I
107TH CONGRESS
1ST SESSION
H. R. 1270
To increase accountability for Government spending and to reduce wasteful
Government spending.
IN THE HOUSE OF REPRESENTATIVES
MARCH 28, 2001
Mr. DEFAZIO introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Energy
and Commerce, Armed Services, Science, Resources, Financial Services,
International Relations, Veterans’ Affairs, and Intelligence (Permanent
Select), for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To increase accountability for Government spending and to
reduce wasteful Government spending.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Comprehensive Fiscal Responsibility and Accountability
Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—INCREASED ACCOUNTABILITY AND REDUCTION IN
MEDICARE WASTE AND FRAUD
Sec. 101. Increased medical reviews and antifraud activities.
Sec. 102. Expansion of medicare senior waste patrol nationwide.
Sec. 103. Application of inherent reasonableness to all Part B services other
than physicians’ services.
Sec. 104. Implementation of commercial claims auditing systems.
TITLE II—INCREASED ACCOUNTABILITY AND REDUCTION OF
WASTEFUL DEFENSE SPENDING
Sec. 201. Cancellation of F–22 aircraft program.
Sec. 202. Cancellation of Comanche helicopter program.
Sec. 203. Cancellation of Crusader artillery program.
Sec. 204. Cancellation of V–22 aircraft program.
Sec. 205. Limitation on procurement of Virginia class attack submarines.
Sec. 206. Termination of production of Trident D5 missiles.
Sec. 207. Reduction in nuclear delivery systems within overall limits of START
II.
Sec. 208. Creation of common NATO airlift capability and reduction of United
States costs for C–17 aircraft.
Sec. 209. Deferral of procurement of additional C–130 tactical airlift planes.
Sec. 210. Reduction in requirements for Air Force and Navy pilots in nonflying
positions.
Sec. 211. Reduction in number of officers so as to return to enlisted-to-officer
ratio in existence in 1989.
Sec. 212. Placement of Selective Service System in ‘‘deep standby’’ status.
Sec. 213. End of taxpayer support for defense industry mergers.
Sec. 214. Reduction of United States support for weapons sales abroad by
eliminating future assistance under the Foreign Military Fi-
nancing program.
Sec. 215. Limitation on proposed increases for National Missile Defense to fis-
cal year 2000 levels.
Sec. 216. Reduction of Central Intelligence Agency budget by 10 percent.
TITLE III—REDUCTION AND REFORM OF ANTIENVIRONMENTAL
SPENDING
Subtitle A—Program Terminations and Fees
Sec. 301. Nuclear Energy Research Initiative.
Sec. 302. National Ignition Facility.
Sec. 303. Tokamak Fusion Reactors.
Sec. 304. Diesel engine research.
Sec. 305. Nuclear waste fund fee.
Subtitle B—Mining Provisions
Sec. 311. Definitions.
Sec. 312. Royalties.
Sec. 313. Limitation on patent issuance.
Sec. 314. Mining claim maintenance requirements.
Sec. 315. Savings clause.
TITLE IV—AMENDMENTS OF INTERNAL REVENUE CODE OF 1986
Sec. 401. Repeal of exclusion of certain income of foreign sales corporations.
Sec. 402. Denial of deduction for payments of excessive compensation.
Sec. 403. Disallowance of deductions for advertising and promotional expenses
relating to tobacco product use.
Sec. 404. Source of income from certain sales of inventory property.
TITLE V—MISCELLANEOUS PROVISIONS TO REDUCE WASTEFUL
AND INEFFICIENT SPENDING
Sec. 501. International space station.
Sec. 502. Overseas Private Investment Corporation.
Sec. 503. Prohibition on provision of new credit by the Export-Import Bank of
the United States.
Sec. 504. Trade and Development Agency.
Sec. 505. Termination of international broadcasting authorities.
Sec. 506. Joint procurement of pharmaceuticals by the Department of Defense
and the Department of Veterans Affairs.
TITLE I—INCREASED ACCOUNT-
ABILITY AND REDUCTION IN
MEDICARE 
WASTE 
AND
FRAUD
SEC. 101. INCREASED MEDICAL REVIEWS AND ANTIFRAUD
ACTIVITIES.
Section 1893(d) of the Social Security Act (42 U.S.C.
1395ddd(d)) is amended by inserting after paragraph (3)
the following:
‘‘(4) In the case of the year 2002 and each sub-
sequent year, procedures to ensure that—
‘‘(A) the number of medical reviews, utili-
zation reviews, and fraud reviews in a fiscal
year of providers of services and other individ-
uals and entities furnishing items and services
for which payment may be made under this title
(as a percentage of total claims paid) is equal
to at least twice the number of such reviews
that were conducted in fiscal year 2000;
‘‘(B) the number of provider cost reports
audited in a fiscal year is equal to at least—
‘‘(i) 15 percent of those submitted by
a home health agency or a skilled nursing
facility; and
‘‘(ii) twice the number of such reports
that were audited in fiscal year 2000 for
those submitted by any other provider of
services or any other individual or entity
furnishing items and services for which
payment may be made under this title; and
‘‘(C) in determining which providers of
services, individuals, entities, or cost reports to
review or audit, priority is placed on providers,
individuals, entities, and areas that the Sec-
retary determines are subject to abuse and
most likely to result in mispayment or overpay-
ment recoveries.’’.
