relates) by the part10 nership for fair market value, over

11 ‘‘(ii) such partner’s distributive share

12 of the net gain which is attributable to the

13 marketable securities of the same class and

14 issuer as the distributed securities held by

15 the partnership immediately after the

16 transaction, determined by using the same

17 fair market value as used under clause (i).

18 Under regulations prescribed by the Secretary,

19 all marketable securities held by the partner20 ship may be treated as marketable securities of

21 the same class and issuer as the distributed se22 curities.

23 ‘‘(C) DEFINITIONS RELATING TO INVEST24 MENT PARTNERSHIPS.—For purposes of sub25 paragraph (A)(iii):
528

1 ‘‘(i) INVESTMENT PARTNERSHIP.—

2 The term ‘investment partnership’ means

3 any partnership which has never been en4 gaged in a trade or business and substan5 tially all of the assets (by value) of which

6 have always consisted of—

7 ‘‘(I) money,

8 ‘‘(II) stock in a corporation,

9 ‘‘(III) notes, bonds, debentures,

10 or other evidences of indebtedness,

11 ‘‘(IV) interest rate, currency, or

12 equity notional principal contracts,

13 ‘‘(V) foreign currencies,

14 ‘‘(VI) interests in or derivative fi15 nancial instruments (including op16 tions, forward or futures contracts,

17 short positions, and similar financial

18 instruments) in any asset described in

19 any other subclause of this clause or

20 in any commodity traded on or sub21 ject to the rules of a board of trade or

22 commodity exchange,

23 ‘‘(VII) other assets specified in

24 regulations prescribed by the Sec25 retary, or
529

1 ‘‘(VIII) any combination of the

2 foregoing.

3 ‘‘(ii) EXCEPTION FOR CERTAIN AC4 TIVITIES.—A partnership shall not be

5 treated as engaged in a trade or business

6 by reason of—

7 ‘‘(I) any activity undertaken as

8 an investor, trader, or dealer in any

9 asset described in clause (i), or

10 ‘‘(II) any other activity specified

11 in regulations prescribed by the Sec12 retary.

13 ‘‘(iii) ELIGIBLE PARTNER.—

14 ‘‘(I) IN GENERAL.—The term ‘el15 igible partner’ means any partner

16 who, before the date of the distribu17 tion, did not contribute to the part18 nership any property other than as19 sets described in clause (i).

20 ‘‘(II) EXCEPTION FOR CERTAIN

21 NONRECOGNITION TRANSACTIONS.—

22 The term ‘eligible partner’ shall not

23 include the transferor or transferee in

24 a nonrecognition transaction involving

25 a transfer of any portion of an inter-
530

1 est in a partnership with respect to

2 which the transferor was not an eligi3 ble partner.

4 ‘‘(iv) LOOK-THRU OF PARTNERSHIP

5 TIERS.—Except as otherwise provided in

6 regulations prescribed by the Secretary—

7 ‘‘(I) a partnership shall be treat8 ed as engaged in any trade or busi9 ness engaged in by, and as holding

10 (instead of a partnership interest) a

11 proportionate share of the assets of,

12 any other partnership in which the

13 partnership holds a partnership inter14 est, and

15 ‘‘(II) a partner who contributes

16 to a partnership an interest in an17 other partnership shall be treated as

18 contributing a proportionate share of

19 the assets of the other partnership.

20 If the preceding sentence does not apply

21 under such regulations with respect to any

22 interest held by a partnership in another

23 partnership, the interest in such other

24 partnership shall be treated as if it were

25 specified in a subclause of clause (i).
531

1 ‘‘(4) BASIS OF SECURITIES DISTRIBUTED.—

2 ‘‘(A) IN GENERAL.—The basis of market3 able securities with respect to which gain is rec4 ognized by reason of this subsection shall be—

5 ‘‘(i) their basis determined under sec6 tion 732, increased by

7 ‘‘(ii) the amount of such gain.

8 ‘‘(B) ALLOCATION OF BASIS INCREASE.—

9 Any increase in basis attributable to the gain

10 described in subparagraph (A)(ii) shall be allo11 cated to marketable securities in proportion to

12 their respective amounts of unrealized apprecia13 tion before such increase.

14 ‘‘(5) SUBSECTION DISREGARDED IN DETERMIN15 ING BASIS OF PARTNER’S INTEREST IN PARTNER16 SHIP AND OF BASIS OF PARTNERSHIP PROPERTY.—

17 Sections 733 and 734 shall be applied as if no gain

18 were recognized, and no adjustment were made to

19 the basis of property, under this subsection.

20 ‘‘(6) CHARACTER OF GAIN RECOGNIZED.—In

21 the case of a distribution of a marketable security

22 which is an unrealized receivable (as defined in sec23 tion 751(c)) or an inventory item (as defined in sec24 tion 751(d)(2)), any gain recognized under this sub25 section shall be treated as ordinary income to the ex-
532

1 tent of any increase in the basis of such security at2 tributable to the gain described in paragraph

3 (4)(A)(ii).

4 ‘‘(7) REGULATIONS.—The Secretary shall pre5 scribe such regulations as may be necessary or ap6 propriate to carry out the purposes of this sub7 section, including regulations to prevent the avoid8 ance of such purposes.’’

9 (b) CONFORMING AMENDMENTS.—

10 (1) The last sentence of section 737(c)(1) is

11 amended to read as follows: ‘‘For purposes of deter12 mining the basis of the distributed property (other

13 than money), such increase shall be treated as occur14 ring immediately before the distribution.’’

15 (2) Section 737 is amended by adding at the

16 end the following new subsection:

17 ‘‘(e) MARKETABLE SECURITIES TREATED AS

18 MONEY.—

‘‘For treatment of marketable securities as money

for purposes of this section, see section 731(c).’’

19 (c) EFFECTIVE DATE.—

20 (1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the amendments made by

22 this section shall apply to distributions after the

23 date of the enactment of this Act.
533

1 (2) CERTAIN DISTRIBUTIONS BEFORE JANUARY

2 1, 1995.—The amendments made by this section

3 shall not apply to any marketable security distrib4 uted before January 1, 1995, by the partnership

5 which held such security on July 27, 1994.

6 (3) DISTRIBUTIONS IN LIQUIDATION OF PART7 NER’S INTEREST.—The amendments made by this

8 section shall not apply to the distribution of a mar9 ketable security in liquidation of a partner’s interest

10 in a partnership if—

11 (A) such liquidation is pursuant to a writ12 ten contract which was binding on July 15,

13 1994, and at all times thereafter before the dis14 tribution, and

15 (B) such contract provides for the pur16 chase of such interest not later than a date cer17 tain for—

18 (i) a fixed value of marketable securi19 ties that are specified in the contract, or

20 (ii) other property.

21 The preceding sentence shall not apply if the partner

22 has the right to elect that such distribution be made

23 other than in marketable securities.

24 (4) DISTRIBUTIONS IN COMPLETE LIQUIDATION

25 OF PUBLICLY TRADED PARTNERSHIPS.—
534

1 (A) IN GENERAL.—The amendments made

2 by this section shall not apply to the distribu3 tion of a marketable security in a qualified

4 partnership liquidation if—

5 (i) the marketable securities were re6 ceived by the partnership in a nonrecogni7 tion transaction in exchange for substan8 tially all of the assets of the partnership,

9 (ii) the marketable securities are dis10 tributed by the partnership within 90 days

11 after their receipt by the partnership, and

12 (iii) the partnership is liquidated be13 fore the beginning of the 1st taxable year

14 of the partnership beginning after Decem15 ber 31, 1997.

16 (B) QUALIFIED PARTNERSHIP LIQUIDA17 TION.—For purposes of subparagraph (A), the

18 term ‘‘qualified partnership liquidation’’

19 means—

20 (i) a complete liquidation of a publicly

21 traded partnership (as defined in section

22 7704(b) of the Internal Revenue Code of

23 1986) which is an existing partnership (as

24 defined in section 10211(c)(2) of the Reve25 nue Act of 1987), and
535

1 (ii) a complete liquidation of a part2 nership which is related to a partnership

3 described in clause (i) if such liquidation is

4 related to a complete liquidation of the

5 partnership described in clause (i).

6 (5) MARKETABLE SECURITIES.—For purposes

7 of this subsection, the term ‘‘marketable securities’’

8 has the meaning given such term by section 731(c)

9 of the Internal Revenue Code of 1986, as added by

10 this section.

11 SEC. 742. TAXPAYER IDENTIFICATION NUMBERS REQUIRED

12 AT BIRTH.

13 (a) EARNED INCOME CREDIT.—Clause (i) of section

14 32(c)(3)(D) is amended to read as follows:

15 ‘‘(i) IN GENERAL.—The requirements

16 of this subparagraph are met if the tax17 payer includes the name, age, and TIN of

18 each qualifying child (without regard to

19 this subparagraph) on the return of tax for

20 the taxable year.’’

21 (b) DEPENDENCY EXEMPTION.—Subsection (e) of

22 section 6109 is amended to read as follows:

23 ‘‘(e) FURNISHING NUMBER FOR DEPENDENTS.—Any

24 taxpayer who claims an exemption under section 151 for

25 any dependent on a return for any taxable year shall in-
536

1 clude on such return the identifying number (for purposes

2 of this title) of such dependent.’’

3 (c) EFFECTIVE DATE.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section

6 shall apply to returns for taxable years beginning

7 after December 31, 1994.

8 (2) EXCEPTION.—The amendments made by

9 this section shall not apply to—

10 (A) returns for taxable years beginning in

11 1995 with respect to individuals who are born

12 after October 31, 1995, and

13 (B) returns for taxable years beginning in

14 1996 with respect to individuals who are born

15 after November 30, 1996.

16 SEC. 743. EXTENSION OF INTERNAL REVENUE SERVICE

17 USER FEES.

18 Subsection (c) of section 10511 of the Revenue Act

19 of 1987 (relating to fees for requests for ruling, deter20 mination, and similar letters) is amended by striking ‘‘Oc21 tober 1, 1995’’ and inserting ‘‘October 1, 2000’’.
537

1 SEC. 744. MODIFICATION OF SUBSTANTIAL UNDERSTATE2 MENT PENALTY FOR CORPORATIONS PAR3 TICIPATING IN TAX SHELTERS.

4 (a) IN GENERAL.—Subparagraph (C) of section

5 6662(d)(2) (relating to special rules in cases involving tax

6 shelters) is amended by redesignating clause (ii) as clause

7 (iii) and by inserting after clause (i) the following new

8 clause:

9 ‘‘(ii) SUBPARAGRAPH (B) NOT TO

10 APPLY TO CORPORATIONS.—Subparagraph

11 (B) shall not apply to any item of a cor12 poration which is attributable to a tax

13 shelter.’’

14 (b) TECHNICAL AMENDMENTS.—

15 (1) Clause (i) of section 6662(d)(2)(C) is

16 amended by striking ‘‘In the case of any item’’ and

17 inserting ‘‘In the case of any item of a taxpayer

18 other than a corporation which is’’.

19 (2) Clause (iii) of section 6662(d)(2)(C), as re20 designated by subsection (a), is amended by striking

21 ‘‘clause (i)’’ and inserting ‘‘this subparagraph’’.

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

23 this section shall apply to items related to transactions

24 occurring after the date of the enactment of this Act.
538

1 SEC. 745. MODIFICATION OF AUTHORITY TO SET TERMS

2 AND CONDITIONS FOR SAVINGS BONDS.

3 (a) IN GENERAL.—Subsection (b) of section 3105 of

4 title 31, United States Code, is amended to read as fol5 lows:

6 ‘‘(b)(1) The Secretary may—

7 ‘‘(A) fix the investment yield for savings bonds;

8 and

9 ‘‘(B) change the investment yield on an out10 standing savings bond, except that the yield on a

11 bond for the period held may not be decreased below

12 the minimum yield for the period guaranteed on the

13 date of issue.

14 ‘‘(2) The Secretary may prescribe regulations provid15 ing that—

16 ‘‘(A) owners of savings bonds may keep the

17 bonds after maturity or after a period beyond matu18 rity during which the bonds have earned interest and

19 continue to earn interest at rates consistent with

20 paragraph (1) of this subsection; and

21 ‘‘(B) savings bonds earning a different rate of

22 interest before the regulations are prescribed shall

23 earn a rate of interest consistent with paragraph

24 (1).’’
539

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

2 this section shall apply to bonds issued after October 31,

3 1994.

4 Subtitle F—Pension Plan Funding

5 and Premiums

6 SEC. 750. SHORT TITLE.

7 This subtitle may be cited as the ‘‘Retirement Protec8 tion Act of 1994’’.

9 PART I—PENSION PLAN FUNDING

10 Subpart A—Amendments to the Internal Revenue

11 Code of 1986

12 SEC. 751. MINIMUM FUNDING REQUIREMENTS.

13 (a) AMENDMENTS TO ADDITIONAL FUNDING RE14 QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—

15 (1) LIMITATIONS ON ADDITIONAL FUNDING RE16 QUIREMENT FOR CERTAIN PLANS.—

17 (A) IN GENERAL.—Paragraph (1) of sec18 tion 412(l) (relating to additional funding re19 quirements for plans which are not multiem20 ployer plans) is amended by striking ‘‘which has

21 an unfunded current liability’’ and inserting ‘‘to

22 which this subsection applies under paragraph

23 (9)’’.
540

1 (B) PLANS TO WHICH REQUIREMENT AP2 PLIES.—Section 412(l) is amended by adding at

3 the end the following new paragraph:

4 ‘‘(9) APPLICABILITY OF SUBSECTION.—

5 ‘‘(A) IN GENERAL.—Except as provided in

6 paragraph (6)(A), this subsection shall apply to

7 a plan for any plan year if its funded current

8 liability percentage for such year is less than 90

9 percent.

10 ‘‘(B) EXCEPTION FOR CERTAIN PLANS AT

11 LEAST 80 PERCENT FUNDED.—Subparagraph

12 (A) shall not apply to a plan for a plan year

13 if—

14 ‘‘(i) the funded current liability per15 centage for the plan year is at least 80

16 percent, and

17 ‘‘(ii) such percentage for each of the

18 2 immediately preceding plan years (or

19 each of the 2d and 3d immediately preced20 ing plan years) is at least 90 percent.

21 ‘‘(C) FUNDED CURRENT LIABILITY PER22 CENTAGE.—For purposes of subparagraphs (A)

23 and (B), the term ‘funded current liability per24 centage’ has the meaning given such term by
541

1 paragraph (8)(B), except that such percentage

2 shall be determined for any plan year—

3 ‘‘(i) without regard to paragraph

4 (8)(E), and

5 ‘‘(ii) by using the rate of interest

6 which is the highest rate allowable for the

7 plan year under paragraph (7)(C).

8 ‘‘(D) TRANSITION RULES.—For purposes

9 of this paragraph:

10 ‘‘(i) FUNDED PERCENTAGE FOR

11 YEARS BEFORE 1995.—The funded current

12 liability percentage for any plan year be13 ginning before January 1, 1995, shall be

14 treated as not less than 90 percent only if

15 for such plan year the plan met one of the

16 following requirements (as in effect for

17 such year):

18 ‘‘(I) The full-funding limitation

19 under subsection (c)(7) for the plan

20 was zero.

21 ‘‘(II) The plan had no additional

22 funding requirement under this sub23 section (or would have had no such

24 requirement if its funded current li-
542

1 ability percentage had been deter2 mined under subparagraph (C)).

3 ‘‘(III) The plan’s additional fund4 ing requirement under this subsection

5 did not exceed the lesser of 0.5 per6 cent of current liability or $5,000,000.

7 ‘‘(ii) SPECIAL RULE FOR 1995 AND

8 1996.—For purposes of determining wheth9 er subparagraph (B) applies to any plan

10 year beginning in 1995 or 1996, a plan

11 shall be treated as meeting the require12 ments of subparagraph (B)(ii) if the plan

13 met the requirements of clause (i) of this

14 subparagraph for any two of the plan years

15 beginning in 1992, 1993, and 1994

16 (whether or not consecutive).’’

17 (2) RELATIONSHIP OF ADDITIONAL FUNDING

18 REQUIREMENT TO FUNDING STANDARD ACCOUNT

19 CHARGES AND CREDITS.—

20 (A) Clause (ii) of section 412(l)(1)(A) is

21 amended to read as follows:

22 ‘‘(ii) the sum of the charges for such

23 plan year under subsection (b)(2), reduced

24 by the sum of the credits for such plan
543

1 year under subparagraph (B) of subsection

2 (b)(3), plus’’.

