Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I want to take this opportunity to comment specifically on Chapter 1 of the supplemental appropriations legislation, S. 1077, and the provision of funding for the Radiation Exposure Compensation Act, or RECA as it is more commonly known. Since the enactment of RECA in 1990 and the subsequent amendments in 2000, thousands of Americans have received compensation based on their unknowing exposure to harmful radiation caused by the government's nuclear production and testing activities. As many of my colleagues will recall, last year, Congress passed the Radiation Exposure Compensation Amendments of 2000, S. 1515. This law made important changes to the original 1990 Act by updating the list of compensable illnesses--primarily cancers--based on scientific and medical information gathered over the past decade. However, even before the enactment of RECA 2000, the Trust Fund became financially depleted. Starting in the Spring of last year, approved claimants began receiving ``IOUs'' from the Department of Justice rather than their checks. Many of us are totally dismayed that the RECA Trust Fund is depleted. It is totally unfair for the government to issue IOUs rather than checks to the hundreds and potentially thousands of individuals who are expected to be approved for compensation. I know that my colleagues on the Appropriations Committee agree, and that is why they have included $84 million for RECA claims in this bill. It is my understanding that these funds are the amount necessary to cover all approved claims pending at the Justice Department through the end of this fiscal year. And that is good news. The bad news is that we still face a shortfall in funding over the course of the next 10 years. That is why I introduced legislation, S. 898, along with my distinguished colleagues Senator Domenici and Senator Daschle to provide permanent funding for the RECA trust fund. Such action would provide certainty to the thousands of claimants for whom the program was enacted 10 years ago. As I am sure my colleagues recognize, for the Federal Government to promise compassionate compensation to the RECA downwinders and workers and then not honor that commitment is simply unacceptable. It is inexcusable for the government to pledge this compensation and then issue nothing more than a simple IOU. This strikes at the very heart of our citizens' ability to have confidence in their government. I have met with many of the RECA claimants in my state. It does not take long to see the pain and suffering they have endured over the years. This pain and suffering, I would add, has taken a toll on their lives and the lives of their families as well. Most of these individuals are now retired; they live on modest incomes and fear that their declining health will only exacerbate their limited family finances. And let us not ignore the overwhelming and personal human tragedy that many of these individuals already have died as a result of the injuries they sustained while working for the government's nuclear production program. Today, we have the opportunity to right a wrong through passage of this legislation, and I hope that we do so at the earliest opportunity. In closing, I particularly want to thank my good friend Senator Domenici, and his excellent staff, for their work on the Appropriations Committee in securing these funds. Senator Domenici and I have worked together since 1990 on RECA. We have done so in the name of thousands of individuals across many states who were literally innocent victims of our nation's nuclear weapons program. I am appreciative for all Senator Domenici has done to make this program the success it has been.

Mr. HATCH. Mr. President, today I rise to speak against Senator McCain's amendment to the fiscal year 2001 supplemental appropriations legislation. I fully appreciate the sentiment underlying this amendment. The men and women of our Armed Forces deserve nothing but the best in living conditions, pay, and working environment. I understand that this amendment would enhance the operations and maintenance of the services. I have always supported legislation that provides for our soldiers, airmen, and marines. However, I find that one of the offsets to Senator McCain's amendment is totally without merit. I am vehemently against section 3003, paragraph (b) in Senator McCain's amendment which reduces the salaries and expenses in the Department of Treasury by $30 million. The amendment does not address what the $30 million is for, but I will tell you this funding is for security for the 2002 Winter Olympics. It pays the salaries and expenses of law enforcement personnel. Senator McCain's amendment seeks to add funding to the military that would not dramatically improve our national security but the $30 million that he takes away from the Treasury Department's budget can have a dramatic impact on safety at this international event. For several years now we have worked very hard to ensure the public safety of this major international event. The law enforcement budget has been carefully planned, fully justified, and endorsed by this body. Any reduction to this budget would have a severe impact on the security of the Olympics and impose unacceptable risks. I am sure my colleagues agree that the safety of the Olympic athletes and spectators is of paramount importance, and a national responsibility when this Nation agreed to host the 2002 Olympic Games.