HR 1270 IH

To increase accountability for Government spending and to reduce wasteful Government spending.

March 28, 2001

Mr. DEFAZIO introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Armed Services, Science, Resources, Financial Services, International Relations, Veterans' Affairs, and Intelligence (Permanent Select), for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To increase accountability for Government spending and to reduce wasteful Government spending.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Comprehensive Fiscal Responsibility and Accountability Act of 2001'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--INCREASED ACCOUNTABILITY AND REDUCTION IN MEDICARE WASTE AND FRAUD

Sec. 101. Increased medical reviews and antifraud activities.

Sec. 102. Expansion of medicare senior waste patrol nationwide.

Sec. 103. Application of inherent reasonableness to all Part B services other than physicians' services.

Sec. 104. Implementation of commercial claims auditing systems.

TITLE II--INCREASED ACCOUNTABILITY AND REDUCTION OF WASTEFUL DEFENSE SPENDING

Sec. 201. Cancellation of F-22 aircraft program.

Sec. 202. Cancellation of Comanche helicopter program.

Sec. 203. Cancellation of Crusader artillery program.

Sec. 204. Cancellation of V-22 aircraft program.

Sec. 205. Limitation on procurement of Virginia class attack submarines.

Sec. 206. Termination of production of Trident D5 missiles.

Sec. 207. Reduction in nuclear delivery systems within overall limits of START II.

Sec. 208. Creation of common NATO airlift capability and reduction of United States costs for C-17 aircraft.

Sec. 209. Deferral of procurement of additional C-130 tactical airlift planes.

Sec. 210. Reduction in requirements for Air Force and Navy pilots in nonflying positions.

Sec. 211. Reduction in number of officers so as to return to enlisted-to-officer ratio in existence in 1989.

Sec. 212. Placement of Selective Service System in `deep standby' status.

Sec. 213. End of taxpayer support for defense industry mergers.

Sec. 214. Reduction of United States support for weapons sales abroad by eliminating future assistance under the Foreign Military Financing program.

Sec. 215. Limitation on proposed increases for National Missile Defense to fiscal year 2000 levels.

Sec. 216. Reduction of Central Intelligence Agency budget by 10 percent.

TITLE III--REDUCTION AND REFORM OF ANTIENVIRONMENTAL SPENDING

Subtitle A--Program Terminations and Fees

Sec. 301. Nuclear Energy Research Initiative.

Sec. 302. National Ignition Facility.

Sec. 303. Tokamak Fusion Reactors.

Sec. 304. Diesel engine research.

Sec. 305. Nuclear waste fund fee.

Subtitle B--Mining Provisions

Sec. 311. Definitions.

Sec. 312. Royalties.

Sec. 313. Limitation on patent issuance.

Sec. 314. Mining claim maintenance requirements.

Sec. 315. Savings clause.

TITLE IV--AMENDMENTS OF INTERNAL REVENUE CODE OF 1986

Sec. 401. Repeal of exclusion of certain income of foreign sales corporations.

Sec. 402. Denial of deduction for payments of excessive compensation.

Sec. 403. Disallowance of deductions for advertising and promotional expenses relating to tobacco product use.

Sec. 404. Source of income from certain sales of inventory property.

TITLE V--MISCELLANEOUS PROVISIONS TO REDUCE WASTEFUL AND INEFFICIENT SPENDING

Sec. 501. International space station.

Sec. 502. Overseas Private Investment Corporation.

Sec. 503. Prohibition on provision of new credit by the Export-Import Bank of the United States.

Sec. 504. Trade and Development Agency.

Sec. 505. Termination of international broadcasting authorities.

Sec. 506. Joint procurement of pharmaceuticals by the Department of Defense and the Department of Veterans Affairs.

TITLE I--INCREASED ACCOUNTABILITY AND REDUCTION IN MEDICARE WASTE AND FRAUD

SEC. 101. INCREASED MEDICAL REVIEWS AND ANTIFRAUD ACTIVITIES.

Section 1893(d) of the Social Security Act (42 U.S.C. 1395ddd(d)) is amended by inserting after paragraph (3) the following:

`(4) In the case of the year 2002 and each subsequent year, procedures to ensure that--

`(A) the number of medical reviews, utilization reviews, and fraud reviews in a fiscal year of providers of services and other individuals and entities furnishing items and services for which payment may be made under this title (as a percentage of total claims paid) is equal to at least twice the number of such reviews that were conducted in fiscal year 2000;

`(B) the number of provider cost reports audited in a fiscal year is equal to at least--

`(i) 15 percent of those submitted by a home health agency or a skilled nursing facility; and

`(ii) twice the number of such reports that were audited in fiscal year 2000 for those submitted by any other provider of services or any other individual or entity furnishing items and services for which payment may be made under this title; and

`(C) in determining which providers of services, individuals, entities, or cost reports to review or audit, priority is placed on providers, individuals, entities, and areas that the Secretary determines are subject to abuse and most likely to result in mispayment or overpayment recoveries.'.

SEC. 102. EXPANSION OF MEDICARE SENIOR WASTE PATROL NATIONWIDE.