3 (B) The last sentence in section 412(l)(1)

4 of such Code is amended to read as follows:

5 ‘‘Such increase shall not exceed the amount which,

6 after taking into account charges (other than the ad7 ditional charge under this subsection) and credits

8 under subsection (b), is necessary to increase the

9 funded current liability percentage (taking into ac10 count the expected increase in current liability due

11 to benefits accruing during the plan year) to 100

12 percent.’’

13 (3) AMENDMENT TO DEFICIT REDUCTION CON14 TRIBUTION.—Paragraph (2) of section 412(l) is

15 amended—

16 (A) by striking ‘‘plus’’ at the end of sub17 paragraph (A);

18 (B) by striking the period at the end of

19 subparagraph (B) and inserting ‘‘, plus’’; and

20 (C) by adding at the end the following new

21 subparagraph:

22 ‘‘(C) the expected increase in current li23 ability due to benefits accruing during the plan

24 year.’’
544

1 (4) INCREASE IN CURRENT LIABILITY DUE TO

2 CHANGE IN REQUIRED ASSUMPTIONS.—

3 (A) Paragraph (3) of section 412(l) is

4 amended by adding at the end the following

5 new subparagraphs:

6 ‘‘(D) SPECIAL RULE FOR REQUIRED

7 CHANGES IN ACTUARIAL ASSUMPTIONS.—

8 ‘‘(i) IN GENERAL.—The unfunded old

9 liability amount with respect to any plan

10 for any plan year shall be increased by the

11 amount necessary to amortize the amount

12 of additional unfunded old liability under

13 the plan in equal annual installments over

14 a period of 12 plan years (beginning with

15 the first plan year beginning after Decem16 ber 31, 1994).

17 ‘‘(ii) ADDITIONAL UNFUNDED OLD LI18 ABILITY.—For purposes of clause (i), the

19 term ‘additional unfunded old liability’

20 means the amount (if any) by which—

21 ‘‘(I) the current liability of the

22 plan as of the beginning of the first

23 plan year beginning after December

24 31, 1994, valued using the assump25 tions required by paragraph (7)(C) as
545

1 in effect for plan years beginning

2 after December 31, 1994, exceeds

3 ‘‘(II) the current liability of the

4 plan as of the beginning of such first

5 plan year, valued using the same as6 sumptions used under subclause (I)

7 (other than the assumptions required

8 by paragraph (7)(C)), using the prior

9 interest rate, and using such mortality

10 assumptions as were used to deter11 mine current liability for the first plan

12 year beginning after December 31,

13 1992.

14 ‘‘(iii) PRIOR INTEREST RATE.—For

15 purposes of clause (ii), the term ‘prior in16 terest rate’ means the rate of interest that

17 is the same percentage of the weighted av18 erage under subsection (b)(5)(B)(ii)(I) for

19 the first plan year beginning after Decem20 ber 31, 1994, as the rate of interest used

21 by the plan to determine current liability

22 for the first plan year beginning after De23 cember 31, 1992, is of the weighted aver24 age under subsection (b)(5)(B)(ii)(I) for
546

1 such first plan year beginning after De2 cember 31, 1992.

3 ‘‘(E) OPTIONAL RULE FOR ADDITIONAL

4 UNFUNDED OLD LIABILITY.—

5 ‘‘(i) IN GENERAL.—If an employer

6 makes an election under clause (ii), the ad7 ditional unfunded old liability for purposes

8 of subparagraph (D) shall be the amount

9 (if any) by which—

10 ‘‘(I) the unfunded current liabil11 ity of the plan as of the beginning of

12 the first plan year beginning after De13 cember 31, 1994, valued using the as14 sumptions required by paragraph

15 (7)(C) as in effect for plan years be16 ginning after December 31, 1994, ex17 ceeds

18 ‘‘(II) the unamortized portion of

19 the unfunded old liability under the

20 plan as of the beginning of the first

21 plan year beginning after December

22 31, 1994.

23 ‘‘(ii) ELECTION.—

24 ‘‘(I) An employer may irrevocably

25 elect to apply the provisions of this
547

1 subparagraph as of the beginning of

2 the first plan year beginning after De3 cember 31, 1994.

4 ‘‘(II) If an election is made under

5 this clause, the increase under para6 graph (1) for any plan year beginning

7 after December 31, 1994, and before

8 January 1, 2002, to which this sub9 section applies (without regard to this

10 subclause) shall not be less than the

11 increase that would be required under

12 paragraph (1) if the provisions of this

13 title as in effect for the last plan year

14 beginning before January 1, 1995,

15 had remained in effect.’’

16 (B) Clause (i) of section 412(l)(4)(B) is

17 amended by inserting ‘‘, the unamortized por18 tion of the additional unfunded old liability,’’

19 after ‘‘old liability’’.

20 (5) APPLICABLE PERCENTAGE FOR DETERMIN21 ING UNFUNDED NEW LIABILITY AMOUNT.—Subpara22 graph (C) of section 412(l)(4) is amended—

23 (A) by striking ‘‘.25’’ and inserting ‘‘.40’’,

24 and

25 (B) by striking ‘‘35’’ and inserting ‘‘60’’.
548

1 (6) UNPREDICTABLE CONTINGENT EVENT

2 AMOUNT.—

3 (A) Subparagraph (A) of section 412(l)(5)

4 is amended—

5 (i) by striking ‘‘greater of’’ and insert6 ing ‘‘greatest of’’ before clause (i);

7 (ii) by striking ‘‘or’’ at the end of

8 clause (i);

9 (iii) by striking the period at the end

10 of clause (ii) and inserting ‘‘, or’’; and

11 (iv) by adding after clause (ii) the fol12 lowing new clause:

13 ‘‘(iii) the additional amount that

14 would be determined under paragraph

15 (4)(A) if the unpredictable contingent

16 event benefit liabilities were included in

17 unfunded new liability notwithstanding

18 paragraph (4)(B)(ii).’’

19 (B) Paragraph (5) of section 412(l) is

20 amended by adding at the end the following

21 new subparagraph:

22 ‘‘(E) LIMITATION.—The present value of

23 the amounts described in subparagraph (A)

24 with respect to any one event shall not exceed
549

1 the unpredictable contingent event benefit li2 abilities attributable to that event.’’

3 (C) Clause (ii) of section 412(m)(4)(D) is

4 amended—

5 (i) by striking ‘‘greater of’’ and insert6 ing ‘‘greatest of’’ before subclause (I);

7 (ii) by striking ‘‘or’’ at the end of

8 subclause (I);

9 (iii) by striking the period at the end

10 of subclause (II) and inserting ‘‘, or’’; and

11 (iv) by adding after subclause (II) the

12 following new clause:

13 ‘‘(III) 25 percent of the amount

14 determined under subsection

15 (l)(5)(A)(iii) for the plan year.’’

16 (7) REQUIRED INTEREST RATE AND MORTALITY

17 ASSUMPTIONS FOR DETERMINING CURRENT LIABIL18 ITY.—

19 (A) IN GENERAL.—Subparagraph (C) of

20 section 412(l)(7) is amended to read as follows:

21 ‘‘(C) INTEREST RATE AND MORTALITY AS22 SUMPTIONS USED.—Effective for plan years be23 ginning after December 31, 1994—

24 ‘‘(i) INTEREST RATE.—
550

1 ‘‘(I) IN GENERAL.—The rate of

2 interest used to determine current li3 ability under this subsection shall be

4 the rate of interest used under sub5 section (b)(5), except that the highest

6 rate in the permissible range under

7 subparagraph (B)(ii) thereof shall not

8 exceed the specified percentage under

9 subclause (II) of the weighted average

10 referred to in such subparagraph.

11 ‘‘(II) SPECIFIED PERCENTAGE.—

12 For purposes of subclause (I), the

13 specified percentage shall be deter14 mined as follows:

‘‘In the case of plan years beginning in calendar year:The specified percentage is:

1995 .................................................................................. 109

1996 .................................................................................. 108

1997 .................................................................................. 107

1998 .................................................................................. 106

1999 and thereafter ...................................................... 105.

15 ‘‘(ii) MORTALITY TABLES.—

16 ‘‘(I) COMMISSIONERS’ STANDARD

17 TABLE.—In the case of plan years be18 ginning before the first plan year to

19 which the first tables prescribed under

20 subclause (II) apply, the mortality

21 table used in determining current li22 ability under this subsection shall be
551

1 the table prescribed by the Secretary

2 which is based on the prevailing com3 missioners’ standard table (described

4 in section 807(d)(5)(A)) used to de5 termine reserves for group annuity

6 contracts issued on January 1, 1993.

7 ‘‘(II) SECRETARIAL AUTHOR8 ITY.—The Secretary may by regula9 tion prescribe for plan years beginning

10 after December 31, 1999, mortality

11 tables to be used in determining cur12 rent liability under this subsection.

13 Such tables shall be based upon the

14 actual experience of pension plans and

15 projected trends in such experience.

16 In prescribing such tables, the Sec17 retary shall take into account results

18 of available independent studies of

19 mortality of individuals covered by

20 pension plans.

21 ‘‘(III) PERIODIC REVIEW.—The

22 Secretary shall periodically (at least

23 every 5 years) review any tables in ef24 fect under this subsection and shall,

25 to the extent the Secretary determines
552

1 necessary, by regulation update the

2 tables to reflect the actual experience

3 of pension plans and projected trends

4 in such experience.

5 ‘‘(iii) SEPARATE MORTALITY TABLES

6 FOR THE DISABLED.—Notwithstanding

7 clause (ii)—

8 ‘‘(I) IN GENERAL.—In the case

9 of plan years beginning after Decem10 ber 31, 1995, the Secretary shall es11 tablish mortality tables which may be

12 used (in lieu of the tables under

13 clause (ii)) to determine current liabil14 ity under this subsection for individ15 uals who are entitled to benefits under

16 the plan on account of disability. The

17 Secretary shall establish separate ta18 bles for individuals whose disabilities

19 occur in plan years beginning before

20 January 1, 1995, and for individuals

21 whose disabilities occur in plan years

22 beginning on or after such date.

23 ‘‘(II) SPECIAL RULE FOR DIS24 ABILITIES OCCURRING AFTER 1994.—

25 In the case of disabilities occurring in
553

1 plan years beginning after December

2 31, 1994, the tables under subclause

3 (I) shall apply only with respect to in4 dividuals described in such subclause

5 who are disabled within the meaning

6 of title II of the Social Security Act

7 and the regulations thereunder.

8 ‘‘(III) PLAN YEARS BEGINNING

9 IN 1995.—In the case of any plan year

10 beginning in 1995, a plan may use its

11 own mortality assumptions for indi12 viduals who are entitled to benefits

13 under the plan on account of disabil14 ity.’’

15 (B) AMORTIZATION OF UNFUNDED MOR16 TALITY INCREASE AMOUNT.—

17 (i) IN GENERAL.—Paragraph (2) of

18 section 412(l), as amended by paragraph

19 (3), is amended by striking ‘‘plus’’ at the

20 end of subparagraph (B), by striking the

21 period at the end of subparagraph (C) and

22 inserting ‘‘, and’’, and by adding at the

23 end the following new subparagraph:

24 ‘‘(D) the aggregate of the unfunded mor25 tality increase amounts.’’
554

1 (ii) UNFUNDED MORTALITY INCREASE

2 AMOUNT.—Section 412(l), as amended by

3 paragraph (1), is amended by adding at

4 the end the following new paragraph:

5 ‘‘(10) UNFUNDED MORTALITY INCREASE

6 AMOUNT.—

7 ‘‘(A) IN GENERAL.—The unfunded mortal8 ity increase amount with respect to each un9 funded mortality increase is the amount nec10 essary to amortize such increase in equal an11 nual installments over a period of 10 plan years

12 (beginning with the first plan year for which a

13 plan uses any new mortality table issued under

14 paragraph (7)(C)(ii)(II) or (III)).

15 ‘‘(B) UNFUNDED MORTALITY INCREASE.—

16 For purposes of subparagraph (A), the term

17 ‘unfunded mortality increase’ means an amount

18 equal to the excess of—

19 ‘‘(i) the current liability of the plan

20 for the first plan year for which a plan

21 uses any new mortality table issued under

22 paragraph (7)(C)(ii)(II) or (III), over

23 ‘‘(ii) the current liability of the plan

24 for such plan year which would have been

25 determined if the mortality table in effect
555

1 for the preceding plan year had been

2 used.’’

3 (iii) CONFORMING AMENDMENT.—

4 Clause (i) of section 412(l)(4)(B), as

5 amended by paragraph (4)(B), is amended

6 by inserting ‘‘the unamortized portion of

7 each unfunded mortality increase,’’ after

8 ‘‘additional unfunded old liability,’’.

9 (8) TRANSITION RULE.—Section 412(l), as

10 amended by paragraph (7), is amended by adding at

11 the end the following new paragraph:

12 ‘‘(11) PHASE-IN OF INCREASES IN FUNDING

13 REQUIRED BY RETIREMENT PROTECTION ACT OF

14 1994.—

15 ‘‘(A) IN GENERAL.—For any applicable

16 plan year, at the election of the employer, the

17 increase under paragraph (1) shall not exceed

18 the greater of—

19 ‘‘(i) the increase that would be re20 quired under paragraph (1) if the provi21 sions of this title as in effect for plan years

22 beginning before January 1, 1995, had re23 mained in effect, or

24 ‘‘(ii) the amount which, after taking

25 into account charges (other than the addi-
556

1 tional charge under this subsection) and

2 credits under subsection (b), is necessary

3 to increase the funded current liability per4 centage (taking into account the expected

5 increase in current liability due to benefits

6 accruing during the plan year) for the ap7 plicable plan year to a percentage equal to

8 the sum of the initial funded current liabil9 ity percentage of the plan plus the applica10 ble number of percentage points for such

11 applicable plan year.

12 ‘‘(B) APPLICABLE NUMBER OF PERCENT13 AGE POINTS.—

14 ‘‘(i) INITIAL FUNDED CURRENT LI15 ABILITY PERCENTAGE OF 75 PERCENT OR

16 LESS.—Except as provided in clause (ii),

17 for plans with an initial funded current li18 ability percentage of 75 percent or less, the

19 applicable number of percentage points for

20 the applicable plan year is:

‘‘In the case The applicable

of applicable number of

plan years percentage

beginning in: points is:

1995 ..................................................... 3

1996 ..................................................... 6

1997 ..................................................... 9

1998 ..................................................... 12

1999 ..................................................... 15

2000 ..................................................... 19

2001 ..................................................... 24.
557

1 ‘‘(ii) OTHER CASES.—In the case of a

2 plan to which this clause applies, the appli3 cable number of percentage points for any

4 such applicable plan year is the sum of—

5 ‘‘(I) 2 percentage points;

6 ‘‘(II) the applicable number of

7 percentage points (if any) under this

8 clause for the preceding applicable

9 plan year;

10 ‘‘(III) the product of .10 multi11 plied by the excess (if any) of (a) 85

12 percentage points over (b) the sum of

13 the initial funded current liability per14 centage and the number determined

15 under subclause (II);

16 ‘‘(IV) for applicable plan years

17 beginning in 2000, 1 percentage

18 point; and

19 ‘‘(V) for applicable plan years be20 ginning in 2001, 2 percentage points.

21 ‘‘(iii) PLANS TO WHICH CLAUSE (ii)

22 APPLIES.—

23 ‘‘(I) IN GENERAL.—Clause (ii)

24 shall apply to a plan for an applicable

25 plan year if the initial funded current
558

1 liability percentage of such plan is

2 more than 75 percent.

3 ‘‘(II) PLANS INITIALLY UNDER

4 CLAUSE (i).—In the case of a plan

5 which (but for this subclause) has an

6 initial funded current liability percent7 age of 75 percent or less, clause (ii)

8 (and not clause (i)) shall apply to

9 such plan with respect to applicable

10 plan years beginning after the first

11 applicable plan year for which the

12 sum of the initial funded current li13 ability percentage and the applicable

14 number of percentage points (deter15 mined under clause (i)) exceeds 75

16 percent. For purposes of applying

17 clause (ii) to such a plan, the initial

18 funded current liability percentage of

19 such plan shall be treated as being the

20 sum referred to in the preceding sen21 tence.

22 ‘‘(C) DEFINITIONS.—For purposes of this

23 paragraph:
559

1 ‘‘(i) The term ‘applicable plan year’

2 means a plan year beginning after Decem3 ber 31, 1994, and before January 1, 2002.

4 ‘‘(ii) The term ‘initial funded current

5 liability percentage’ means the funded cur6 rent liability percentage as of the first day

7 of the first plan year beginning after De8 cember 31, 1994.’’