SEC. 102. EXPANSION OF MEDICARE SENIOR WASTE PA-
TROL NATIONWIDE.
There are authorized to be appropriated $25,000,000
in fiscal year 2002, and such sums as are necessary for
fiscal years 2003 through 2005, for the purpose of car-
rying out, and expanding nationwide, the Health Care
Anti-Fraud, Waste and Abuse Community Volunteer
Demonstration Projects conducted by the Administration
on Aging pursuant to the Omnibus Consolidated Appro-
priations Act, 1997 (Public Law 104–208).
SEC. 103. APPLICATION OF INHERENT REASONABLENESS
TO ALL PART B SERVICES OTHER THAN PHY-
SICIANS’ SERVICES.
(a) REPEAL OF CERTAIN PROVISIONS OF THE BAL-
ANCED BUDGET ACT OF 1997.—
(1) REPEAL.—Section 4316 of the Balanced
Budget Act of 1997 (Public Law 105–33; 111 Stat.
390), and the amendments made by such section,
are repealed effective August 5, 1997.
(2) APPLICABILITY.—Effective August 5, 1997,
the Social Security Act shall be applied and adminis-
tered as if section 4316 of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 390), and
the amendments made by such section, had not been
enacted.
(b) APPLICATION OF INHERENT REASONABLENESS
TO ALL PART B SERVICES OTHER THAN PHYSICIANS’
SERVICES.—
(1) IN GENERAL.—Section 1842(b)(8) of the
Social Security Act (42 U.S.C. 1395u(b)(8)) is
amended to read as follows:
‘‘(8) The Secretary shall describe by regulation the
factors to be used in determining the cases (of particular
items or services) in which the application of this part
(other than to physicians’ services paid under section
1848) results in the determination of an amount that, be-
cause of its being grossly excessive or grossly deficient,
is not inherently reasonable, and provide in those cases
for the factors to be considered in establishing an amount
that is realistic and equitable.’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall take effect August 5, 1997.
SEC. 104. IMPLEMENTATION OF COMMERCIAL CLAIMS AU-
DITING SYSTEMS.
(a) COMMERCIAL CLAIMS AUDITING SYSTEMS.—
(1) IN GENERAL.—Not later than 90 days after
the date of enactment of this Act, the Secretary
shall require medicare carriers to use commercial
claims auditing systems in the processing of claims
under part B of the medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395j
et seq.) for the purpose of identifying billing errors
and abuses.
(2) SUPPLEMENT TO OTHER TECHNOLOGY.—
Commercial claims auditing systems required under
paragraph (1) shall be used as a supplement to any
other information technology used by medicare car-
riers in processing claims under the medicare pro-
gram.
(3) UNIFORMITY.—In order to ensure uni-
formity in processing claims under the medicare pro-
gram, the Secretary may require that medicare car-
riers utilize 1 or more common commercial claims
auditing systems, provided that the selection of such
system or systems by the Secretary shall be—
(A) after due consideration of competing
alternative systems; but
(B) without regard to any provision of law
that requires the use of competitive procedures
(as defined in section 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403)) or
the publication of notice of proposed procure-
ments.
(4) IMPLEMENTATION.—Commercial claims au-
diting systems required under paragraph (1) shall be
implemented by all medicare carriers by not later
than 180 days after the date of enactment of this
Act.
(b) MINIMUM
SOFTWARE
REQUIREMENTS.—Any
commercial claims auditing system required to be imple-
mented pursuant to subsection (a) shall, at a minimum—
(1) be a commercial item;
(2) surpass the capability of systems currently
used in the processing of claims under part B of the
medicare program; and
(3) be modifiable to—
(A) satisfy pertinent statutory require-
ments of the medicare program; and
(B) conform to policies of the Secretary re-
garding claims processing under such program.
(c) DISCLOSURE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), notwithstanding any other provision of
law, any information technology (or data related
thereto) utilized by medicare carriers in establishing
a commercial claims auditing system pursuant to
subsection (a) shall not be subject to public disclo-
sure.
(2) AUTHORIZED DISCLOSURE.—The Secretary
may authorize the public disclosure of the informa-
tion described in paragraph (1) if the Secretary de-
termines that—
(A) release of such information is in the
public interest; and
(B) the information to be released is not
protected from disclosure under section 552(b)
of title 5, United States Code.
(d) DEFINITIONS.—In this section—
(1) COMMERCIAL CLAIMS AUDITING SYSTEM.—
The term ‘‘commercial claims auditing system’’
means a commercial specialized auditing system that
includes edits which identify inappropriately coded
health care claims.
(2) COMMERCIAL ITEM.—The term ‘‘commer-
cial item’’ has the meaning given such term in sec-
tion 4 of the Office of Federal Procurement Policy
Act (41 U.S.C. 403).
(3) INFORMATION
TECHNOLOGY.—The term
‘‘information technology’’ has the meaning given
such term in subparagraphs (A) and (B) of section
5002(3) of the Information Technology Management
Reform Act of 1996 (40 U.S.C. 1401(3)), were such
information technology to be acquired by an execu-
tive agency.