There are authorized to be appropriated $25,000,000 in fiscal year 2002, and such sums as are necessary for fiscal years 2003 through 2005, for the purpose of carrying out, and expanding nationwide, the Health Care Anti-Fraud, Waste and Abuse Community Volunteer Demonstration Projects conducted by the Administration on Aging pursuant to the Omnibus Consolidated Appropriations Act, 1997 (Public Law 104-208).

SEC. 103. APPLICATION OF INHERENT REASONABLENESS TO ALL PART B SERVICES OTHER THAN PHYSICIANS' SERVICES.

(a) REPEAL OF CERTAIN PROVISIONS OF THE BALANCED BUDGET ACT OF 1997-

(1) REPEAL- Section 4316 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 390), and the amendments made by such section, are repealed effective August 5, 1997.

(2) APPLICABILITY- Effective August 5, 1997, the Social Security Act shall be applied and administered as if section 4316 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 390), and the amendments made by such section, had not been enacted.

(b) APPLICATION OF INHERENT REASONABLENESS TO ALL PART B SERVICES OTHER THAN PHYSICIANS' SERVICES-

(1) IN GENERAL- Section 1842(b)(8) of the Social Security Act (42 U.S.C. 1395u(b)(8)) is amended to read as follows:

`(8) The Secretary shall describe by regulation the factors to be used in determining the cases (of particular items or services) in which the application of this part (other than to physicians' services paid under section 1848) results in the determination of an amount that, because of its being grossly excessive or grossly deficient, is not inherently reasonable, and provide in those cases for the factors to be considered in establishing an amount that is realistic and equitable.'.

(2) EFFECTIVE DATE- The amendment made by this subsection shall take effect August 5, 1997.

SEC. 104. IMPLEMENTATION OF COMMERCIAL CLAIMS AUDITING SYSTEMS.

(a) COMMERCIAL CLAIMS AUDITING SYSTEMS-

(1) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Secretary shall require medicare carriers to use commercial claims auditing systems in the processing of claims under part B of the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) for the purpose of identifying billing errors and abuses.

(2) SUPPLEMENT TO OTHER TECHNOLOGY- Commercial claims auditing systems required under paragraph (1) shall be used as a supplement to any other information technology used by medicare carriers in processing claims under the medicare program.

(3) UNIFORMITY- In order to ensure uniformity in processing claims under the medicare program, the Secretary may require that medicare carriers utilize 1 or more common commercial claims auditing systems, provided that the selection of such system or systems by the Secretary shall be--

(A) after due consideration of competing alternative systems; but

(B) without regard to any provision of law that requires the use of competitive procedures (as defined in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)) or the publication of notice of proposed procurements.

(4) IMPLEMENTATION- Commercial claims auditing systems required under paragraph (1) shall be implemented by all medicare carriers by not later than 180 days after the date of enactment of this Act.

(b) MINIMUM SOFTWARE REQUIREMENTS- Any commercial claims auditing system required to be implemented pursuant to subsection (a) shall, at a minimum--

(1) be a commercial item;

(2) surpass the capability of systems currently used in the processing of claims under part B of the medicare program; and

(3) be modifiable to--

(A) satisfy pertinent statutory requirements of the medicare program; and

(B) conform to policies of the Secretary regarding claims processing under such program.

(c) DISCLOSURE-

(1) IN GENERAL- Except as provided in paragraph (2), notwithstanding any other provision of law, any information technology (or data related thereto) utilized by medicare carriers in establishing a commercial claims auditing system pursuant to subsection (a) shall not be subject to public disclosure.

(2) AUTHORIZED DISCLOSURE- The Secretary may authorize the public disclosure of the information described in paragraph (1) if the Secretary determines that--

(A) release of such information is in the public interest; and

(B) the information to be released is not protected from disclosure under section 552(b) of title 5, United States Code.

(d) DEFINITIONS- In this section--

(1) COMMERCIAL CLAIMS AUDITING SYSTEM- The term `commercial claims auditing system' means a commercial specialized auditing system that includes edits which identify inappropriately coded health care claims.

(2) COMMERCIAL ITEM- The term `commercial item' has the meaning given such term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).

(3) INFORMATION TECHNOLOGY- The term `information technology' has the meaning given such term in subparagraphs (A) and (B) of section 5002(3) of the Information Technology Management Reform Act of 1996 (40 U.S.C. 1401(3)), were such information technology to be acquired by an executive agency.

(4) MEDICARE CARRIER- The term `medicare carrier' means an entity that has a contract with the Secretary pursuant to section 1842(a) of the Social Security Act (42 U.S.C. 1395u(a)).

(5) SECRETARY- The term `Secretary' means the Secretary of Health and Human Services.

TITLE II--INCREASED ACCOUNTABILITY AND REDUCTION OF WASTEFUL DEFENSE SPENDING

SEC. 201. CANCELLATION OF F-22 AIRCRAFT PROGRAM.

The Secretary of the Air Force shall cancel the F-22 Raptor aircraft program. No funds may be obligated for that program after the date of the enactment of this Act.

SEC. 202. CANCELLATION OF COMANCHE HELICOPTER PROGRAM.

The Secretary of the Army shall cancel the Comanche helicopter program. No funds may be obligated for that program after the date of the enactment of this Act.