9 (9) LIQUIDITY REQUIREMENT.—

10 (A) IN GENERAL.—Section 412(m) is

11 amended by redesignating paragraph (5) as

12 paragraph (6) and by inserting after paragraph

13 (4) the following new paragraph:

14 ‘‘(5) LIQUIDITY REQUIREMENT.—

15 ‘‘(A) IN GENERAL.—A plan to which this

16 paragraph applies shall be treated as failing to

17 pay the full amount of any required installment

18 to the extent that the value of the liquid assets

19 paid in such installment is less than the liquid20 ity shortfall (whether or not such liquidity

21 shortfall exceeds the amount of such install22 ment required to be paid but for this para23 graph).

24 ‘‘(B) PLANS TO WHICH PARAGRAPH AP25 PLIES.—This paragraph shall apply to a de-
560

1 fined benefit plan (other than a multiemployer

2 plan or a plan described in subsection (l)(6)(A))

3 which—

4 ‘‘(i) is required to pay installments

5 under this subsection for a plan year, and

6 ‘‘(ii) has a liquidity shortfall for any

7 quarter during such plan year.

8 ‘‘(C) PERIOD OF UNDERPAYMENT.—For

9 purposes of paragraph (1), any portion of an

10 installment that is treated as not paid under

11 subparagraph (A) shall continue to be treated

12 as unpaid until the close of the quarter in

13 which the due date for such installment occurs.

14 ‘‘(D) LIMITATION ON INCREASE.—If the

15 amount of any required installment is increased

16 by reason of subparagraph (A), in no event

17 shall such increase exceed the amount which,

18 when added to prior installments for the plan

19 year, is necessary to increase the funded cur20 rent liability percentage (taking into account

21 the expected increase in current liability due to

22 benefits accruing during the plan year) to 100

23 percent.

24 ‘‘(E) DEFINITIONS.—For purposes of this

25 paragraph:
561

1 ‘‘(i) LIQUIDITY SHORTFALL.—The

2 term ‘liquidity shortfall’ means, with re3 spect to any required installment, an

4 amount equal to the excess (as of the last

5 day of the quarter for which such install6 ment is made) of the base amount with re7 spect to such quarter over the value (as of

8 such last day) of the plan’s liquid assets.

9 ‘‘(ii) BASE AMOUNT.—

10 ‘‘(I) IN GENERAL.—The term

11 ‘base amount’ means, with respect to

12 any quarter, an amount equal to 3

13 times the sum of the adjusted dis14 bursements from the plan for the 12

15 months ending on the last day of such

16 quarter.

17 ‘‘(II) SPECIAL RULE.—If the

18 amount determined under clause (i)

19 exceeds an amount equal to 2 times

20 the sum of the adjusted disburse21 ments from the plan for the 36

22 months ending on the last day of the

23 quarter and an enrolled actuary cer24 tifies to the satisfaction of the Sec25 retary that such excess is the result of
562

1 nonrecurring circumstances, the base

2 amount with respect to such quarter

3 shall be determined without regard to

4 amounts related to those nonrecurring

5 circumstances.

6 ‘‘(iii) DISBURSEMENTS FROM THE

7 PLAN.—The term ‘disbursements from the

8 plan’ means all disbursements from the

9 trust, including purchases of annuities,

10 payments of single sums and other bene11 fits, and administrative expenses.

12 ‘‘(iv) ADJUSTED DISBURSEMENTS.—

13 The term ‘adjusted disbursements’ means

14 disbursements from the plan reduced by

15 the product of—

16 ‘‘(I) the plan’s funded current li17 ability percentage (as defined in sub18 section (l)(8)) for the plan year, and

19 ‘‘(II) the sum of the purchases of

20 annuities, payments of single sums,

21 and such other disbursements as the

22 Secretary shall provide in regulations.

23 ‘‘(v) LIQUID ASSETS.—The term ‘liq24 uid assets’ means cash, marketable securi-
563

1 ties and such other assets as specified by

2 the Secretary in regulations.

3 ‘‘(vi) QUARTER.—The term ‘quarter’

4 means, with respect to any required install5 ment, the 3-month period preceding the

6 month in which the due date for such in7 stallment occurs.

8 ‘‘(F) REGULATIONS.—The Secretary may

9 prescribe such regulations as are necessary to

10 carry out this paragraph.’’

11 (B) EXCISE TAX ON UNPAID LIQUIDITY

12 SHORTFALL.—

13 (i) Subsection (e) of section 4971 is

14 amended by striking ‘‘(a) or (b)’’ wherever

15 it appears and inserting ‘‘(a), (b), or (f)’’.

16 (ii) Section 4971 is amended by redes17 ignating subsection (f) as subsection (g)

18 and adding a new subsection (f) to read as

19 follows:

20 ‘‘(f) FAILURE TO PAY LIQUIDITY SHORTFALL.—

21 ‘‘(1) IN GENERAL.—In the case of a plan to

22 which section 412(m)(5) applies, there is hereby im23 posed a tax of 10 percent of the excess (if any) of—

24 ‘‘(A) the amount of the liquidity shortfall

25 for any quarter, over
564

1 ‘‘(B) the amount of such shortfall which is

2 paid by the required installment under section

3 412(m) for such quarter (but only if such in4 stallment is paid on or before the due date for

5 such installment).

6 ‘‘(2) ADDITIONAL TAX.—If the plan has a li7 quidity shortfall as of the close of any quarter and

8 as of the close of each of the following 4 quarters,

9 there is hereby imposed a tax equal to 100 percent

10 of the amount on which tax was imposed by para11 graph (1) for such first quarter.

12 ‘‘(3) DEFINITIONS AND SPECIAL RULE.—

13 ‘‘(A) LIQUIDITY SHORTFALL; QUARTER.—

14 For purposes of this subsection, the terms ‘li15 quidity shortfall’ and ‘quarter’ have the respec16 tive meanings given such terms by section

17 412(m)(5).

18 ‘‘(B) SPECIAL RULE.—If the tax imposed

19 by paragraph (2) is paid with respect to any li20 quidity shortfall for any quarter, no further tax

21 shall be imposed by this subsection on such

22 shortfall for such quarter.’’

23 (C) TREATMENT OF FAILURE TO MAKE

24 CERTAIN PAYMENTS IF PLAN HAS LIQUIDITY
565

1 SHORTFALL.—Section 401(a) is amended by

2 adding at the end the following new paragraph:

3 ‘‘(32) TREATMENT OF FAILURE TO MAKE CER4 TAIN PAYMENTS IF PLAN HAS LIQUIDITY SHORT5 FALL.—

6 ‘‘(A) IN GENERAL.—A trust forming part

7 of a pension plan to which section 412(m)(5)

8 applies shall not be treated as failing to con9 stitute a qualified trust under this section mere10 ly because such plan ceases to make any pay11 ment described in subparagraph (B) during any

12 period that such plan has a liquidity shortfall

13 (as defined in section 412(m)(5)).

14 ‘‘(B) PAYMENTS DESCRIBED.—A payment

15 is described in this subparagraph if such pay16 ment is—

17 ‘‘(i) any payment, in excess of the

18 monthly amount paid under a single life

19 annuity (plus any social security supple20 ments described in the last sentence of sec21 tion 411(a)(9)), to a participant or bene22 ficiary whose annuity starting date (as de23 fined in section 417(f)(2)) occurs during

24 the period referred to in subparagraph (A),
566

1 ‘‘(ii) any payment for the purchase of

2 an irrevocable commitment from an insurer

3 to pay benefits, and

4 ‘‘(iii) any other payment specified by

5 the Secretary by regulations.

6 ‘‘(C) PERIOD OF SHORTFALL.—For pur7 poses of this paragraph, a plan has a liquidity

8 shortfall during the period that there is an

9 underpayment of an installment under section

10 412(m) by reason of paragraph (5)(A) thereof.’’

11 (10) AMENDMENT TO DEFINITION OF FULL12 FUNDING LIMITATION.—

13 (A) Subparagraph (A) of section 412(c)(7)

14 is amended by inserting ‘‘(including the ex15 pected increase in current liability due to bene16 fits accruing during the plan year)’’ after ‘‘cur17 rent liability’’ in clause (i).

18 (B) Section 412(c)(7) is amended by add19 ing at the end the following new subparagraph:

20 ‘‘(E) MINIMUM AMOUNT.—

21 ‘‘(i) IN GENERAL.—In no event shall

22 the full-funding limitation determined

23 under subparagraph (A) be less than the

24 excess (if any) of—
567

1 ‘‘(I) 90 percent of the current li2 ability of the plan (including the ex3 pected increase in current liability due

4 to benefits accruing during the plan

5 year), over

6 ‘‘(II) the value of the plan’s as7 sets determined under paragraph (2).

8 ‘‘(ii) CURRENT LIABILITY; ASSETS.—

9 For purposes of clause (i)—

10 ‘‘(I) the term ‘current liability’

11 has the meaning given such term by

12 subsection (l)(7) (without regard to

13 subparagraph (D) thereof), and

14 ‘‘(II) assets shall not be reduced

15 by any credit balance in the funding

16 standard account.’’

17 (C) Subparagraph (B) of section 412(c)(7)

18 is amended to read as follows:

19 ‘‘(B) CURRENT LIABILITY.—For purposes

20 of subparagraph (D) and subclause (I) of sub21 paragraph (A)(i), the term ‘current liability’

22 has the meaning given such term by subsection

23 (l)(7) (without regard to subparagraphs (C)

24 and (D) thereof) and using the rate of interest

25 used under subsection (b)(5)(B).’’
568

1 (11) REFERENCE TO ACT.—Section 404(g)(4)

2 is amended by striking ‘‘the Single-Employer Pen3 sion Plan Amendments Act of 1986’’ and inserting

4 ‘‘the Retirement Protection Act of 1994’’.

5 (b) EFFECTIVE DATES.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the amendments made by this section

8 shall apply to plan years beginning after December

9 31, 1994.

10 (2) REFERENCE.—The amendment made by

11 subsection (a)(11) shall take effect on the date of

12 the enactment of this Act.

13 SEC. 752. LIMITATION ON CHANGES IN CURRENT LIABILITY

14 ASSUMPTIONS.

15 (a) IN GENERAL.—Paragraph (5) of section 412(c)

16 is amended—

17 (1) by striking ‘‘If the funding method’’ and in18 serting the following:

19 ‘‘(A) IN GENERAL.—If the funding meth20 od’’, and

21 (2) by adding at the end the following new sub22 paragraph:

23 ‘‘(B) APPROVAL REQUIRED FOR CERTAIN

24 CHANGES IN ASSUMPTIONS BY CERTAIN SIN-
569

1 GLE-EMPLOYER PLANS SUBJECT TO ADDI2 TIONAL FUNDING REQUIREMENT.—

3 ‘‘(i) IN GENERAL.—No actuarial as4 sumption (other than the assumptions de5 scribed in subsection (l)(7)(C)) used to de6 termine the current liability for a plan to

7 which this subparagraph applies may be

8 changed without the approval of the Sec9 retary.

10 ‘‘(ii) PLANS TO WHICH SUBPARA11 GRAPH APPLIES.—This subparagraph shall

12 apply to a plan only if—

13 ‘‘(I) the plan is a defined benefit

14 plan (other than a multiemployer

15 plan) to which title IV of the Em16 ployee Retirement Income Security

17 Act of 1974 applies;

18 ‘‘(II) the aggregate unfunded

19 vested benefits as of the close of the

20 preceding plan year (as determined

21 under section 4006(a)(3)(E)(iii) of the

22 Employee Retirement Income Security

23 Act of 1974) of such plan and all

24 other plans maintained by the contrib25 uting sponsors (as defined in section
570

1 4001(a)(13) of such Act) and mem2 bers of such sponsors’ controlled

3 groups (as defined in section

4 4001(a)(14) of such Act) which are

5 covered by title IV of such Act (dis6 regarding plans with no unfunded

7 vested benefits) exceed $50,000,000;

8 and

9 ‘‘(III) the change in assumptions

10 (determined after taking into account

11 any changes in interest rate and mor12 tality table) results in a decrease in

13 the unfunded current liability of the

14 plan for the current plan year that ex15 ceeds $50,000,000, or that exceeds

16 $5,000,000 and that is 5 percent or

17 more of the current liability of the

18 plan before such change.’’

19 (b) EFFECTIVE DATE.—

20 (1) IN GENERAL.—The amendment made by

21 this section shall apply to changes in assumptions

22 for plan years beginning after October 28, 1993.

23 (2) CERTAIN CHANGES CEASE TO BE EFFEC24 TIVE.—In the case of changes in assumptions for

25 plan years beginning after December 31, 1992, and
571

1 on or before October 28, 1993, such changes shall

2 cease to be effective for plan years beginning after

3 December 31, 1994, if—

4 (A) such change would have required the

5 approval of the Secretary of the Treasury had

6 such amendment applied to such change, and

7 (B) such change is not so approved.

8 SEC. 753. ANTICIPATION OF BARGAINED BENEFIT IN9 CREASES.

10 (a) IN GENERAL.—Section 412(c) is amended by

11 adding at the end the following new paragraph:

12 ‘‘(12) ANTICIPATION OF BENEFIT INCREASES

13 EFFECTIVE IN THE FUTURE.—In determining pro14 jected benefits, the funding method of a collectively

15 bargained plan described in section 413(a) (other

16 than a multiemployer plan) shall anticipate benefit

17 increases scheduled to take effect during the term of

18 the collective bargaining agreement applicable to the

19 plan.’’

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

21 this section shall apply to plan years beginning after De22 cember 31, 1994, with respect to collective bargaining

23 agreements in effect on or after January 1, 1995.
572

1 SEC. 754. MODIFICATION OF QUARTERLY CONTRIBUTION

2 REQUIREMENT.

3 (a) IN GENERAL.—Paragraph (1) of section 412(m)

4 is amended—

5 (1) by inserting ‘‘which has a funded current li6 ability percentage (as defined in subsection (l)(8))

7 for the preceding plan year of less than 100 per8 cent’’ before ‘‘fails’’, and

9 (2) by striking ‘‘any plan year’’ and inserting

10 ‘‘the plan year’’.

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

12 this section shall apply to plan years beginning after the

13 date of enactment of this Act.

14 SEC. 755. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE

15 CONTRIBUTIONS.

16 (a) IN GENERAL.—Section 4972(c) is amended by

17 adding at the end the following new paragraph:

18 ‘‘(6) EXCEPTIONS.—In determining the amount

19 of nondeductible contributions for any taxable year,

20 there shall not be taken into account—

21 ‘‘(A) contributions that would be deduct22 ible under section 404(a)(1)(D) if the plan had

23 more than 100 participants if—

24 ‘‘(i) the plan is covered under section

25 4021 of the Employee Retirement Income

26 Security Act of 1974, and
573

1 ‘‘(ii) the plan is terminated under sec2 tion 4041(b) of such Act on or before the

3 last day of the taxable year, and

4 ‘‘(B) contributions to 1 or more defined

5 contribution plans which are not deductible

6 when contributed solely because of section

7 404(a)(7), but only to the extent such contribu8 tions do not exceed 6 percent of compensation

9 (within the meaning of section 404(a)) paid or

10 accrued (during the taxable year for which the

11 contributions were made) to beneficiaries under

12 the plans.

13 If 1 or more defined benefit plans were taken into

14 account in determining the amount allowable as a

15 deduction under section 404 for contributions to any

16 defined contribution plan, subparagraph (B) shall

17 apply only if such defined benefit plans are described

18 in section 404(a)(1)(D). For purposes of subpara19 graph (B), the deductible limits under section

20 404(a)(7) shall first be applied to amounts contrib21 uted to a defined benefit plan and then to amounts

22 described in subparagraph (B).’’

23 (b) EFFECTIVE DATE.—

24 (1) SECTION 4972(c)(6)(A).—Section

25 4972(c)(6)(A) of the Internal Revenue Code of 1986
574

1 (as added by this section) shall apply to taxable

2 years ending on or after the date of enactment of

3 this Act.

4 (2) SECTION 4972(c)(6)(B).—Section

5 4972(c)(6)(B) of such Code (as added by this sec6 tion) shall apply to taxable years ending on or after

7 December 31, 1992.

8 Subpart B—Amendments to the Employee

9 Retirement Income Security Act of 1974

10 SEC. 761. MINIMUM FUNDING REQUIREMENTS.

11 (a) AMENDMENTS TO ADDITIONAL FUNDING RE12 QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—

13 (1) LIMITATIONS ON ADDITIONAL FUNDING RE14 QUIREMENT FOR CERTAIN PLANS.—

15 (A) IN GENERAL.—Paragraph (1) of sec16 tion 302(d) of the Employee Retirement Income

17 Security Act of 1974 (29 U.S.C. 1082(d)) is

18 amended by striking ‘‘which has an unfunded

19 current liability’’ and inserting ‘‘to which this

20 subsection applies under paragraph (9)’’.