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce S. 1140, ``The Motor Vehicle Franchise Contract Arbitration Fairness Act of 2001.'' I am pleased to be joined in cosponsorship of this legislation by Senators Feingold, Grassley, Leahy, Warner, Breaux, Burns, Reid, Craig, Torricelli, Bennett, Snowe, DeWine, Thomas, and Hutchinson. Our bill is intended to allow automobile dealers their day in court when they have disputes with the manufacturers. As automobile dealers throughout Utah have pointed out to me, the motor vehicle dealer contract often includes mandatory arbitration clauses, and they also point out their unequal bargaining power. This is usually the result of various factors, including the manufacturers' discretion to allocate vehicle inventory and control on the timing of delivery. Manufacturers can, thus, determine the dealer's financial future with the allocation of the best-selling models. Manufacturers can also exercise leverage over the flow of revenue to dealers, such as warranty payments. Manufacturers can limit dealers' rights to transfer ownership or control of the business, even to family members. And manufacturers have tried, arbitrarily, to take businesses away from dealers without cause. I recognize the efficiencies of mandatory arbitration clauses in general, but the specific circumstances in the manufacturer-dealer relationship justifies this widely-supported bipartisan proposal. It is worthy to note that Congress in 1956 enacted the Automobile Dealer Day in Court Act, which provided a small business dealer in limited circumstances the right to proceed in Federal court when faced with abuses by manufacturers. And State legislatures have enacted significant protections for auto dealers. S. 1140 amends Title 9 of the U.S. Code and make arbitration of disputes in motor vehicle franchise contracts optional. This would allow dealers to opt voluntarily for arbitration or use procedures and remedies available under State law, such as state-established administrative boards specifically established to resolve dealer/ manufacturer disputes. I must note that this legislation is extremely narrow and affects only the unique relationship between small business auto dealers and motor vehicle manufacturers, which is strictly governed by State law. This legislation is necessary to protect the States' interest in regulating the motor vehicle dealer/manufacturer relationship. All States, except for Alaska, have enacted laws specifically designed to regulate the economic relationship between motor vehicle dealers and manufacturers to prevent unfair manufacturer contract terms and practices. In most States, including my home State of Utah, effective State administrative forums already exist to handle dealer/ manufacturer disputes outside of the court system. Indeed, in the majority of States, a special State agency or forum is charged with administering and enforcing motor vehicle franchise law. These State forums provide an inexpensive, speedy, and non-judicial resolution of disputes. I urge my colleagues to support this worthwhile legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, as we move into recess for our annual Independence Day celebration, I wish to offer my deepest gratitude for all veterans of this country who took the call for arms in silent and noble duty and sacrificed more than we can ever repay. From the Revolutionary War to the Persian Gulf War, American men and women have always answered the call to secure and preserve independence and freedom both here and abroad. We are forever in their debt. I also want to take this occasion to recognize and honor a special group of brave, indeed extraordinary, soldiers who served this country so gallantly in WWII. I want to pay special tribute to those who served in the Pacific, were taken prisoner, and then enslaved, and forced into labor without pay, under horrific conditions by Japanese companies. While I in no way wish to suggest that other American troops did not suffer equally horrific hardships or served with any less courage, the situation faced by this particular group of veterans was unique. As recognized in a unanimous joint resolution last year, all members of Congress stated their strong support for these brave Americans. As with many of our colleagues here today, I am committed to supporting these veterans in every way possible in their fight for justice. This weekend the Prime Minister of Japan will be meeting with the President of the United States. I cannot praise this President enough for his thoughtfulness in hosting this event for the leader of Japan. On this Independence Day, as we honor and appreciate America's freedom, we cannot help but think of those who served our country. Freedom, indeed, is not free. The price is immeasurable. I hope the Prime Minister will understand, as I know he does, the value we place upon our veterans--the very people who fought and paid the price. Our country appreciates the decades of friendship the United States and Japan have shared. Often, we probably do not recognize as we should the value of our bilateral relationship with Japan. On many occasions, we get bogged down in trade disputes. But ultimately we have found ways to resolve past trade differences, and I am confident we can address all current and future trade issues. It is with this sincere hope and appreciation that I raise the memory of injustices perpetrated by private companies in Japan against American servicemen, and I hope that we can find a resolution to this problem. There is no more appropriate time to open the door to this long overdue dialogue between the United States and Japan. This is a moral issue that will not go away. We can work with Japan to close this sad chapter in history. In so doing, we will fortify and continue our bilateral relationship with Japan. In closing, I urge all Americans, during this next week as we celebrate our freedom and our great history, to thank our soldiers who gave their lives and their freedom to fight for our nation. I thank them and express my support that they will be helped and protected. I will fight for them as they fought for me, my children, and all other Americans.