(4) MEDICARE CARRIER.—The term ‘‘medicare
carrier’’ means an entity that has a contract with
the Secretary pursuant to section 1842(a) of the So-
cial Security Act (42 U.S.C. 1395u(a)).
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
TITLE II—INCREASED ACCOUNT-
ABILITY AND REDUCTION OF
WASTEFUL DEFENSE SPEND-
ING
SEC. 201. CANCELLATION OF F–22 AIRCRAFT PROGRAM.
The Secretary of the Air Force shall cancel the F–
22 Raptor aircraft program. No funds may be obligated
for that program after the date of the enactment of this
Act.
SEC. 202. CANCELLATION OF COMANCHE HELICOPTER
PROGRAM.
The Secretary of the Army shall cancel the Comanche
helicopter program. No funds may be obligated for that
program after the date of the enactment of this Act.
SEC. 203. CANCELLATION OF CRUSADER ARTILLERY PRO-
GRAM.
The Secretary of the Army shall cancel the Crusader
artillery program. No funds may be obligated for that pro-
gram after the date of the enactment of this Act.
SEC. 204. CANCELLATION OF V–22 AIRCRAFT PROGRAM.
The Secretary of the Navy shall cancel the V–22 Os-
prey aircraft program. No funds may be obligated for that
program after the date of the enactment of this Act.
SEC. 205. LIMITATION ON PROCUREMENT OF VIRGINIA
CLASS ATTACK SUBMARINES.
Through fiscal year 2010, the Secretary of the Navy
may enter into contracts for the procurement of no more
than eight Virginia class submarines (including contracts
entered into before the date of the enactment of this Act).
SEC. 206. TERMINATION OF PRODUCTION OF TRIDENT D5
MISSILES.
No funds may be obligated after the date of the en-
actment of this Act for production of Trident D5 missiles.
SEC. 207. REDUCTION IN NUCLEAR DELIVERY SYSTEMS
WITHIN OVERALL LIMITS OF START II.
The President shall take such steps as necessary to
reduce the nuclear delivery systems of the United States
so as to bring the number of such systems within the over-
all START II limits. For purposes of this section, the term
‘‘overall START II limits’’ means the limitations on nu-
clear delivery systems that would be in effect under the
START II Treaty, if ratified.
SEC. 208. CREATION OF COMMON NATO AIRLIFT CAPA-
BILITY AND REDUCTION OF UNITED STATES
COSTS FOR C–17 AIRCRAFT.
The Secretary of Defense shall seek to reach an
agreement with the other member nations of the North
Atlantic Treaty Organization to establish a common
NATO airlift capability consisting of 20 C–17 aircraft
with a cost-sharing arrangement similar to that for the
common NATO AWACS fleet. The 20 C–17 aircraft pro-
grammed by the Air Force for procurement in fiscal years
2002 and 2003 shall be transferred to NATO for that
common NATO airlift capability upon such an agreement
being entered into.
SEC. 209. DEFERRAL OF PROCUREMENT OF ADDITIONAL C–
130 TACTICAL AIRLIFT PLANES.
The Secretary of the Air Force may not enter into
a contract for procurement of additional C–130 aircraft
for fiscal years 2002 through 2006.
SEC. 210. REDUCTION IN REQUIREMENTS FOR AIR FORCE
AND NAVY PILOTS IN NONFLYING POSITIONS.
The Secretary of the Air Force and the Secretary of
the Navy shall each evaluate nonflying positions in the Air
Force and the Navy, respectively, that are currently re-
quired to be held by pilots and, to the maximum extent
practicable, shall modify the qualifications for those posi-
tions to reduce the requirements for pilots for those posi-
tions.
SEC. 211. REDUCTION IN NUMBER OF OFFICERS SO AS TO
RETURN TO ENLISTED-TO-OFFICER RATIO IN
EXISTENCE IN 1989.
The Secretary of Defense shall implement a program
to reduce the ratio of enlisted-to-officer personnel of each
of the Army, Navy, Air Force, and Marine Corps to a ratio
of at least six-to-one by not later than January 1, 2006.
The Secretary shall carry out that program through re-
ductions in officer promotions to general and flag officer
grades and through reductions in the number of officers
in pay grades O–4, O–5, and O–6 through voluntary pro-
grams under existing provisions of law, including tem-
porary early retirement authority, voluntary separation in-
centive, and the special separation benefit.
SEC. 212. PLACEMENT OF SELECTIVE SERVICE SYSTEM IN
‘‘DEEP STANDBY’’ STATUS.
(a) RESTRICTION OF REGISTRATION REQUIREMENT
TO PERIODS OF NATIONAL EMERGENCIES.—(1) Section
3(a) of the Military Selective Service Act (50 U.S.C. App.
453(a)) is amended by inserting after ‘‘this title,’’ the fol-
lowing: ‘‘during any period in which a declaration of na-
tional emergency is in effect,’’.
(2) Section 3 of such Act (50 U.S.C. App. 453) is
further amended by adding at the end the following new
subsections:
‘‘(c) The President shall have the authority to declare
a period of national emergency during which the registra-
tion requirements of subsection (a) shall apply. Subject
to subsection (d), the President shall provide for the
prompt termination of the declaration of national emer-
gency upon the termination of the national emergency.