21 (B) PLANS TO WHICH REQUIREMENT AP22 PLIES.—Section 302(d) of such Act is amended

23 by adding at the end the following new para24 graph:

25 ‘‘(9) APPLICABILITY OF SUBSECTION.—
575

1 ‘‘(A) IN GENERAL.—Except as provided in

2 paragraph (6)(A), this subsection shall apply to

3 a plan for any plan year if its funded current

4 liability percentage for such year is less than 90

5 percent.

6 ‘‘(B) EXCEPTION FOR CERTAIN PLANS AT

7 LEAST 80 PERCENT FUNDED.—Subparagraph

8 (A) shall not apply to a plan for a plan year

9 if—

10 ‘‘(i) the funded current liability per11 centage for the plan year is at least 80

12 percent, and

13 ‘‘(ii) such percentage for each of the

14 2 immediately preceding plan years (or

15 each of the 2d and 3d immediately preced16 ing plan years) is at least 90 percent.

17 ‘‘(C) FUNDED CURRENT LIABILITY PER18 CENTAGE.—For purposes of subparagraphs (A)

19 and (B), the term ‘funded current liability per20 centage’ has the meaning given such term by

21 paragraph (8)(B), except that such percentage

22 shall be determined for any plan year—

23 ‘‘(i) without regard to paragraph

24 (8)(E), and
576

1 ‘‘(ii) by using the rate of interest

2 which is the highest rate allowable for the

3 plan year under paragraph (7)(C).

4 ‘‘(D) TRANSITION RULES.—For purposes

5 of this paragraph:

6 ‘‘(i) FUNDED PERCENTAGE FOR

7 YEARS BEFORE 1995.—The funded current

8 liability percentage for any plan year be9 ginning before January 1, 1995, shall be

10 treated as not less than 90 percent only if

11 for such plan year the plan met one of the

12 following requirements (as in effect for

13 such year):

14 ‘‘(I) The full-funding limitation

15 under subsection (c)(7) for the plan

16 was zero.

17 ‘‘(II) The plan had no additional

18 funding requirement under this sub19 section (or would have had no such

20 requirement if its funded current li21 ability percentage had been deter22 mined under subparagraph (C)).

23 ‘‘(III) The plan’s additional fund24 ing requirement under this subsection
577

1 did not exceed the lesser of 0.5 per2 cent of current liability or $5,000,000.

3 ‘‘(ii) SPECIAL RULE FOR 1995 AND

4 1996.—For purposes of determining wheth5 er subparagraph (B) applies to any plan

6 year beginning in 1995 or 1996, a plan

7 shall be treated as meeting the require8 ments of subparagraph (B)(ii) if the plan

9 met the requirements of clause (i) of this

10 subparagraph for any two of the plan years

11 beginning in 1992, 1993, and 1994

12 (whether or not consecutive).’’

13 (2) RELATIONSHIP OF ADDITIONAL FUNDING

14 REQUIREMENT TO FUNDING STANDARD ACCOUNT

15 CHARGES AND CREDITS.—

16 (A) Clause (ii) of section 302(d)(1)(A) of

17 such Act is amended to read as follows:

18 ‘‘(ii) the sum of the charges for such

19 plan year under subsection (b)(2), reduced

20 by the sum of the credits for such plan

21 year under subparagraph (B) of subsection

22 (b)(3), plus’’.

23 (B) The last sentence in section 302(d)(1)

24 of such Act is amended to read as follows:
578

1 ‘‘Such increase shall not exceed the amount which,

2 after taking into account charges (other than the ad3 ditional charge under this subsection) and credits

4 under subsection (b), is necessary to increase the

5 funded current liability percentage (taking into ac6 count the expected increase in current liability due

7 to benefits accruing during the plan year) to 100

8 percent.’’

9 (3) AMENDMENT TO DEFICIT REDUCTION CON10 TRIBUTION.—Paragraph (2) of section 302(d) of

11 such Act is amended—

12 (A) by striking ‘‘plus’’ at the end of sub13 paragraph (A);

14 (B) by striking the period at the end of

15 subparagraph (B) and inserting ‘‘, plus’’; and

16 (C) by adding at the end the following new

17 subparagraph:

18 ‘‘(C) the expected increase in current li19 ability due to benefits accruing during the plan

20 year.’’

21 (4) INCREASE IN CURRENT LIABILITY DUE TO

22 CHANGE IN REQUIRED ASSUMPTIONS.—

23 (A) Paragraph (3) of section 302(d) of

24 such Act is amended by adding at the end the

25 following new subparagraphs:
579

1 ‘‘(D) SPECIAL RULE FOR REQUIRED

2 CHANGES IN ACTUARIAL ASSUMPTIONS.—

3 ‘‘(i) IN GENERAL.—The unfunded old

4 liability amount with respect to any plan

5 for any plan year shall be increased by the

6 amount necessary to amortize the amount

7 of additional unfunded old liability under

8 the plan in equal annual installments over

9 a period of 12 plan years (beginning with

10 the first plan year beginning after Decem11 ber 31, 1994).

12 ‘‘(ii) ADDITIONAL UNFUNDED OLD LI13 ABILITY.—For purposes of clause (i), the

14 term ‘additional unfunded old liability’

15 means the amount (if any) by which—

16 ‘‘(I) the current liability of the

17 plan as of the beginning of the first

18 plan year beginning after December

19 31, 1994, valued using the assump20 tions required by paragraph (7)(C) as

21 in effect for plan years beginning

22 after December 31, 1994, exceeds

23 ‘‘(II) the current liability of the

24 plan as of the beginning of such first

25 plan year, valued using the same as-
580

1 sumptions used under subclause (I)

2 (other than the assumptions required

3 by paragraph (7)(C)), using the prior

4 interest rate, and using such mortality

5 assumptions as were used to deter6 mine current liability for the first plan

7 year beginning after December 31,

8 1992.

9 ‘‘(iii) PRIOR INTEREST RATE.—For

10 purposes of clause (ii), the term ‘prior in11 terest rate’ means the rate of interest that

12 is the same percentage of the weighted av13 erage under subsection (b)(5)(B)(ii)(I) for

14 the first plan year beginning after Decem15 ber 31, 1994, as the rate of interest used

16 by the plan to determine current liability

17 for the first plan year beginning after De18 cember 31, 1992, is of the weighted aver19 age under subsection (b)(5)(B)(ii)(I) for

20 such first plan year beginning after De21 cember 31, 1992.

22 ‘‘(E) OPTIONAL RULE FOR ADDITIONAL

23 UNFUNDED OLD LIABILITY.—

24 ‘‘(i) IN GENERAL.—If an employer

25 makes an election under clause (ii), the ad-
581

1 ditional unfunded old liability for purposes

2 of subparagraph (D) shall be the amount

3 (if any) by which—

4 ‘‘(I) the unfunded current liabil5 ity of the plan as of the beginning of

6 the first plan year beginning after De7 cember 31, 1994, valued using the as8 sumptions required by paragraph

9 (7)(C) as in effect for plan years be10 ginning after December 31, 1994, ex11 ceeds

12 ‘‘(II) the unamortized portion of

13 the unfunded old liability under the

14 plan as of the beginning of the first

15 plan year beginning after December

16 31, 1994.

17 ‘‘(ii) ELECTION.—

18 ‘‘(I) An employer may irrevocably

19 elect to apply the provisions of this

20 subparagraph as of the beginning of

21 the first plan year beginning after De22 cember 31, 1994.

23 ‘‘(II) If an election is made under

24 this clause, the increase under para25 graph (1) for any plan year beginning
582

1 after December 31, 1994, and before

2 January 1, 2002, to which this sub3 section applies (without regard to this

4 subclause) shall not be less than the

5 increase that would be required under

6 paragraph (1) if the provisions of this

7 title as in effect for the last plan year

8 beginning before January 1, 1995,

9 had remained in effect.’’

10 (B) Clause (i) of section 302(d)(4)(B) of

11 such Act is amended by inserting ‘‘, the

12 unamortized portion of the additional unfunded

13 old liability,’’ after ‘‘old liability’’.

14 (5) APPLICABLE PERCENTAGE FOR DETERMIN15 ING UNFUNDED NEW LIABILITY AMOUNT.—Subpara16 graph (C) of section 302(d)(4) of such Act is

17 amended—

18 (A) by striking ‘‘.25’’ and inserting ‘‘.40’’,

19 and

20 (B) by striking ‘‘35’’ and inserting ‘‘60’’.

21 (6) UNPREDICTABLE CONTINGENT EVENT

22 AMOUNT.—

23 (A) Subparagraph (A) of section 302(d)(5)

24 of such Act is amended—
583

1 (i) by striking ‘‘greater of’’ and insert2 ing ‘‘greatest of’’ before clause (i);

3 (ii) by striking ‘‘or’’ at the end of

4 clause (i);

5 (iii) by striking the period at the end

6 of clause (ii) and inserting ‘‘, or’’; and

7 (iv) by adding after clause (ii) the fol8 lowing new clause:

9 ‘‘(iii) the additional amount that

10 would be determined under paragraph

11 (4)(A) if the unpredictable contingent

12 event benefit liabilities were included in

13 unfunded new liability notwithstanding

14 paragraph (4)(B)(ii).’’

15 (B) Paragraph (5) of section 302(d) of

16 such Act is amended by adding at the end the

17 following new subparagraph:

18 ‘‘(E) LIMITATION.—The present value of

19 the amounts described in subparagraph (A)

20 with respect to any one event shall not exceed

21 the unpredictable contingent event benefit li22 abilities attributable to that event.’’

23 (C) Clause (ii) of section 302(e)(4)(D) of

24 such Act is amended—
584

1 (i) by striking ‘‘greater of’’ and insert2 ing ‘‘greatest of’’ before subclause (I);

3 (ii) by striking ‘‘or’’ at the end of

4 subclause (I);

5 (iii) by striking the period at the end

6 of subclause (II) and inserting ‘‘, or’’; and

7 (iv) by adding after subclause (II) the

8 following new clause:

9 ‘‘(III) 25 percent of the amount

10 determined under subsection

11 (d)(5)(A)(iii) for the plan year.’’

12 (7) REQUIRED INTEREST RATE AND MORTALITY

13 ASSUMPTIONS FOR DETERMINING CURRENT LIABIL14 ITY.—

15 (A) IN GENERAL.—Subparagraph (C) of

16 section 302(d)(7) of such Act is amended to

17 read as follows:

18 ‘‘(C) INTEREST RATE AND MORTALITY AS19 SUMPTIONS USED.—Effective for plan years be20 ginning after December 31, 1994—

21 ‘‘(i) INTEREST RATE.—

22 ‘‘(I) IN GENERAL.—The rate of

23 interest used to determine current li24 ability under this subsection shall be

25 the rate of interest used under sub-
585

1 section (b)(5), except that the highest

2 rate in the permissible range under

3 subparagraph (B)(ii) thereof shall not

4 exceed the specified percentage under

5 subclause (II) of the weighted average

6 referred to in such subparagraph.

7 ‘‘(II) SPECIFIED PERCENTAGE.—

8 For purposes of subclause (I), the

9 specified percentage shall be deter10 mined as follows:

‘‘In the case of plan years beginning in calendar year:The specified percentage is:

1995 .................................................................................. 109

1996 .................................................................................. 108

1997 .................................................................................. 107

1998 .................................................................................. 106

1999 and thereafter ...................................................... 105.

11 ‘‘(ii) MORTALITY TABLES.—

12 ‘‘(I) COMMISSIONERS’ STANDARD

13 TABLE.—In the case of plan years be14 ginning before the first plan year to

15 which the first tables prescribed under

16 subclause (II) apply, the mortality

17 table used in determining current li18 ability under this subsection shall be

19 the table prescribed by the Secretary

20 of the Treasury which is based on the

21 prevailing commissioners’ standard

22 table (described in section
586

1 807(d)(5)(A) of the Internal Revenue

2 Code of 1986) used to determine re3 serves for group annuity contracts is4 sued on January 1, 1993.

5 ‘‘(II) SECRETARIAL AUTHOR6 ITY.—The Secretary of the Treasury

7 may by regulation prescribe for plan

8 years beginning after December 31,

9 1999, mortality tables to be used in

10 determining current liability under

11 this subsection. Such tables shall be

12 based upon the actual experience of

13 pension plans and projected trends in

14 such experience. In prescribing such

15 tables, the Secretary of the Treasury

16 shall take into account results of

17 available independent studies of mor18 tality of individuals covered by pen19 sion plans.

20 ‘‘(III) PERIODIC REVIEW.—The

21 Secretary of the Treasury shall peri22 odically (at least every 5 years) review

23 any tables in effect under this sub24 section and shall, to the extent the

25 Secretary determines necessary, by
587

1 regulation update the tables to reflect

2 the actual experience of pension plans

3 and projected trends in such experi4 ence.

5 ‘‘(iii) SEPARATE MORTALITY TABLES

6 FOR THE DISABLED.—Notwithstanding

7 clause (ii)—

8 ‘‘(I) IN GENERAL.—In the case

9 of plan years beginning after Decem10 ber 31, 1995, the Secretary of the

11 Treasury shall establish mortality ta12 bles which may be used (in lieu of the

13 tables under clause (ii)) to determine

14 current liability under this subsection

15 for individuals who are entitled to

16 benefits under the plan on account of

17 disability. Such Secretary shall estab18 lish separate tables for individuals

19 whose disabilities occur in plan years

20 beginning before January 1, 1995,

21 and for individuals whose disabilities

22 occur in plan years beginning on or

23 after such date.

24 ‘‘(II) SPECIAL RULE FOR DIS25 ABILITIES OCCURRING AFTER 1994.—
588

1 In the case of disabilities occurring in

2 plan years beginning after December

3 31, 1994, the tables under subclause

4 (I) shall apply only with respect to in5 dividuals described in such subclause

6 who are disabled within the meaning

7 of title II of the Social Security Act

8 and the regulations thereunder.

9 ‘‘(III) PLAN YEARS BEGINNING

10 IN 1995.—In the case of any plan year

11 beginning in 1995, a plan may use its

12 own mortality assumptions for indi13 viduals who are entitled to benefits

14 under the plan on account of disabil15 ity.’’

16 (B) AMORTIZATION OF UNFUNDED MOR17 TALITY INCREASE AMOUNT.—

18 (i) IN GENERAL.—Paragraph (2) of

19 section 302(d) of such Act, as amended by

20 paragraph (3), is amended by striking

21 ‘‘plus’’ at the end of subparagraph (B), by

22 striking the period at the end of subpara23 graph (C) and inserting ‘‘, and’’, and by

24 adding at the end the following new sub25 paragraph:
589

1 ‘‘(D) the aggregate of the unfunded mor2 tality increase amounts.’’

3 (ii) UNFUNDED MORTALITY INCREASE

4 AMOUNT.—Section 302(d) of such Act, as

5 amended by paragraph (1), is amended by

6 adding at the end the following new para7 graph:

8 ‘‘(10) UNFUNDED MORTALITY INCREASE

9 AMOUNT.—

10 ‘‘(A) IN GENERAL.—The unfunded mortal11 ity increase amount with respect to each un12 funded mortality increase is the amount nec13 essary to amortize such increase in equal an14 nual installments over a period of 10 plan years

15 (beginning with the first plan year for which a

16 plan uses any new mortality table issued under

17 paragraph (7)(C)(ii)(II) or (III)).

18 ‘‘(B) UNFUNDED MORTALITY INCREASE.—

19 For purposes of subparagraph (A), the term

20 ‘unfunded mortality increase’ means an amount

21 equal to the excess of—

22 ‘‘(i) the current liability of the plan

23 for the first plan year for which a plan

24 uses any new mortality table issued under

25 paragraph (7)(C)(ii)(II) or (III), over
590

1 ‘‘(ii) the current liability of the plan

2 for such plan year which would have been

3 determined if the mortality table in effect

4 for the preceding plan year had been

5 used.’’

6 (iii) CONFORMING AMENDMENT.—

7 Clause (i) of section 302(d)(4)(B) of such

8 Act, as amended by paragraph (4)(B), is

9 amended by inserting ‘‘the unamortized

10 portion of each unfunded mortality in11 crease,’’ after ‘‘additional unfunded old li12 ability,’’.