SEC. 203. CANCELLATION OF CRUSADER ARTILLERY PROGRAM.

The Secretary of the Army shall cancel the Crusader artillery program. No funds may be obligated for that program after the date of the enactment of this Act.

SEC. 204. CANCELLATION OF V-22 AIRCRAFT PROGRAM.

The Secretary of the Navy shall cancel the V-22 Osprey aircraft program. No funds may be obligated for that program after the date of the enactment of this Act.

SEC. 205. LIMITATION ON PROCUREMENT OF VIRGINIA CLASS ATTACK SUBMARINES.

Through fiscal year 2010, the Secretary of the Navy may enter into contracts for the procurement of no more than eight Virginia class submarines (including contracts entered into before the date of the enactment of this Act).

SEC. 206. TERMINATION OF PRODUCTION OF TRIDENT D5 MISSILES.

No funds may be obligated after the date of the enactment of this Act for production of Trident D5 missiles.

SEC. 207. REDUCTION IN NUCLEAR DELIVERY SYSTEMS WITHIN OVERALL LIMITS OF START II.

The President shall take such steps as necessary to reduce the nuclear delivery systems of the United States so as to bring the number of such systems within the overall START II limits. For purposes of this section, the term `overall START II limits' means the limitations on nuclear delivery systems that would be in effect under the START II Treaty, if ratified.

SEC. 208. CREATION OF COMMON NATO AIRLIFT CAPABILITY AND REDUCTION OF UNITED STATES COSTS FOR C-17 AIRCRAFT.

The Secretary of Defense shall seek to reach an agreement with the other member nations of the North Atlantic Treaty Organization to establish a common NATO airlift capability consisting of 20 C-17 aircraft with a cost-sharing arrangement similar to that for the common NATO AWACS fleet. The 20 C-17 aircraft programmed by the Air Force for procurement in fiscal years 2002 and 2003 shall be transferred to NATO for that common NATO airlift capability upon such an agreement being entered into.

SEC. 209. DEFERRAL OF PROCUREMENT OF ADDITIONAL C-130 TACTICAL AIRLIFT PLANES.

The Secretary of the Air Force may not enter into a contract for procurement of additional C-130 aircraft for fiscal years 2002 through 2006.

SEC. 210. REDUCTION IN REQUIREMENTS FOR AIR FORCE AND NAVY PILOTS IN NONFLYING POSITIONS.

The Secretary of the Air Force and the Secretary of the Navy shall each evaluate nonflying positions in the Air Force and the Navy, respectively, that are currently required to be held by pilots and, to the maximum extent practicable, shall modify the qualifications for those positions to reduce the requirements for pilots for those positions.

SEC. 211. REDUCTION IN NUMBER OF OFFICERS SO AS TO RETURN TO ENLISTED-TO-OFFICER RATIO IN EXISTENCE IN 1989.

The Secretary of Defense shall implement a program to reduce the ratio of enlisted-to-officer personnel of each of the Army, Navy, Air Force, and Marine Corps to a ratio of at least six-to-one by not later than January 1, 2006. The Secretary shall carry out that program through reductions in officer promotions to general and flag officer grades and through reductions in the number of officers in pay grades O-4, O-5, and O-6 through voluntary programs under existing provisions of law, including temporary early retirement authority, voluntary separation incentive, and the special separation benefit.

SEC. 212. PLACEMENT OF SELECTIVE SERVICE SYSTEM IN `DEEP STANDBY' STATUS.

(a) RESTRICTION OF REGISTRATION REQUIREMENT TO PERIODS OF NATIONAL EMERGENCIES- (1) Section 3(a) of the Military Selective Service Act (50 U.S.C. App. 453(a)) is amended by inserting after `this title,' the following: `during any period in which a declaration of national emergency is in effect,'.

(2) Section 3 of such Act (50 U.S.C. App. 453) is further amended by adding at the end the following new subsections:

`(c) The President shall have the authority to declare a period of national emergency during which the registration requirements of subsection (a) shall apply. Subject to subsection (d), the President shall provide for the prompt termination of the declaration of national emergency upon the termination of the national emergency.

`(d) A declaration of national emergency under subsection (c) shall terminate upon the expiration of a 10-day period of continuous session of Congress after the date of the declaration unless Congress enacts a law before the end of that period ratifying that specific declaration. For purposes of this subsection, the continuity of a session of Congress is broken only by an adjournment of the Congress sine die, and the days on which either House is not in session because of an adjournment of more than three days to a day certain are excluded in the computation of the 10-day period.'.

(3) Section 12 of such Act (50 U.S.C. App. 462) is amended by adding at the end the following new subsection:

`(h) In addition to the exception provided by subsection (g), a person may not be denied a right, privilege, benefit, or employment position under Federal law on the grounds that the person failed to present himself for and submit to registration under section 3 before the date of the enactment of this subsection.'.

(b) SUSPENSION OF ACTIVITIES OF SELECTIVE SERVICE SYSTEM BOARDS- Section 17 of such Act (50 U.S.C. App. 467) is amended by adding at the end the following new subsection:

`(d) Except during any period in which a declaration of national emergency is in effect under section 3--

`(1) the President may not appoint a person as a member of a civilian local board, civilian appeal board, or similar local agency of the Selective Service System; and

`(2) any such board established under section 10(b)(3) may not meet.'.