‘‘(d) A declaration of national emergency under sub-
section (c) shall terminate upon the expiration of a 10-
day period of continuous session of Congress after the
date of the declaration unless Congress enacts a law before
the end of that period ratifying that specific declaration.
For purposes of this subsection, the continuity of a session
of Congress is broken only by an adjournment of the Con-
gress sine die, and the days on which either House is not
in session because of an adjournment of more than three
days to a day certain are excluded in the computation of
the 10-day period.’’.
(3) Section 12 of such Act (50 U.S.C. App. 462) is
amended by adding at the end the following new sub-
section:
‘‘(h) In addition to the exception provided by sub-
section (g), a person may not be denied a right, privilege,
benefit, or employment position under Federal law on the
grounds that the person failed to present himself for and
submit to registration under section 3 before the date of
the enactment of this subsection.’’.
(b) SUSPENSION
OF
ACTIVITIES
OF
SELECTIVE
SERVICE SYSTEM BOARDS.—Section 17 of such Act (50
U.S.C. App. 467) is amended by adding at the end the
following new subsection:
‘‘(d) Except during any period in which a declaration
of national emergency is in effect under section 3—
‘‘(1) the President may not appoint a person as
a member of a civilian local board, civilian appeal
board, or similar local agency of the Selective Serv-
ice System; and
‘‘(2) any such board established under section
10(b)(3) may not meet.’’.
(c) REPORT ON STANDBY REGISTRATION PROGRAM
FOR USE DURING NATIONAL EMERGENCIES.—Not later
than 150 days after the date of the enactment of this Act,
the Director of the Selective Service System shall submit
to Congress a report detailing a standby emergency man-
power mobilization program to be used by the Selective
Service System during periods in which a declaration of
national emergency is in effect for the registration of per-
sons who would be subject to registration under section
3 of the Military Selective Service Act (50 U.S.C. App.
453) during such a period. The report shall include an
estimate of the cost to implement and operate the standby
program and an evaluation of the feasibility of using exist-
ing and emerging information systems available to the
Government to improve the effectiveness of any registra-
tion requirements.
SEC. 213. END OF TAXPAYER SUPPORT FOR DEFENSE IN-
DUSTRY MERGERS.
Expenses incurred by a defense contractor related to
a corporate merger may not be considered to be an allow-
able cost under a Department of Defense contract, and
no funds appropriated to the Department of Defense may
be used to reimburse a contractor for any such expense.
SEC. 214. REDUCTION OF UNITED STATES SUPPORT FOR
WEAPONS SALES ABROAD BY ELIMINATING
FUTURE ASSISTANCE UNDER THE FOREIGN
MILITARY FINANCING PROGRAM.
After the date of the enactment of this Act, no new
loan, grant, or other assistance may be provided under the
‘‘Foreign Military Financing Program’’ account under
section 23 of the Arms Export Control Act (22 U.S.C.
2763).
SEC. 215. LIMITATION ON PROPOSED INCREASES FOR NA-
TIONAL MISSILE DEFENSE TO FISCAL YEAR
2000 LEVELS.
The amount appropriated for the National Missile
Defense program of the Department of Defense for any
fiscal year may not exceed the amount appropriated for
that program for fiscal year 2000, adjusted for inflation.
SEC. 216. REDUCTION OF CENTRAL INTELLIGENCE AGENCY
BUDGET BY 10 PERCENT.
The total amount obligated for programs and activi-
ties of the Central Intelligence Agency for fiscal year 2002
may not exceed 90 percent of the total amount obligated
for programs and activities of the Central Intelligence
Agency for fiscal year 2001.
TITLE III—REDUCTION AND RE-
FORM OF ANTIENVIRONMEN
TAL SPENDING
Subtitle A—Program Terminations
and Fees
SEC. 301. NUCLEAR ENERGY RESEARCH INITIATIVE.
The Department of Energy shall not obligate any fur-
ther funding for the Nuclear Energy Research Initiative.
SEC. 302. NATIONAL IGNITION FACILITY.
The Department of Energy shall not obligate any fur-
ther funding for the National Ignition Facility.
SEC. 303. TOKAMAK FUSION REACTORS.
The Department of Energy shall not obligate any fur-
ther funding for Tokamak fusion reactors.
SEC. 304. DIESEL ENGINE RESEARCH.
The Department of Energy shall not obligate any fur-
ther funding for research on diesel engines for cars and
light trucks.
SEC. 305. NUCLEAR WASTE FUND FEE.
(a) FEE ADJUSTMENT.—Section 302(a)(2) of the
Nuclear Waste Policy Act of 1982 is amended by adding
at the end the following new sentence: ‘‘The Secretary
shall adjust the fee annually for inflation.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect 90 days after the date of
enactment of this section.
Subtitle B—Mining Provisions
SEC. 311. DEFINITIONS.
For purposes of subtitle:
(1) The term ‘‘locatable mineral’’ means any
mineral not subject to disposition under any of the
following:
(A) The Mineral Leasing Act (30 U.S.C.
181 et seq.).
(B) The Geothermal Steam Act of 1970
(30 U.S.C. 100 et seq.).
(C) The Act of July 31, 1947, commonly
known as the Materials Act of 1947 (30 U.S.C.