13 (8) TRANSITION RULE.—Section 302(d) of such

14 Act, as amended by paragraph (7), is amended by

15 adding at the end the following new paragraph:

16 ‘‘(11) PHASE-IN OF INCREASES IN FUNDING

17 REQUIRED BY RETIREMENT PROTECTION ACT OF

18 1994.—

19 ‘‘(A) IN GENERAL.—For any applicable

20 plan year, at the election of the employer, the

21 increase under paragraph (1) shall not exceed

22 the greater of—

23 ‘‘(i) the increase that would be re24 quired under paragraph (1) if the provi25 sions of this title as in effect for plan years
591

1 beginning before January 1, 1995, had re2 mained in effect, or

3 ‘‘(ii) the amount which, after taking

4 into account charges (other than the addi5 tional charge under this subsection) and

6 credits under subsection (b), is necessary

7 to increase the funded current liability per8 centage (taking into account the expected

9 increase in current liability due to benefits

10 accruing during the plan year) for the ap11 plicable plan year to a percentage equal to

12 the sum of the initial funded current liabil13 ity percentage of the plan plus the applica14 ble number of percentage points for such

15 applicable plan year.

16 ‘‘(B) APPLICABLE NUMBER OF PERCENT17 AGE POINTS.—

18 ‘‘(i) INITIAL FUNDED CURRENT LI19 ABILITY PERCENTAGE OF 75 PERCENT OR

20 LESS.—Except as provided in clause (ii),

21 for plans with an initial funded current li22 ability percentage of 75 percent or less, the

23 applicable number of percentage points for

24 the applicable plan year is:
592

‘‘In the case The applicable

of applicable number of

plan years percentage

beginning in: points is:

1995 ..................................................... 3

1996 ..................................................... 6

1997 ..................................................... 9

1998 ..................................................... 12

1999 ..................................................... 15

2000 ..................................................... 19

2001 ..................................................... 24.

1 ‘‘(ii) OTHER CASES.—In the case of a

2 plan to which this clause applies, the appli3 cable number of percentage points for any

4 such applicable plan year is the sum of—

5 ‘‘(I) 2 percentage points;

6 ‘‘(II) the applicable number of

7 percentage points (if any) under this

8 clause for the preceding applicable

9 plan year;

10 ‘‘(III) the product of .10 multi11 plied by the excess (if any) of (a) 85

12 percentage points over (b) the sum of

13 the initial funded current liability per14 centage and the number determined

15 under subclause (II);

16 ‘‘(IV) for applicable plan years

17 beginning in 2000, 1 percentage

18 point; and

19 ‘‘(V) for applicable plan years be20 ginning in 2001, 2 percentage points.
593

1 ‘‘(iii) PLANS TO WHICH CLAUSE (ii)

2 APPLIES.—

3 ‘‘(I) IN GENERAL.—Clause (ii)

4 shall apply to a plan for an applicable

5 plan year if the initial funded current

6 liability percentage of such plan is

7 more than 75 percent.

8 ‘‘(II) PLANS INITIALLY UNDER

9 CLAUSE (i).—In the case of a plan

10 which (but for this subclause) has an

11 initial funded current liability percent12 age of 75 percent or less, clause (ii)

13 (and not clause (i)) shall apply to

14 such plan with respect to applicable

15 plan years beginning after the first

16 applicable plan year for which the

17 sum of the initial funded current li18 ability percentage and the applicable

19 number of percentage points (deter20 mined under clause (i)) exceeds 75

21 percent. For purposes of applying

22 clause (ii) to such a plan, the initial

23 funded current liability percentage of

24 such plan shall be treated as being the
594

1 sum referred to in the preceding sen2 tence.

3 ‘‘(C) DEFINITIONS.—For purposes of this

4 paragraph—

5 ‘‘(i) The term ‘applicable plan year’

6 means a plan year beginning after Decem7 ber 31, 1994, and before January 1, 2002.

8 ‘‘(ii) The term ‘initial funded current

9 liability percentage’ means the funded cur10 rent liability percentage as of the first day

11 of the first plan year beginning after De12 cember 31, 1994.’’

13 (9) LIQUIDITY REQUIREMENT.—

14 (A) IN GENERAL.—Section 302(e) of such

15 Act is amended by redesignating paragraph (5)

16 as paragraph (6) and by inserting after para17 graph (4) the following new paragraph:

18 ‘‘(5) LIQUIDITY REQUIREMENT.—

19 ‘‘(A) IN GENERAL.—A plan to which this

20 paragraph applies shall be treated as failing to

21 pay the full amount of any required installment

22 to the extent that the value of the liquid assets

23 paid in such installment is less than the liquid24 ity shortfall (whether or not such liquidity

25 shortfall exceeds the amount of such install-
595

1 ment required to be paid but for this para2 graph).

3 ‘‘(B) PLANS TO WHICH PARAGRAPH AP4 PLIES.—This paragraph shall apply to a de5 fined benefit plan (other than a multiemployer

6 plan or a plan described in subsection

7 (d)(6)(A)) which—

8 ‘‘(i) is required to pay installments

9 under this subsection for a plan year, and

10 ‘‘(ii) has a liquidity shortfall for any

11 quarter during such plan year.

12 ‘‘(C) PERIOD OF UNDERPAYMENT.—For

13 purposes of paragraph (1), any portion of an

14 installment that is treated as not paid under

15 subparagraph (A) shall continue to be treated

16 as unpaid until the close of the quarter in

17 which the due date for such installment occurs.

18 ‘‘(D) LIMITATION ON INCREASE.—If the

19 amount of any required installment is increased

20 by reason of subparagraph (A), in no event

21 shall such increase exceed the amount which,

22 when added to prior installments for the plan

23 year, is necessary to increase the funded cur24 rent liability percentage (taking into account

25 the expected increase in current liability due to
596

1 benefits accruing during the plan year) to 100

2 percent.

3 ‘‘(E) DEFINITIONS.—For purposes of this

4 paragraph—

5 ‘‘(i) LIQUIDITY SHORTFALL.—The

6 term ‘liquidity shortfall’ means, with re7 spect to any required installment, an

8 amount equal to the excess (as of the last

9 day of the quarter for which such install10 ment is made) of the base amount with re11 spect to such quarter over the value (as of

12 such last day) of the plan’s liquid assets.

13 ‘‘(ii) BASE AMOUNT.—

14 ‘‘(I) IN GENERAL.—The term

15 ‘base amount’ means, with respect to

16 any quarter, an amount equal to 3

17 times the sum of the adjusted dis18 bursements from the plan for the 12

19 months ending on the last day of such

20 quarter.

21 ‘‘(II) SPECIAL RULE.—If the

22 amount determined under clause (i)

23 exceeds an amount equal to 2 times

24 the sum of the adjusted disburse25 ments from the plan for the 36
597

1 months ending on the last day of the

2 quarter and an enrolled actuary cer3 tifies to the satisfaction of the Sec4 retary of the Treasury that such ex5 cess is the result of nonrecurring cir6 cumstances, the base amount with re7 spect to such quarter shall be deter8 mined without regard to amounts re9 lated to those nonrecurring cir10 cumstances.

11 ‘‘(iii) DISBURSEMENTS FROM THE

12 PLAN.—The term ‘disbursements from the

13 plan’ means all disbursements from the

14 trust, including purchases of annuities,

15 payments of single sums and other bene16 fits, and administrative expenses.

17 ‘‘(iv) ADJUSTED DISBURSEMENTS.—

18 The term ‘adjusted disbursements’ means

19 disbursements from the plan reduced by

20 the product of—

21 ‘‘(I) the plan’s funded current li22 ability percentage (as defined in sub23 section (d)(8)) for the plan year, and

24 ‘‘(II) the sum of the purchases of

25 annuities, payments of single sums,
598

1 and such other disbursements as the

2 Secretary of the Treasury shall pro3 vide in regulations.

4 ‘‘(v) LIQUID ASSETS.—The term ‘liq5 uid assets’ means cash, marketable securi6 ties and such other assets as specified by

7 the Secretary of the Treasury in regula8 tions.

9 ‘‘(vi) QUARTER.—The term ‘quarter’

10 means, with respect to any required install11 ment, the 3-month period preceding the

12 month in which the due date for such in13 stallment occurs.

14 ‘‘(F) REGULATIONS.—The Secretary of the

15 Treasury may prescribe such regulations as are

16 necessary to carry out this paragraph.’’

17 (B) LIMITATION ON DISTRIBUTIONS

18 OTHER THAN LIFE ANNUITIES PAID BY THE

19 PLAN.—

20 (i) Section 206 of the Employee Re21 tirement Income Security Act of 1974 (29

22 U.S.C. 1056) is amended by adding at the

23 end the following new subsection:

24 ‘‘(e) LIMITATION ON DISTRIBUTIONS OTHER THAN

25 LIFE ANNUITIES PAID BY THE PLAN.—
599

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

2 provision of this part, the fiduciary of a pension plan

3 that is subject to the additional funding require4 ments of section 302(d) shall not permit a prohib5 ited payment to be made from a plan during a pe6 riod in which such plan has a liquidity shortfall (as

7 defined in section 302(e)(5)).

8 ‘‘(2) PROHIBITED PAYMENT.—For purposes of

9 paragraph (1), the term ‘prohibited payment’

10 means—

11 ‘‘(A) any payment, in excess of the month12 ly amount paid under a single life annuity (plus

13 any social security supplements described in the

14 last sentence of section 204(b)(1)(G)), to a par15 ticipant or beneficiary whose annuity starting

16 date (as defined in section 205(h)(2)), that oc17 curs during the period referred to in paragraph

18 (1),

19 ‘‘(B) any payment for the purchase of an

20 irrevocable commitment from an insurer to pay

21 benefits, and

22 ‘‘(C) any other payment specified by the

23 Secretary of the Treasury by regulations.

24 ‘‘(3) PERIOD OF SHORTFALL.—For purposes of

25 this subsection, a plan has a liquidity shortfall dur-
600

1 ing the period that there is an underpayment of an

2 installment under section 302(e) by reason of para3 graph (5)(A) thereof.

4 ‘‘(4) COORDINATION WITH OTHER PROVI5 SIONS.—Compliance with this subsection shall not

6 constitute a violation of any other provision of this

7 Act.’’

8 (ii) Section 502 of such Act is amend9 ed by adding at the end a new subsection

10 (m) to read as follows:

11 ‘‘(m) In the case of a distribution to a pension plan

12 participant or beneficiary in violation of section 206(e) by

13 a plan fiduciary, the Secretary shall assess a penalty

14 against such fiduciary in an amount equal to the value

15 of the distribution. Such penalty shall not exceed $10,000

16 for each such distribution.’’

17 (10) AMENDMENT TO DEFINITION OF FULL18 FUNDING LIMITATION.—

19 (A) Subparagraph (A) of section 302(c)(7)

20 of such Act is amended by inserting ‘‘(including

21 the expected increase in current liability due to

22 benefits accruing during the plan year)’’ after

23 ‘‘current liability’’ in clause (i).
601

1 (B) Section 302(c)(7) of such Act is

2 amended by adding at the end the following

3 new subparagraph:

4 ‘‘(E) MINIMUM AMOUNT.—

5 ‘‘(i) IN GENERAL.—In no event shall

6 the full-funding limitation determined

7 under subparagraph (A) be less than the

8 excess (if any) of—

9 ‘‘(I) 90 percent of the current li10 ability of the plan (including the ex11 pected increase in current liability due

12 to benefits accruing during the plan

13 year), over

14 ‘‘(II) the value of the plan’s as15 sets determined under paragraph (2).

16 ‘‘(ii) CURRENT LIABILITY; ASSETS.—

17 For purposes of clause (i)—

18 ‘‘(I) the term ‘current liability’

19 has the meaning given such term by

20 subsection (d)(7) (without regard to

21 subparagraph (D) thereof), and

22 ‘‘(II) assets shall not be reduced

23 by any credit balance in the funding

24 standard account.’’
602

1 (C) Subparagraph (B) of section 302(c)(7)

2 of such Act is amended to read as follows:

3 ‘‘(B) CURRENT LIABILITY.—For purposes

4 of subparagraph (D) and subclause (I) of sub5 paragraph (A)(i), the term ‘current liability’

6 has the meaning given such term by subsection

7 (d)(7) (without regard to subparagraphs (C)

8 and (D) thereof) and using the rate of interest

9 used under subsection (b)(5)(B).’’

10 (11) DEFINITION OF CONTRIBUTING SPON11 SOR.—Paragraph (13) of section 4001(a) of such

12 Act (29 U.S.C. 1301(a)(13)) is amended by striking

13 ‘‘means a person—’’ and all that follows and insert14 ing ‘‘means a person described in section

15 302(c)(11)(A) of this Act (without regard to section

16 302(c)(11)(B) of this Act) or section 412(c)(11)(A)

17 of the Internal Revenue Code of 1986 (without re18 gard to section 412(c)(11)(B) of such Code).’’

19 (b) EFFECTIVE DATES.—

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendments made by this section

22 shall apply to plan years beginning after December

23 31, 1994.
603

1 (2) CONTRIBUTING SPONSOR.—The amendment

2 made by subsection (a)(11) shall be effective as if

3 included in the Pension Protection Act.

4 SEC. 762. LIMITATION ON CHANGES IN CURRENT LIABILITY

5 ASSUMPTIONS.

6 (a) IN GENERAL.—Paragraph (5) of section 302(c)

7 of the Employee Retirement Income Security Act of 1974

8 (29 U.S.C. 1082(c)(5)) is amended—

9 (1) by striking ‘‘If the funding method’’ and in10 serting the following:

11 ‘‘(A) IN GENERAL.—If the funding meth12 od’’, and

13 (2) by adding at the end the following new sub14 paragraph:

15 ‘‘(B) APPROVAL REQUIRED FOR CERTAIN

16 CHANGES IN ASSUMPTIONS BY CERTAIN SIN17 GLE-EMPLOYER PLANS SUBJECT TO ADDI18 TIONAL FUNDING REQUIREMENT.—

19 ‘‘(i) IN GENERAL.—No actuarial as20 sumption (other than the assumptions de21 scribed in subsection (d)(7)(C)) used to de22 termine the current liability for a plan to

23 which this subparagraph applies may be

24 changed without the approval of the Sec25 retary of the Treasury.
604

1 ‘‘(ii) PLANS TO WHICH SUBPARA2 GRAPH APPLIES.—This subparagraph shall

3 apply to a plan only if—

4 ‘‘(I) the plan is a defined benefit

5 plan (other than a multiemployer

6 plan) to which title IV applies;

7 ‘‘(II) the aggregate unfunded

8 vested benefits as of the close of the

9 preceding plan year (as determined

10 under section 4006(a)(3)(E)(iii)) of

11 such plan and all other plans main12 tained by the contributing sponsors

13 (as defined in section 4001(a)(13))

14 and members of such sponsors’ con15 trolled groups (as defined in section

16 4001(a)(14)) which are covered by

17 title IV (disregarding plans with no

18 unfunded vested benefits) exceed

19 $50,000,000; and

20 ‘‘(III) the change in assumptions

21 (determined after taking into account

22 any changes in interest rate and mor23 tality table) results in a decrease in

24 the unfunded current liability of the

25 plan for the current plan year that ex-
605

1 ceeds $50,000,000, or that exceeds

2 $5,000,000 and that is 5 percent or

3 more of the current liability of the

4 plan before such change.’’

5 (b) EFFECTIVE DATE.—

6 (1) IN GENERAL.—The amendment made by

7 this section shall apply to changes in assumptions

8 for plan years beginning after October 28, 1993.

9 (2) CERTAIN CHANGES CEASE TO BE EFFEC10 TIVE.—In the case of changes in assumptions for

11 plan years beginning after December 31, 1992, and

12 on or before October 28, 1993, such changes shall

13 cease to be effective for plan years beginning after

14 December 31, 1994, if—

15 (A) such change would have required the

16 approval of the Secretary of the Treasury had

17 such amendment applied to such change, and

18 (B) such change is not so approved.

19 SEC. 763. ANTICIPATION OF BARGAINED BENEFIT IN20 CREASES.

21 (a) IN GENERAL.—Section 302(c) of the Employee

22 Retirement Income Security Act of 1974 (29 U.S.C.

23 1082(c)) is amended by adding at the end the following

24 new paragraph:
606

1 ‘‘(12) ANTICIPATION OF BENEFIT INCREASES

2 EFFECTIVE IN THE FUTURE.—In determining pro3 jected benefits, the funding method of a collectively

4 bargained plan described in section 413(a) of the In5 ternal Revenue Code of 1986 (other than a multiem6 ployer plan) shall anticipate benefit increases sched7 uled to take effect during the term of the collective

8 bargaining agreement applicable to the plan.’’

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

10 this section shall apply to plan years beginning after De11 cember 31, 1994 with respect to collective bargaining

12 agreements in effect on or after January 1, 1995.