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce S. 1140, ``The Motor Vehicle Franchise Contract Arbitration Fairness Act of 2001.'' I am pleased to be joined in cosponsorship of this legislation by Senators Feingold, Grassley, Leahy, Warner, Breaux, Burns, Reid, Craig, Torricelli, Bennett, Snowe, DeWine, Thomas, and Hutchinson. Our bill is intended to allow automobile dealers their day in court when they have disputes with the manufacturers. As automobile dealers throughout Utah have pointed out to me, the motor vehicle dealer contract often includes mandatory arbitration clauses, and they also point out their unequal bargaining power. This is usually the result of various factors, including the manufacturers' discretion to allocate vehicle inventory and control on the timing of delivery. Manufacturers can, thus, determine the dealer's financial future with the allocation of the best-selling models. Manufacturers can also exercise leverage over the flow of revenue to dealers, such as warranty payments. Manufacturers can limit dealers' rights to transfer ownership or control of the business, even to family members. And manufacturers have tried, arbitrarily, to take businesses away from dealers without cause. I recognize the efficiencies of mandatory arbitration clauses in general, but the specific circumstances in the manufacturer-dealer relationship justifies this widely-supported bipartisan proposal. It is worthy to note that Congress in 1956 enacted the Automobile Dealer Day in Court Act, which provided a small business dealer in limited circumstances the right to proceed in Federal court when faced with abuses by manufacturers. And State legislatures have enacted significant protections for auto dealers. S. 1140 amends Title 9 of the U.S. Code and make arbitration of disputes in motor vehicle franchise contracts optional. This would allow dealers to opt voluntarily for arbitration or use procedures and remedies available under State law, such as state-established administrative boards specifically established to resolve dealer/ manufacturer disputes. I must note that this legislation is extremely narrow and affects only the unique relationship between small business auto dealers and motor vehicle manufacturers, which is strictly governed by State law. This legislation is necessary to protect the States' interest in regulating the motor vehicle dealer/manufacturer relationship. All States, except for Alaska, have enacted laws specifically designed to regulate the economic relationship between motor vehicle dealers and manufacturers to prevent unfair manufacturer contract terms and practices. In most States, including my home State of Utah, effective State administrative forums already exist to handle dealer/ manufacturer disputes outside of the court system. Indeed, in the majority of States, a special State agency or forum is charged with administering and enforcing motor vehicle franchise law. These State forums provide an inexpensive, speedy, and non-judicial resolution of disputes. I urge my colleagues to support this worthwhile legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, this is an important bill. I want to see a Patients' Bill of Rights signed into law, but I am afraid some of my colleagues here, on the other side of the aisle, have rejected any efforts to move the reasonable Frist-Breaux-Jeffords bipartisan, or I should say tri-partisan bill. They have put lawyers and litigation ahead of patients and medical care. I would like to say a few words on the liability provisions of this legislation. We all recognize that the liability provisions of this legislation are critical. These elements are key to providing patients with quality health care instead of extended court time. When I refer to the liability provisions, of course I am talking about a family of issues, including: exhaustion of appeals, employer liability, caps on damages, and class action lawsuits. Each of these is important, and indeed critical to patient care and health care delivery, and needs to be addressed and corrected before the President can sign a bill. With regard to the provision on exhaustion of appeals, I believe the Thompson amendment, which we just approved is certainly a big improvement over the McCain-Kennedy language. The amendment will make certain that no judicial proceedings commence prior to patients exhausting all of the internal and external review mechanisms. This is purely a common sense amendment, which properly maintains emphasis on speedy resolution of patient problems without lengthy and costly court proceedings. I want to emphasize that nothing in the amendment prohibits patients from having their day in court. Nor does this amendment prevent them from receiving immediate, needed care. It just requires them to go through the internal and external review process before going to court for damages. The amendment still allows for those patients who really need immediate care to get that care while they go through the administrative appeal process. It is important to underscore that no one will suffer irreparable harm under the amendment. To reiterate, this amendment does not prohibit patients from going to court for care; it simply asks them to go through internal and external review before going to court to seek liability and damages. What is wrong with that? If we go down the route of the McCain-Kennedy bill, we are not helping the patient get care. What we are doing is rendering both the internal and new external appeal process pointless. Why are we bothering to establish stricter standards for internal reviews and set up an external appeal process if the work of the appeals panel