601 et seq.).
(D) The Mineral Leasing for Acquired
Lands Act (30 U.S.C. 351 et seq.).
(2) The term ‘‘mineral activities’’ means any
activity for, related to or incidental to mineral explo-
ration, mining, beneficiation and processing activi-
ties for any locatable mineral, including access.
When used with respect to this term:
(A) The term ‘‘exploration’’ means those
techniques employed to locate the presence of a
locatable mineral deposit and to establish its
nature, position, size, shape, grade and value.
(B) The term ‘‘mining’’ means the proc-
esses employed for the extraction of a locatable
mineral from the earth.
(C) The term ‘‘beneficiation’’ means the
crushing and grinding of locatable mineral ore
and such processes as are employed to free the
mineral from other constituents, including but
not necessarily limited to, physical and chemical
separation techniques.
(D) The term ‘‘processing’’ means proc-
esses downstream of beneficiation employed to
prepare locatable mineral ore into the final
marketable product, including but not limited
to, smelting and electrolytic refining.
(3) The term ‘‘mining claim’’ means a claim for
the purposes of mineral activities.
(4) The term ‘‘net smelter return’’ shall have
the same meaning as the term defined in section
613(c)(1) of the Internal Revenue Code.
(5) The term ‘‘Secretary’’ means the Secretary
of the Interior acting through the Director of the
Minerals Management Service.
(6) The term ‘‘substantial underreporting’’
means the difference between the royalty on the
value of the production which should have been re-
ported and the royalty on the value of the produc-
tion which was reported, if the value which should
have been reported is greater than the value which
was reported. An underreporting constitutes a ‘‘sub-
stantial underreporting’’ if such difference exceeds
10 percent of the royalty on the value of production
which should have been reported.
SEC. 312. ROYALTIES.
(a) RESERVATION OF ROYALTY.—Production of all
locatable minerals from any mining claim located or con-
verted under the general mining laws, or mineral con-
centrates or products derived from locatable minerals from
any mining claim located or converted under the general
mining laws, as the case may be, shall be subject to a
royalty of 8 percent of the net smelter return from such
production. The claim holder and any operator to whom
the claim holder has assigned the obligation to make roy-
alty payments under the claim and any person who con-
trols such claim holder or operator shall be jointly and
severally liable for payment of such royalties.
(b) DUTIES OF CLAIM HOLDERS, OPERATORS, AND
TRANSPORTERS.—(1) A person—
(A) who is required to make any royalty pay-
ment under this section shall make such payments
to the United States at such times and in such man-
ner as the Secretary may by rule prescribe; and
(B) shall notify the Secretary, in the time and
manner as may be specified by the Secretary, of any
assignment that such person may have made of the
obligation to make any royalty or other payment
under a mining claim.
(2) Any person paying royalties under this section
shall file a written instrument, together with the first roy-
alty payment, affirming that such person is liable to the
Secretary for making proper payments for all amounts due
for all time periods for which such person as a payment
in his or her vehicle, or in his or her immediate control,
documentation showing, at a minimum, the amount, ori-
gin, and intended destination of the locatable mineral, con-
centrate, or product derived therefrom in such cir-
cumstances as the Secretary determines is appropriate.
(c) RECORDKEEPING
AND REPORTING REQUIRE-
MENTS.—(1) A claim holder, operator, or other person di-
rectly involved in developing, producing, processing, trans-
porting, purchasing, or selling locatable minerals, con-
centrates, or products derived therefrom, subject to this
Act, through the point of royalty computation shall estab-
lish and maintain any records, make any reports, and pro-
vide any information that the Secretary may reasonably
require for the purposes of implementing this section or
determining compliance with rules or orders under this
section. Such records shall include, but not be limited to,
periodic reports, records, documents, and other data. Such
reports may also include, but not be limited to, pertinent
technical and financial data relating to the quantity, qual-
ity, composition volume, weight, and assay of all minerals
extracted from the mining claim. Upon the request of any
officer or employee duly designated by the Secretary or
any State conducting an audit or investigation pursuant
to this section, the appropriate records, reports, or infor-
mation which may be required by this section shall be
made available for inspection and duplication by such offi-
cer or employee or State.
(2) Records required by the Secretary under this sec-
tion shall be maintained for 6 years after cessation of all
mining activity at the claim concerned unless the Sec-
retary notifies the operator that he or she has initiated
an audit or investigation involving such records and that
such records must be maintained for a longer period. In
any case when an audit or investigation is underway,
records shall be maintained until the Secretary releases
the operator of the obligation to maintain such records.
(d) AUDITS.—The Secretary is authorized to conduct
such audits of all claim holders, operators, transporters,
purchasers, processors, or other persons directly or indi-
rectly involved in the production or sales of minerals cov-
ered by this Act, as the Secretary deems necessary for the
purposes of ensuring compliance with the requirements of
this section. For purposes of performing such audits, the
Secretary shall, at reasonable times and upon request,
have access to, and may copy, all books, papers and other
documents that relate to compliance with any provision
of this section by any person.