(c) REPORT ON STANDBY REGISTRATION PROGRAM FOR USE DURING NATIONAL EMERGENCIES- Not later than 150 days after the date of the enactment of this Act, the Director of the Selective Service System shall submit to Congress a report detailing a standby emergency manpower mobilization program to be used by the Selective Service System during periods in which a declaration of national emergency is in effect for the registration of persons who would be subject to registration under section

3 of the Military Selective Service Act (50 U.S.C. App. 453) during such a period. The report shall include an estimate of the cost to implement and operate the standby program and an evaluation of the feasibility of using existing and emerging information systems available to the Government to improve the effectiveness of any registration requirements.

SEC. 213. END OF TAXPAYER SUPPORT FOR DEFENSE INDUSTRY MERGERS.

Expenses incurred by a defense contractor related to a corporate merger may not be considered to be an allowable cost under a Department of Defense contract, and no funds appropriated to the Department of Defense may be used to reimburse a contractor for any such expense.

SEC. 214. REDUCTION OF UNITED STATES SUPPORT FOR WEAPONS SALES ABROAD BY ELIMINATING FUTURE ASSISTANCE UNDER THE FOREIGN MILITARY FINANCING PROGRAM.

After the date of the enactment of this Act, no new loan, grant, or other assistance may be provided under the `Foreign Military Financing Program' account under section 23 of the Arms Export Control Act (22 U.S.C. 2763).

SEC. 215. LIMITATION ON PROPOSED INCREASES FOR NATIONAL MISSILE DEFENSE TO FISCAL YEAR 2000 LEVELS.

The amount appropriated for the National Missile Defense program of the Department of Defense for any fiscal year may not exceed the amount appropriated for that program for fiscal year 2000, adjusted for inflation.

SEC. 216. REDUCTION OF CENTRAL INTELLIGENCE AGENCY BUDGET BY 10 PERCENT.

The total amount obligated for programs and activities of the Central Intelligence Agency for fiscal year 2002 may not exceed 90 percent of the total amount obligated for programs and activities of the Central Intelligence Agency for fiscal year 2001.

TITLE III--REDUCTION AND REFORM OF ANTIENVIRONMENTAL SPENDING

Subtitle A--Program Terminations and Fees

SEC. 301. NUCLEAR ENERGY RESEARCH INITIATIVE.

The Department of Energy shall not obligate any further funding for the Nuclear Energy Research Initiative.

SEC. 302. NATIONAL IGNITION FACILITY.

The Department of Energy shall not obligate any further funding for the National Ignition Facility.

SEC. 303. TOKAMAK FUSION REACTORS.

The Department of Energy shall not obligate any further funding for Tokamak fusion reactors.

SEC. 304. DIESEL ENGINE RESEARCH.

The Department of Energy shall not obligate any further funding for research on diesel engines for cars and light trucks.

SEC. 305. NUCLEAR WASTE FUND FEE.

(a) FEE ADJUSTMENT- Section 302(a)(2) of the Nuclear Waste Policy Act of 1982 is amended by adding at the end the following new sentence: `The Secretary shall adjust the fee annually for inflation.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect 90 days after the date of enactment of this section.

Subtitle B--Mining Provisions

SEC. 311. DEFINITIONS.

For purposes of subtitle:

(1) The term `locatable mineral' means any mineral not subject to disposition under any of the following:

(A) The Mineral Leasing Act (30 U.S.C. 181 et seq.).

(B) The Geothermal Steam Act of 1970 (30 U.S.C. 100 et seq.).

(C) The Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 et seq.).

(D) The Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 et seq.).

(2) The term `mineral activities' means any activity for, related to or incidental to mineral exploration, mining, beneficiation and processing activities for any locatable mineral, including access. When used with respect to this term:

(A) The term `exploration' means those techniques employed to locate the presence of a locatable mineral deposit and to establish its nature, position, size, shape, grade and value.

(B) The term `mining' means the processes employed for the extraction of a locatable mineral from the earth.

(C) The term `beneficiation' means the crushing and grinding of locatable mineral ore and such processes as are employed to free the mineral from other constituents, including but not necessarily limited to, physical and chemical separation techniques.

(D) The term `processing' means processes downstream of beneficiation employed to

prepare locatable mineral ore into the final marketable product, including but not limited to, smelting and electrolytic refining.

(3) The term `mining claim' means a claim for the purposes of mineral activities.

(4) The term `net smelter return' shall have the same meaning as the term defined in section 613(c)(1) of the Internal Revenue Code.

(5) The term `Secretary' means the Secretary of the Interior acting through the Director of the Minerals Management Service.

(6) The term `substantial underreporting' means the difference between the royalty on the value of the production which should have been reported and the royalty on the value of the production which was reported, if the value which should have been reported is greater than the value which was reported. An underreporting constitutes a `substantial underreporting' if such difference exceeds 10 percent of the royalty on the value of production which should have been reported.

SEC. 312. ROYALTIES.