13 SEC. 764. MODIFICATION OF QUARTERLY CONTRIBUTION

14 REQUIREMENT.

15 (a) IN GENERAL.—Paragraph (1) of section 302(e)

16 of the Employee Retirement Income Security Act of 1974

17 (29 U.S.C. 1082(e)) is amended—

18 (1) by inserting ‘‘which has a funded current li19 ability percentage (as defined in subsection (d)(8))

20 for the preceding plan year of less than 100 per21 cent’’ before ‘‘fails’’, and

22 (2) by striking ‘‘any plan year’’ and inserting

23 ‘‘the plan year’’.
607

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

2 this section shall apply to plan years beginning after the

3 date of enactment of this Act.

4 Subpart C—Other Funding Provisions

5 SEC. 766. PROHIBITION ON BENEFIT INCREASES WHERE

6 PLAN SPONSOR IS IN BANKRUPTCY.

7 (a) AMENDMENT TO THE EMPLOYEE RETIREMENT

8 INCOME SECURITY ACT OF 1974.—Section 204 of the

9 Employee Retirement Income Security Act of 1974 (29

10 U.S.C. 1054) is amended by redesignating subsection (i)

11 as (j) and inserting after subsection (h) the following new

12 subsection:

13 ‘‘(i)(1) In the case of a plan described in paragraph

14 (3) which is maintained by an employer that is a debtor

15 in a case under title 11, United States Code, or similar

16 Federal or State law, no amendment of the plan which

17 increases the liabilities of the plan by reason of—

18 ‘‘(A) any increase in benefits,

19 ‘‘(B) any change in the accrual of benefits, or

20 ‘‘(C) any change in the rate at which benefits

21 become nonforfeitable under the plan,

22 with respect to employees of the debtor, shall be effective

23 prior to the effective date of such employer’s plan of reor24 ganization.
608

1 ‘‘(2) Paragraph (1) shall not apply to any plan

2 amendment that—

3 ‘‘(A) the Secretary of the Treasury determines

4 to be reasonable and that provides for only de

5 minimis increases in the liabilities of the plan with

6 respect to employees of the debtor,

7 ‘‘(B) only repeals an amendment described in

8 section 302(c)(8),

9 ‘‘(C) is required as a condition of qualification

10 under part I of subchapter D of chapter 1 of the In11 ternal Revenue Code of 1986, or

12 ‘‘(D) was adopted prior to, or pursuant to a col13 lective bargaining agreement entered into prior to,

14 the date on which the employer became a debtor in

15 a case under title 11, United States Code, or similar

16 Federal or State law.

17 ‘‘(3) This subsection shall apply only to plans (other

18 than multiemployer plans) covered under section 4021 of

19 this Act for which the funded current liability percentage

20 (within the meaning of section 302(d)(8) of this Act) is

21 less than 100 percent after taking into account the effect

22 of the amendment.

23 ‘‘(4) For purposes of this subsection, the term ‘em24 ployer’ has the meaning set forth in section 302(c)(11)(A),

25 without regard to section 302(c)(11)(B).’’
609

1 (b) AMENDMENT TO INTERNAL REVENUE CODE OF

2 1986.—Section 401(a), as amended by section 751 of this

3 Act, is further amended by adding at the end the following

4 new paragraph:

5 ‘‘(33) PROHIBITION ON BENEFIT INCREASES

6 WHILE SPONSOR IS IN BANKRUPTCY.—

7 ‘‘(A) IN GENERAL.—A trust which is part

8 of a plan to which this paragraph applies shall

9 not constitute a qualified trust under this sec10 tion if an amendment to such plan is adopted

11 while the employer is a debtor in a case under

12 title 11, United States Code, or similar Federal

13 or State law, if such amendment increases li14 abilities of the plan by reason of—

15 ‘‘(i) any increase in benefits,

16 ‘‘(ii) any change in the accrual of ben17 efits, or

18 ‘‘(iii) any change in the rate at which

19 benefits become nonforfeitable under the

20 plan,

21 with respect to employees of the debtor, and

22 such amendment is effective prior to the effec23 tive date of such employer’s plan of reorganiza24 tion.
610

1 ‘‘(B) EXCEPTIONS.—This paragraph shall

2 not apply to any plan amendment if—

3 ‘‘(i) the plan, were such amendment

4 to take effect, would have a funded current

5 liability percentage (as defined in section

6 412(l)(8)) of 100 percent or more,

7 ‘‘(ii) the Secretary determines that

8 such amendment is reasonable and pro9 vides for only de minimis increases in the

10 liabilities of the plan with respect to em11 ployees of the debtor,

12 ‘‘(iii) such amendment only repeals an

13 amendment described in subsection

14 412(c)(8), or

15 ‘‘(iv) such amendment is required as a

16 condition of qualification under this part.

17 ‘‘(C) PLANS TO WHICH THIS PARAGRAPH

18 APPLIES.—This paragraph shall apply only to

19 plans (other than multiemployer plans) covered

20 under section 4021 of the Employee Retirement

21 Income Security Act of 1974.

22 ‘‘(D) EMPLOYER.—For purposes of this

23 paragraph, the term ‘employer’ means the em24 ployer referred to in section 412(c)(11) (with25 out regard to subparagraph (B) thereof).’’
611

1 (c) EFFECTIVE DATE OF PLAN AMENDMENT.—Sec2 tion 4022 of the Employee Retirement Income Security

3 Act of 1974 (29 U.S.C. 1322) is amended by inserting

4 at the end the following new subsection:

5 ‘‘(f) For purposes of this section, the effective date

6 of a plan amendment described in section 204(i)(1) shall

7 be the effective date of the plan of reorganization of the

8 employer described in section 204(i)(1) or, if later, the ef9 fective date stated in such amendment.’’

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

11 this section shall apply to plan amendments adopted on

12 or after the date of enactment of this Act.

13 SEC. 767. SINGLE SUM DISTRIBUTIONS.

14 (a) AMENDMENTS TO INTERNAL REVENUE CODE OF

15 1986 RELATING TO MINIMUM BENEFITS.—

16 (1) DETERMINATION OF PRESENT VALUE FOR

17 PURPOSES OF RESTRICTIONS ON MANDATORY DIS18 TRIBUTIONS.—Subparagraph (B) of section

19 411(a)(11) is amended to read as follows:

20 ‘‘(B) DETERMINATION OF PRESENT

21 VALUE.—For purposes of subparagraph (A),

22 the present value shall be calculated in accord23 ance with section 417(e)(3).’’

24 (2) DETERMINATION OF PRESENT VALUE FOR

25 PURPOSES OF RESTRICTIONS ON CASH-OUTS.—Para-
612

1 graph (3) of section 417(e) is amended to read as

2 follows:

3 ‘‘(3) DETERMINATION OF PRESENT VALUE.—

4 ‘‘(A) IN GENERAL.—

5 ‘‘(i) PRESENT VALUE.—Except as

6 provided in subparagraph (B), for pur7 poses of paragraphs (1) and (2), the

8 present value shall not be less than the

9 present value calculated by using the appli10 cable mortality table and the applicable in11 terest rate.

12 ‘‘(ii) DEFINITIONS.—For purposes of

13 clause (i)—

14 ‘‘(I) APPLICABLE MORTALITY

15 TABLE.—The term ‘applicable mortal16 ity table’ means the table prescribed

17 by the Secretary. Such table shall be

18 based on the prevailing commis19 sioners’ standard table (described in

20 section 807(d)(5)(A)) used to deter21 mine reserves for group annuity con22 tracts issued on the date as of which

23 present value is being determined

24 (without regard to any other subpara25 graph of section 807(d)(5)).
613

1 ‘‘(II) APPLICABLE INTEREST

2 RATE.—The term ‘applicable interest

3 rate’ means the annual rate of inter4 est on 30-year Treasury securities for

5 the month before the date of distribu6 tion or such other time as the Sec7 retary may by regulations prescribe.

8 ‘‘(B) EXCEPTION.—In the case of a dis9 tribution from a plan that was adopted and in

10 effect before the date of the enactment of the

11 Retirement Protection Act of 1994, the present

12 value of any distribution made before the ear13 lier of—

14 ‘‘(i) the later of the date a plan

15 amendment applying subparagraph (A) is

16 adopted or made effective, or

17 ‘‘(ii) the first day of the first plan

18 year beginning after December 31, 1999,

19 shall be calculated, for purposes of paragraphs

20 (1) and (2), using the interest rate determined

21 under the regulations of the Pension Benefit

22 Guaranty Corporation for determining the

23 present value of a lump sum distribution on

24 plan termination that were in effect on Septem25 ber 1, 1993, and using the provisions of the
614

1 plan as in effect on the day before such date of

2 enactment; but only if such provisions of the

3 plan met the requirements of section 417(e)(3)

4 as in effect on the day before such date of en5 actment.’’

6 (b) AMENDMENTS TO INTERNAL REVENUE CODE OF

7 1986 RELATING TO MAXIMUM BENEFITS.—Subpara8 graph (E) of section 415(b)(2) is amended—

9 (1) by redesignating clauses (ii) and (iii) as

10 clauses (iii) and (iv), respectively,

11 (2) by striking clause (i) and inserting the fol12 lowing new clauses:

13 ‘‘(i) Except as provided in clause (ii),

14 for purposes of adjusting any benefit or

15 limitation under subparagraph (B) or (C),

16 the interest rate assumption shall not be

17 less than the greater of 5 percent or the

18 rate specified in the plan.

19 ‘‘(ii) For purposes of adjusting the

20 benefit or limitation of any form of benefit

21 subject to section 417(e)(3), the applicable

22 interest rate (as defined in section

23 417(e)(3)) shall be substituted for ‘5 per24 cent’ in clause (i).’’, and
615

1 (3) by adding at the end the following new

2 clause:

3 ‘‘(v) For purposes of adjusting any

4 benefit or limitation under subparagraph

5 (B), (C), or (D), the mortality table used

6 shall be the table prescribed by the Sec7 retary. Such table shall be based on the

8 prevailing commissioners’ standard table

9 (described in section 807(d)(5)(A)) used to

10 determine reserves for group annuity con11 tracts issued on the date the adjustment is

12 being made (without regard to any other

13 subparagraph of section 807(d)(5)).’’

14 (c) AMENDMENTS TO EMPLOYEE RETIREMENT IN15 COME SECURITY ACT OF 1974.—

16 (1) DETERMINATION OF PRESENT VALUE FOR

17 PURPOSES OF RESTRICTIONS ON MANDATORY DIS18 TRIBUTIONS.—Section 203(e)(2) of the Employee

19 Retirement Income Security Act of 1974 (29 U.S.C.

20 1053(e)(2)) is amended to read as follows:

21 ‘‘(2) For purposes of paragraph (1), the present value

22 shall be calculated in accordance with section 205(g)(3).’’

23 (2) DETERMINATION OF PRESENT VALUE FOR

24 PURPOSES OF RESTRICTIONS ON CASH-OUTS.—Sec-
616

1 tion 205(g)(3) of such Act (29 U.S.C. 1055(g)(3))

2 is amended to read as follows:

3 ‘‘(3) DETERMINATION OF PRESENT VALUE.—

4 ‘‘(A) IN GENERAL.—

5 ‘‘(i) PRESENT VALUE.—Except as

6 provided in subparagraph (B), for pur7 poses of paragraphs (1) and (2), the

8 present value shall not be less than the

9 present value calculated by using the appli10 cable mortality table and the applicable in11 terest rate.

12 ‘‘(ii) DEFINITIONS.—For purposes of

13 clause (i)—

14 ‘‘(I) APPLICABLE MORTALITY

15 TABLE.—The term ‘applicable mortal16 ity table’ means the table prescribed

17 by the Secretary of the Treasury.

18 Such table shall be based on the pre19 vailing commissioners’ standard table

20 (described in section 807(d)(5)(A) of

21 the Internal Revenue Code of 1986)

22 used to determine reserves for group

23 annuity contracts issued on the date

24 as of which present value is being de25 termined (without regard to any other
617

1 subparagraph of section 807(d)(5) of

2 such Code).

3 ‘‘(II) APPLICABLE INTEREST

4 RATE.—The term ‘applicable interest

5 rate’ means the annual rate of inter6 est on 30-year Treasury securities for

7 the month before the date of distribu8 tion or such other time as the Sec9 retary of the Treasury may by regula10 tions prescribe.

11 ‘‘(B) EXCEPTION.—In the case of a dis12 tribution from a plan that was adopted and in

13 effect prior to the date of the enactment of the

14 Retirement Protection Act of 1994, the present

15 value of any distribution made before the ear16 lier of—

17 ‘‘(i) the later of when a plan amend18 ment applying subparagraph (A) is adopt19 ed or made effective, or

20 ‘‘(ii) the first day of the first plan

21 year beginning after December 31, 1999,

22 shall be calculated, for purposes of paragraphs

23 (1) and (2), using the interest rate determined

24 under the regulations of the Pension Benefit

25 Guaranty Corporation for determining the
618

1 present value of a lump sum distribution on

2 plan termination that were in effect on Septem3 ber 1, 1993, and using the provisions of the

4 plan as in effect on the day before such date of

5 enactment; but only if such provisions of the

6 plan met the requirements of section 205(g)(3)

7 as in effect on the day before such date of en8 actment.’’

9 (d) EFFECTIVE DATE.—

10 (1) IN GENERAL.—The amendments made by

11 this section shall apply to plan years and limitation

12 years beginning after December 31, 1994; except

13 that an employer may elect to treat the amendments

14 made by this section as being effective on or after

15 the date of the enactment of this Act.

16 (2) NO REDUCTION IN ACCRUED BENEFITS.—A

17 participant’s accrued benefit shall not be considered

18 to be reduced in violation of section 411(d)(6) of the

19 Internal Revenue Code of 1986 or section 204(g) of

20 the Employee Retirement Income Security Act of

21 1974 merely because (A) the benefit is determined

22 in accordance with section 417(e)(3)(A) of such

23 Code, as amended by this Act, or section 205(g)(3)

24 of the Employee Retirement Income Security Act of

25 1974, as amended by this Act, or (B) the plan ap-
619

1 plies section 415(b)(2)(E) of such Code, as amended

2 by this Act.

3 (3) SECTION 415.—

4 (A) NO REDUCTION REQUIRED.—An ac5 crued benefit shall not be required to be re6 duced below the accrued benefit as of the last

7 day of the last plan year beginning before Jan8 uary 1, 1995, merely because of the amend9 ments made by subsection (b).

10 (B) TIMING OF PLAN AMENDMENT.—A

11 plan that operates in accordance with the

12 amendments made by subsection (b) shall not

13 be treated as failing to satisfy section 401(a) of

14 the Internal Revenue Code of 1986 or as not

15 being operated in accordance with the provi16 sions of the plan until such date as the Sec17 retary of the Treasury provides merely because

18 the plan has not been amended to include the

19 amendments made by subsection (b).

20 SEC. 768. ADJUSTMENTS TO LIEN FOR MISSED MINIMUM

21 FUNDING CONTRIBUTIONS.

22 (a) AMENDMENTS TO THE INTERNAL REVENUE

23 CODE OF 1986.—

24 (1) CLARIFICATION OF APPLICABILITY OF PRO25 VISION.—Paragraph (2) of section 412(n) is amend-
620

1 ed by adding at the end the following new sentence:

2 ‘‘This subsection shall not apply to any plan to

3 which section 4021 of the Employee Retirement In4 come Security Act of 1974 does not apply (as such

5 section is in effect on the date of the enactment of

6 the Retirement Protection Act of 1994).’’.

7 (2) REPEAL OF $1,000,000 OFFSET.—Paragraph

8 (3) of section 412(n) is amended to read as follows:

9 ‘‘(3) AMOUNT OF LIEN.—For purposes of para10 graph (1), the amount of the lien shall be equal to

11 the aggregate unpaid balance of required install12 ments and other payments required under this sec13 tion (including interest)—

14 ‘‘(A) for plan years beginning after 1987,

15 and

16 ‘‘(B) for which payment has not been

17 made before the due date.’’

18 (3) REPEAL OF 60-DAY DELAY.—Section

19 412(n)(4)(B) is amended by striking ‘‘60th day fol20 lowing the’’.

21 (b) AMENDMENTS TO THE EMPLOYEE RETIREMENT

22 INCOME SECURITY ACT OF 1974.—

23 (1) CLARIFICATION OF APPLICABILITY OF PRO24 VISION.—Section 302(f)(1) of the Employee Retire25 ment Income Security Act of 1974 (29 U.S.C.
621

1 1082(f)(1)) is amended by striking ‘‘to which this

2 section applies’’ and inserting ‘‘covered under sec3 tion 4021 of this Act’’.

4 (2) REPEAL OF $1,000,000 OFFSET.—Paragraph

5 (3) of section 302(f) of such Act is amended to read

6 as follows:

7 ‘‘(3) AMOUNT OF LIEN.—For purposes of para8 graph (1), the amount of the lien shall be equal to

9 the aggregate unpaid balance of required install10 ments and other payments required under this sec11 tion (including interest)—

12 ‘‘(A) for plan years beginning after 1987,

13 and

14 ‘‘(B) for which payment has not been

15 made before the due date.’’