(e) COOPERATIVE AGREEMENTS.—(1) The Secretary
is authorized to enter into cooperative agreements with the
Secretary of Agriculture to share information concerning
the royalty management of locatable minerals, con-
centrates, or products derived therefrom, to carry out in-
spection, auditing, investigation, or enforcement (not in-
cluding the collection of royalties, civil or criminal pen-
alties, or other payments) activities under this section in
cooperation with the Secretary, and to carry out any other
activity described in this section.
(2) Except as provided in paragraph (4)(A) of this
subsection (relating to trade secrets), and pursuant to a
cooperative agreement, the Secretary of Agriculture shall,
upon request, have access to all royalty accounting infor-
mation in the possession of the Secretary respecting the
production, removal, or sale of locatable minerals, con-
centrates, or products derived therefrom from claims on
lands open to location under the general mining laws.
(3) Trade secrets, proprietary, and other confidential
information shall be made available by the Secretary pur-
suant to a cooperative agreement under this subsection to
the Secretary of Agriculture upon request only if—
(A) the Secretary of Agriculture consents in
writing to restrict the dissemination of the informa-
tion to those who are directly involved in an audit
or investigation under this section and who have a
need to know;
(B) the Secretary of Agriculture accepts liabil-
ity for wrongful disclosure; and
(C) the Secretary of Agriculture demonstrates
that such information is essential to the conduct of
an audit or investigation under this subsection.
(f) INTEREST AND SUBSTANTIAL UNDERREPORTING
ASSESSMENTS.—(1) In the case of mining claims where
royalty payments are not received by the Secretary on the
date that such payments are due, the Secretary shall
charge interest on such underpayments at the same inter-
est rate as is applicable under section 6621(a)(2) of the
Internal Revenue Code of 1986. In the case of an under-
payment, interest shall be computed and charged only on
the amount of the deficiency and not on the total amount.
(2) If there is any underreporting of royalty owed on
production from a claim for any production month by any
person liable for royalty payments under this section, the
Secretary may assess a penalty of 10 percent of the
amount of that underreporting.
(3) If there is a substantial underreporting of royalty
owed on production from a claim for any production
month by any person responsible for paying the royalty,
the Secretary may assess a penalty of 10 percent of the
amount of that underreporting.
(4) The Secretary shall not impose the assessment
provided in paragraph (2) or (3) of this subsection if the
person liable for royalty payments under this section cor-
rects the underreporting before the date such person re-
ceives notice from the Secretary that an underreporting
may have occurred, or before 90 days after the date of
the enactment of this section, whichever is later.
(5) The Secretary shall waive any portion of an as-
sessment under paragraph (2) or (3) of this subsection
attributable to that portion of the underreporting for
which the person responsible for paying the royalty dem-
onstrates that—
(A) such person had written authorization from
the Secretary to report royalty on the value of the
production on basis on which it was reported;
(B) such person had substantial authority for
reporting royalty on the value of the production on
the basis on which it was reported;
(C) such person previously had notified the Sec-
retary, in such manner as the Secretary may by rule
prescribe, of relevant reasons or facts affecting the
royalty treatment of specific production which led to
the underreporting; or
(D) such person meets any other exception
which the Secretary may, by rule, establish.
(6) All penalties collected under this subsection shall
be deposited in the Treasury.
(g) EXPANDED ROYALTY OBLIGATIONS.—Each per-
son liable for royalty payments under this section shall
be jointly and severally liable for royalty on all locatable
minerals, concentrates, or products derived therefrom lost
or wasted from a mining claim located or converted under
this section when such loss or waste is due to negligence
on the part of any person or due to the failure to comply
with any rule, regulation, or order issued under this sec-
tion.
(h) EXCEPTION.—No royalty shall be payable under
subsection (a) with respect to minerals processed at a fa-
cility by the same person or entity which extracted the
minerals if an urban development action grant has been
made under section 119 of the Housing and Community
Development Act of 1974 with respect to any portion of
such facility.
(i) EFFECTIVE DATE.—The royalty under this sec-
tion shall take effect with respect to the production of
locatable minerals after the enactment of this Act, but any
royalty payments attributable to production during the
first 12 calendar months after the enactment of this sec-
tion shall be payable at the expiration of such 12-month
period.
SEC. 313. LIMITATION ON PATENT ISSUANCE.
(a) MINING CLAIMS.—After llll, 2001, no pat-
ent shall be issued by the United States for any mining
claim located under the general mining laws or under this
Act unless the Secretary determines that, for the claim
concerned—
(1) a patent application was filed with the Sec-
retary on or before llll, 2001; and
(2) all requirements established under sections
2325 and 2326 of the Revised Statutes (30 U.S.C.
29 and 30) for vein or lode claims and sections
2329, 2330, 2331, and 2333 of the Revised Statutes
(30 U.S.C. 35, 36, and 37) for placer claims were
fully complied with by that date.
If the Secretary makes the determinations referred to in
paragraphs (1) and (2) for any mining claim, the holder
of the claim shall be entitled to the issuance of a patent
in the same manner and degree to which such claim holder
would have been entitled to prior to the enactment of this
Act, unless and until such determinations are withdrawn
or invalidated by the Secretary or by a court of the United
States.