doesn't matter and can be bypassed through a judicial process? Unfortunately, that is exactly what McCain-Kennedy does--allows patients to bypass the administrative appeal process and go directly to court. The main difference between the McCain-Kennedy bill and the Thompson amendment is this--with Thompson, we emphasize care over court. The Thompson amendment places the emphasis where it should be--on guaranteeing that people get the health care that they need, when they need it. I believe the Thompson amendment is important in a number of ways. It will help curb unnecessary lawsuits. It provides patients with a fair review process. And most importantly, it codifies current law by allowing patients to file injunctive relief when they need immediate care. The Thompson amendment will not only protect the rights of patients but will also improve the McCain-Kennedy legislation. As far as employer liability is concerned, the language of the McCain-Kennedy legislation was completely unacceptable. The bill claimed to limit federal or state causes of action against a group health plan, employer, or plan sponsor, but it specifically authorizes a cause of action against an employer if such person or persons directly participated in the consideration of a claim for benefits and in doing so failed to exercise ordinary care. But, at the same time, the McCain-Kennedy bill specifically excluded any cause of action against a doctor or hospital. I think the Snowe-DeWine amendment adopted yesterday starts to address these concerns. The Snowe-DeWine language includes protections for employers who delegate plan decision making to a third party. It helps strengthen the definition of the designated decision maker so that some employers will not be unfairly exposed to liability. However, other employers would not be protected. I am serious when I say this could result in employees losing health coverage. Employers will not want to chose between offering health insurance to their employees and opening themselves up to liability and huge court costs. I find it ironic that my colleagues on the other side of the aisle, who always claim they are trying to find ways to lower the uninsured population, are actually pressing for legislation that will dramatically increase the uninsured population. And if you don't believe me, talk to any expert who is not a trial lawyer because the message is loud and clear that unless the bill is improved, health coverage will be severely jeopardized, and employees will lose their insurance. Is this the result that we want, especially in legislation that claims to be a Patients' Bill of Rights? I think not. As far as damage caps are concerned, the Frist-Breaux-Jeffords legislation is a step in the right direction. The McCain-Kennedy language is not. The problem with the current McCain-Kennedy legislation is that it allows patients to go both to federal and state court to collect damages. For federal causes of action, economic and non-economic damages are unlimited. And even though the bill's proponents claim there are no punitive damages provisions, as a former medical malpractice attorney, I know punitive damages when I see them. Supporters of the McCain-Kennedy approach claim their bill doesn't allow punitive damages in federal court. That is absolutely not true. Under their bill, a defendant in federal court can be hit with up to $5 million in ``civil assessment'' damages. Let's call it like it is. The purpose of the civil assessment is to punish providers, plain and simple. The bill includes no limits on state law damages. It is very apparent to everyone in this chamber that the trial lawyers have been principally involved in drafting these liability provisions and they have done so with their own interests in mind. This provision is simply not in the best interest of the American people. The McCain-Kennedy language allowing for unlimited damages is unworkable. Economic and non-economic damages are uncapped. In my opinion, non-economic damages should be capped. Another issue that is extremely important is class action. The McCain-Kennedy language had no restrictions on class actions on its newly permitted state causes of action nor for its newly created federal causes of action for damages. Fortunately, the DeWine language attempts to restrict the litigation nightmare that would have resulted from the McCain-Kennedy language. Finding common ground on these issues--exhaustion of appeals, employer liability, caps on damages and class action is crucial to the success of the Patients' Bill of Rights legislation. It is incumbent upon us to do this right and to do what is in the best interest of patients, not trial attorneys. I am confident that if we are all willing, we can make these provisions legally sound. We have spent far too many years on this issue not to do it right. We have a real opportunity to pass meaningful patients' rights legislation. Let's not squander this opportunity by acting expeditiously.