16 (3) REPEAL OF 60-DAY DELAY.—Section

17 302(f)(4)(B) of such Act is amended by striking

18 ‘‘60th day following the’’.

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

20 this section shall be effective for installments and other

21 payments required under section 412 of the Internal Reve22 nue Code of 1986 or under part 3 of subtitle B of the

23 Employee Retirement Income Security Act of 1974 that

24 become due on or after the date of enactment.
622

1 SEC. 769. SPECIAL FUNDING RULES FOR CERTAIN PLANS.

2 (a) FUNDING RULES NOT TO APPLY TO CERTAIN

3 PLANS.—Any changes made by this Act to section 412

4 of the Internal Revenue Code of 1986 or to part 3 of sub5 title B of title I of the Employee Retirement Income Secu6 rity Act of 1974 shall not apply to—

7 (1) a plan which is, on the date of enactment

8 of this Act, subject to a restoration payment sched9 ule order issued by the Pension Benefit Guaranty

10 Corporation that meets the requirements of section

11 1.412(c)(1)–3 of the Treasury Regulations, or

12 (2) a plan established by an affected air carrier

13 (as defined under section 4001(a)(14)(C)(ii)(I) of

14 such Act) and assumed by a new plan sponsor pur15 suant to the terms of a written agreement with the

16 Pension Benefit Guaranty Corporation dated Janu17 ary 5, 1993, and approved by the United States

18 Bankruptcy Court for the District of Delaware on

19 December 30, 1992.

20 (b) CHANGE IN ACTUARIAL METHOD.—Any amorti21 zation installments for bases established under section

22 412(b) of the Internal Revenue Code of 1986 and section

23 302(b) of the Employee Retirement Income Security Act

24 of 1974 for plan years beginning after December 31,

25 1987, and before January 1, 1993, by reason of

26 nonelective changes under the frozen entry age actuarial
623

1 cost method shall not be included in the calculation of off2 sets under section 412(l)(1)(A)(ii) of such Code and sec3 tion 302(d)(1)(A)(ii) of such Act for the 1st 5 plan years

4 beginning after December 31, 1994.

5 PART II—AMENDMENTS RELATED TO TITLE IV

6 OF THE EMPLOYEE RETIREMENT INCOME

7 SECURITY ACT OF 1974

8 SEC. 771. REPORTABLE EVENTS.

9 (a) RESPONSIBILITY FOR REPORTABLE EVENTS RE10 PORTING.—Section 4043(a) of the Employee Retirement

11 Income Security Act of 1974 (29 U.S.C. 1343(a)) is

12 amended—

13 (1) in the first sentence, by inserting ‘‘or the

14 contributing sponsor’’ before ‘‘knows or has reason

15 to know’’;

16 (2) in the first sentence, by inserting ‘‘, unless

17 a notice otherwise required under this subsection has

18 already been provided with respect to such event’’

19 before the period at the end; and

20 (3) by striking the last sentence.

21 (b) NOTIFICATION THAT EVENT IS ABOUT TO

22 OCCUR.—Section 4043 of such Act is amended by redesig23 nating subsections (b), (c), and (d) as (c), (d), and (e),

24 respectively, and by inserting after subsection (a) the fol25 lowing new subsection:
624

1 ‘‘(b)(1) The requirements of this subsection shall be

2 applicable to a contributing sponsor if, as of the close of

3 the preceding plan year—

4 ‘‘(A) the aggregate unfunded vested benefits (as

5 determined under section 4006(a)(3)(E)(iii)) of

6 plans subject to this title which are maintained by

7 such sponsor and members of such sponsor’s con8 trolled groups (disregarding plans with no unfunded

9 vested benefits) exceed $50,000,000, and

10 ‘‘(B) the funded vested benefit percentage for

11 such plans is less than 90 percent.

12 For purposes of subparagraph (B), the funded vested ben13 efit percentage means the percentage which the aggregate

14 value of the assets of such plans bears to the aggregate

15 vested benefits of such plans (determined in accordance

16 with section 4006(a)(3)(E)(iii)).

17 ‘‘(2) This subsection shall not apply to an event if

18 the contributing sponsor, or the member of the contribut19 ing sponsor’s controlled group to which the event relates,

20 is—

21 ‘‘(A) a person subject to the reporting require22 ments of section 13 or 15(d) of the Securities Ex23 change Act of 1934, or
625

1 ‘‘(B) a subsidiary (as defined for purposes of

2 such Act) of a person subject to such reporting re3 quirements.

4 ‘‘(3) No later than 30 days prior to the effective date

5 of an event described in paragraph (9), (10), (11), (12),

6 or (13) of subsection (c), a contributing sponsor to which

7 the requirements of this subsection apply shall notify the

8 corporation that the event is about to occur.

9 ‘‘(4) The corporation may waive the requirement of

10 this subsection with respect to any or all reportable events

11 with respect to any contributing sponsor.’’

12 (c) NEW REPORTABLE EVENTS.—Subsection (c) of

13 section 4043 of such Act (as redesignated by subsection

14 (b)) is amended—

15 (1) by striking the ‘‘or’’ at the end of para16 graph (8);

17 (2) by striking paragraph (9); and

18 (3) by inserting after paragraph (8) the follow19 ing new paragraphs:

20 ‘‘(9) when, as a result of an event, a person

21 ceases to be a member of the controlled group;

22 ‘‘(10) when a contributing sponsor or a member

23 of a contributing sponsor’s controlled group

24 liquidates in a case under title 11, United States
626

1 Code, or under any similar Federal law or law of a

2 State or political subdivision of a State;

3 ‘‘(11) when a contributing sponsor or a member

4 of a contributing sponsor’s controlled group declares

5 an extraordinary dividend (as defined in section

6 1059(c) of the Internal Revenue Code of 1986) or

7 redeems, in any 12-month period, an aggregate of

8 10 percent or more of the total combined voting

9 power of all classes of stock entitled to vote, or an

10 aggregate of 10 percent of more of the total value

11 of shares of all classes of stock, of a contributing

12 sponsor and all members of its controlled group;

13 ‘‘(12) when, in any 12-month period, an aggre14 gate of 3 percent or more of the benefit liabilities of

15 a plan covered by this title and maintained by a con16 tributing sponsor or a member of its controlled

17 group are transferred to a person that is not a mem18 ber of the controlled group or to a plan or plans

19 maintained by a person or persons that are not such

20 a contributing sponsor or a member of its controlled

21 group; or

22 ‘‘(13) when any other event occurs that may be

23 indicative of a need to terminate the plan and that

24 is prescribed by the corporation in regulations.’’
627

1 (d) DISCLOSURE EXEMPTION.—Section 4043 of such

2 Act is amended by adding at the end the following new

3 subsection:

4 ‘‘(f) Any information or documentary material sub5 mitted to the corporation pursuant to this section shall

6 be exempt from disclosure under section 552 of title 5,

7 United States Code, and no such information or documen8 tary material may be made public, except as may be rel9 evant to any administrative or judicial action or proceed10 ing. Nothing in this section is intended to prevent disclo11 sure to either body of Congress or to any duly authorized

12 committee or subcommittee of the Congress.’’

13 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

14 (1) Subsection (a) of section 4043 of such Act,

15 and subsections (d) and (e) of such section 4043 (as

16 redesignated by subsection (b)), are each amended

17 by striking ‘‘subsection (b)’’ each place it appears

18 and inserting ‘‘subsection (c)’’.

19 (2) Section 4042(a)(3) of such Act is amended

20 by striking ‘‘4043(b)(7)’’ and inserting

21 ‘‘4043(c)(7)’’.

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

23 this section shall be effective for events occurring 60 days

24 or more after the date of enactment of this Act.
628

1 SEC. 772. CERTAIN INFORMATION REQUIRED TO BE FUR2 NISHED TO PBGC.

3 (a) GENERAL RULE.—Subtitle A of title IV of the

4 Employee Retirement Income Security Act of 1974 (29

5 U.S.C. 1301 et seq.) is amended by adding at the end

6 the following new section:

7 ‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMA8 TION.

9 ‘‘(a) INFORMATION REQUIRED.—Each person de10 scribed in subsection (b) shall provide the corporation an11 nually, on or before a date specified by the corporation

12 in regulations, with—

13 ‘‘(1) such records, documents, or other informa14 tion that the corporation specifies in regulations as

15 necessary to determine the liabilities and assets of

16 plans covered by this title; and

17 ‘‘(2) copies of such person’s audited (or, if un18 available, unaudited) financial statements, and such

19 other financial information as the corporation may

20 prescribe in regulations.

21 ‘‘(b) PERSONS REQUIRED TO PROVIDE INFORMA22 TION.—The persons covered by subsection (a) are each

23 contributing sponsor, and each member of a contributing

24 sponsor’s controlled group, of a single-employer plan cov25 ered by this title, if—
629

1 ‘‘(1) the aggregate unfunded vested benefits at

2 the end of the preceding plan year (as determined

3 under section 4006(a)(3)(E)(iii)) of plans main4 tained by the contributing sponsor and the members

5 of its controlled group exceed $50,000,000 (dis6 regarding plans with no unfunded vested benefits);

7 ‘‘(2) the conditions for imposition of a lien de8 scribed in section 302(f)(1)(A) and (B) of this Act

9 or section 412(n)(1)(A) and (B) of the Internal Rev10 enue Code of 1986 have been met with respect to

11 any plan maintained by the contributing sponsor or

12 any member of its controlled group; or

13 ‘‘(3) minimum funding waivers in excess of

14 $1,000,000 have been granted with respect to any

15 plan maintained by the contributing sponsor or any

16 member of its controlled group, and any portion

17 thereof is still outstanding.

18 ‘‘(c) INFORMATION EXEMPT FROM DISCLOSURE RE19 QUIREMENTS.—Any information or documentary material

20 submitted to the corporation pursuant to this section shall

21 be exempt from disclosure under section 552 of title 5,

22 United States Code, and no such information or documen23 tary material may be made public, except as may be rel24 evant to any administrative or judicial action or proceed25 ing. Nothing in this section is intended to prevent disclo-
630

1 sure to either body of Congress or to any duly authorized

2 committee or subcommittee of the Congress.’’

3 (b) CLERICAL AMENDMENT.—The table of contents

4 contained in section 1 of such Act is amended by inserting

5 after the item relating to section 4009 the following new

6 item:

‘‘Sec. 4010. Authority to require certain information.’’

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

8 this section shall be effective on the date of enactment of

9 this Act.

10 SEC. 773. ENFORCEMENT OF MINIMUM FUNDING REQUIRE11 MENTS.

12 (a) IN GENERAL.—Paragraph (1) of section 4003(e)

13 of the Employee Retirement Income Security Act of 1974

14 (29 U.S.C. 1303(e)(1)) is amended—

15 (1) by inserting ‘‘(A)’’ after ‘‘enforce’’; and

16 (2) by striking the period after ‘‘title’’ and in17 serting ‘‘, and (B) in the case of a plan which is cov18 ered under this title (other than a multiemployer

19 plan) and for which the conditions for imposition of

20 a lien described in section 302(f)(1)(A) and (B) of

21 this Act or section 412(n)(1)(A) and (B) of the In22 ternal Revenue Code of 1986 have been met, section

23 302 of this Act and section 412 of such Code.’’

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

25 this section shall be effective for installments and other
631

1 payments required under section 302 of the Employee Re2 tirement Income Security Act of 1974 or section 412 of

3 the Internal Revenue Code of 1986 that become due on

4 or after the date of the enactment of this Act.

5 SEC. 774. COMPUTATION OF ADDITIONAL PBGC PREMIUM.

6 (a) PHASE-OUT OF VARIABLE RATE PREMIUM

7 CAP.—

8 (1) IN GENERAL.—Subparagraph (E) of section

9 4006(a)(3) of the Employee Retirement Income Se10 curity Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is

11 amended by striking clause (iv), and by redesignat12 ing clause (v) as clause (iv).

13 (2) EFFECTIVE DATE.—

14 (A) IN GENERAL.—The amendments made

15 by this subsection shall be effective for plan

16 years beginning on or after July 1, 1994.

17 (B) TRANSITION RULE.—In the case of

18 plan years beginning on or after July 1, 1994,

19 and before July 1, 1996, the additional pre20 mium payable with respect to any participant

21 by reason of the amendments made by this sec22 tion shall not exceed the sum of—

23 (i) $53, and

24 (ii) the product derived by multiply25 ing—
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1 (I) the excess (if any) of the

2 amount determined under clause (i) of

3 section 4006(a)(3)(E) of the Em4 ployee Retirement Income Security

5 Act of 1974, over $53, by

6 (II) the applicable percentage.

7 For purposes of this subparagraph, the applica8 ble percentage shall be the percentage specified

9 in the following table:

For the plan year beginning: The applicable peron or after but before centage is:

July 1, 1994 ........................ July 1, 1995 ...................... 20 percent

July 1, 1995 ........................ July 1, 1996 ...................... 60 percent

10 (b) INTEREST RATE AND ASSET VALUATION.—

11 (1) INTEREST RATE.—Subclause (II) of section

12 4006(a)(3)(E)(iii) of the Employee Retirement In13 come Security Act of 1974 is amended—

14 (A) by striking ‘‘80 percent’’ and inserting

15 ‘‘the applicable percentage’’, and

16 (B) by adding at the end the following new

17 sentence: ‘‘For purposes of this subclause, the

18 applicable percentage is 80 percent for plan

19 years beginning before July 1, 1997, 85 percent

20 for plan years beginning after June 30, 1997,

21 and before the 1st plan year to which the first

22 tables prescribed under section
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1 302(d)(7)(C)(ii)(II) apply, and 100 percent for

2 such 1st plan year and subsequent plan years.’’

3 (2) ASSET VALUATION.—Clause (iii) of section

4 4006(a)(3)(E) of such Act is amended—

5 (A) by inserting ‘‘or (III)’’ after

6 ‘‘subclause (II)’’ in subclause (I), and

7 (B) by adding at the end the following new

8 subclause:

9 ‘‘(III) In the case of any plan

10 year for which the applicable percent11 age under subclause (II) is 100 per12 cent, the value of the plan’s assets

13 used in determining unfunded current

14 liability under subclause (I) shall be

15 their fair market value.’’

16 (3) EFFECTIVE DATE.—The amendments made

17 by this subsection shall apply to plan years begin18 ning after the date of the enactment of this Act.

19 (c) TRANSITION RULE FOR CERTAIN REGULATED

20 PUBLIC UTILITIES.—In the case of a regulated public util21 ity described in section 7701(a)(33)(A)(i) of the Internal

22 Revenue Code of 1986, the amendments made by this sec23 tion shall not apply to plan years beginning before the ear24 lier of—

25 (1) January 1, 1998, or
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1 (2) the date the regulated public utility begins

2 to collect from utility customers rates that reflect

3 the costs incurred or projected to be incurred for ad4 ditional premiums under section 4006(a)(3)(E) of

5 the Employee Retirement Income Security Act of

6 1974 pursuant to final and nonappealable deter7 minations by all public utility commissions (or other

8 authorities having jurisdiction over the rates and

9 terms of service by the regulated public utility) that

10 the costs are just and reasonable and recoverable

11 from customers of the regulated public utility.

12 SEC. 775. DISCLOSURE TO PARTICIPANTS.

13 (a) PARTICIPANT NOTICE REQUIREMENT.—Subtitle

14 A of title IV of the Employee Retirement Income Security

15 Act of 1974 (as amended by section 772 of this Act) is

16 further amended by adding at the end the following new

17 section:

18 ‘‘SEC. 4011. NOTICE TO PARTICIPANTS.

19 ‘‘(a) IN GENERAL.—The plan administrator of a plan

20 subject to the additional premium under section

21 4006(a)(3)(E) shall provide, in a form and manner and

22 at such time as prescribed in regulations of the corpora23 tion, notice to plan participants and beneficiaries of the

24 plan’s funding status and the limits on the corporation’s

25 guaranty should the plan terminate while underfunded.
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1 Such notice shall be written in a manner so as to be under2 stood by the average plan participant.

3 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to

4 any plan to which section 302(d) does not apply for the

5 plan year by reason of paragraph (9) thereof.’’

6 (b) CLERICAL AMENDMENT.—The table of contents

7 contained in section 1 of such Act is amended by inserting

8 after the item relating to section 4010 (as added by sec9 tion 772 of this Act) the following new item:

‘‘Sec. 4011. Notice to participants.’’

10 (c) EFFECTIVE DATE.—The amendment made by

11 this section shall be effective for plan years beginning after

12 the date of enactment of this Act.