(b) MILL SITES.—After llll, 2001, no patent
shall be issued by the United States for any mill site claim
located under the general mining laws unless the Secretary
determines that for the mill site concerned—
(2) For purposes of paragraph (1), with respect to
any claim holder, the term ‘‘related party’’ means each
of the following:
(A) The spouse and dependent children (as de-
fined in section 152 of the Internal Revenue Code of
1986), of the claim holder.
(B) Any affiliate of the claim holder.
(f) CO-OWNERSHIP.—Upon the failure of any one or
more of several co-owners to contribute such co-owner or
owners’ portion of the fee under this section, any co-owner
who has paid such fee may, after the payment due date,
give the delinquent co-owner or owners notice of such fail-
ure in writing (or by publication in the newspaper nearest
the claim for at least once a week for at least 90 days).
If at the expiration of 90 days after such notice in writing
or by publication, any delinquent co-owner fails or refuses
to contribute his portion, his interest in the claim shall
become the property of the co-owners who have paid the
required fee.
(g) CREDIT AGAINST ROYALTY.—The amount of the
annual claim maintenance fee required to be paid under
this section for any claim for any period shall be credited
against the amount of royalty required to be paid under
section 312 for the same period with respect to that claim.
(h) PURCHASING POWER ADJUSTMENT.—The Sec-
retary shall adjust all dollar amounts established in this
section for changes in the purchasing power of the dollar
every 10 years following the date of enactment of this sec-
tion, employing the Consumer Price Index for all urban
consumers published by the Department of Labor as the
basis for adjustment, and rounding according to the ad-
justment process of conditions of the Federal Civil Pen-
alties Inflation Adjustment Act of 1990 (104 Stat. 890).
SEC. 315. SAVINGS CLAUSE.
Nothing in sections 312, 313, or 314 shall be con-
strued as repealing or modifying any Federal law, regula-
tion, order, or land use plan, in effect prior to the effective
date of such section, that prohibits or restricts the applica-
tion of the general mining laws, including such laws that
provide for special management criteria for operations
under the general mining laws as in effect prior to the
effective date of such section, to the extent such laws pro-
vide environmental protection greater than required under
the general mining laws.
TITLE IV—AMENDMENTS OF IN-
TERNAL REVENUE CODE OF
1986
SEC. 
401. 
REPEAL 
OF 
EXCLUSION 
OF 
CERTAIN
EXTRATERRITORIAL INCOME.
(a) IN GENERAL.—Section 114 of the Internal Rev-
enue Code of 1986 (relating to extraterritorial income) is
amended by adding at the end the following new sub-
section:
‘‘(f) TERMINATION.—This section shall not apply to
transactions after December 31, 2001.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to transactions after December 31,
2001.
SEC. 402. DENIAL OF DEDUCTION FOR PAYMENTS OF EX-
CESSIVE COMPENSATION.
(a) IN GENERAL.—Section 162 of the Internal Rev-
enue Code of 1986 (relating to deduction for trade or busi-
ness expenses) is amended by inserting after subsection
(h) the following new subsection:
‘‘(i) EXCESSIVE COMPENSATION.—
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed under this chapter for any excessive com-
pensation with respect to any full-time employee.
‘‘(2) EXCESSIVE
COMPENSATION.—For pur-
poses of this subsection, the term ‘excessive com-
pensation’ means, with respect to any employee, the
amount by which—
‘‘(A) the compensation for services per-
formed by such employee during the taxable
year, exceeds
‘‘(B) an amount equal to 25 times the low-
est compensation for services performed by any
other full-time employee during such taxable
year.
‘‘(3) DEFINITIONS AND SPECIAL RULES.—For
purposes of this subsection—
‘‘(A) COMPENSATION.—
‘‘(i) IN
GENERAL.—The term ‘com-
pensation’ means salary, wages, and bo-
nuses.
‘‘(ii) PART-YEAR EMPLOYEES.—In the
case of any part-year employee, the com-
pensation of the employee shall be com-
puted on an annualized basis.
‘‘(B) EMPLOYER.—All persons treated as a
single employer under subsection (a) or (b) of
section 52 or subsection (m) or (o) of section
414 shall be treated as 1 employer.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 403. DISALLOWANCE OF DEDUCTIONS FOR ADVER-
TISING AND PROMOTIONAL EXPENSES RE-
LATING TO TOBACCO PRODUCT USE.
(a) IN GENERAL.—Part IX of subchapter B of chap-
ter 1 of subtitle A of the Internal Revenue Code of 1986
(relating to items not deductible) is amended by adding
at the end the following new section:
‘‘SEC. 280I. DISALLOWANCE OF DEDUCTION FOR TOBACCO
ADVERTISING 
AND 
PROMOTIONAL 
EX-
PENSES.
‘‘No deduction shall be allowed under this chapter for
expenses relating to advertising or promoting cigars, ciga-
rettes, smokeless tobacco, pipe tobacco, or any similar to-
bacco product. For purposes of this section, any term used
in this section which is also used in section 5702 shall
have the same meaning given such term by section 5702.’’
(b) CONFORMING AMENDMENT.—The table of sec-
tions for such part IX is amended by adding after the
item relating to section 280H the following new item:
‘‘Sec. 280I. Disallowance of deduction for tobacco advertising
and promotion expenses.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after De-
cember 31, 2001.