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to oppose amendment No. 847 offered by my friend from Kansas, Senator Brownback. This amendment purports to establish safeguards with respect to medical treatments that encompass therapies directed at genetic defects. The amendment would impose criminal sanctions, including imprisonment of up to 10 years, on those who violate the restrictions on modifying the human genetic structure. Not only is this the wrong time to consider this amendment, it is also the wrong piece of legislation on which to consider this amendment. In all candor, I must tell my colleagues that in my view, based on my preliminary reading of this amendment, I greatly doubt there will ever be a right time for this proposal. I have no doubt that this amendment is well-intentioned. I have worked with Senator Brownback many times in the past on many issues, including many important right-to-life issues, such as outlawing partial birth abortion. Both he and I are proud to call ourselves pro-life Senators. But, as my colleagues are aware, Senator Brownback and I happen to disagree on the issue of federal funding for embryonic stem cell research. I understand and completely respect his views on this issue. In a nutshell, the Brownback amendment attempts to regulate genetic research. But I am afraid that it might regulate this critical avenue of research right out of existence. This is an exceedingly complex and dynamic field of science. It is certainly not the type of legislation that we want to attach as a non-germane amendment to a bill that does not directly relate to biomedical research. My goodness, we have our hands full enough with HMOs and the Patients' Bill of Rights. We do not need to further complicate an already complex bill with this language. Why do we need to take floor time on this proposal? Have there been hearings on this language? Has there been a committee mark-up on this bill? Isn't the reason why we have committee hearings and committee mark- ups so that complex issues can be adequately aired by members of the critical committees before the full Senate debates an issue? There is much virtue for letting legislation ripen and be scrutinized in committee before the entire body debates the merits of proposals such as this amendment. I think we should defeat this amendment today so that the relevant committees can thoroughly review this legislation. While I strongly believe that we should defeat this amendment on strictly procedural grounds, I do want to make a few comments on some initial problems that I have with respect to the substance of the bill. First, because there are over 300 diseases thought to be caused by a defect in a single gene, we must be extremely careful that we do not cut off or unduly impede vital research on such diseases. As a co-sponsor of the Orphan Drug Act of 1984, I know very well how millions of American families must struggle each day with small population but highly debilitating diseases such as multiple sclerosis, ALS, and Fragile X Syndrome. The problem with the Brownback amendment is that it appears to thwart research on gene therapies that may lead one day to cures for many of these single-gene diseases. It would not be right for the Senate to hastily adopt language that derails research on such crippling diseases as Alzheimer's or Parkinson's. I am concerned with what the definition of human germline gene modification in section 301 of the Brownback bill could do when it is read in context of section 302 of his legislation. The amendment's definition of human germline modification is ambiguous. As one attorney representing the biotechnology industry has characterized the reach of this definition: Among other problems, which of the examples listed are ``sources'' of ``forms'' of DNA and why does it matter? Moreover, the sentence--and he is referring to the first definition in section 301 which describes human germline modification--ends by referring to ``including DNA from any source, and in any form, such as nuclei, chromosomes, nuclear, mitochondrial, and synthetic DNA.'' To what part of the first sentence defining ``human germline modification'' is the language referring? Does the last sentence of the definition, ``Nor does it include the change of DNA involved in the normal process of sexual reproduction'' prohibit in vitro fertilization? Does any part of the amendment prohibit or allow in vitro fertilization? What genetic technologies does ``normal'' cover, if any? Without objection, I would like to place in the Recrd a copy of this legal memorandum prepared by Edward Korweck of the law firm of Hogan & Hartson. As I understand it, this memorandum was written on behalf of BIO, the biotechnology industry association. I also ask unanimous consent to place in the Record a copy of a letter from BIO to Senator Lott opposing the Brownback amendment. This letter voices its opposition to the amendment by stating: Let's not cripple essential medical research for a host of chronic and fatal diseases such as diabetes, Parkinson's disease, Alzheimer's disease, and various cancers. The patients and families who suffer from these diseases are looking to advances in medical research to develop cures and better treatments for them. This argument must be considered by all members of the Senate. The question of how in vitro fertilization relates to the normal process of sexual reproduction is a question of great importance because it appears to directly implicate the science of embryonic stem cell research. Specifically, we need to know this language would treat research with human pluripotent stem cells. We all know where Senator Brownback stands on that issue. While I generally agree with my friend from Kansas, I disagree with him on embryonic stem cell research. This is an issue that deserves careful consideration by each Senate. I welcome this debate. But today is not the time. We simply need to know all the implications of the Brownback language before we even consider such legislation. In my view, this Senate should go on record as supporting federal funding for embryonic stem cell research. And we certainly do not want to turn back the clock on the type of gene therapy research that has been conducted for over 20 years. This is simply not the kind of measure that you try to slip into an unrelated bill. All interested parties--patient groups, religious and advocacy organizations, scientists, health care providers, biotechnology firms-- deserve to be fully consulted on how the language of this measure will affect their interests.