13 SEC. 776. MISSING PARTICIPANTS.

14 (a) IN GENERAL.—Subtitle C of title IV of the Em15 ployee Retirement Income Security Act of 1974 (29

16 U.S.C. 1341 et seq.) is amended by adding at the end

17 the following new section:

18 ‘‘SEC. 4050. MISSING PARTICIPANTS.

19 ‘‘(a) GENERAL RULE.—

20 ‘‘(1) PAYMENT TO THE CORPORATION.—A plan

21 administrator satisfies section 4041(b)(3)(A) in the

22 case of a missing participant only if the plan admin23 istrator—

24 ‘‘(A) transfers the participant’s designated

25 benefit to the corporation or purchases an irrev-
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1 ocable commitment from an insurer in accord2 ance with clause (i) of section 4041(b)(3)(A),

3 and

4 ‘‘(B) provides the corporation such infor5 mation and certifications with respect to such

6 designated benefits or irrevocable commitments

7 as the corporation shall specify.

8 ‘‘(2) TREATMENT OF TRANSFERRED ASSETS.—

9 A transfer to the corporation under this section shall

10 be treated as a transfer of assets from a terminated

11 plan to the corporation as trustee, and shall be held

12 with assets of terminated plans for which the cor13 poration is trustee under section 4042, subject to

14 the rules set forth in that section.

15 ‘‘(3) PAYMENT BY THE CORPORATION.—After a

16 missing participant whose designated benefit was

17 transferred to the corporation is located—

18 ‘‘(A) in any case in which the plan could

19 have distributed the benefit of the missing par20 ticipant in a single sum without participant or

21 spousal consent under section 205(g), the cor22 poration shall pay the participant or beneficiary

23 a single sum benefit equal to the designated

24 benefit paid the corporation plus interest as

25 specified by the corporation, and
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1 ‘‘(B) in any other case, the corporation

2 shall pay a benefit based on the designated ben3 efit and the assumptions prescribed by the cor4 poration at the time that the corporation re5 ceived the designated benefit.

6 The corporation shall make payments under sub7 paragraph (B) available in the same forms and at

8 the same times as a guaranteed benefit under sec9 tion 4022 would be available to be paid, except that

10 the corporation may make a benefit available in the

11 form of a single sum if the plan provided a single

12 sum benefit (other than a single sum described in

13 subsection (b)(2)(A)).

14 ‘‘(b) DEFINITIONS.—For purposes of this section—

15 ‘‘(1) MISSING PARTICIPANT.—The term ‘miss16 ing participant’ means a participant or beneficiary

17 under a terminating plan whom the plan adminis18 trator cannot locate after a diligent search.

19 ‘‘(2) DESIGNATED BENEFIT.—The term ‘des20 ignated benefit’ means the single sum benefit the

21 participant would receive—

22 ‘‘(A) under the plan’s assumptions, in the

23 case of a distribution that can be made without

24 participant or spousal consent under section

25 205(g);
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1 ‘‘(B) under the assumptions of the cor2 poration in effect on the date that the des3 ignated benefit is transferred to the corpora4 tion, in the case of a plan that does not pay any

5 single sums other than those described in sub6 paragraph (A); or

7 ‘‘(C) under the assumptions of the cor8 poration or of the plan, whichever provides the

9 higher single sum, in the case of a plan that

10 pays a single sum other than those described in

11 subparagraph (A).

12 ‘‘(c) REGULATORY AUTHORITY.—The corporation

13 shall prescribe such regulations as are necessary to carry

14 out the purposes of this section, including rules relating

15 to what will be considered a diligent search, the amount

16 payable to the corporation, and the amount to be paid by

17 the corporation.’’

18 (b) CONFORMING TITLE IV AMENDMENTS.—

19 (1) AMENDMENT TO SECTION 4003.—Section

20 4003(a) of such Act (29 U.S.C. 1303(a)) is amend21 ed in the second sentence by inserting before the pe22 riod the following: ‘‘and whether section 4050(a) has

23 been satisfied’’.

24 (2) AMENDMENT TO SECTION 4005.—Section

25 4005(b)(2)(A) of such Act (29 U.S.C.
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1 1305(b)(2)(A)) is amended by inserting ‘‘or benefits

2 payable under section 4050’’ after ‘‘section 4022A’’.

3 (3) AMENDMENT TO SECTION 4041.—Section

4 4041(b)(3)(A)(ii) of such Act (29 U.S.C.

5 1341(b)(3)(A)(ii)) is amended by adding at the end

6 the following new sentence: ‘‘A transfer of assets to

7 the corporation in accordance with section 4050 on

8 behalf of a missing participant shall satisfy this sub9 paragraph with respect to such participant.’’

10 (c) CONFORMING ERISA AMENDMENTS.—

11 (1) The table of contents contained in section

12 1 of the Employee Retirement Income Security Act

13 of 1974 is amended by inserting after the item relat14 ed to section 4049 the following new item:

‘‘Sec. 4050. Missing participants.’’

15 (2) Section 206 of such Act (29 U.S.C. 1056)

16 is amended by adding at the end the following new

17 subsection:

18 ‘‘(f) MISSING PARTICIPANTS IN TERMINATED

19 PLANS.—In the case of a plan covered by title IV, the

20 plan shall provide that, upon termination of the plan, ben21 efits of missing participants shall be treated in accordance

22 with section 4050.’’

23 (d) CONFORMING INTERNAL REVENUE CODE

24 AMENDMENTS.—Section 401(a), as amended by section
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1 766 of this Act, is further amended by inserting after

2 paragraph (33) the following new paragraph:

3 ‘‘(34) BENEFITS OF MISSING PARTICIPANTS ON

4 PLAN TERMINATION.—In the case of a plan covered

5 by title IV of the Employee Retirement Income Se6 curity Act of 1974, a trust forming part of such

7 plan shall not be treated as failing to constitute a

8 qualified trust under this section merely because the

9 pension plan of which such trust is a part, upon its

10 termination, transfers benefits of missing partici11 pants to the Pension Benefit Guaranty Corporation

12 in accordance with section 4050 of such Act.’’

13 (e) EFFECTIVE DATE.—The provisions of this section

14 shall be effective with respect to distributions that occur

15 in plan years commencing after final regulations imple16 menting these provisions are prescribed by the Pension

17 Benefit Guaranty Corporation.

18 SEC. 777. MODIFICATION OF MAXIMUM GUARANTEE FOR

19 DISABILITY BENEFITS.

20 (a) IN GENERAL.—Section 4022(b)(3) of the Em21 ployee Retirement Income Security Act of 1974 (29

22 U.S.C. 1322(b)(3)) is amended by adding at the end the

23 following new sentences: ‘‘The maximum guaranteed

24 monthly benefit shall not be reduced solely on account of

25 the age of a participant in the case of a benefit payable
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1 by reason of disability that occurred on or before the ter2 mination date, if the participant demonstrates to the satis3 faction of the corporation that the Social Security Admin4 istration has determined that the participant satisfies the

5 definition of disability under title II or XVI of the Social

6 Security Act, and the regulations thereunder. If a benefit

7 payable by reason of disability is converted to an early

8 or normal retirement benefit for reasons other than a

9 change in the health of the participant, such early or nor10 mal retirement benefit shall be treated as a continuation

11 of the benefit payable by reason of disability and this sub12 paragraph shall continue to apply.’’

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

14 this section shall be effective for plan terminations under

15 section 4041(c) of the Employee Retirement Income Secu16 rity Act of 1974 with respect to which notices of intent

17 to terminate are provided under section 4041(a)(2) of

18 such Act, or under section 4042 of such Act with respect

19 to which proceedings are instituted by the corporation, on

20 or after the date of enactment of this Act.

21 SEC. 778. PROCEDURES TO FACILITATE DISTRIBUTION OF

22 TERMINATION BENEFITS.

23 (a) REMEDIES FOR NONCOMPLIANCE WITH RE24 QUIREMENTS FOR STANDARD TERMINATION.—
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1 (1) NOTICE OF NONCOMPLIANCE.—Section

2 4041(b)(2)(C)(i) of the Employee Retirement In3 come Security Act of 1974 (29 U.S.C.

4 1341(b)(2)(C)(i)) is amended—

5 (A) by striking subclause (I) and inserting

6 the following new subclause:

7 ‘‘(I) it determines, based on the

8 notice sent under paragraph (2)(A) of

9 subsection (b), that there is reason to

10 believe that the plan is not sufficient

11 for benefit liabilities,’’;

12 (B) by striking the period at the end of

13 subclause (II) and inserting ‘‘, or’’; and

14 (C) by adding at the end the following new

15 subclause:

16 ‘‘(III) it determines that any

17 other requirement of subparagraph

18 (A) or (B) of this paragraph or of

19 subsection (a)(2) has not been met,

20 unless it further determines that the

21 issuance of such notice would be in22 consistent with the interests of par23 ticipants and beneficiaries.’’

24 (2) EFFECTIVE DATE.—The amendments made

25 by this subsection shall apply to any plan termi-
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1 nation under section 4041(b) of the Employee Re2 tirement Income Security Act of 1974 with respect

3 to which the Pension Benefit Guaranty Corporation

4 has not, as of the date of enactment of this Act, is5 sued a notice of noncompliance that has become

6 final, or otherwise issued a final determination that

7 the plan termination is nullified.

8 (b) DISTRESS TERMINATION CRITERIA FOR BANK9 ING INSTITUTIONS.—

10 (1) CLARIFICATION OF DISTRESS CRITERION.—

11 Subclause (I) of section 4041(c)(2)(B)(i) of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1341(c)(2)(B)(i)) is amended by inserting

14 after ‘‘under any similar’’ the following: ‘‘Federal

15 law or’’.

16 (2) EFFECTIVE DATE.—The amendment made

17 by this subsection shall be effective as if included in

18 the Single-Employer Pension Plan Amendments Act

19 of 1986.

20 PART III—EFFECTIVE DATES

21 SEC. 781. EFFECTIVE DATES.

22 Except as otherwise provided in this subtitle, the

23 amendments made by this subtitle shall be effective on the

24 date of enactment of this Act.
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1 TITLE VIII—PIONEER

2 PREFERENCES

3 SEC. 801. PIONEER PREFERENCES.

4 Section 309(j) of the Communications Act of 1934

5 (47 U.S.C. 309(j)) is amended by adding at the end the

6 following new paragraph:

7 ‘‘(13) RECOVERY OF VALUE OF PUBLIC SPEC8 TRUM IN CONNECTION WITH PIONEER PREF9 ERENCES.—

10 ‘‘(A) IN GENERAL.—Notwithstanding para11 graph (6)(G), the Commission shall not award

12 licenses pursuant to a preferential treatment

13 accorded by the Commission to persons who

14 make significant contributions to the develop15 ment of a new telecommunications service or

16 technology, except in accordance with the re17 quirements of this paragraph.

18 ‘‘(B) RECOVERY OF VALUE.—The Commis19 sion shall recover for the public a portion of the

20 value of the public spectrum resource made

21 available to such person by requiring such per22 son, as a condition for receipt of the license, to

23 agree to pay a sum determined by—

24 ‘‘(i) identifying the winning bids for

25 the licenses that the Commission deter-
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1 mines are most reasonably comparable in

2 terms of bandwidth, scope of service area,

3 usage restrictions, and other technical

4 characteristics to the license awarded to

5 such person, and excluding licenses that

6 the Commission determines are subject to

7 bidding anomalies due to the award of

8 preferential treatment;

9 ‘‘(ii) dividing each such winning bid

10 by the population of its service area (here11 inafter referred to as the per capita bid

12 amount);

13 ‘‘(iii) computing the average of the

14 per capita bid amounts for the licenses

15 identified under clause (i);

16 ‘‘(iv) reducing such average amount

17 by 15 percent; and

18 ‘‘(v) multiplying the amount deter19 mined under clause (iv) by the population

20 of the service area of the license obtained

21 by such person.

22 ‘‘(C) INSTALLMENTS PERMITTED.—The

23 Commission shall require such person to pay

24 the sum required by subparagraph (B) in a

25 lump sum or in guaranteed installment pay-
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1 ments, with or without royalty payments, over

2 a period of not more than 5 years.

3 ‘‘(D) RULEMAKING ON PIONEER PREF4 ERENCES.—Except with respect to pending ap5 plications described in clause (iv) of this sub6 paragraph, the Commission shall prescribe reg7 ulations specifying the procedures and criteria

8 by which the Commission will evaluate applica9 tions for preferential treatment in its licensing

10 processes (by precluding the filing of mutually

11 exclusive applications) for persons who make

12 significant contributions to the development of

13 a new service or to the development of new

14 technologies that substantially enhance an exist15 ing service. Such regulations shall—

16 ‘‘(i) specify the procedures and cri17 teria by which the significance of such con18 tributions will be determined, after an op19 portunity for review and verification by ex20 perts in the radio sciences drawn from

21 among persons who are not employees of

22 the Commission or by any applicant for

23 such preferential treatment;

24 ‘‘(ii) include such other procedures as

25 may be necessary to prevent unjust enrich-
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1 ment by ensuring that the value of any

2 such contribution justifies any reduction in

3 the amounts paid for comparable licenses

4 under this subsection;

5 ‘‘(iii) be prescribed not later than 6

6 months after the date of enactment of this

7 paragraph;

8 ‘‘(iv) not apply to applications that

9 have been accepted for filing on or before

10 September 1, 1994; and

11 ‘‘(v) cease to be effective on the date

12 of the expiration of the Commission’s au13 thority under subparagraph (F).

14 ‘‘(E) IMPLEMENTATION WITH RESPECT TO

15 PENDING APPLICATIONS.—In applying this

16 paragraph to any broadband licenses in the per17 sonal communications service awarded pursuant

18 to the preferential treatment accorded by the

19 Federal Communications Commission in the

20 Third Report and Order in General Docket 90-

21 314 (FCC 93-550, released February 3,

22 1994)—

23 ‘‘(i) the Commission shall not recon24 sider the award of preferences in such

25 Third Report and Order, and the Commis-
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1 sion shall not delay the grant of licenses

2 based on such awards more than 15 days

3 following the date of enactment of this

4 paragraph, and the award of such pref5 erences and licenses shall not be subject to

6 administrative or judicial review;

7 ‘‘(ii) the Commission shall not alter

8 the bandwidth or service areas designated

9 for such licenses in such Third Report and

10 Order;

11 ‘‘(iii) except as provided in clause (v),

12 the Commission shall use, as the most rea13 sonably comparable licenses for purposes of

14 subparagraph (B)(i), the broadband li15 censes in the personal communications

16 service for blocks A and B for the 20 larg17 est markets (ranked by population) in

18 which no applicant has obtained pref19 erential treatment;

20 ‘‘(iv) for purposes of subparagraph

21 (C), the Commission shall permit guaran22 teed installment payments over a period of

23 5 years, subject to—

24 ‘‘(I) the payment only of interest

25 on unpaid balances during the first 2
649

1 years, commencing not later than 30

2 days after the award of the license

3 (including any preferential treatment

4 used in making such award) is final

5 and no longer subject to administra6 tive or judicial review, except that no

7 such payment shall be required prior

8 to the date of completion of the auc9 tion of the comparable licenses de10 scribed in clause (iii); and

11 ‘‘(II) payment of the unpaid bal12 ance and interest thereon after the

13 end of such 2 years in accordance

14 with the regulations prescribed by the

15 Commission; and

16 ‘‘(v) the Commission shall recover

17 with respect to broadband licenses in the

18 personal communications service an

19 amount under this paragraph that is equal

20 to not less than $400,000,000, and if such

21 amount is less than $400,000,000, the

22 Commission shall recover an amount equal

23 to $400,000,000 by allocating such amount

24 among the holders of such licenses based
650

1 on the population of the license areas held

2 by each licensee.

3 The Commission shall not include in any

4 amounts required to be collected under clause

5 (v) the interest on unpaid balances required to

6 be collected under clause (iv).

7 ‘‘(F) EXPIRATION.—The authority of the

8 Commission to provide preferential treatment in

9 licensing procedures (by precluding the filing of

10 mutually exclusive applications) to persons who

11 make significant contributions to the develop12 ment of a new service or to the development of

13 new technologies that substantially enhance an

14 existing service shall expire on September 30,

15 1998.

16 ‘‘(G) EFFECTIVE DATE.—This paragraph

17 shall be effective on the date of its enactment

18 and apply to any licenses issued on or after Au19 gust 1, 1994, by the Federal Communications

20 Commission pursuant to any licensing proce21 dure that provides preferential treatment (by

22 precluding the filing of mutually exclusive appli23 cations) to persons who make significant con24 tributions to the development of a new service
651

1 or to the development of new technologies that

2 substantially enhance an existing service.’’.

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