(a) RESERVATION OF ROYALTY- Production of all locatable minerals from any mining claim located or converted under the general mining laws, or mineral concentrates or products derived from locatable minerals from any mining claim located or converted under the general mining laws, as the case may be, shall be subject to a royalty of 8 percent of the net smelter return from such production. The claim holder and any operator to whom the claim holder has assigned the obligation to make royalty payments under the claim and any person who controls such claim holder or operator shall be jointly and severally liable for payment of such royalties.

(b) DUTIES OF CLAIM HOLDERS, OPERATORS, AND TRANSPORTERS- (1) A person--

(A) who is required to make any royalty payment under this section shall make such payments to the United States at such times and in such manner as the Secretary may by rule prescribe; and

(B) shall notify the Secretary, in the time and manner as may be specified by the Secretary, of any assignment that such person may have made of the obligation to make any royalty or other payment under a mining claim.

(2) Any person paying royalties under this section shall file a written instrument, together with the first royalty payment, affirming that such person is liable to the Secretary for making proper payments for all amounts due for all time periods for which such person as a payment responsibility. Such liability for the period referred to in the preceding sentence shall include any and all additional amounts billed by the Secretary and determined to be due by final agency or judicial action. Any person liable for royalty payments under this section who assigns any payment obligation shall remain jointly and severally liable for all royalty payments due for the claim for the period.

(3) A person conducting mineral activities shall--

(A) develop and comply with the site security provisions in operations permit designed to protect from theft the locatable minerals, concentrates or products derived therefrom which are produced or stored on a mining claim, and such provisions shall conform with such minimum standards as the Secretary may prescribe by rule, taking into account the variety of circumstances on mining claims; and

(B) not later than the 5th business day after production begins anywhere on a mining claim, or production resumes after more than 90 days after production was suspended, notify the Secretary, in the manner prescribed by the Secretary, of the date on which such production has begun or resumed.

(4) The Secretary may by rule require any person engaged in transporting a locatable mineral, concentrate, or product derived therefrom to carry on his or her person, in his or her vehicle, or in his or her immediate control, documentation showing, at a minimum, the amount, origin, and intended destination of the locatable mineral, concentrate, or product derived therefrom in such circumstances as the Secretary determines is appropriate.

(c) RECORDKEEPING AND REPORTING REQUIREMENTS- (1) A claim holder, operator, or other person directly involved in developing, producing, processing, transporting, purchasing, or selling locatable minerals, concentrates, or products derived therefrom, subject to this Act, through the point of royalty computation shall establish and maintain any records, make any reports, and provide any information that the Secretary may reasonably require for the purposes of implementing this section or determining compliance with rules or orders under this section. Such records shall include, but not be limited to, periodic reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, composition volume, weight, and assay of all minerals extracted from the mining claim. Upon the request of any officer or employee duly designated by the Secretary or any State conducting an audit or investigation pursuant to this section, the appropriate records, reports, or information which may be required by this section shall be made available for inspection and duplication by such officer or employee or State.

(2) Records required by the Secretary under this section shall be maintained for 6 years after cessation of all mining activity at the claim concerned unless the Secretary notifies the operator that he or she has initiated an audit or investigation involving such records and that such records must be maintained for a longer period. In any case when an audit or investigation is underway, records shall be maintained until the Secretary releases the operator of the obligation to maintain such records.

(d) AUDITS- The Secretary is authorized to conduct such audits of all claim holders, operators, transporters, purchasers, processors, or other persons directly or indirectly involved in the production or sales of minerals covered by this Act, as the Secretary deems necessary for the purposes of ensuring compliance with the requirements of this section. For purposes of performing such audits, the Secretary shall, at reasonable times and upon request, have access to, and may copy, all books, papers and other documents that relate to compliance with any provision of this section by any person.

(e) COOPERATIVE AGREEMENTS- (1) The Secretary is authorized to enter into cooperative agreements with the Secretary of Agriculture to share information concerning

the royalty management of locatable minerals, concentrates, or products derived therefrom, to carry out inspection, auditing, investigation, or enforcement (not including the collection of royalties, civil or criminal penalties, or other payments) activities under this section in cooperation with the Secretary, and to carry out any other activity described in this section.

(2) Except as provided in paragraph (4)(A) of this subsection (relating to trade secrets), and pursuant to a cooperative agreement, the Secretary of Agriculture shall, upon request, have access to all royalty accounting information in the possession of the Secretary respecting the production, removal, or sale of locatable minerals, concentrates, or products derived therefrom from claims on lands open to location under the general mining laws.

(3) Trade secrets, proprietary, and other confidential information shall be made available by the Secretary pursuant to a cooperative agreement under this subsection to the Secretary of Agriculture upon request only if--

(A) the Secretary of Agriculture consents in writing to restrict the dissemination of the information to those who are directly involved in an audit or investigation under this section and who have a need to know;

(B) the Secretary of Agriculture accepts liability for wrongful disclosure; and

(C) the Secretary of Agriculture demonstrates that such information is essential to the conduct of an audit or investigation under this subsection.

(f) INTEREST AND SUBSTANTIAL UNDERREPORTING ASSESSMENTS- (1) In the case of mining claims where royalty payments are not received by the Secretary on the date that such payments are due, the Secretary shall charge interest on such underpayments at the same interest rate as is applicable under section 6621(a)(2) of the Internal Revenue Code of 1986. In the case of an underpayment, interest shall be computed and charged only on the amount of the deficiency and not on the total amount.