Mr. HATCH

Mr. HATCH. Mr. President, I rise in favor of the Grassley motion to commit this legislation to the Finance Committee, the HELP Committee and the Judiciary Committee. The legislation before this body is one which will have an enormous impact on medical providers, the health insurance industry, employers and, most important, the patients. As the ranking Republican of the Senate Judiciary Committee, I have serious concerns with the liability provisions of this bill and how they will be impact employers, medical providers and patients. The McCain-Kennedy bill creates new causes of action, changes the careful balance of ERISA's uniformity rules, and has potential new adverse implications on our judicial system. Moreover, the liability provisions have been crafted without the benefit of appropriate and necessary review of the appropriate committees of jurisdiction. My colleagues, this is not the way to legislate. At the very least, the Judiciary Committee should be afforded the opportunity to review the liability provisions that will clearly have a major impact on our legal system. Just a few months ago, when the bankruptcy reform legislation was brought to the Senate floor under rule 14, the legislation had been considered by the Judiciary Committee, the entire Senate and a bipartisan conference committee over the last 6 years. However, Democrats raised objections then that the bill needed to be reviewed by the Judiciary Committee before consideration on the Senate floor. As a result, we followed regular order and the committee reviewed the bill after which it was sent to the Senate floor for consideration. Now the tactics of my friends on the other side is to bypass the committees altogether which is exactly what they vocally opposed on bankruptcy reform legislation just a few months ago. Moreover, we now have the third iteration of the liability provisions which is less than a week old. Clearly, the legal ramifications of these provisions are not well known, and I think it would be in the best interest of this legislation to craft language that is truly going to help patients which we all have been saying is our No. 1 priority. The provisions in the McCain-Kennedy legislation make sweeping changes that will affect our judicial system. This bill changes Federal law and permits various causes of action in both State and Federal courts. It also changes the rules governing class action lawsuits, as well as impacting punitive damages all the while exposing new classes of individuals to open-ended liability. I want to emphasize that these are all critical important, legal issues that must be considered carefully. The regular process of the Senate should not be circumvented for the political expediencies of my friends on the other side. Why rush this important bill through the Senate? According to the Congressional Budget Office, this legislation will cause premiums to increase by at least 4.2 percent. As a result, it is estimated that 1.3 million Americans will lose their health insurance because health premiums will become too expensive. Even worse, employers benefits altogether for fear of more expanded liability exposure under so-called bipartisan Democrat proposal. Shouldn't we hear from experts and other legal scholars in an open forum before passing such a monumental bill that impacts so many Americans? It is very apparent to everyone in this Chamber that the trial lawyers have been principally involved in drafting these liability provisions and they have done so with their own interest in mind. And believe me, as a former medical malpractice attorney, I know what their tricks are, and I know what they are trying to do. This provisions are simply not in the best interest of the American people. Accordingly, I urge my colleagues to support his motion to commit. It is incumbent upon us to do this right and to do this in the best interest of patients, not trial attorneys. I am confident that with a little extra time, we can make these provisions legally sound. We have spent far too many years on this issue not to do it right. We have a real opportunity to pass meaningful patients' rights legislation. Let us not squander this opportunity by acting expeditiously without the benefit of more careful and thoughtful review.

Mr. HATCH

Mr. HATCH. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to introduce the Medicare Patient Access to Preventive and Diagnostic Tests Act. This bipartisan legislation will establish new procedures under Medicare for determining the coding and payment amounts for clinical diagnostic laboratory tests. I am pleased to have my colleague, Senator John Kerry, as the lead Democratic sponsor of this bill. Similar legislation has been introduced in the House of Representatives by Congresswoman Jennifer Dunn and Congressman Jim McDermott. Innovative clinical laboratory tests help save lives and reduce health care costs by detecting diseases, such as cancer, heart attacks, and kidney failure in their early stages, when they are more treatable. However, there are serious flaws in the way that the Center for Medicare and Medicaid Services, CMS, formally known as HCFA, currently sets reimbursement rates for diagnostic tests. This cumbersome bureaucratic system makes it difficult for physicians and laboratories to offer these diagnostic tests to their patients who need them. Due to institutionalized flaws in the current Medicare reimbursement system, revolutionary and innovative diagnostic tests may not benefit patients for years to come. In addition, it has been shown that lower laboratory payments correlate with lower utilization. The payment rates vary significantly from region to region and State to State. For example, in my home State of Utah, a patient is sent for blood work to test for kidney disease. Based upon the 2001 Medicare Lab Reimbursement schedule, the Utah lab would receive $2.12 for performing the test. However, labs in Arizona, Nevada, Montana, New Mexico and Wyoming, would receive $6.33 to perform the same test. This makes no economic or medical sense to me. A recent Institute of Medicine, IoM, report stated that Medicare payments for outpatient clinical laboratory services should be based on a single, rational fee schedule. Medicare should account for market- based factors such as local labor costs and prices for goods and services in establishing the fee schedule. In addition, CMS should provide opportunities for stakeholder input and develop better communication with contractors while policies are being developed and after these policies are adopted. Our bill, based upon the principles of this IoM report, would require CMS to establish a national fee schedule for new and current tests, based upon an open, transparent, and rational public process for incorporating new tests, as well as to provide clear explanations of the reasoning behind its reimbursement decisions. This new process would be based upon science based methodologies for setting prices for new technologies that are designed to establish fair and appropriate payment levels for these items and services. CMS's procedures would provide that the payment amount for tests would be established under either the so-called gap-filling or cross- walking methodologies, and they would specify the rules for deciding which methodology will be used and how it will be employed. In particular, the legislation would require that if a new test is clinically similar to a test for which a fee schedule amount has already been established, through cross-walking, CMS will pay the same fee schedule amount for the new test. In determining whether tests are clinically similar, CMS will not take into account economic factors. Finally, this new process would provide a mechanism for any laboratory or other stakeholder to challenge CMS fee schedule decisions. The cost of these changes is small in light of the significant impact on improving the quality of patient care. I hope my colleagues will join me in cosponsoring this bill. The laudable goal of this bipartisan legislation is to establish an open and transparent public process for incorporating new laboratory tests into the Medicare program. Many seniors currently do not have full access to the medical care they need due to the antiquated process for assigning billing codes and setting reimbursement rates. We need to bridge the gap between seniors and the life-saving lab tests they need to preserve their health and promote their well-being. I ask my colleagues to join with me in supporting this legislation and ask unanimous consent that the text of this bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to introduce the Medicare Patient Access to Preventive and Diagnostic Tests Act. This bipartisan legislation will establish new procedures under Medicare for determining the coding and payment amounts for clinical diagnostic laboratory tests. I am pleased to have my colleague, Senator John Kerry, as the lead Democratic sponsor of this bill. Similar legislation has been introduced in the House of Representatives by Congresswoman Jennifer Dunn and Congressman Jim McDermott. Innovative clinical laboratory tests help save lives and reduce health care costs by detecting diseases, such as cancer, heart attacks, and kidney failure in their early stages, when they are more treatable. However, there are serious flaws in the way that the Center for Medicare and Medicaid Services, CMS, formally known as HCFA, currently sets reimbursement rates for diagnostic tests. This cumbersome bureaucratic system makes it difficult for physicians and laboratories to offer these diagnostic tests to their patients who need them. Due to institutionalized flaws in the current Medicare reimbursement system, revolutionary and innovative diagnostic tests may not benefit patients for years to come. In addition, it has been shown that lower laboratory payments correlate with lower utilization. The payment rates vary significantly from region to region and State to State. For example, in my home State of Utah, a patient is sent for blood work to test for kidney disease. Based upon the 2001 Medicare Lab Reimbursement schedule, the Utah lab would receive $2.12 for performing the test. However, labs in Arizona, Nevada, Montana, New Mexico and Wyoming, would receive $6.33 to perform the same test. This makes no economic or medical sense to me. A recent Institute of Medicine, IoM, report stated that Medicare payments for outpatient clinical laboratory services should be based on a single, rational fee schedule. Medicare should account for market- based factors such as local labor costs and prices for goods and services in establishing the fee schedule. In addition, CMS should provide opportunities for stakeholder input and develop better communication with contractors while policies are being developed and after these policies are adopted. Our bill, based upon the principles of this IoM report, would require CMS to establish a national fee schedule for new and current tests, based upon an open, transparent, and rational public process for incorporating new tests, as well as to provide clear explanations of the reasoning behind its reimbursement decisions. This new process would be based upon science based methodologies for setting prices for new technologies that are designed to establish fair and appropriate payment levels for these items and services. CMS's procedures would provide that the payment amount for tests would be established under either the so-called gap-filling or cross- walking methodologies, and they would specify the rules for deciding which methodology will be used and how it will be employed. In particular, the legislation would require that if a new test is clinically similar to a test for which a fee schedule amount has already been established, through cross-walking, CMS will pay the same fee schedule amount for the new test. In determining whether tests are clinically similar, CMS will not take into account economic factors. Finally, this new process would provide a mechanism for any laboratory or other stakeholder to challenge CMS fee schedule decisions. The cost of these changes is small in light of the significant impact on improving the quality of patient care. I hope my colleagues will join me in cosponsoring this bill. The laudable goal of this bipartisan legislation is to establish an open and transparent public process for incorporating new laboratory tests into the Medicare program. Many seniors currently do not have full access to the medical care they need due to the antiquated process for assigning billing codes and setting reimbursement rates. We need to bridge the gap between seniors and the life-saving lab tests they need to preserve their health and promote their well-being. I ask my colleagues to join with me in supporting this legislation and ask unanimous consent that the text of this bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I move to reconsider the vote and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. HATCH

Mr. HATCH. A few comments about the study we request from the Patent and Trademark Office included in this legislation. There was some controversy generated in some quarters over an earlier draft of the TEACH Act that directed the Undersecretary for Intellectual Property to provide the Judiciary Committee with information about technological protection measures for copyrighted works online. I must confess, I still do not entirely understand the precise objections to that formulation. One lobbyist, I believe from the Digital Media Association, was arguing that the study would lead to a rash of class action lawsuits. I have been trying to parse the language to see if this informational report might have also provided for attorneys fees. But, fortunately, such imaginative readings of the language are no longer necessary because we were able to come to some agreement late last night on language that will allow the Committee to receive useful information for our own use and for the information of our constituents without causing interest rates to increase or the Potomac to run backwards. In all seriousness, I thank those who worked with us late into the night to forge an agreement that allows us to move forward on this last issue as part of this consensus legislation. I believe we have a bill that will be good for students, teachers, copyright owners, and information technologists. But I would like to explain some of the thinking that went into requesting that report. First of all, the report is not designed to be a first step toward the government regulating, mandating, or favoring types of technologies or products produced to protect copyrighted works online. Second, the legislative language makes clear that we do not seek a government comparison of various products that are commercially available. We do not seek such comparisons, and we do not want the government picking winners and losers among commercial products, nor in setting the standards that would govern the development of such products. Instead, this request is made because technological protection will be increasingly important in preventing widespread, unlawful copying of copyrighted works generally, and the Committee wishes to know as much about its capabilities as possible, for ourselves and for our constitents. This information would be extremely valuable, for example, if the Committee determines in the future that it is appropriate to facilitate the standard-setting process or to encourage the implementation of such standards in devices so that creative works can be offered to the public in a secure environment. