1652
pensation for work injuries, and chapter 171 of title 28,
United States Code, relating to tort claims.
(e) FOREIGN SERVICE POSITIONS.—In order to as-
sure United States representation in trade matters at a
level commensurate with the level of representation main-
tained by industrial nations which are major trade com-
petitors of the United States, the Secretary of State shall
classify certain positions at Foreign Service posts as com-
mercial minister positions and shall assign members of the
Foreign Service performing functions of the Office, with
the concurrence of the USTR, to such positions in nations
which are major trade competitors of the United States.
The Secretary of State shall obtain and use the rec-
ommendations of the USTR with respect to the number
of positions to be so classified under this subsection.
SEC. 17342. DELEGATION AND ASSIGNMENT.
Except where otherwise expressly prohibited by law
or otherwise provided by this subtitle, the USTR may dele-
gate any of the functions transferred to the USTR by this
subtitle and any function transferred or granted to the
USTR after the effective date of this subtitle to such offi-
cers and employees of the Office as the USTR may des-
ignate, and may authorize successive redelegations of such
functions as may be necessary or appropriate. No delega-
tion of functions by the USTR under this section or under
1653
any other provision of this subtitle shall relieve the USTR
of responsibility for the administration of such functions.
SEC. 17343. SUCCESSION.
(a) ORDER OF SUCCESSION.—Subject to the author-
ity of the President, and except as provided in section
17321(b), the USTR shall prescribe the order by which
officers of the Office who are appointed by the President,
by and with the advice and consent of the Senate, shall
act for, and perform the functions of, the USTR or any
other officer of the Office appointed by the President, by
and with the advice and consent of the Senate, during the
absence or disability of the USTR or such other officer,
or in the event of a vacancy in the office of the USTR
or such other officer.
(b) CONTINUATION.—Notwithstanding any other pro-
vision of law, and unless the President directs otherwise,
an individual acting for the USTR or another officer of
the Office pursuant to subsection (a) shall continue to
serve in that capacity until the absence or disability of
the USTR or such other officer no longer exists or a suc-
cessor to the USTR or such other officer has been ap-
pointed by the President and confirmed by the Senate.
SEC. 17344. REORGANIZATION.
(a) IN GENERAL.—Subject to subsection (b), the
USTR is authorized to allocate or reallocate functions
1654
among the officers of the Office, and to establish, consoli-
date, alter, or discontinue such organizational entities in
the Office as may be necessary or appropriate.
(b) EXCEPTION.—The USTR may not exercise the
authority under subsection (a) to establish, consolidate,
alter, or discontinue any organizational entity in the Office
or allocate or reallocate any function of an officer or em-
ployee of the Office that is inconsistent with any specific
provision of this subtitle.
SEC. 17345. RULES.
The USTR is authorized to prescribe, in accordance
with the provisions of chapters 5 and 6 of title 5, United
States Code, such rules and regulations as the USTR de-
termines necessary or appropriate to administer and man-
age the functions of the USTR or the Office.
SEC. 17346. FUNDS TRANSFER.
The USTR may, when authorized in an appropriation
Act in any fiscal year, transfer funds from one appropria-
tion to another within the Office, except that no appro-
priation for any fiscal year shall be either increased or
decreased by more than 10 percent and no such transfer
shall result in increasing any such appropriation above the
amount authorized to be appropriated therefor.
1655
SEC. 17347. CONTRACTS, GRANTS, AND COOPERATIVE
AGREEMENTS.
(a) IN GENERAL.—Subject to the provisions of the
Federal Property and Administrative Services Act of
1949, the USTR may make, enter into, and perform such
contracts, leases, cooperative agreements, grants, or other
similar transactions with public agencies, private organiza-
tions, and persons, and make payments (in lump sum or
installments, and by way of advance or reimbursement,
and, in the case of any grant, with necessary adjustments
on account of overpayments and underpayments) as the
USTR considers necessary or appropriate to carry out the
functions of the USTR or the Office.
(b) EXCEPTION.—Notwithstanding any other provi-
sion of this subtitle, the authority to enter into contracts
or to make payments under this subchapter shall be effec-
tive only to such extent or in such amounts as are provided
in advance in appropriation Acts. This subsection does not
apply with respect to the authority granted under section
17349.
SEC. 17348. USE OF FACILITIES.
(a) USE BY USTR.—With their consent, the USTR,
with or without reimbursement, may use the research,
services, equipment, and facilities of—
(1) an individual,
1656
(2) any public or private nonprofit agency or
organization, including any agency or instrumental-
ity of the United States or of any State, the District
of Columbia, the Commonwealth of Puerto Rico, or
any territory or possession of the United States,
(3) any political subdivision of any State, the
District of Columbia, the Commonwealth of Puerto
Rico, or any territory or possession of the United
States, or
(4) any foreign government,
in carrying out any function of the USTR or the Office.
(b) USE OF USTR FACILITIES.—The USTR, under
terms, at rates, and for periods that the USTR considers
to be in the public interest, may permit the use by public
and private agencies, corporations, associations or other
organizations, or individuals, of any real property, or any
facility, structure or other improvement thereon, under the
custody of the USTR. The USTR may require permittees
under this section to maintain or recondition, at their own
expense, the real property, facilities, structures, and im-
provements used by such permittees.
SEC. 17349. GIFTS AND BEQUESTS.
(a) IN GENERAL.—The USTR is authorized to ac-
cept, hold, administer, and utilize gifts and bequests of
property, both real and personal, for the purpose of aiding
1657
or facilitating the work of the Office. Gifts and bequests
of money and the proceeds from sales of other property
received as gifts or bequests shall be deposited in the Unit-
ed States Treasury in a separate fund and shall be dis-
bursed on order of the USTR. Property accepted pursuant
to this subsection, and the proceeds thereof, shall be used
as nearly as possible in accordance with the terms of the
gift or bequest.
(b) TAX TREATMENT.—For the purpose of Federal
income, estate, and gift taxes, and State taxes, property
accepted under subsection (a) shall be considered a gift
or bequest to or for the use of the United States.
(c) INVESTMENT.—Upon the request of the USTR,
the Secretary of the Treasury may invest and reinvest in
securities of the United States or in securities guaranteed
as to principal and interest by the United States any mon-
eys contained in the fund provided for in subsection (a).
Income accruing from such securities, and from any other
property held by the USTR pursuant to subsection (a),
shall be deposited to the credit of the fund, and shall be
disbursed upon order of the USTR.
SEC. 17350. WORKING CAPITAL FUND.
(a) ESTABLISHMENT.—The USTR is authorized to
establish for the Office a working capital fund, to be avail-
able without fiscal year limitation, for expenses necessary
1658
for the maintenance and operation of such common ad-
ministrative services as the USTR shall find to be desir-
able in the interest of economy and efficiency, including—
(1) a central supply service for stationery and
other supplies and equipment for which adequate
stocks may be maintained to meet in whole or in
part the requirements of the Office and its compo-
nents;
(2) central messenger, mail, and telephone serv-
ice and other communications services;
(3) office space and central services for docu-
ment reproduction and for graphics and visual aids;
(4) a central library service; and
(5) such other services as may be approved by
the Director of the Office of Management and Budg-
et.
(b) OPERATION OF FUND.—The capital of the fund
shall consist of any appropriations made for the purpose
of providing working capital and the fair and reasonable
value of such stocks of supplies, equipment, and other as-
sets and inventories on order as the USTR may transfer
to the fund, less the related liabilities and unpaid obliga-
tions. The fund shall be reimbursed in advance from avail-
able funds of agencies and offices in the Office, or from
other sources, for supplies and services at rates which will
1659
approximate the expense of operation, including the ac-
crual of annual leave and the depreciation of equipment.
The fund shall also be credited with receipts from sale or
exchange of property and receipts in payment for loss or
damage to property owned by the fund. There shall be cov-
ered into the United States Treasury as miscellaneous re-
ceipts any surplus of the fund (all assets, liabilities, and
prior losses considered) above the amounts transferred or
appropriated to establish and maintain the fund. There
shall be transferred to the fund the stocks of supplies,
equipment, other assets, liabilities, and unpaid obligations
relating to those services which the USTR determines will
be performed.
SEC. 17351. SERVICE CHARGES.
(a) AUTHORITY.—Notwithstanding any other provi-
sion of law, the USTR may establish reasonable fees and
commissions with respect to applications, documents,
awards, loans, grants, research data, services, and assist-
ance administered by the Office, and the USTR may
change and abolish such fees and commissions. Before es-
tablishing, changing, or abolishing any schedule of fees or
commissions under this section, the USTR may submit
such schedule to the Congress.
(b) DEPOSITS.—The USTR is authorized to require
a deposit before the USTR provides any item, information,
1660
service, or assistance for which a fee or commission is re-
quired under this section.
(c) DEPOSIT OF MONEYS.—Moneys received under
this section shall be deposited in the Treasury in a special
account for use by the USTR and are authorized to be
appropriated and made available until expended.
(d) FACTORS IN ESTABLISHING FEES AND COMMIS-
SIONS.—In establishing reasonable fees or commissions
under this section, the USTR may take into account—
(1) the actual costs which will be incurred in
providing the items, information, services, or assist-
ance concerned;
(2) the efficiency of the Government in provid-
ing such items, information, services, or assistance;
(3) the portion of the cost that will be incurred
in providing such items, information, services, or as-
sistance which may be attributed to benefits for the
general public rather than exclusively for the person
to whom the items, information, services, or assist-
ance is provided;
(4) any public service which occurs through the
provision of such items, information, services, or as-
sistance; and
(5) such other factors as the USTR considers
appropriate.
1661
(e) REFUNDS OF EXCESS PAYMENTS.—In any case
in which the USTR determines that any person has made
a payment which is not required under this section or has
made a payment which is in excess of the amount required
under this section, the USTR, upon application or other-
wise, may cause a refund to be made from applicable
funds.
SEC. 17352. SEAL OF OFFICE.
The USTR shall cause a seal of office to be made
for the Office of such design as the USTR shall approve.
Judicial notice shall be taken of such seal.
Subchapter E—Related Agencies
SEC. 17361. INTERAGENCY TRADE ORGANIZATION.
Section 242(a)(3) of the Trade Expansion Act of
1962 (19 U.S.C. 1872(a)(3)) is amended to read as fol-
lows:
‘‘(3)(A) The interagency organization estab-
lished under subsection (a) shall be composed of—
‘‘(i) the United States Trade Representa-
tive, who shall be the chairperson,
‘‘(ii) the Secretary of Agriculture,
‘‘(iii) the Secretary of the Treasury,
‘‘(iv) the Secretary of Labor,
‘‘(v) the Secretary of State, and
1662
‘‘(vi) the representatives of such other de-
partments and agencies as the United States
Trade Representative shall designate.
‘‘(B) The United States Trade Representative
may invite representatives from other agencies, as
appropriate, to attend particular meetings if subject
matters of specific functional interest to such agen-
cies are under consideration. It shall meet at such
times and with respect to such matters as the Presi-
dent or the chairperson shall direct.’’.
SEC. 17362. NATIONAL SECURITY COUNCIL.
The fourth paragraph of section 101(a) of the Na-
tional Security Act of 1947 (50 U.S.C. 402(a)) is amend-
ed—
(1) by redesignating clauses (5), (6), and (7) as
clauses (6), (7), and (8), respectively; and
(2) by inserting after clause (4) the following
new clause:
‘‘(5) the United States Trade Representative;’’.
SEC. 17363. INTERNATIONAL MONETARY FUND.
Section 3 of the Bretton Woods Agreement Act is
amended by adding at the end the following new sub-
section:
‘‘(e) The United States executive director of the Fund
shall consult with the United States Trade Representative
1663
with respect to matters under consideration by the Fund
which relate to trade.’’.
Subchapter F—Conforming Amendments
SEC. 17371. AMENDMENTS TO GENERAL PROVISIONS.
(a) INSPECTOR GENERAL.—The Inspector General
Act of 1978 is amended—
(1) in subsection 9(a)(1) by inserting after sub-
paragraph (W) the following:
‘‘(X) of the United States Trade Rep-
resentative, all functions of the Inspector Gen-
eral of the Department of Commerce and the
Office of the Inspector General of the Depart-
ment of Commerce relating to the functions
transferred to the United States Trade Rep-
resentative by section 17332 of the Department
of Commerce Dismantling Act; and’’; and
(2) in section 11—
(A) in paragraph (1) by inserting ‘‘the
United States Trade Representative;’’ after
‘‘the Attorney General;’’; and
(B) in paragraph (2) by inserting ‘‘the Of-
fice of the United States Trade Representa-
tive,’’ after ‘‘Treasury;’’.
1664
(b) AMENDMENT TO THE TRADE ACT OF 1974.—(1)
Chapter 4 of title I of the Trade Act of 1974 is amended
to read as follows:
‘‘CHAPTER 4—REPRESENTATION IN
TRADE NEGOTIATIONS
‘‘SEC. 141. FUNCTIONS OF THE UNITED STATES TRADE REP-
RESENTATIVE.