(2) If there is any underreporting of royalty owed on production from a claim for any production month by any person liable for royalty payments under this section, the Secretary may assess a penalty of 10 percent of the amount of that underreporting.

(3) If there is a substantial underreporting of royalty owed on production from a claim for any production month by any person responsible for paying the royalty, the Secretary may assess a penalty of 10 percent of the amount of that underreporting.

(4) The Secretary shall not impose the assessment provided in paragraph (2) or (3) of this subsection if the person liable for royalty payments under this section corrects the underreporting before the date such person receives notice from the Secretary that an underreporting may have occurred, or before 90 days after the date of the enactment of this section, whichever is later.

(5) The Secretary shall waive any portion of an assessment under paragraph (2) or (3) of this subsection attributable to that portion of the underreporting for which the person responsible for paying the royalty demonstrates that--

(A) such person had written authorization from the Secretary to report royalty on the value of the production on basis on which it was reported;

(B) such person had substantial authority for reporting royalty on the value of the production on the basis on which it was reported;

(C) such person previously had notified the Secretary, in such manner as the Secretary may by rule prescribe, of relevant reasons or facts affecting the royalty treatment of specific production which led to the underreporting; or

(D) such person meets any other exception which the Secretary may, by rule, establish.

(6) All penalties collected under this subsection shall be deposited in the Treasury.

(g) EXPANDED ROYALTY OBLIGATIONS- Each person liable for royalty payments under this section shall be jointly and severally liable for royalty on all locatable minerals, concentrates, or products derived therefrom lost or wasted from a mining claim located or converted under this section when such loss or waste is due to negligence on the part of any person or due to the failure to comply with any rule, regulation, or order issued under this section.

(h) EXCEPTION- No royalty shall be payable under subsection (a) with respect to minerals processed at a facility by the same person or entity which extracted the minerals if an urban development action grant has been made under section 119 of the Housing and Community Development Act of 1974 with respect to any portion of such facility.

(i) EFFECTIVE DATE- The royalty under this section shall take effect with respect to the production of locatable minerals after the enactment of this Act, but any royalty payments attributable to production during the first 12 calendar months after the enactment of this section shall be payable at the expiration of such 12-month period.

SEC. 313. LIMITATION ON PATENT ISSUANCE.

(a) MINING CLAIMS- After XXXX, 2001, no patent shall be issued by the United States for any mining claim located under the general mining laws or under this Act unless the Secretary determines that, for the claim concerned--

(1) a patent application was filed with the Secretary on or before XXXX, 2001; and

(2) all requirements established under sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36, and 37) for placer claims were fully complied with by that date.

If the Secretary makes the determinations referred to in paragraphs (1) and (2) for any mining claim, the holder of the claim shall be entitled to the issuance of a patent in the same manner and degree to which such claim holder would have been entitled to prior to the enactment of this Act, unless and until such determinations are withdrawn or invalidated by the Secretary or by a court of the United States.

(b) MILL SITES- After XXXX, 2001, no patent shall be issued by the United States for any mill site claim located under the general mining laws unless the Secretary determines that for the mill site concerned--

(1) a patent application for such land was filed with the Secretary on or before XXXX, 2001; and

(2) all requirements applicable to such patent application were fully complied with by that date.

If the Secretary makes the determinations referred to in paragraphs (1) and (2) for any mill site claim, the holder of the claim shall be entitled to the issuance of a patent in the same manner and degree to which such claim holder would have been entitled to prior to the enactment of this section, unless and until such determinations are withdrawn or invalidated by the Secretary or by a court of the United States.

SEC. 314. MINING CLAIM MAINTENANCE REQUIREMENTS.

(a) IN GENERAL- (1) The holder of each mining claim converted under the general mining laws shall pay to the Secretary an annual claim maintenance fee of $100 per claim.

(2) The holder of each mining claim located pursuant to the general mining laws shall pay to the Secretary an annual claim maintenance fee of $200 per claim.

(b) TIME OF PAYMENT- The claim maintenance fee payable pursuant to subsection (a) for any year shall be paid on or before August 31 of each year, except that in the case of claims referred to in subsection (a)(2), for the initial calendar year in which the location is made, the locator shall pay the initial claim maintenance fee at the time the location notice is recorded with the Bureau of Land Management.

(c) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTENANCE FEES UNDER ENERGY POLICY ACT OF 1992- This section shall not apply to any oil shale claims for which a fee is required to be paid under section 2511(e)(2) of the Energy Policy Act of 1992 (Public Law 102-486; 106 Stat. 3111; 30 U.S.C. 242).

(d) CLAIM MAINTENANCE FEES PAYABLE UNDER 1993 ACT- The claim maintenance fees payable under this section for any period with respect to any claim shall be reduced by the amount of the claim maintenance fees paid under section 10101 of the Omnibus Budget Reconciliation Act of 1993 with respect to that claim and with respect to the same period.

(e) WAIVER- (1) The claim maintenance fee required under this section may be waived for a claim holder who certifies in writing to the Secretary that on the date the payment was due, the claim holder and all related parties held not more than 10 mining claims on lands open to location. Such certification shall be made on or before the date on which payment is due.

(2) For purposes of paragraph (1), with respect to any claim holder, the term `related party' means each of the following:

(A) The spouse and dependent children (as defined in section 152 of the Internal Revenue Code of 1986), of the claim holder.

(B) Any affiliate of the claim holder.

(f) CO-OWNERSHIP- Upon the failure of any one or more of several co-owners to contribute such co-owner or owners' portion of the fee under this section, any co-owner who has paid such fee may, after the payment due date, give the delinquent co-owner or owners notice of such failure in writing (or by publication in the newspaper nearest the claim for at least once a week for at least 90 days). If at the expiration of 90 days after such notice in writing or by publication, any delinquent co-owner fails or refuses to contribute his portion, his interest in the claim shall become the property of the co-owners who have paid the required fee.

(g) CREDIT AGAINST ROYALTY- The amount of the annual claim maintenance fee required to be paid under this section for any claim for any period shall be credited against the amount of royalty required to be paid under section 312 for the same period with respect to that claim.

(h) PURCHASING POWER ADJUSTMENT- The Secretary shall adjust all dollar amounts established in this section for changes in the purchasing power of the dollar every 10 years following the date of enactment of this section, employing the Consumer Price Index for all urban consumers published by the Department of Labor as the basis for adjustment, and rounding according to the adjustment process of conditions of the Federal Civil Penalties Inflation Adjustment Act of 1990 (104 Stat. 890).

SEC. 315. SAVINGS CLAUSE.

Nothing in sections 312, 313, or 314 shall be construed as repealing or modifying any Federal law, regulation, order, or land use plan, in effect prior to the effective date of such section, that prohibits or restricts the application of the general mining laws, including such laws that provide for special management criteria for operations under the general mining laws as in effect prior to the effective date of such section, to the extent such laws provide environmental protection greater than required under the general mining laws.

TITLE IV--AMENDMENTS OF INTERNAL REVENUE CODE OF 1986

SEC. 401. REPEAL OF EXCLUSION OF CERTAIN EXTRATERRITORIAL INCOME.

(a) IN GENERAL- Section 114 of the Internal Revenue Code of 1986 (relating to extraterritorial income) is amended by adding at the end the following new subsection:

`(f) TERMINATION- This section shall not apply to transactions after December 31, 2001.'

(b) EFFECTIVE DATE- The amendment made by this section shall apply to transactions after December 31, 2001.

SEC. 402. DENIAL OF DEDUCTION FOR PAYMENTS OF EXCESSIVE COMPENSATION.

(a) IN GENERAL- Section 162 of the Internal Revenue Code of 1986 (relating to deduction for trade or business expenses) is amended by inserting after subsection (h) the following new subsection:

`(i) EXCESSIVE COMPENSATION-

`(1) IN GENERAL- No deduction shall be allowed under this chapter for any excessive compensation with respect to any full-time employee.

`(2) EXCESSIVE COMPENSATION- For purposes of this subsection, the term `excessive compensation' means, with respect to any employee, the amount by which--

`(A) the compensation for services performed by such employee during the taxable year, exceeds

`(B) an amount equal to 25 times the lowest compensation for services performed by any other full-time employee during such taxable year.

`(3) DEFINITIONS AND SPECIAL RULES- For purposes of this subsection--

`(A) COMPENSATION-

`(i) IN GENERAL- The term `compensation' means salary, wages, and bonuses.

`(ii) PART-YEAR EMPLOYEES- In the case of any part-year employee, the compensation of the employee shall be computed on an annualized basis.

`(B) EMPLOYER- All persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as 1 employer.'

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 403. DISALLOWANCE OF DEDUCTIONS FOR ADVERTISING AND PROMOTIONAL EXPENSES RELATING TO TOBACCO PRODUCT USE.

(a) IN GENERAL- Part IX of subchapter B of chapter 1 of subtitle A of the Internal Revenue Code of 1986 (relating to items not deductible) is amended by adding at the end the following new section:

`SEC. 280I. DISALLOWANCE OF DEDUCTION FOR TOBACCO ADVERTISING AND PROMOTIONAL EXPENSES.

`No deduction shall be allowed under this chapter for expenses relating to advertising or promoting cigars, cigarettes, smokeless tobacco, pipe tobacco, or any similar tobacco product. For purposes of this section, any term used in this section which is also used in section 5702 shall have the same meaning given such term by section 5702.'

(b) CONFORMING AMENDMENT- The table of sections for such part IX is amended by adding after the item relating to section 280H the following new item:

`Sec. 280I. Disallowance of deduction for tobacco advertising and promotion expenses.'

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years ending after December 31, 2001.

SEC. 404. SOURCE OF INCOME FROM CERTAIN SALES OF INVENTORY PROPERTY.

(a) GENERAL RULE- Subsection (b) of section 865 of the Internal Revenue Code of 1986 (relating to exception for inventory property) is amended to read as follows:

`(b) EXCEPTION FOR INVENTORY PROPERTY-

`(1) IN GENERAL- Except as otherwise provided in this subsection, income derived from the sale of inventory property shall be sourced under the rules of sections 861(a)(6), 862(a)(6), and 863 and this section shall not apply.