SEC. 404. SOURCE OF INCOME FROM CERTAIN SALES OF IN-
VENTORY PROPERTY.
(a) GENERAL RULE.—Subsection (b) of section 865
of the Internal Revenue Code of 1986 (relating to excep-
tion for inventory property) is amended to read as follows:
‘‘(b) EXCEPTION FOR INVENTORY PROPERTY.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, income derived from the
sale of inventory property shall be sourced under the
rules of sections 861(a)(6), 862(a)(6), and 863 and
this section shall not apply.
‘‘(2) TREATMENT OF CERTAIN SALES TO RE-
LATED PERSONS.—
‘‘(A) IN GENERAL.—If any inventory prop-
erty produced (in whole or in part) by the tax-
payer is sold by the taxpayer (directly or indi-
rectly) to a related person—
‘‘(i) the portion determined under
subparagraph (B) of the income from such
sale shall be sourced in the United States
or outside the United States depending on
where the production activities occur, and
other United States resident for use, consump-
tion, or disposition in the United States, and
‘‘(B) such sale is not attributable to an of-
fice or other fixed place of business maintained
by such United States resident outside the
United States,
any income of such United States resident (or any
related person) from such sale shall be sourced in
the United States.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to sales after December 31,
2001.
TITLE V—MISCELLANEOUS PRO-
VISIONS TO REDUCE WASTE-
FUL 
AND 
INEFFICIENT
SPENDING
SEC. 501. INTERNATIONAL SPACE STATION.
The National Aeronautics and Space Administration
shall not obligate any further funding for the International
Space Station.
SEC. 502. OVERSEAS PRIVATE INVESTMENT CORPORATION.
(a) PROHIBITION ON NEW CONTRACTS.—The Over-
seas Private Investment Corporation may not, on or after
the date of enactment of this Act, issue any contract of
insurance or reinsurance, or any guaranty, or enter into
any agreement to provide financing.
(b) EXISTING CONTRACTS.—Subsection (a) does not
require the termination of any contract or other agreement
entered into before the date of enactment of this Act.
SEC. 503. PROHIBITION ON PROVISION OF NEW CREDIT BY
THE EXPORT-IMPORT BANK OF THE UNITED
STATES.
Notwithstanding any other provision of law, the Ex-
port-Import Bank of the United States may not, on or
after the date of the enactment of this Act, provide any
guarantee, insurance, or extension of credit, or participate
in any extension of credit, except pursuant to a commit-
ment made by the Export-Import Bank of the United
States before such date of enactment.
SEC. 504. TRADE AND DEVELOPMENT AGENCY.
(a) TERMINATION
OF AGENCY.—Effective on the
date of enactment of this Act, the Trade and Development
Agency is abolished.
(b) ADMINISTRATION OF EXISTING OBLIGATIONS.—
The Secretary of State shall carry out the functions per-
formed on the day before the date of enactment of this
Act by the Trade and Development Agency only for pur-
poses of administering contracts or agreements issued or
entered into by the Trade and Development Agency before
the date of enactment of this Act that are effective on
such date of enactment. Such functions shall terminate
when all such contracts and agreements expire.
(c) TERMINATION OF PROVISIONS.—Section 661 of
the Foreign Assistance Act of 1961 (22 U.S.C. 2191 and
following) is repealed, effective on the date of enactment
of this Act, except that such section shall continue in ef-
fect with respect to the functions performed by the Sec-
retary of State under subsection (b).
(d) TERMINATION OF AFFAIRS.—The Director of the
Office of Management and Budget shall take the nec-
essary steps to terminate the affairs of the Trade and De-
velopment Agency.
(e) APPROPRIATIONS.—Funds available to the Trade
and Development Agency shall, on the date of enactment
of this Act, be transferred to the Secretary of State for
use in performing the functions of the Trade and Develop-
ment Agency under subsection (b). Upon the expiration
of the contracts and agreements with respect to which the
Secretary of State is exercising such functions, any unex-
pended balances of the funds transferred under this sub-
section shall be deposited in the Treasury as miscellaneous
receipts.
SEC. 
505. 
TERMINATION 
OF 
INTERNATIONAL 
BROAD-
CASTING AUTHORITIES.
(a) TERMINATION OF BROADCASTING TO CUBA.—Ef-
fective October 1, 2001, the Television Broadcasting to
Cuba Act (22 U.S.C. 1465aa and following) and the Radio
Broadcasting to Cuba Act (22 U.S.C. 1465 and following)
are repealed.
(b) TERMINATION
OF
INTERNATIONAL
BROAD-
CASTING OPERATIONS.—Effective October 1, 2001, the
United States International Broadcasting Act of 1994 (22
U.S.C. 6201 and following) is repealed.
SEC. 506. JOINT PROCUREMENT OF PHARMACEUTICALS BY
THE DEPARTMENT OF DEFENSE AND THE DE-
PARTMENT OF VETERANS AFFAIRS.
The Secretary of Defense and the Secretary of Vet-
erans Affairs shall—
(1) establish a joint office for the procurement
of pharmaceuticals for the Department of Defense
and the Department of Veterans Affairs; and
(2) jointly develop and implement a common
clinically-based formulary for the pharmaceutical
programs of the Department of Defense and the De-
partment of Veterans Affairs.
Æ