‘‘The United States Trade Representative established
under section 17311 of the Department of Commerce Dis-
mantling Act shall—
‘‘(1) be the chief representative of the United
States for each trade negotiation under this title or
chapter 1 of title III of this Act, or subtitle A of
title I of the Omnibus Trade and Competitiveness
Act of 1988, or any other provision of law enacted
after the Department of Commerce Dismantling Act;
‘‘(2) report directly to the President and the
Congress, and be responsible to the President and
the Congress for the administration of trade agree-
ments programs under this Act, the Omnibus Trade
and Competitiveness Act of 1988, the Trade Expan-
sion Act of 1962, section 350 of the Tariff Act of
1930, and any other provision of law enacted after
the Department of Commerce Dismantling Act;
1665
‘‘(3) advise the President and the Congress
with respect to nontariff barriers to international
trade, international commodity agreements, and
other matters which are related to the trade agree-
ments programs; and
‘‘(4) be responsible for making reports to Con-
gress with respect to the matters set forth in para-
graphs (1) and (2).’’.
(2) The table of contents in the first section of the
Trade Act of 1974 is amended by striking the items relat-
ing to chapter 4 and section 141 and inserting the follow-
ing:
‘‘CHAPTER 4—REPRESENTATION IN TRADE NEGOTIATIONS
‘‘Sec. 141. Functions of the United States Trade Representative.’’.
(d) FOREIGN SERVICE PERSONNEL.—The Foreign
Service Act of 1980 is amended by striking paragraph (3)
of section 202(a) (22 U.S.C. 3922(a)) and inserting the
following:
‘‘(3) The United States Trade Representative
may utilize the Foreign Service personnel system in
accordance with this Act—
‘‘(A) with respect to the personnel per-
forming functions—
‘‘(i) which were transferred to the De-
partment of Commerce from the Depart-
1666
ment of State by Reorganization Plan No.
3 of 1979; and
‘‘(ii) which were subsequently trans-
ferred to the United States Trade Rep-
resentative by section 17332 of the De-
partment of Commerce Dismantling Act;
and
‘‘(B) with respect to other personnel of the
Office of United States Trade Representative to
the extent the President determines to be nec-
essary in order to enable the Office of the Unit-
ed States Trade Representative to carry out
functions which require service abroad.’’.
(e) CHIEF FINANCIAL OFFICERS.—Section 901(b)(1)
of title 31, United States Code, is amended by adding at
the end the following:
‘‘(Q) The Office of the United States
Trade Representative.’’.
SEC. 17372. REPEALS.
Sections 1 and 2 of the Act of June 5, 1939 (15
U.S.C. 1502 and 1503; 53 Stat. 808), relating to the
Under Secretary of Commerce, are repealed.
1667
SEC. 17373. CONFORMING AMENDMENTS RELATING TO EX-
ECUTIVE SCHEDULE POSITIONS.
(a) POSITIONS AT LEVEL I.—Section 5312 of title
5, United States Code, is amended by amending the item
relating to the United States Trade Representative to read
as follows:
‘‘United States Trade Representative, Office of
the United States Trade Representative.’’.
(b) POSITIONS AT LEVEL II.—Section 5313 of title
5, United States Code, is amended by adding at the end
the following:
‘‘Deputy Administrator of the Office of the
United States Trade Representative.
‘‘Deputy United States Trade Representatives,
Office of the United States Trade Representative
(2).’’.
(c) POSITIONS AT LEVEL III.—Section 5314 of title
5, United States Code, is amended by adding at the end
the following:
‘‘Assistant Administrators, Office of the United
States Trade Representative (3).
‘‘Director General for Export Promotion, Office
of the United States Trade Representative.’’.
(d) POSITIONS AT LEVEL IV.—Section 5315 of title
5, United States Code, is amended—
1668
(1) by striking the item relating to the Assist-
ant Secretary of Commerce and Director General of
the United States and Foreign Commercial Service;
and
(2) by adding at the end the following:
‘‘General Counsel, Office of the United States
Trade Representative.
‘‘Inspector General, Office of the United States
Trade Representative.
‘‘Chief Financial Officer, Office of the United
States Trade Representative.’’.
Subchapter G—Miscellaneous
SEC. 17381. EFFECTIVE DATE.
(a) IN GENERAL.—This subtitle shall take effect on
the effective date specified in section 17209(a), except
that—
(1) section 17336 shall take effect on the date
of the enactment of this Act; and
(2) at any time after the date of the enactment
of this Act the officers provided for in subchapter B
may be nominated and appointed, as provided in
such subchapter.
(b) INTERIM
COMPENSATION
AND
EXPENSES.—
Funds available to the Department of Commerce or the
Office of the United States Trade Representative (or any
1670
gated or expended by the United States in performing all
functions vested in the USTR and the Office pursuant to
this subtitle may not exceed 75 percent of the total
amount obligated or expended by the United States in per-
forming all such functions for fiscal year 1995.
(b) EXCEPTION.—Subsection (a) shall not apply to
obligations or expenditures incurred as a direct con-
sequence of the termination, transfer, or other disposition
of functions described in subsection (a) pursuant to this
title.
(c) RULE
OF CONSTRUCTION.—This section shall
take precedence over any other provision of law unless
such provision explicitly refers to this section and makes
an exception to it.
(d) RESPONSIBILITIES OF THE DIRECTOR OF THE
OFFICE OF MANAGEMENT AND BUDGET.—The Director
of the Office of Management and Budget shall—
(1) ensure compliance with the requirements of
this section; and
(2) include in each report under sections
17106(a) and (b) a description of actions taken to
comply with such requirements.
1671
Subtitle D—Patent and Trademark
Office Corporation
SEC. 17401. SHORT TITLE.
This subtitle may be cited as the ‘‘Patent and Trade-
mark Office Corporation Act of 1995’’.
CHAPTER 1—PATENT AND TRADEMARK
OFFICE
SEC. 17411. ESTABLISHMENT OF PATENT AND TRADEMARK
OFFICE AS A CORPORATION.
Section 1 of title 35, United States Code, is amended
to read as follows:
‘‘§ 1. Establishment
‘‘(a) ESTABLISHMENT.—The Patent and Trademark
Office is established as a wholly owned Government cor-
poration subject to chapter 91 of title 31, except as other-
wise provided in this title.
‘‘(b) OFFICES.—The Patent and Trademark Office
shall maintain an office in the District of Columbia, or
the metropolitan area thereof, for the service of process
and papers and shall be deemed, for purposes of venue
in civil actions, to be a resident of the district in which
its principal office is located. The Patent and Trademark
Office may establish offices in such other places as it con-
siders necessary or appropriate in the conduct of its busi-
ness.
1672
‘‘(c) REFERENCE.—For purposes of this title, the
Patent and Trademark Office shall also be referred to as
the ‘Office’.’’.
SEC. 17412. POWERS AND DUTIES.
Section 2 of title 35, United States Code, is amended
to read as follows:
‘‘§ 2. Powers and Duties
‘‘(a) IN GENERAL.—The Patent and Trademark Of-
fice shall be responsible for—
‘‘(1) the granting and issuing of patents and
the registration of trademarks;
‘‘(2) conducting studies, programs, or ex-
changes of items or services regarding domestic and
international patent and trademark law or the ad-
ministration of the Office, including programs to
recognize, identify, assess, and forecast the tech-
nology of patented inventions and their utility to in-
dustry;
‘‘(3) authorizing or conducting studies and pro-
grams cooperatively with foreign patent and trade-
mark offices and international organizations, in con-
nection with the granting and issuing of patents and
the registration of trademarks; and
‘‘(4) disseminating to the public information
with respect to patents and trademarks.
1673
‘‘(b) SPECIFIC POWERS.—The Office—
‘‘(1) shall have perpetual succession;
‘‘(2) shall adopt and use a corporate seal, which
shall be judicially noticed and with which letters pat-
ent, certificates of trademark registrations, and pa-
pers issued by the Office shall be authenticated;
‘‘(3) may sue and be sued in its corporate name
and be represented by its own attorneys in all judi-
cial and administrative proceedings, subject to the
provisions of section 8 of this title;
‘‘(4) may indemnify the Commissioner of Pat-
ents and Trademarks, and other officers, attorneys,
agents, and employees (including members of the
Management Advisory Board established in section
5) of the Office for liabilities and expenses incurred
within the scope of their employment;
‘‘(5) may adopt, amend, and repeal bylaws,
rules, and regulations, governing the manner in
which its business will be conducted and the powers
granted to it by law will be exercised;
‘‘(6) may acquire, construct, purchase, lease,
hold, manage, operate, improve, alter, and renovate
any real, personal, or mixed property, or any interest
therein, as it considers necessary to carry out its
functions;
1674
‘‘(7)(A) may make such purchases, contracts
for the construction, maintenance, or management
and operation of facilities, and contracts for supplies
or services, without regard to section 111 of the
Federal Property and Administrative Services Act of
1949 (40 U.S.C. 759); and
‘‘(B) may enter into and perform such pur-
chases and contracts for printing services, including
the process of composition, platemaking, presswork,
silk screen processes, binding, microform, and the
products of such processes, as it considers necessary
to carry out the functions of the Office, without re-
gard to sections 501 through 517 and 1101 through
1123 of title 44;
‘‘(8) may use, with their consent, services,
equipment, personnel, and facilities of other depart-
ments, agencies, and instrumentalities of the Fed-
eral Government, on a reimbursable basis, and co-
operate with such other departments, agencies, and
instrumentalities in the establishment and use of
services, equipment, and facilities of the Office;
‘‘(9) may obtain from the Administrator of
General Services such services as the Administrator
is authorized to provide to other agencies of the
1675
United States, on the same basis as those services
are provided to other agencies of the United States;
‘‘(10) may use, with the consent of the United
States and the agency, government, or international
organization concerned, the services, records, facili-
ties, or personnel of any State or local government
agency or instrumentality or foreign government or
international organization to perform functions on
its behalf;
‘‘(11) may determine the character of and the
necessity for its obligations and expenditures and
the manner in which they shall be incurred, allowed,
and paid, subject to the provisions of this title and
the Act of July 5, 1946 (commonly referred to as
the ‘Trademark Act of 1946’);
‘‘(12) may retain and use all of its revenues
and receipts, including revenues from the sale, lease,
or disposal of any real, personal, or mixed property,
or any interest therein, of the Office, in carrying out
the functions of the Office, including for research
and development and capital investment, subject to
the provisions of section 10101 of the Omnibus
Budget Reconciliation Act of 1990 (35 U.S.C. 41
note);
1676
‘‘(13) shall have the priority of the United
States with respect to the payment of debts from
bankrupt, insolvent, and decedents’ estates;
‘‘(14) may accept monetary gifts or donations
of services, or of real, personal, or mixed property,
in order to carry out the functions of the Office;
‘‘(15) may execute, in accordance with its by-
laws, rules, and regulations, all instruments nec-
essary and appropriate in the exercise of any of its
powers;
‘‘(16) may provide for liability insurance and
insurance against any loss in connection with its
property, other assets, or operations either by con-
tract or by self-insurance; and
‘‘(17) shall pay any settlement or judgment en-
tered against it from the funds of the Office and not
from amounts available under section 1304 of title
31.’’.
SEC. 17413. ORGANIZATION AND MANAGEMENT.
Section 3 of title 35, United States Code, is amended
to read as follows:
‘‘§ 3. Officers and employees
‘‘(a) COMMISSIONER.—
‘‘(1) IN
GENERAL.—The management of the
Patent and Trademark Office shall be vested in a
1677
Commissioner of Patents and Trademarks (hereafter
in this title referred to as the ‘Commissioner’), who
shall be a citizen of the United States and who shall
be appointed by the President, by and with the ad-
vice and consent of the Senate. The Commissioner
shall be a person who, by reason of professional
background and experience in patent and trademark
law, is especially qualified to manage the Office.
‘‘(2) DUTIES.—
‘‘(A) IN
GENERAL.—The Commissioner
shall be responsible for the management and di-
rection of the Office, including the issuance of
patents and the registration of trademarks.
‘‘(B) ADVISING
THE
PRESIDENT.—The
Commissioner shall advise the President of all
activities of the Patent and Trademark Office
undertaken in response to obligations of the
United States under treaties and executive
agreements, or which relate to cooperative pro-
grams with those authorities of foreign govern-
ments that are responsible for granting patents
or registering trademarks. The Commissioner
shall also recommend to the President changes
in law or policy which may improve the ability
of United States citizens to secure and enforce
1678
patent rights or trademark rights in the United
States or in foreign countries.
‘‘(C) CONSULTING
WITH
THE
MANAGE-
MENT
ADVISORY
BOARD.—The Commissioner
shall consult with the Management Advisory
Board established in section 5 on a regular
basis on matters relating to the operation of the
Patent and Trademark Office, and shall consult
with the Board before submitting budgetary
proposals to the Office of Management and
Budget or changing or proposing to change pat-
ent or trademark user fees or patent or trade-
mark regulations.
‘‘(D) SECURITY CLEARANCES.—The Com-
missioner, in consultation with the Director of
the Office of Personnel Management, shall
maintain a program for identifying national se-
curity positions and providing for appropriate
security clearances.
‘‘(3) TERM.—The Commissioner shall serve a
term of 5 years, and may continue to serve after the
expiration of the Commissioner’s term until a suc-
cessor is appointed and assumes office. The Com-
missioner may be reappointed to subsequent terms.