`(2) TREATMENT OF CERTAIN SALES TO RELATED PERSONS-

`(A) IN GENERAL- If any inventory property produced (in whole or in part) by the taxpayer is sold by the taxpayer (directly or indirectly) to a related person--

`(i) the portion determined under subparagraph (B) of the income from such sale shall be sourced in the United States or outside the United States depending on where the production activities occur, and

`(ii) the remaining portion of such income shall be sourced under the rules of sections 861(a)(6), 862(a)(6), and 863.

`(B) AMOUNT APPORTIONED TO PRODUCTION ACTIVITIES- For purposes of subparagraph (A), the portion determined under this subparagraph is so much of the income from the sale as does not exceed the greater of--

`(i) the portion of such income apportioned to production activities under section 863(b), or

`(ii) the portion of the combined income of the taxpayer and related person attributable to such property which would have been apportioned to production activities under section 863(b) if such taxpayer and related person were one taxpayer.

`(C) RELATED PERSON- For purposes of this paragraph, the term `related person' means any person related (within the meaning of section 482) to the taxpayer.

`(3) CERTAIN SALES FOR USE IN UNITED STATES- If--

`(A) a United States resident sells (directly or indirectly) inventory property to another United States resident for use, consumption, or disposition in the United States, and

`(B) such sale is not attributable to an office or other fixed place of business maintained by such United States resident outside the United States,

any income of such United States resident (or any related person) from such sale shall be sourced in the United States.'

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to sales after December 31, 2001.

TITLE V--MISCELLANEOUS PROVISIONS TO REDUCE WASTEFUL AND INEFFICIENT SPENDING

SEC. 501. INTERNATIONAL SPACE STATION.

The National Aeronautics and Space Administration shall not obligate any further funding for the International Space Station.

SEC. 502. OVERSEAS PRIVATE INVESTMENT CORPORATION.

(a) PROHIBITION ON NEW CONTRACTS- The Overseas Private Investment Corporation may not, on or after the date of enactment of this Act, issue any contract of

insurance or reinsurance, or any guaranty, or enter into any agreement to provide financing.

(b) EXISTING CONTRACTS- Subsection (a) does not require the termination of any contract or other agreement entered into before the date of enactment of this Act.

SEC. 503. PROHIBITION ON PROVISION OF NEW CREDIT BY THE EXPORT-IMPORT BANK OF THE UNITED STATES.

Notwithstanding any other provision of law, the Export-Import Bank of the United States may not, on or after the date of the enactment of this Act, provide any guarantee, insurance, or extension of credit, or participate in any extension of credit, except pursuant to a commitment made by the Export-Import Bank of the United States before such date of enactment.

SEC. 504. TRADE AND DEVELOPMENT AGENCY.

(a) TERMINATION OF AGENCY- Effective on the date of enactment of this Act, the Trade and Development Agency is abolished.

(b) ADMINISTRATION OF EXISTING OBLIGATIONS- The Secretary of State shall carry out the functions performed on the day before the date of enactment of this Act by the Trade and Development Agency only for purposes of administering contracts or agreements issued or entered into by the Trade and Development Agency before the date of enactment of this Act that are effective on such date of enactment. Such functions shall terminate when all such contracts and agreements expire.

(c) TERMINATION OF PROVISIONS- Section 661 of the Foreign Assistance Act of 1961 (22 U.S.C. 2191 and following) is repealed, effective on the date of enactment of this Act, except that such section shall continue in effect with respect to the functions performed by the Secretary of State under subsection (b).

(d) TERMINATION OF AFFAIRS- The Director of the Office of Management and Budget shall take the necessary steps to terminate the affairs of the Trade and Development Agency.

(e) APPROPRIATIONS- Funds available to the Trade and Development Agency shall, on the date of enactment of this Act, be transferred to the Secretary of State for use in performing the functions of the Trade and Development Agency under subsection (b). Upon the expiration of the contracts and agreements with respect to which the Secretary of State is exercising such functions, any unexpended balances of the funds transferred under this subsection shall be deposited in the Treasury as miscellaneous receipts.

SEC. 505. TERMINATION OF INTERNATIONAL BROADCASTING AUTHORITIES.

(a) TERMINATION OF BROADCASTING TO CUBA- Effective October 1, 2001, the Television Broadcasting to Cuba Act (22 U.S.C. 1465aa and following) and the Radio Broadcasting to Cuba Act (22 U.S.C. 1465 and following) are repealed.

(b) TERMINATION OF INTERNATIONAL BROADCASTING OPERATIONS- Effective October 1, 2001, the United States International Broadcasting Act of 1994 (22 U.S.C. 6201 and following) is repealed.

SEC. 506. JOINT PROCUREMENT OF PHARMACEUTICALS BY THE DEPARTMENT OF DEFENSE AND THE DEPARTMENT OF VETERANS AFFAIRS.

The Secretary of Defense and the Secretary of Veterans Affairs shall--

(1) establish a joint office for the procurement of pharmaceuticals for the Department of Defense and the Department of Veterans Affairs; and

(2) jointly develop and implement a common clinically-based formulary for the pharmaceutical programs of the Department of Defense and the Department of Veterans Affairs.

END