1679
‘‘(4) OATH.—The Commissioner shall, before
taking office, take an oath to discharge faithfully the
duties of the Office.
‘‘(5) COMPENSATION.—The Commissioner shall
receive compensation at the rate of pay in effect for
Level III of the Executive Schedule under section
5314 of title 5.
‘‘(6) REMOVAL.—The Commissioner may be re-
moved from office by the President only for cause.
‘‘(7) DESIGNEE OF COMMISSIONER.—The Com-
missioner shall designate an officer of the Office who
shall be vested with the authority to act in the ca-
pacity of the Commissioner in the event of the ab-
sence or incapacity of the Commissioner.
‘‘(b) OFFICERS AND EMPLOYEES OF THE OFFICE.—
‘‘(1) DEPUTY COMMISSIONERS.—The Commis-
sioner shall appoint a Deputy Commissioner for Pat-
ents and a Deputy Commissioner for Trademarks
for terms that shall expire on the date on which the
Commissioner’s term expires. The Deputy Commis-
sioner for Patents shall be a person with dem-
onstrated experience in patent law and the Deputy
Commissioner for Trademarks shall be a person with
demonstrated experience in trademark law. The
Deputy Commissioner for Patents and the Deputy
1680
Commissioner for Trademarks shall be the principal
policy advisors to the Commissioner on all aspects of
the activities of the Office that affect the adminis-
tration of patent and trademark operations, respec-
tively.
‘‘(2) OTHER OFFICERS AND EMPLOYEES.—The
Commissioner shall—
‘‘(A) appoint an Inspector General and
such other officers, employees (including attor-
neys), and agents of the Office as the Commis-
sioner considers necessary to carry out its func-
tions;
‘‘(B) fix the compensation of such officers
and employees; and
‘‘(C) define the authority and duties of
such officers and employees and delegate to
them such of the powers vested in the Office as
the Commissioner may determine.
The Office shall not be subject to any administra-
tively or statutorily imposed limitation on positions
or personnel, and no positions or personnel of the
Office shall be taken into account for purposes of
applying any such limitation, except to the extent
otherwise specifically provided by statute with re-
spect to the Office.
1681
‘‘(c) LIMITS ON COMPENSATION.—Except as other-
wise provided in this title or any other provision of law,
the basic pay of an officer or employee of the Office for
any calendar year may not exceed the annual rate of basic
pay in effect for level IV of the Executive Schedule under
section 5315 of title 5. The Commissioner shall by regula-
tion establish a limitation on the total compensation pay-
able to officers or employees of the Office, which may not
exceed the annual rate of basic pay in effect for level I
of the Executive Schedule under section 5312 of title 5.
‘‘(d) INAPPLICABILITY OF TITLE 5 GENERALLY.—
Except as otherwise provided in this section, officers and
employees of the Office shall not be subject to the provi-
sions of title 5 relating to Federal employees.
‘‘(e) CONTINUED APPLICABILITY OF CERTAIN PRO-
VISION OF TITLE 5.—The following provisions of title 5
shall apply to the Office and its officers and employees:
‘‘(1) Section 3110 (relating to employment of
relatives; restrictions).
‘‘(2) Subchapter II of chapter 55 (relating to
withholding pay).
‘‘(3) Subchapter II of chapter 73 (relating to
employment limitations).
‘‘(f) PROVISIONS OF TITLE 5 RELATING TO CERTAIN
BENEFITS.—
1682
‘‘(1) RETIREMENT.—(A)(i) Any individual who
becomes an officer or employee of the Office pursu-
ant to subsection (h) shall, if such individual has at
least 3 years of creditable service (within the mean-
ing of section 8332 or 8411 of title 5) as of the ef-
fective date of the Patent and Trademark Office
Corporation Act of 1995, remain subject to sub-
chapter III of chapter 83 or chapter 84 of such title,
as the case may be, so long as such individual con-
tinues to hold an office or position in or under the
Office without a break in service.
‘‘(ii)(I) Except as provided in subclause (II),
with respect to an individual described in clause (i),
the Office shall make the appropriate withholding
from pay and shall pay the contributions required of
an employing agency into the Civil Service Retire-
ment and Disability Fund and, if applicable, the
Thrift Savings Fund in accordance with applicable
provisions of subchapter III of chapter 83 or chapter
84 of title 5, as the case may be.
‘‘(II) In the case of an officer or employee who
remains subject to subchapter III of chapter 83 of
such title by virtue of this subparagraph, the Office
shall, instead of the amount which would otherwise
be required under the second sentence of section
1683
8334(a)(1) of title 5, contribute an amount equal to
the normal-cost percentage (determined with respect
to officers and employees of the Office using dy-
namic assumptions, as defined by section 8401(9) of
such title) of the individual’s basic pay, minus the
amount required to be withheld from such pay under
such section 8334(a)(1).
‘‘(B)(i) Notwithstanding subsection (d), the
provisions of subchapter III of chapter 83 or chapter
84 of title 5 (as applicable) which relate to disability
shall be considered to remain in effect, with respect
to an individual who becomes an officer or employee
of the Office pursuant to subsection (h), until the
end of the 2-year period beginning on the effective
date of the Patent and Trademark Office Corpora-
tion Act of 1995 or, if earlier, until such individual
satisfies the prerequisites for coverage under any
program offered by the Office to replace the disabil-
ity retirement program under chapter 83 or 84 of
title 5.
‘‘(ii) This clause applies with respect to any of-
ficer or employee of the Office who is receiving dis-
ability coverage under this subparagraph and has
completed the service requirement specified in the
first sentence of section 8337(a) or 8451(a)(1)(A) of
1684
title 5 (as applicable), but who is not described in
subparagraph (A)(i). In the case of any individual to
whom this clause applies, the Office shall pay into
the Civil Service Retirement and Disability Fund an
amount equal to that portion of the normal-cost per-
centage (determined in the same manner as under
subparagraph (A)(ii)(II)) of the basic pay of such
individual (for service performed during the period
during which such individual is receiving such cov-
erage) allocable to such coverage. Any amounts pay-
able under this clause shall be paid at such time and
in such manner as mutually agreed to by the Office
and the Office of Personnel Management, and shall
be in lieu of any individual or agency contributions
otherwise required.
‘‘(2) HEALTH BENEFITS.—(A) Officers and em-
ployees of the Office shall not become ineligible to
participate in the health benefits program under
chapter 89 of title 5 by reason of subsection (d)
until the effective date of elections made during the
first election period (under section 8905(f) of title 5)
beginning after the end of the 2-year period begin-
ning on the effective date of the the Patent and
Trademark Office Corporation Act of 1995.
1685
‘‘(B)(i) With respect to any individual who be-
comes an officer or employee of the Office pursuant
to subsection (h), the eligibility of such individual to
participate in such program as an annuitant (or of
any other person to participate in such program as
an annuitant based on the death of such individual)
shall be determined disregarding the requirements of
section 8905(b) of title 5. The preceding sentence
shall not apply if the individual ceases to be an offi-
cer or employee of the Office for any period of time
after becoming an officer or employee of the Office
pursuant to subsection (h) and before separation.
‘‘(ii) The Government contributions authorized
by section 8906 for health benefits for anyone par-
ticipating in the health benefits program pursuant to
this subparagraph shall be made by the Office in the
same manner as provided under section 8906(g)(2)
of title 5 with respect to the United States Postal
Service for individuals associated therewith.
‘‘(iii) For purposes of this subparagraph, the
term ‘annuitant’ has the meaning given such term
by section 8901(3) of title 5.
‘‘(3) LIFE INSURANCE.—(A) Officers and em-
ployees of the Office shall not become ineligible to
participate in the life insurance program under
1686
chapter 87 of title 5 by reason of subsection (d)
until the first day after the end of the 2-year period
beginning on the effective date of the the Patent and
Trademark Office Corporation Act of 1995.
‘‘(B)(i) Eligibility for life insurance coverage
after retirement or while in receipt of compensation
under subchapter I of chapter 81 of title 5 shall be
determined, in the case of any individual who be-
comes an officer or employee of the Office pursuant
to subsection (h), without regard to the require-
ments of section 8706(b) (1) or (2), but subject to
the condition specified in the last sentence of para-
graph (2)(B)(i) of this subsection.
‘‘(ii) Government contributions under section
8708(d) on behalf of any such individual shall be
made by the Office in the same manner as provided
under paragraph (3) thereof with respect to the
United States Postal Service for individuals associ-
ated therewith.
‘‘(4) EMPLOYEES’ COMPENSATION FUND.—The
Office shall remain responsible for reimbursing the
Employees’ Compensation Fund, pursuant to section
8147 of title 5, for compensation paid or payable
after the effective date of the Patent and Trademark
Office Corporation Act of 1995 in accordance with
1687
chapter 81 of title 5 with regard to any injury, dis-
ability, or death due to events arising before such
date, whether or not a claim has been filed or is
final on such date.
‘‘(5) REQUIREMENT THAT THE OFFICE OFFER
CERTAIN MINIMUM NUMBER OF LIFE AND HEALTH
INSURANCE
POLICIES.—The Office shall offer at
least 1 life insurance policy and at least 3 health in-
surance policies to its officers and employees, com-
parable to existing Federal benefits, beginning on
the first day after the end of the 2-year period be-
ginning on the effective date of the Patent and
Trademark Office Corporation Act of 1995.
‘‘(g) LABOR-MANAGEMENT RELATIONS.—
‘‘(1) LABOR RELATIONS AND EMPLOYEE RELA-
TIONS PROGRAMS.—The Office shall develop labor
relations and employee relations programs with the
objective of improving productivity and efficiency, in-
corporating the following principles:
‘‘(A) Such programs shall be consistent
with the merit principles in section 2301(b) of
title 5.
‘‘(B) Such programs shall provide veterans
preference protections equivalent to those estab-
1688
lished by sections 2801, 3308–3318, and 3320
of title 5.
‘‘(C)(i) In order to maximize individual
freedom of choice in the pursuit of employment
and to encourage an economic climate condu-
cive to economic growth, the right to work shall
not be subject to undue restraint or coercion.
The right to work shall not be infringed or re-
stricted in any way based on membership in, af-
filiation with, or financial support of a labor or-
ganization.
‘‘(ii) No person shall be required, as a con-
dition of employment or continuation of employ-
ment:
‘‘(I) To resign or refrain from vol-
untary membership in, voluntary affiliation
with, or voluntary financial support of a
labor organization.
‘‘(II) To become or remain a member
of a labor organization.
‘‘(III) To pay any dues, fees, assess-
ments, or other charges of any kind or
amount to a labor organization.
‘‘(IV) To pay to any charity or other
third party, in lieu of such payments, any
1689
amount equivalent to or a pro-rata portion
of dues, fees, assessments, or other charges
regularly required of members of a labor
organization.
‘‘(V) To be recommended, approved,
referred, or cleared by or through a labor
organization.
‘‘(iii) This subparagraph shall not apply to
a person described in section 7103(a)(2)(v) of
title 5 or a ‘supervisor’, ‘management official’,
or ‘confidential employee’ as those terms are
defined in 7103(a)(10), (11), and (13) of such
title.
‘‘(iv) Any labor organization recognized by
the Office as the exclusive representative of a
unit of employees of the Office shall represent
the interests of all employees in that unit with-
out discrimination and without regard to labor
organization membership.
‘‘(2) ADOPTION
OF
EXISTING
LABOR
AGREE-
MENTS.—The Office shall adopt all labor agreements
which are in effect, as of the day before the effective
date of the Patent and Trademark Office Corpora-
tion Act of 1995, with respect to such Office (as
then in effect). Each such agreement shall remain in
1690
effect for the 2-year period commencing on such
date, unless the agreement provides for a shorter du-
ration or the parties agree otherwise before such pe-
riod ends.
‘‘(h) CARRYOVER OF PERSONNEL.—
‘‘(1) FROM PTO.—Effective as of the effective
date of the Patent and Trademark Office Corpora-
tion Act of 1995, all officers and employees of the
Patent and Trademark Office on the day before
such effective date shall become officers and employ-
ees of the Office, without a break in service.
‘‘(2) OTHER PERSONNEL.—Any individual who,
on the day before the effective date of the Patent
and Trademark Office Corporation Act of 1995, is
an officer or employee of the Department of Com-
merce (other than an officer or employee under
paragraph (1)) shall be transferred to the Office if—
‘‘(A) such individual serves in a position
for which a major function is the performance
of work reimbursed by the Patent and Trade-
mark Office, as determined by the Secretary of
Commerce;
‘‘(B) such individual serves in a position
that performed work in support of the Patent
and Trademark Office during at least half of
1692
termination had occurred immediately before such
date. An employee who would have been entitled to
appeal any such termination to the Merit Systems
Protection Board, if such termination had occurred
immediately before such effective date, may appeal
any such termination occurring within this 2-year
period to the Board under such procedures as it may
prescribe.
‘‘(5) CONTINUATION
IN
OFFICE
OF
CERTAIN
OFFICERS.—(A) The individual serving as the Com-
missioner of Patents and Trademarks on the day be-
fore the effective date of the Patent and Trademark
Office Corporation Act of 1995 may serve as the
Commissioner until the earlier of 1 year after the ef-
fective date of that Act or the date on which a Com-
missioner is appointed under subsection (a).
‘‘(B) The individual serving as the Assistant
Commissioner for Patents on the day before the ef-
fective date of the Patent and Trademark Office
Corporation Act of 1995 may serve as the Deputy
Commissioner for Patents until the earlier of 1 year
after the effective date of that Act or the date on
which a Deputy Commissioner for Patents is ap-
pointed under subsection (b).
1693
‘‘(C) The individual serving as the Assistant
Commissioner for Trademarks on the day before the
effective date of the Patent and Trademark Office
Corporation Act of 1995 may serve as the Deputy
Commissioner for Trademarks until the earlier of 1
year after the effective date of that Act or the date
on which a Deputy Commissioner for Trademarks is
appointed under subsection (b).
‘‘(i) COMPETITIVE STATUS.—For purposes of ap-
pointment to a position in the competitive service for
which an officer or employee of the Office is qualified,
such officer or employee shall not forfeit any competitive
status, acquired by such officer or employee before the ef-
fective date of the Patent and Trademark Office Corpora-
tion Act of 1995, by reason of becoming an officer or em-
ployee of the Office pursuant to subsection (h).
‘‘(j) SAVINGS PROVISIONS.—All orders, determina-
tions, rules, and regulations regarding compensation and
benefits and other terms and conditions of employment,
in effect for the Office and its officers and employees im-
mediately before the effective date of the Patent and
Trademark Office Corporation Act of 1995, shall continue
in effect with respect to the Office and its officers and
employees until modified, superseded, or set aside by the
1694
Office or a court of appropriate jurisdiction or by oper-
ation of law.’’.
SEC. 17414. MANAGEMENT ADVISORY BOARD.
Chapter 1 of part I of title 35, United States Code,
is amended by inserting after section 4 the following:
‘‘§ 5. Patent and Trademark Office Management Advi-
sory Board
‘‘(a) ESTABLISHMENT OF MANAGEMENT ADVISORY
BOARD.—
‘‘(1) APPOINTMENT.—The Patent and Trade-
mark Office shall have a Management Advisory
Board (hereafter in this title referred to as the
‘Board’) of 12 members, 4 of whom shall be ap-
pointed by the President, 4 of whom shall be ap-
pointed by the Speaker of the House of Representa-
tives, and 4 of whom shall be appointed by the
President pro tempore of the Senate. Not more than
3 of the 4 members appointed by each appointing
authority shall be members of the same political
party.
‘‘(2) TERMS.—Members of the Board shall be
appointed for a term of 4 years each, except that of
the members first appointed by each appointing au-
thority, 1 shall be for a term of 1 year, 1 shall be
1695
for a term of 2 years, and 1 shall be for a term of
3 years. No member may serve more than 1 term.
‘‘(3) CHAIR.—The President shall designate the
chair of the Board, whose term as chair shall be for
3 years.
‘‘(4) TIMING
OF
APPOINTMENTS.—Initial ap-
pointments to the Board shall be made within 3
months after the effective date of the Patent and
Trademark Office Corporation Act of 1995, and va-
cancies shall be filled within 3 months after they
occur.
‘‘(5) VACANCIES.—Vacancies shall be filled in
the manner in which the original appointment was
made under this subsection. Members appointed to
fill a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
that term. A member may serve after the expiration
of that member’s term until a successor is ap-
pointed.
‘‘(b) BASIS FOR APPOINTMENTS.—Members of the
Board shall be citizens of the United States who shall be
chosen so as to represent the interests of diverse users
of the Patent and Trademark Office, and shall include in-
1696
dividuals with substantial background and achievement in
corporate finance and management.
‘‘(c) APPLICABILITY OF CERTAIN ETHICS LAWS.—
Members of the Board shall be special Government em-
ployees within the meaning of section 202 of title 18.
‘‘(d) MEETINGS.—The Board shall meet at the call
of the chair to consider an agenda set by the chair.
‘‘(e) DUTIES.—The Board shall—
‘‘(1) review the policies, goals, performance,
budget, and user fees of the Patent and Trademark
Office, and advise the Commissioner on these mat-
ters; and
‘‘(2) within 60 days after the end of each fiscal
year, prepare an annual report on the matters re-
ferred to in paragraph (1), transmit the report to
the President and the Committees on the Judiciary
of the Senate and the House of Representatives, and
publish the report in the Patent and Trademark Of-
fice Official Gazette.
‘‘(f) STAFF.—The Board shall employ a staff of not
more than 10 members and shall procure support services
for the staff adequate to enable the Board to carry out
its functions, using funds available to the Commissioner
under section 42 of this title. The Board shall ensure that
members of the staff, other than clerical staff, are espe-
1697
cially qualified in the areas of patents, trademarks, or
management of public agencies. Persons employed by the
Board shall receive compensation as determined by the
Board, which may not exceed the limitations set forth in
section 3(c) of this title, shall serve in accordance with
terms and conditions of employment established by the
Board, and shall be subject solely to the direction of the
Board, notwithstanding any other provision of law.
‘‘(g) COMPENSATION.—Members of the Board shall
be compensated for each day (including travel time) dur-
ing which they are attending meetings or conferences of
the Board or otherwise engaged in the business of the
Board, at the rate which is the daily equivalent of the an-
nual rate of basic pay in effect for level III of the Execu-
tive Schedule under section 5314 of title 5, and while away
from their homes or regular places of business they may
be allowed travel expenses, including per diem in lieu of
subsistence, as authorized by section 5703 of title 5.
‘‘(h) ACCESS
TO INFORMATION.—Members of the
Board shall be provided access to records and information
in the Patent and Trademark Office, except for personnel
or other privileged information and information concern-
ing patent applications required to be kept in confidence
by section 122 of this title.’’.
1698
SEC. 17415. INDEPENDENCE FROM DEPARTMENT OF COM-
MERCE.
(a) DUTIES OF COMMISSIONER.—Section 6 of title
35, United States Code, is amended—
(1) by striking ‘‘, under the direction of the
Secretary of Commerce,’’ each place it appears; and
(2) by striking ‘‘, subject to the approval of the
Secretary of Commerce,’’.
(b) REGULATIONS FOR AGENTS AND ATTORNEYS.—
Section 31 of title 35, United States Code, is amended
by striking ‘‘, subject to the approval of the Secretary of
Commerce,’’.
SEC. 17416. TRADEMARK TRIAL AND APPEAL BOARD.
Section 17 of the Act of July 5, 1946 (commonly re-
ferred to as the ‘‘Trademark Act of 1946’’) (15 U.S.C.
1067) is amended to read as follows:
‘‘SEC. 17. (a) In every case of interference, opposition
to registration, application to register as a lawful concur-
rent user, or application to cancel the registration of a
mark, the Commissioner shall give notice to all parties and
shall direct a Trademark Trial and Appeal Board to deter-
mine and decide the respective rights of registration.
‘‘(b) The Trademark Trial and Appeal Board shall
include the Commissioner, the Deputy Commissioner for
Patents, the Deputy Commissioner for Trademarks, and
1699
members competent in trademark law who are appointed
by the Commissioner.’’.
SEC. 17417. BOARD OF PATENT APPEALS AND INTER-
FERENCES.
Section 7 of title 35, United States Code, is amended
to read as follows:
‘‘§ 7. Board of Patent Appeals and Interferences
‘‘(a) ESTABLISHMENT
AND COMPOSITION.—There
shall be in the Patent and Trademark Office a Board of
Patent Appeals and Interferences. The Commissioner, the
Deputy Commissioner for Patents, the Deputy Commis-
sioner for Trademarks, and the examiners-in-chief shall
constitute the Board. The examiners-in-chief shall be per-
sons of competent legal knowledge and scientific ability.
‘‘(b) DUTIES.—The Board of Patent Appeals and
Interferences shall, on written appeal of an applicant, re-
view adverse decisions of examiners upon applications for
patents and shall determine priority and patentability of
invention in interferences declared under section 135(a)
of this title. Each appeal and interference shall be heard
by at least 3 members of the Board, who shall be des-
ignated by the Commissioner. Only the Board of Patent
Appeals and Interferences may grant rehearings.’’.
1700
SEC. 17418. SUITS BY AND AGAINST THE CORPORATION.
Chapter 1 of part I of title 35, United States Code,
is amended—
(1) by redesignating sections 8 through 14 as
sections 9 through 15; and
(2) by inserting after section 7 the following
new section:
‘‘§ 8. Suits by and against the Corporation
‘‘(a) IN GENERAL.—
‘‘(1) ACTIONS UNDER UNITED STATES LAW.—
Any civil action or proceeding to which the Patent
and Trademark Office is a party is deemed to arise
under the laws of the United States. The Federal
courts shall have exclusive jurisdiction over all civil
actions by or against the Office.
‘‘(2) CONTRACT CLAIMS.—Any action or pro-
ceeding against the Office in which any claim is cog-
nizable under the Contract Disputes Act of 1978 (41
U.S.C. 601 and following) shall be subject to that
Act. For purposes of that Act, the Commissioner
shall be deemed to be the agency head with respect
to contract claims arising with respect to the Office.
Any other action or proceeding against the Office
founded upon contract may be brought in an appro-
priate district court, notwithstanding any provision
of title 28.
1701
‘‘(3) TORT CLAIMS.—(A) Any action or pro-
ceeding against the Office in which any claim is cog-
nizable under the provisions of section 1346(b) and
chapter 171 of title 28, shall be governed by those
provisions.
‘‘(B) Any other action or proceeding against the
Office founded upon tort may be brought in an ap-
propriate district court without regard to the provi-
sions of section 1346(b) and chapter 171 of title 28.
‘‘(4) PROHIBITION
ON
ATTACHMENT, LIENS,
ETC.—No attachment, garnishment, lien, or similar
process, intermediate or final, in law or equity, may
be issued against property of the Office.
‘‘(5) SUBSTITUTION
OF
OFFICE
AS
PARTY.—
The Office shall be substituted as defendant in any
civil action or proceeding against an officer or em-
ployee of the Office, if the Office determines that the
officer or employee was acting within the scope of
his or her employment with the Office. If the Office
refuses to certify scope of employment, the officer or
employee may at any time before trial petition the
court to find and certify that the officer or employee
was acting within the scope of his or her employ-
ment. Upon certification by the court, the Office
shall be substituted as the party defendant. A copy
1703
with exclusive authority in the conduct, settlement,
or compromise of that action or proceeding.
‘‘(3) CONSULTATIONS
WITH
AND
ASSISTANCE
BY ATTORNEY GENERAL.—The Office may consult
with the Attorney General concerning any legal mat-
ter, and the Attorney General shall provide advice
and assistance to the Office, including representing
the Office in litigation, if requested by the Office.
‘‘(4) 
REPRESENTATION
BEFORE
SUPREME
COURT.—The Attorney General shall represent the
Office in all cases before the United States Supreme
Court.
‘‘(5) QUALIFICATIONS OF ATTORNEYS.—An at-
torney admitted to practice to the bar of the highest
court of at least one State in the United States or
the District of Columbia and employed by the Office
may represent the Office in any legal proceeding in
which the Office or an officer or employee of the Of-
fice is a party or interested, regardless of whether
the attorney is a resident of the jurisdiction in which
the proceeding is held and notwithstanding any
other prerequisites of qualification or appearance re-
quired by the court or administrative body before
which the proceeding is conducted.’’.
1704
SEC. 17419. ANNUAL REPORT OF COMMISSIONER.
Section 15 of title 35, United States Code, as redesig-
nated by section 17418 of this Act, is amended to read
as follows:
‘‘§ 15. Annual report to Congress
‘‘The Commissioner shall report to the Congress, not
later than 180 days after the end of each fiscal year, the
moneys received and expended by the Office, the purposes
for which the moneys were spent, the quality and quantity
of the work of the Office, and other information relating
to the Office. The report under this section shall also meet
the requirements of section 9106 of title 31, to the extent
that such requirements are not inconsistent with the pre-
ceding sentence. The report required under this section
shall be deemed to be the report of the Patent and Trade-
mark Office under section 9106 of title 31, and the Com-
missioner shall not file a separate report under such sec-
tion.’’.
SEC. 17420. SUSPENSION OR EXCLUSION FROM PRACTICE.
Section 32 of title 35, United States Code, is amend-
ed by inserting before the last sentence the following: ‘‘The
Commissioner shall have the discretion to designate any
attorney who is an officer or employee of the Patent and
Trademark Office to conduct the hearing required by this
section.’’.
1705
SEC. 17421. FUNDING.
Section 42 of title 35, United States Code, is amend-
ed to read as follows:
‘‘§ 42. Patent and Trademark Office funding
‘‘(a) FEES PAYABLE TO THE OFFICE.—All fees for
services performed by or materials furnished by the Patent
and Trademark Office shall be payable to the Office.
‘‘(b) USE OF MONEYS.—Moneys of the Patent and
Trademark Office not otherwise used to carry out the
functions of the Office shall be kept in cash on hand or
on deposit, or invested in obligations of the United States
or guaranteed by the United States, or in obligations or
other instruments which are lawful investments for fidu-
ciary, trust, or public funds. Fees available to the Commis-
sioner under this title shall be used exclusively for the
processing of patent applications and for other services
and materials relating to patents. Fees available to the
Commissioner under section 31 of the Act of July 5, 1946
(commonly referred to as the ‘Trademark Act of 1946’;
15 U.S.C. 1113), shall be used exclusively for the process-
ing of trademark registrations and for other services and
materials relating to trademarks.
‘‘(c) BORROWING
AUTHORITY.—The Patent and
Trademark Office is authorized to issue from time to time
for purchase by the Secretary of the Treasury its deben-
tures, bonds, notes, and other evidences of indebtedness
1706
(hereafter in this subsection referred to as ‘obligations’)
to assist in financing its activities. Borrowing under this
subsection shall be subject to prior approval in appropria-
tion Acts. Such borrowing shall not exceed amounts ap-
proved in appropriation Acts. Any such borrowing shall
be repaid only from fees paid to the Office and surcharges
appropriated by the Congress. Such obligations shall be
redeemable at the option of the Office before maturity in
the manner stipulated in such obligations and shall have
such maturity as is determined by the Office with the ap-
proval of the Secretary of the Treasury. Each such obliga-
tion issued to the Treasury shall bear interest at a rate
not less than the current yield on outstanding marketable
obligations of the United States of comparable maturity
during the month preceding the issuance of the obligation
as determined by the Secretary of the Treasury. The Sec-
retary of the Treasury shall purchase any obligations of
the Office issued under this subsection and for such pur-
pose the Secretary of the Treasury is authorized to use
as a public-debt transaction the proceeds of any securities
issued under chapter 31 of title 31, and the purposes for
which securities may be issued under that chapter are ex-
tended to include such purpose. Payment under this sub-
section of the purchase price of such obligations of the
1707
Patent and Trademark Office shall be treated as public
debt transactions of the United States.’’.
SEC. 17422. AUDITS.
Chapter 4 of part I of title 35, United States Code,
is amended by adding at the end the following new section:
‘‘§ 43. Audits
‘‘(a) IN GENERAL.—Financial statements of the Pat-
ent and Trademark Office shall be prepared on an annual
basis in accordance with generally accepted accounting
principles. Such statements shall be audited by an inde-
pendent certified public accountant chosen by the Com-
missioner. The audit shall be conducted in accordance with
standards that are consistent with generally accepted Gov-
ernment auditing standards and other standards estab-
lished by the Comptroller General, and with the generally
accepted auditing standards of the private sector, to the
extent feasible. The Commissioner shall transmit to the
Committees on the Judiciary of the House of Representa-
tives and the Senate the results of each audit under this
subsection.
‘‘(b) REVIEW
BY COMPTROLLER GENERAL.—The
Comptroller General may review any audit of the financial
statement of the Patent and Trademark Office that is con-
ducted under subsection (a). The Comptroller General
shall report to the Congress and the Office the results of
1708
any such review and shall include in such report appro-
priate recommendations.
‘‘(c) AUDIT
BY
COMPTROLLER
GENERAL.—The
Comptroller General may audit the financial statements
of the Office and such audit shall be in lieu of the audit
required by subsection (a). The Office shall reimburse the
Comptroller General for the cost of any audit conducted
under this subsection.
‘‘(d) ACCESS TO OFFICE RECORDS.—All books, fi-
nancial records, report files, memoranda, and other prop-
erty that the Comptroller General deems necessary for the
performance of any audit shall be made available to the
Comptroller General.
‘‘(e) APPLICABILITY IN LIEU OF TITLE 31 PROVI-
SIONS.—This section applies to the Office in lieu of the
provisions of section 9105 of title 31.’’.
SEC. 17423. TRANSFERS.
(a) TRANSFER OF FUNCTIONS.—Except as otherwise
provided in this Act, there are transferred to, and vested
in, the Patent and Trademark Office all functions, powers,
and duties vested by law in the Secretary of Commerce
or the Department of Commerce or in the officers or com-
ponents in the Department of Commerce with respect to
the authority to grant patents and register trademarks,
and in the Patent and Trademark Office, as in effect on
1709
the day before the effective date of this subtitle, and in
the officers and components of such Office.
(b) TRANSFER
OF FUNDS
AND PROPERTY.—The
Secretary of Commerce shall transfer to the Patent and
Trademark Office, on the effective date of this subtitle,
so much of the assets, liabilities, contracts, property,
records, and unexpended and unobligated balances of ap-
propriations, authorizations, allocations, and other funds
employed, held, used, arising from, available to, or to be
made available to the Department of Commerce, including
funds set aside for accounts receivable which are related
to functions, powers, and duties which are vested in the
Patent and Trademark Office by this subtitle.
CHAPTER 2—EFFECTIVE DATE;
TECHNICAL AMENDMENTS
SEC. 17431. EFFECTIVE DATE.
This subtitle shall take effect 6 months after the date
of the enactment of this Act.
SEC. 17432. TECHNICAL AND CONFORMING AMENDMENTS.
(a) AMENDMENTS TO TITLE 35.—
(1) The table of contents for part I of title 35,
United States Code, is amended by amending the
item relating to chapter 1 to read as follows:
‘‘1. Establishment, Officers and Employees, Functions ...........................
1.’’
1710
(2) The table of sections for chapter 1 of title
35, United States Code, is amended to read as fol-
lows:
‘‘CHAPTER 1—ESTABLISHMENT, OFFICERS
AND EMPLOYEES, FUNCTIONS
‘‘Sec.
‘‘1. Establishment.
‘‘2. Powers and duties.
‘‘3. Officers and employees.
‘‘4. Restrictions on officers and employees as to interest in patents.
‘‘5. Patent and Trademark Office Management Advisory Board.
‘‘6. Duties of Commissioner.
‘‘7. Board of Patent Appeals and Interferences.
‘‘8. Suits by and against the Corporation.
‘‘9. Library.
‘‘10. Classification of patents.
‘‘11. Certified copies of records.
‘‘12. Publications.
‘‘13. Exchange of copies of patents with foreign countries.
‘‘14. Copies of patents for public libraries.
‘‘15. Annual report to Congress.’’.
(3) The table of contents for chapter 4 of part I of
title 35, United States Code, is amended by adding at the
end the following new item:
‘‘43. Audits.’’.
(b) OTHER PROVISIONS OF LAW.—
(1) Section 9101(3) of title 31, United States
Code, is amended by adding at the end the follow-
ing:
‘‘(O) the Patent and Trademark Office.’’.
(2) Section 500(e) of title 5, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘Patent and Trademark Office’’.
1711
(3) Section 5102(c)(23) of title 5, United
States Code, is amended by striking ‘‘Department of
Commerce’’.
(4) Section 5316 of title 5, United States Code
(5 U.S.C. 5316) is amended by striking ‘‘Commis-
sioner of Patents, Department of Commerce.’’,
‘‘Deputy Commissioner of Patents and Trade-
marks.’’, ‘‘Assistant Commissioner for Patents.’’,
and ‘‘Assistant Commissioner for Trademarks.’’.
(5) Section 12 of the Act of February 14, 1903
(15 U.S.C. 1511) is amended by striking ‘‘(d) Pat-
ent and Trademark Office;’’ and redesignating sub-
sections (a) through (g) as paragraphs (1) through
(6), respectively.
(6) The Act of April 12, 1892 (27 Stat. 395;
20 U.S.C. 91) is amended by striking ‘‘Patent Of-
fice’’ and inserting ‘‘Patent and Trademark Office’’.
(7) Sections 505(m) and 512(o) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(m)
and 360b(o)) are each amended by striking ‘‘of the
Department of Commerce’’.
(8) Section 105(e) of the Federal Alcohol Ad-
ministration Act (27 U.S.C. 205(e)) is amended by
striking ‘‘Patent Office’’ and inserting ‘‘Patent and
Trademark Office’’.
1712
(9) Section 1744 of title 28, United States
Code is amended—
(A) by striking ‘‘Patent Office’’ each place
it appears and inserting ‘‘Patent and Trade-
mark Office’’; and
(B) by striking ‘‘Commissioner of Patents’’
and inserting ‘‘Commissioner of Patents and
Trademarks’’.
(10) Section 1745 of title 28, United States
Code, is amended by striking ‘‘United States Patent
Office’’ and inserting ‘‘Patent and Trademark Of-
fice’’.
(11) Section 1928 of title 28, United States
Code, is amended by striking ‘‘Patent Office’’ and
inserting ‘‘Patent and Trademark Office’’.
(12) Section 160 of the Atomic Energy Act of
1954 (42 U.S.C. 2190) is amended—
(A) by striking ‘‘United States Patent Of-
fice’’ and inserting ‘‘Patent and Trademark Of-
fice’’; and
(B) by striking ‘‘Commissioner of Patents’’
and inserting ‘‘Commissioner of Patents and
Trademarks’’.
(13) Section 305(c) of the National Aeronautics
and Space Act of 1958 (42 U.S.C. 2457(c)) is
1713
amended by striking ‘‘Commissioner of Patents’’ and
inserting ‘‘Commissioner of Patents and Trade-
marks’’.
(14) Section 12(a) of the Solar Heating and
Cooling Demonstration Act of 1974 (42 U.S.C.
5510(a)) is amended by striking ‘‘Commissioner of
the Patent Office’’ and inserting ‘‘Commissioner of
Patents and Trademarks’’.
(15) Section 1111 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(16) Section 1114 of title 44, United States
Code, is amended by striking ‘‘the Commissioner of
Patents,’’.
(17) Section 1123 of title 44, United States
Code, is amended by striking ‘‘the Patent Office.’’.
(18) Sections 1337 and 1338 of title 44, United
States Code, and the items relating to those sections
in the table of contents for chapter 13 of such title,
are repealed.
(19) Section 10(i) of the Trading With the
Enemy Act (50 U.S.C. App. 10(i)) is amended by
striking ‘‘Commissioner of Patents’’ and inserting
‘‘Commissioner of Patents and Trademarks’’.
1714
(20) Section 8G(a)(2) of the Inspector General
Act of 1978 (5 U.S.C. App.) is amended by inserting
‘‘the Patent and Trademark Office,’’, after ‘‘the
Panama Canal Commission,’’.
Subtitle E—Miscellaneous
Provisions
SEC. 17501. REFERENCES.
Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any
document of or pertaining to a department or office from
which a function is transferred by this title—
(1) to the head of such department or office is
deemed to refer to the head of the department or of-
fice to which such function is transferred; or
(2) to such department or office is deemed to
refer to the department or office to which such func-
tion is transferred.
SEC. 17502. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal offi-
cial to whom a function is transferred by this title may,
for purposes of performing the function, exercise all au-
thorities under any other provision of law that were avail-
able with respect to the performance of that function to
the official responsible for the performance of the function
1715
immediately before the effective date of the transfer of the
function under this title.
SEC. 17503. SAVINGS PROVISIONS.
(a) LEGAL DOCUMENTS.—All orders, determinations,
rules, regulations, permits, grants, loans, contracts, agree-
ments, certificates, licenses, and privileges—
(1) that have been issued, made, granted, or al-
lowed to become effective by the President, the Sec-
retary of Commerce, the United States Trade Rep-
resentative, any officer or employee of any office
transferred by this title, or any other Government
official, or by a court of competent jurisdiction, in
the performance of any function that is transferred
by this title, and
(2) that are in effect on the effective date of
such transfer (or become effective after such date
pursuant to their terms as in effect on such effective
date),
shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked in
accordance with law by the President, any other author-
ized official, a court of competent jurisdiction, or operation
of law.
(b) PROCEEDINGS.—This title shall not affect any
proceedings or any application for any benefits, service,
1716
license, permit, certificate, or financial assistance pending
on the date of the enactment of this Act before an office
transferred by this title, but such proceedings and applica-
tions shall be continued. Orders shall be issued in such
proceedings, appeals shall be taken therefrom, and pay-
ments shall be made pursuant to such orders, as if this
Act had not been enacted, and orders issued in any such
proceeding shall continue in effect until modified, termi-
nated, superseded, or revoked by a duly authorized official,
by a court of competent jurisdiction, or by operation of
law. Nothing in this subsection shall be considered to pro-
hibit the discontinuance or modification of any such pro-
ceeding under the same terms and conditions and to the
same extent that such proceeding could have been discon-
tinued or modified if this title had not been enacted.
(c) SUITS.—This title shall not affect suits com-
menced before the date of the enactment of this Act, and
in all such suits, proceeding shall be had, appeals taken,
and judgments rendered in the same manner and with the
same effect as if this title had not been enacted.
(d) NONABATEMENT OF ACTIONS.—No suit, action,
or other proceeding commenced by or against the Depart-
ment of Commerce or the Secretary of Commerce, or by
or against any individual in the official capacity of such
individual as an officer or employee of an office trans-
1717
ferred by this title, shall abate by reason of the enactment
of this title.
(e) CONTINUANCE OF SUITS.—If any Government of-
ficer in the official capacity of such officer is party to a
suit with respect to a function of the officer, and under
this title such function is transferred to any other officer
or office, then such suit shall be continued with the other
officer or the head of such other office, as applicable, sub-
stituted or added as a party.
(f) ADMINISTRATIVE PROCEDURE AND JUDICIAL RE-
VIEW.—Except as otherwise provided by this title, any
statutory requirements relating to notice, hearings, action
upon the record, or administrative or judicial review that
apply to any function transferred by this title shall apply
to the exercise of such function by the head of the Federal
agency, and other officers of the agency, to which such
function is transferred by this title.
SEC. 17504. TRANSFER OF ASSETS.
Except as otherwise provided in this title, so much
of the personnel, property, records, and unexpended bal-
ances of appropriations, allocations, and other funds em-
ployed, used, held, available, or to be made available in
connection with a function transferred to an official or
agency by this title shall be available to the official or the
head of that agency, respectively, at such time or times
1718
as the Director of the Office of Management and Budget
directs for use in connection with the functions trans-
ferred.
SEC. 17505. DELEGATION AND ASSIGNMENT.
Except as otherwise expressly prohibited by law or
otherwise provided in this title, an official to whom func-
tions are transferred under this title (including the head
of any office to which functions are transferred under this
title) may delegate any of the functions so transferred to
such officers and employees of the office of the official as
the official may designate, and may authorize successive
redelegations of such functions as may be necessary or ap-
propriate. No delegation of functions under this section
or under any other provision of this title shall relieve the
official to whom a function is transferred under this title
of responsibility for the administration of the function.
SEC. 17506. AUTHORITY OF DIRECTOR OF THE OFFICE OF
MANAGEMENT AND BUDGET WITH RESPECT
TO FUNCTIONS TRANSFERRED.
(a) DETERMINATIONS.—If necessary, the Director
shall make any determination of the functions that are
transferred under this title.
(b) INCIDENTAL TRANSFERS.—The Director, at such
time or times as the Director shall provide, may make
such determinations as may be necessary with regard to
1719
the functions transferred by this title, and to make such
additional incidental dispositions of personnel, assets, li-
abilities, grants, contracts, property, records, and unex-
pended balances of appropriations, authorizations, alloca-
tions, and other funds held, used, arising from, available
to, or to be made available in connection with such func-
tions, as may be necessary to carry out the provisions of
this title. The Director shall provide for the termination
of the affairs of all entities terminated by this title and
for such further measures and dispositions as may be nec-
essary to effectuate the purposes of this title.
SEC. 17507. CERTAIN VESTING OF FUNCTIONS CONSIDERED
TRANSFERS.
For purposes of this title, the vesting of a function
in a department or office pursuant to reestablishment of
an office shall be considered to be the transfer of the
function.
SEC. 17508. AVAILABILITY OF EXISTING FUNDS.
Existing appropriations and funds available for the
performance of functions, programs, and activities termi-
nated pursuant to this title shall remain available, for the
duration of their period of availability, for necessary ex-
penses in connection with the termination and resolution
of such functions, programs, and activities.
1720
SEC. 17509. DEFINITIONS.
For purposes of this title—
(1) the term ‘‘function’’ includes any duty, obli-
gation, power, authority, responsibility, right, privi-
lege, activity, or program; and
(2) the term ‘office’ includes any office, admin-
istration, agency, bureau, institute, council, unit, or-
ganizational entity, or component thereof.
TITLE XVIII—WELFARE REFORM
SEC. 18001. ENACTMENT OF THE PERSONAL RESPONSIBIL-
ITY ACT OF 1995.
H.R. 4, as passed by the House of Representatives
on March 24, 1995, is hereby enacted with the following
amendments:
(1) In section 101, insert
‘‘(a) IN GENERAL.—’’ before ‘‘Title IV of the Social
Security Act’’.
(2) At the end of section 101, add the follow-
ing:
(b) SUBMISSION OF STATE PLAN FOR FISCAL YEAR
1996 DEEMED ACCEPTANCE
OF GRANT LIMITATIONS
AND FORMULA.—The submission of a plan by a State
under section 402(a) of the Social Security Act (as in ef-
fect pursuant to the amendment made by subsection (a)
of this section) for fiscal year 1996 is deemed to constitute
the State’s acceptance of the grant limitations under sec-
1721
tion 403(a)(1)(A)(i) of such Act (as so in effect) for fiscal
year 1996 (including the formula for computing the
amount of the grant).
(3) Strike section 403(a)(1)(A) of the Social
Security Act, as proposed to be added by section
101, and insert the following:
‘‘(A) IN
GENERAL.—Each eligible State
shall be entitled to receive from the Secretary—
‘‘(i) for fiscal year 1996, a grant in
an amount equal to—
‘‘(I) the State family assistance
grant for fiscal year 1996; minus
‘‘(II) the total amount of obliga-
tions to the State under part A of this
title (as in effect before the effective
date of this part) for fiscal year 1996,
other than with respect to amounts
expended for child care pursuant to
subsection (g) or (i) of section 402 of
this title (as so in effect); and
‘‘(ii) for each of fiscal years 1997,
1998, 1999, and 2000, a grant in an
amount equal to the State family assist-
ance grant for the fiscal year.
(4) In section 201, insert
1722
‘‘(a) IN GENERAL.—’’ before ‘‘Part B of title IV of
the Social Security Act’’.
(5) At the end of section 201, add the follow-
ing:
(b) SUBMISSION OF STATE PLAN FOR FISCAL YEAR
1996 DEEMED ACCEPTANCE
OF GRANT LIMITATIONS
AND FORMULA.—The submission of a plan by a State
under section 422(a) of the Social Security Act (as in ef-
fect pursuant to the amendment made by subsection (a)
of this section) for fiscal year 1996 is deemed to constitute
the State’s acceptance of the grant limitations under sec-
tion 423(a)(1)(A) of such Act (as so in effect) for fiscal
year 1996 (including the formula for computing the
amount of the grant).
(6) Strike section 423(a)(1) of the Social Secu-
rity Act, as proposed to be added by section 201,
and insert the following:
‘‘(1) IN GENERAL.—Each eligible State shall be
entitled to receive from the Secretary—
‘‘(A) for fiscal year 1996, a grant in an
amount equal to—
‘‘(i) the State share of the child pro-
tection amount for fiscal year 1996; minus
‘‘(ii) the total amount of obligations to
the State under parts B and E of this title
1723
(as in effect before the effective date of
this part) for fiscal year 1996; and
‘‘(B) for each subsequent fiscal year speci-
fied in subsection (b)(1), a grant in an amount
equal to the State share of the child protection
amount for the fiscal year.
(7) Strike section 301(b) and insert the follow-
ing:
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
658B of the Child Care and Development Block Grant Act
of 1990 (42 U.S.C. 9858B) is amended to read as follows:
‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this subchapter $1,804,000,000 for fiscal year 1996 and
$2,093,000,000 for each of the fiscal years 1997, 1998,
1999, 2000, 2001, and 2002.’’.
(8) In the matter preceding paragraph (1) of
section 3 of the Child Nutrition Act of 1966, as pro-
posed to be amended by section 321, strike ‘‘The
Secretary’’ and insert ‘‘(a) IN GENERAL.—The Sec-
retary’’.
(9) At the end of section 3 of the Child Nutri-
tion Act of 1966, as proposed to be amended by sec-
tion 321, add the following:
‘‘(b) ADDITIONAL REQUIREMENTS.—
1724
‘‘(1) RESTRICTION ON ALLOTMENTS.—
‘‘(A) COMPUTATION.—The Secretary shall
provide for the computation of State obligation
allotments in accordance with this section for
each of the fiscal years 1996 through 2000.
‘‘(B) LIMITATION ON OBLIGATIONS.—The
Secretary shall not enter into obligations with
any State under this Act for a fiscal year in ex-
cess of the obligation allotment for that State
for the fiscal year, as determined under sub-
section (a). The sum of such obligation allot-
ments for all States in any fiscal year shall not
exceed the amount appropriated to carry out
this Act for that fiscal year.
‘‘(2) AGREEMENT.—The submission of an ap-
plication by a State under section 4 is deemed to
constitute the State’s acceptance of the obligation al-
lotment limitations under this section (including the
formula for computing the amount of such obligation
allotment).
(10) In the matter preceding paragraph (1) of
section 3 of the National School Lunch Act, as pro-
posed to be amended by section 341, strike ‘‘The
Secretary’’ and insert ‘‘(a) IN GENERAL.—The Sec-
retary’’.
1725
(11) At the end of section 3 of the National
School Lunch Act, as proposed to be amended by
section 341, add the following:
‘‘(b) ADDITIONAL REQUIREMENTS.—
‘‘(1) RESTRICTION ON ALLOTMENTS.—
‘‘(A) COMPUTATION.—The Secretary shall
provide for the computation of State obligation
allotments in accordance with this section for
each of the fiscal years 1996 through 2000.
‘‘(B) LIMITATION ON OBLIGATIONS.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), the Secretary shall not enter into obli-
gations with any State under this Act for
a fiscal year in excess of the obligation al-
lotment for that State for the fiscal year,
as determined under subsection (a). The
sum of such obligation allotments for all
States in any fiscal year shall not exceed
the school-based nutrition amount for that
fiscal year.
‘‘(ii) REDUCTION
FOR
POST-ENACT-
MENT NEW OBLIGATIONS IN FISCAL YEAR
1996.—
‘‘(I) IN GENERAL.—The amount
of the obligation allotment otherwise
1726
provided under this section for fiscal
year 1996 for a State under this Act
(as in effect on and after the date of
the enactment of the Personal Re-
sponsibility Act of 1995) shall be re-
duced by the amount of the obliga-
tions described in subclause (II) that
are entered into under this Act or
under the Child Nutrition Act of 1966
on or after October 1, 1995, but prior
to the date of the enactment of the
Personal Responsibility Act of 1995.
‘‘(II) AMOUNT OF OBLIGATIONS
DESCRIBED.—(aa) Except as provided
in division (bb), the amount of the ob-
ligations described in this subclause
are 100 percent of the amount of the
obligations entered into under this Act
and under the Child Nutrition Act of
1966 (except obligations entered into
under section 17 of such Act).
‘‘(bb) For purposes of obligations
entered into under the summer food
service program for children under
section 13 of this Act, the child and
1727
adult care food program under section
17 of this Act, and the special milk
program under section 3 of the Child
Nutrition Act of 1966, the amount of
the obligations described in this
subclause are 12.5 percent of the
amount the obligations entered into
under each such program.
‘‘(2) AGREEMENT.—The submission of an ap-
plication by a State under section 4 is deemed to
constitute the State’s acceptance of the obligation al-
lotment limitations under this section (including the
formula for computing the amount of such obligation
allotment).
‘‘(3) TERMINATION OF PROGRAMS; LIMITATION
ON NEW OBLIGATION AUTHORITY.—
‘‘(A) ELIMINATION OF INDIVIDUAL ENTI-
TLEMENT.—Effective on the date of the enact-
ment of the Personal Responsibility Act of
1995—
‘‘(i) except as provided in subpara-
graph (B), the Federal Government has no
obligation to provide payment with respect
to items and services provided under this
Act (as in effect on and after the date of
1728
the enactment of the Personal Responsibil-
ity Act of 1995); and
‘‘(ii) this Act (as in effect on and
after the date of the enactment of the Per-
sonal Responsibility Act of 1995) shall not
be construed as providing for an entitle-
ment, under Federal law in relation to the
Federal Government, in an individual or
person at the time of provision or receipt
of services.
‘‘(B) LIMITATION
ON
OBLIGATION
AU-
THORITY.—Notwithstanding any other provision
of this Act, the Secretary is authorized to enter
into obligations with any State under this Act
for expenses incurred after the date of the en-
actment of the Personal Responsibility Act and
during fiscal year 1996, but not in excess of the
obligation allotment for that State for fiscal
year 1996, as determined under subsection (a).
TITLE XIX—CONTRACT WITH
AMERICA-TAX RELIEF
SEC. 19001. ENACTMENT OF CONTRACT WITH AMERICA TAX
RELIEF ACT OF 1995.
(a) IN GENERAL.—Title VI of H.R. 1215 of the
104th Congress, as passed by the House of Representa-
1729
tives, is hereby enacted with the following modifications
to such title:
(1) Strike subtitle E (relating to social security
earnings test) and redesignate subtitles F and G as
subtitles E and F, respectively.
(2) Strike subsections (c)(2) and (d)(2) of sec-
tion 6201.
(3) Strike the amendment contained in para-
graph (2) of section 6301(d) and insert the follow-
ing: ‘‘Subsection (h) of section 1 is amended by add-
ing at the end the following new sentence: ‘For pur-
poses of this subsection, taxable income shall be
computed without regard to the deduction allowed
by section 1202.’ ’’
(4) Strike section 6321 (relating to depreciation
adjustment for certain property placed in service
after December 31, 1994).
(5) Strike part III of subtitle C (relating to al-
ternative minimum tax relief).
(6) Strike subtitle F (as redesignated by para-
graph (1)) and insert the following:
1730
‘‘Subtitle F—Tax Reduction
Contingent on Deficit Reduction
‘‘SEC. 6701. TAX REDUCTION CONTINGENT ON DEFICIT RE-
DUCTION.
‘‘This title, which is contained within the Act that—
‘‘(1) carries out the concurrent resolution on
the budget for fiscal year 1996 that provides that
the budget of the United States will be in balance
by fiscal year 2002; and
‘‘(2) achieves a level of deficit reduction pursu-
ant to the reconciliation instructions of that concur-
rent resolution that will result in a budget of the
United States that will be in balance by fiscal year
2002; and
‘‘(B) is certified pursuant to the requirements
set forth in section 210 of that concurrent resolu-
tion,
shall take effect as so provided by its effective date provi-
sions.
‘‘SEC. 6702. MONITORING.
‘‘The Committees on the Budget of the House of
Representatives and the Senate shall each monitor
progress on achieving a balanced budget consistent with
the most recently agreed to concurrent resolution on the
budget for fiscal year 1996 or any subsequent fiscal year
1731
(and the reconciliation Act for that resolution) or the most
recently agreed to concurrent resolution on the budget
that would achieve a balanced budget by fiscal year 2002
(and the reconciliation Act for that resolution). After con-
sultation with the Director of the Congressional Budget
Office, each such committee shall submit a report of its
findings to its House and the President on or before De-
cember 15, 1995, and annually thereafter. Each such re-
port shall contain the following:
‘‘(1) Estimates of the deficit levels (based on
legislation enacted through the date of the report)
for each fiscal year through fiscal year 2002.
‘‘(2) An analysis of the variance (if any) be-
tween those estimated deficit levels and the levels set
forth in the concurrent resolution on the budget for
fiscal year 1996 or the most recently agreed to con-
current resolution on the budget that would achieve
a balanced budget by fiscal year 2002.
‘‘(3) Policy options to achieve the additional
levels of deficit reduction necessary to balance the
budget of the United States by fiscal year 2002.
‘‘SEC. 6703. CONGRESSIONAL ACTION.
‘‘Each House of Congress shall incorporate the policy
options included in the report of its Committee on the
Budget under section 6702(a)(3) (or other policy options)
1732
in developing a concurrent resolution on the budget for
any fiscal year that achieves the additional levels of deficit
reduction necessary to balance the budget of the United
States by fiscal year 2002.
‘‘SEC. 6704. PRESIDENTIAL ACTION.
‘‘If the President submits a budget under section
1105(a) of title 31, United States Code, that does not pro-
vide for a balanced budget for the United States by fiscal
year 2002, then the President shall include with that sub-
mission a complete budget that balances the budget by
that fiscal year.’’
(7) Conform the table of contents accordingly.
(b) TECHNICAL CORRECTION.—Effective with re-
spect to taxable years ending after December 31, 1994,
paragraph (1) of section 1201(b) of the Internal Revenue
Code of 1986, as added by such title VI, is amended to
read as follows:
‘‘(1) IN GENERAL.—In the case of any taxable
year ending after December 31, 1994, and beginning
before January 1, 1996, in applying subsection (a),
net capital gain for such taxable year shall not ex-
ceed such net capital gain determined by taking into
account only gain or loss properly taken into account
for the portion of the taxable year after December
31, 1994.’’
1733
SEC. 19002. COMPLIANCE WITH CONCURRENT RESOLUTION
ON THE BUDGET.
(a) IN GENERAL.—For purposes of the Internal Rev-
enue Code of 1986, the taxpayer’s net modified chapter
1 liability for any taxable year shall be such liability deter-
mined without regard to this section—
(1) increased by 27 percent of the excess (if
any) of—
(A) the amount which would be the tax-
payer’s net modified chapter 1 liability for such
year if such liability were determined without
regard to the amendments made by subtitles A,
B, C, and D of title VI of H.R. 1215 of the
104th Congress, as passed by the House of
Representatives, over
(B) the taxpayer’s net modified chapter 1
liability for such year determined without re-
gard to this section, or
(2) reduced by 27 percent of the excess (if any)
of the amount described in paragraph (1)(B) over
the liability described in paragraph (1)(A).
(b) NET MODIFIED CHAPTER 1 LIABILITY.—For
purposes of subsection (a), the term ‘‘net modified chapter
1 liability’’ means the liability for tax under chapter 1 of
the Internal Revenue Code of 1986 determined—
1734
(1) without regard to sections 1201 and 1202
of such Code, as amended by such title VI,
(2) without regard to the amendments made by
sections 6103 and 6104 of such title VI,
(3) after the application of any credit against
such tax other than the credits under sections 31,
33, and 34 of such Code, and
(4) before crediting any payment of estimated
tax for the taxable year.
(c) CAPITAL GAINS.—
(1) CAPITAL
GAINS
DEDUCTION
FOR
TAX-
PAYERS
OTHER
THAN
CORPORATIONS.—For pur-
poses of applying section 1202 of the Internal Reve-
nue Code of 1986, as added by such title VI—
(A) in the case of taxable years ending be-
fore January 1, 1996, ‘‘42.5 percent’’ shall be
substituted for ‘‘50 percent’’ in subsection (a)
thereof, and
(B) in the case of taxable years ending
after December 31, 1995, ‘‘34.5 percent’’ shall
be substituted for ‘‘50 percent’’ in subsection
(a) thereof.
(2) ALTERNATIVE
CAPITAL
GAINS
TAX
FOR
CORPORATIONS.—
1735
(A) For purposes of applying section 1201
of such Code, as amended by such title VI—
(i) in the case of taxable years ending
before January 1, 1996, ‘‘26.5 percent’’
shall be substituted for ‘‘25 percent’’ in
subsection (a)(2) thereof, and
(ii) in the case of taxable years ending
after December 31, 1995, ‘‘31.9 percent’’
shall be substituted for ‘‘25 percent’’ in
subsection (a)(2) thereof.
(B) For purposes of applying section
852(b)(3)(D)(iii) of such Code, as amended by
such title VI—
(i) in the case of taxable years ending
before January 1, 1996, ‘‘73.5 percent’’
shall be substituted for ‘‘75 percent’’ in
subsection (a)(2) thereof, and
(ii) in the case of taxable years ending
after December 31, 1995, ‘‘68.1 percent’’
shall be substituted for ‘‘75 percent’’ in
subsection (a)(2) thereof.
(3) INDEXING.—For purposes of applying sec-
tion 1022 of such Code, as added by such title VI,
only 69 percent of the applicable inflation adjust-
1736
ment under subsection (c)(2) of such section 1022
shall be taken into account.
(4) CONFORMING
CHANGES.—Proper adjust-
ments shall be made to the percentages and frac-
tions in the following provisions to reflect the per-
centages in paragraphs (1) and (2):
(A) 
Sections 
170(c), 
1445(e), 
and
7518(g)(6)(A) of such Code.
(B) Section 607(h)(6)(A) of the Merchant
Marine Act, 1936.
(d) AMERICAN DREAM SAVINGS ACCOUNTS.—For
purposes of applying section 408A of such Code, as added
by such title VI—
(1) only 69 percent of the income on the assets
held in an American Dream Savings Account (which
would otherwise be includible in gross income) shall
be excludible from gross income,
(2) only 69 percent of any distribution attrib-
utable to amounts not previously included in gross
income shall be entitled to the treatment described
in subsection (d)(1) of such section 408A, and
(3) only 69 percent of any payment or distribu-
tion referred to in subsection (d)(3)(B) of such sec-
tion 408A shall be entitled to the treatment de-
scribed in such subsection.
1738
(2) DELAY IN BENEFIT OF REPEAL FOR TAX-
ABLE YEARS 1995 AND 1996.—
(A) IN GENERAL.—Paragraph (1) shall not
apply to any taxable year beginning before Jan-
uary 1, 1997, but there shall be allowed as a
credit against the tax imposed by subtitle A of
such Code for each taxable year referred to in
subparagraph (C) an amount equal to the credit
determined under subparagraph (B).
(B) AMOUNT OF CREDIT.—The credit de-
termined under this subparagraph for any tax-
able year to which this paragraph applies is an
amount equal to 1⁄3 of the excess (if any) of—
(i) the aggregate tax paid under sec-
tion 55 of such Code for taxable years be-
ginning after December 31, 1994, and be-
fore January 1, 1997, over
(ii) the amount of tax which would
have been imposed by such section 55 for
such taxable years had paragraph (1) ap-
plied to such taxable years.
(C) YEARS CREDIT ALLOWED.—The tax-
able years referred to in this subparagraph are
the first 3 taxable years of the taxpayer begin-
ning after December 31, 1996.
1739
(D) COORDINATION WITH OTHER PROVI-
SIONS.—For purposes of the Internal Revenue
Code of 1986, the credit allowed under para-
graph (1) shall be treated as a credit allowed
under subpart C of part IV of subchapter A of
chapter 1 of such Code and as referred to in
paragraph (2) of 1324(b) of title 31, United
States Code, immediately before the period at
the end thereof.
(g) COMPARABLE TREATMENT
FOR ESTATE
AND
GIFT TAX CHANGES.—A rule similar to the rule of sub-
section (a) shall apply to any reduction in liability for tax
under subtitle B of such Code by reason of the amend-
ments made by section 6351 of such title VI.
TITLE XX—BUDGET
ENFORCEMENT
SEC. 20001. SHORT TITLE; PURPOSE.
(a) SHORT TITLE.—This title may be cited as the
‘‘Seven-Year Balanced Budget Enforcement Act of 1995’’.
(b) PURPOSE.—This title extends and reduces the
discretionary spending limits and extends the pay-as-you-
go requirements.
SEC. 20002. DISCRETIONARY SPENDING LIMITS.
(a) LIMITS.—Section 601(a)(2) of the Congressional
Budget Act of 1974 is amended by striking subparagraphs
1740
(A), (B), (C), (D), and (F), by redesignating subpara-
graph (E) as subparagraph (A) and by striking ‘‘and’’ at
the end of that subparagraph, and by inserting after sub-
paragraph (A) the following new subparagraphs:
‘‘(B) with respect to fiscal year 1996, for
the discretionary category: $485,074,000,000 in
new budget authority and $531,768,000,000 in
outlays;
‘‘(C) with respect to fiscal year 1997, for
the discretionary category: $482,430,000,000 in
new budget authority and $520,295,000,000 in
outlays;
‘‘(D) with respect to fiscal year 1998, for
the discretionary category: $490,692,000,000 in
new budget authority and $512,632,000,000 in
outlays;
‘‘(E) with respect to fiscal year 1999, for
the discretionary category: $482,207,000,000 in
new budget authority and $510,482,000,000 in
outlays;
‘‘(F) with respect to fiscal year 2000, for
the discretionary category: $489,379,000,000 in
new budget authority and $514,234,000,000 in
outlays;
1741
‘‘(G) with respect to fiscal year 2001, for
the discretionary category: $496,601,000,000 in
new budget authority and $516,403,000,000 in
outlays; and
‘‘(H) with respect to fiscal year 2002, for
the discretionary category: $498,837,000,000 in
new budget authority and $515,075,000,000 in
outlays;’’.
(b) COMMITTEE
ALLOCATIONS
AND
ENFORCE-
MENT.—Section 602 of the Congressional Budget Act of
1974 is amended—
(1) in subsection (c), by striking ‘‘1995’’ and
inserting ‘‘2002’’ and by striking the last sentence;
and
(2) in subsection (d), by striking ‘‘1992 TO
1995’’ in the side heading and inserting ‘‘1996 TO
2002’’ and by striking ‘‘1992 through 1995’’ and in-
serting ‘‘1996 through 2002’’.
(c) TERM OF BUDGET RESOLUTIONS.—Section 606
of the Congressional Budget Act of 1974 is amended—
(1) in its section heading by striking ‘‘5-year’’
and inserting ‘‘term of’’;
(2) in the sideheading of subsection (a), by
striking ‘‘5-YEAR’’ and inserting ‘‘TERM OF’’;
1742
(3) in subsection (a), by striking ‘‘1992, 1993,
1994, or 1995’’ and inserting ‘‘1996 or any fiscal
year thereafter through 2002’’ and by inserting ‘‘at
least’’ before ‘‘each’’; and
(4) in subsection (d)(1), by striking ‘‘1992,
1993, 1994, and 1995’’ and inserting ‘‘1996 or any
fiscal year thereafter through 2002’’, and by striking
‘‘(i) and (ii)’’.
(d) EFFECTIVE DATE.—Section 607 of the Congres-
sional Budget Act of 1974 is amended by striking ‘‘1991
to 1998’’ and inserting ‘‘1996 to 2002’’.
(e) SEQUESTRATION REGARDING VIOLENT CRIME
REDUCTION TRUST FUND.—(1) Section 251A(b)(1) of
the Balanced Budget and Emergency Deficit Control Act
of 1985 is amended by striking subparagraphs (B), (C),
and (D) and its last sentence and inserting the following:
‘‘(B) 
For 
fiscal 
year 
1996,
$2,227,000,000.
‘‘(C) For fiscal year 1997, $3,846,000,000.
‘‘(D) 
For 
fiscal 
year 
1998,
$4,901,000,000.
‘‘(E) 
For 
fiscal 
year 
1999,
$5,639,000,000.
‘‘(F) 
For 
fiscal 
year 
2000,
$6,225,000,000.’’.
1743
(2) Section 310002 of the Violent Crime Control and
Law Enforcement Act of 1994 (42 U.S.C. 14212) is re-
pealed.
(f) CONFORMING AMENDMENT.—The item relating
to section 606 in the table of contents set forth in section
1(b) of the Congressional Budget and Impoundment Con-
trol Act of 1974 is amended by striking ‘‘5-year’’ and in-
serting ‘‘Term of’’.
SEC. 20003. GENERAL STATEMENT AND DEFINITIONS.
(a) GENERAL STATEMENT.—Section 250(b) of the
Balanced Budget and Emergency Deficit Control Act of
1985 is amended by striking the first two sentences and
inserting the following: ‘‘This part provides for the en-
forcement of deficit reduction by reducing and extending
the discretionary spending limits though fiscal year 2002
and permanently extending pay-as-you-go requirements.’’.
(b) DEFINITIONS.—Section 250(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(1) by striking paragraph (4) and inserting the
following:
‘‘(4) The term ‘category’ means:
‘‘(A) For fiscal years 1996 through 2000,
all discretionary appropriations except those
subject to section 251A; and
1744
‘‘(B) For fiscal year 2001 and any subse-
quent fiscal year, all discretionary appropria-
tions.’’;
(2) by striking paragraph (6) and inserting the
following:
‘‘(6) The term ‘budgetary resources’ means new
budget authority, unobligated balances, direct spend-
ing authority, and obligation limitations.’’;
(3) in paragraph (9), by striking ‘‘1992’’ and
inserting ‘‘1996’’; and
(4) in paragraph (14), by striking ‘‘through fis-
cal year 1995’’.
SEC. 20004. ENFORCING DISCRETIONARY SPENDING LIM-
ITS.
Section 251 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended—
(1) in the side heading of subsection (a), by
striking ‘‘1991–1998’’ and inserting ‘‘1996–2002’’;
(2) in the first sentence of subsection (b)(1), by
striking ‘‘1992, 1993, 1994, 1995, 1996, 1997 or
1998’’ and inserting ‘‘1997 or any fiscal year there-
after through 2002’’ and by striking ‘‘through
1998’’ and inserting ‘‘through 2002’’;
(3) in subsection (b)(1), by striking ‘‘the follow-
ing:’’ and all that follows through ‘‘The adjust-
1745
ments’’ and inserting ‘‘the following: the adjust-
ments’’ and by striking subparagraphs (B) and (C);
(4) in subsection (b)(2), by striking ‘‘1991,
1992, 1993, 1994, 1995, 1996, 1997, or 1998’’ and
inserting ‘‘1996 or any fiscal year thereafter through
2002’’ and by striking ‘‘through 1998’’ and insert-
ing ‘‘through 2002’’;
(5) in subsection (b)(2)(E), by striking clauses
(i), (ii), and (iii) and by striking ‘‘(iv) if, for fiscal
years 1994, 1995, 1996, 1997, and 1998’’ and in-
serting ‘‘If, for fiscal years 1996 through 2002’’;
and
(6) in subsection (b)(2)(F), by striking every-
thing after ‘‘the adjustment in outlays’’ and insert-
ing ‘‘for a category for a fiscal year is the amount
of the excess but not to exceed 0.5 percent of the
adjusted discretionary spending limit on outlays for
that fiscal year in fiscal year 1996 or any fiscal year
thereafter through 2002.’’.
SEC. 20005. ENFORCING PAY-AS-YOU-GO.
(a) EXTENSION.—(1) Section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(A) in the side heading of subsection (a), by
striking ‘‘FISCAL YEARS 1992–1998’’; and
1746
(B) in subsection (e), by striking ‘‘, for any fis-
cal year from 1991 through 1998,’’ and by striking
‘‘through 1995’’.
(b) ROLLING PAY-AS-YOU-GO SCORECARD.—Section
252(d) of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended by striking ‘‘each fiscal
year through fiscal year 1998’’ each place it appears and
inserting ‘‘the current year (if applicable), the budget
year, and each of the first 4 outyears’’.
SEC. 20006. REPORTS AND ORDERS.
Section 254 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended—
(1) in subsection (d)(2), by striking
‘‘1998’’ and inserting ‘‘2002’’; and
(2)(A) in subsection (g)(2)(A), by striking
‘‘1998’’ and inserting ‘‘2002’’; and
(B) in subsection (g)(3), by striking ‘‘in each
outyear through 1998’’ and inserting ‘‘in each of the
4 ensuing outyears’’.
SEC. 20007. TECHNICAL CORRECTION.
Section 258 of the Balanced Budget and Emergency
Deficit Control Act of 1985, entitled ‘‘Modification of
Presidential Order’’, is repealed.
1747
SEC. 20008. SPECIAL RULE ON INTERRELATIONSHIP BE-
TWEEN CHANGES IN DISCRETIONARY SPEND-
ING LIMITS AND PAY-AS-YOU-GO REQUIRE-
MENTS.
(a)(1) Section 252 of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by
adding at the end the following new subsection:
‘‘(f) SPECIAL RULE
ON INTERRELATIONSHIP BE-
TWEEN SECTIONS 251, 251A, and 252.—Whenever legis-
lation is enacted during the 104th Congress that decreases
the discretionary spending limits for budget authority and
outlays for a fiscal year under section 601(a)(2) of the
Congressional Budget Act of 1974 or in section 251A(b)
of the Balanced Budget and Emergency Deficit Control
Act of 1985, or both, then, for purposes of subsection (b),
an amount equal to that decrease in the discretionary
spending limit for outlays shall be treated as direct spend-
ing legislation decreasing the deficit for that fiscal year.’’.
(2) Section 310(a) of the Congressional Budget Act
of 1974 is amended by striking ‘‘or’’ at the end of para-
graph (3), by redesignating paragraph (4) as paragraph
(5) and by striking ‘‘and (3)’’ in such redesignated para-
graph (5) and inserting ‘‘(3), and (4)’’, and by inserting
after paragraph (3) the following new paragraph:
1748
‘‘(4) carry out section 252(f) of the Balanced
Budget and Emergency Deficit Control Act of 1985;
or’’.
(b) For purposes of section 252(f) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (as
amended by subsection (a)(1))—
(1) reductions in the discretionary spending
limit for outlays under section 601(a)(2) of the Con-
gressional Budget Act of 1974 for each of fiscal
years 1999 through 2002 under section 20002 shall
be measured as reductions from the discretionary
spending limit for outlays for fiscal year 1998 as in
effect immediately before the enactment of this Act;
and
(2) reductions in the discretionary spending
limit for outlays under section 251A(b) of the Bal-
anced Budget and Emergency Deficit Control Act of
1985 for each of fiscal years 1996 through 2000
under section 20002 shall be measured as reductions
in outlays for that fiscal year under section 251A(b)
as in effect immediately before the enactment of this
Act.
1749
SEC. 20009. MEDICARE SAVINGS CANNOT BE USED TO PAY
FOR TAX CUTS.
Any net savings in direct spending and receipts in
the Medicare program for any fiscal year resulting from
the enactment of this Act or H.R. 2425 (as applicable)
shall not be counted for purposes of section 252 of the
Balanced Budget and Emergency Deficit Control Act of
1985.
SEC. 20010. EFFECTIVE DATE.
(a) EXPIRATION.—Section 275(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(1) by striking ‘‘Part C of this title, section’’
and inserting ‘‘Sections 251, 253, 258B, and’’; and
(2) by striking ‘‘1995’’ and inserting ‘‘2002’’.
(b) EXPIRATION.—Section 14002(c)(3) of the Omni-
bus Budget Reconciliation Act of 1993 (2 U.S.C. 900
note) is repealed.
SEC. 20011. APPLICATION OF SECTION 251 ADJUSTMENTS.
Section 251(b)(2) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 is amended by adding
at the end the following new subparagraph:
‘‘(H) SPECIAL ALLOWANCE FOR WELFARE RE-
FORM.—If, for any fiscal year, appropriations are
enacted for accounts specified in clauses (i) and (ii),
the adjustment shall be the sum of:
1750
‘‘(i) the excess of the appropriation for the
fiscal year for the Child Care and Development
Block Grant over $1,082,000,000, but not to
exceed $722,000,000 in fiscal year 1996 or
$1,011,000,000 in fiscal year 1997 through
2002; and
‘‘(ii) the excess of the appropriation for the
fiscal year for the Family Nutrition Block
Grant Program over $3,470,000,000, but not to
exceed $692,000,000 in fiscal year 1996,
$1,307,000,000 
in 
fiscal 
year 
1997,
$1,466,000,000 
in 
fiscal 
year 
1998,
$1,650,000,000 
in 
fiscal 
year 
1999,
$1,838,000,000 
in 
fiscal 
year 
2000,
$2,075,000,000 
in 
fiscal 
year 
2001, 
or
$2,324,000,000 in fiscal year 2002;
and the outlays flowing in all years from such excess
appropriations (as reduced pursuant to the limita-
tions in clauses (i) and (ii).’’.
SEC. 20012. SPECIAL RULES APPLICABLE TO DEPARTMENT
OF DEFENSE SEQUESTRATION.
Section 255 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended by striking sub-
section (h) (relating to optional exemption of military per-
1751
sonnel) and adding at the end the following new sub-
section:
‘‘(j) OPTIONAL EXEMPTION FOR MILITARY PERSON-
NEL.—
‘‘(1) AUTHORITY FOR EXEMPTION.—The Presi-
dent may, with respect to any military personnel ac-
count, exempt that account from sequestration or
provide for a lower uniform percentage reduction
than would otherwise apply.
‘‘(B) The President may not use the au-
thority provided by subparagraph (A) unless he
notifies the Congress of the manner in which
such authority will be exercised on or before the
initial snapshot date for the budget year.
‘‘(2) AUTHORITY FOR MILITARY TECHNICIANS
AND MEDICAL PERSONNEL.—
‘‘(A) Whenever the President exempts a
military personnel account from sequestration
under paragraph (1) and after all other seques-
trations to Department of Defense account have
been made, the Secretary of Defense may trans-
fer amounts to any appropriation for operation
and maintenance for the current fiscal year
from amounts available under any other appro-
priation to the Department of Defense, but—
1752
‘‘(i) amounts so transferred shall be
available only for the pay of military tech-
nicians, the pay of medical personnel, and
other expenses of medical programs (in-
cluding CHAMPUS); and
‘‘(ii) the total amount transferred to
any operations and maintenance appropria-
tion shall not exceed the amount seques-
tered from such appropriation.
‘‘(C) The authority to make transfers pur-
suant to subparagraph (A) is in addition to any
authority of the Secretary of Defense to make
transfers of appropriated funds under any other
provision of law.
‘‘(D) The Secretary of Defense may carry
out a transfer of funds under subparagraph (A)
only after notifying the Committees on Appro-
priations of the Senate and House of Rep-
resentatives of the proposed transfer and a pe-
riod of 20 calendar days in session has elapsed
after such notice is received.’’.
SEC. 20013. TREATMENT OF DIRECT STUDENT LOANS.
Section 504 of the Federal Credit Reform Act of
1990 is amended by adding at the end the following new
subsection:
1753
‘‘(h) TREATMENT OF DIRECT STUDENT LOANS.—
The cost of a direct loan under the Federal direct student
loan program shall be the net present value, at the time
when the direct loan is disbursed, of the following cash
flows for the estimated life of the loan:
‘‘(1) Loan disbursements.
‘‘(2) Repayments of principal.
‘‘(3) Payments of interest and other payments
by or to the Government over the life of the loan
after adjusting for estimated defaults, prepayments,
fees, penalties, and other recoveries.
‘‘(4) Direct expenses, including—
‘‘(A) activities related to credit extension,
loan origination, loan servicing, management of
contractors, and payments to contractors, other
government entities, and program participants;
‘‘(B) collection of delinquent loans; and
‘‘(C) writeoff and closeout of loans.’’.
SEC. 20014. DEFINITION OF PROGRAMS, PROJECTS, AND
ACTIVITIES FOR DEPARTMENT OF DEFENSE
APPROPRIATIONS.
For purposes of the Balanced Budget and Emergency
Deficit Control Act of 1985, the term program, project,
and activity for appropriations contained in any Depart-
ment of Defense appropriation Act shall be defined as the
1754
most specific level of budget items identified in the most
recent Department of Defense appropriation Act, the ac-
companying House and Senate Committee reports, the
conference report and accompanying joint explanatory
statement of the managers of the committee of conference,
the related classified annexes and reports, and the P–1
and R–1 budget justification documents as subsequently
modified by congressional action: Provided, That the fol-
lowing exception to the above definition shall apply:
For the Military Personnel and the Operation and
Maintenance accounts, the term ‘‘program, project, and
activity’’ is defined as the appropriation accounts con-
tained in the most recent Department of Defense appro-
priation Act: Provided further, That at the time the Presi-
dent submits his budget for any fiscal year, the Depart-
ment of Defense shall transmit to the Committees on Ap-
propriations and the Committees on Armed Services of the
Senate and the House of Representatives a budget jus-
tification document to be known as the ‘‘O–1’’ which shall
identify, at the budget activity, activity group, and sub-
activity group level, the amounts requested by the Presi-
dent to be appropriated to the Department of Defense for
operation and maintenance in any budget request, or
amended budget request, for that fiscal year.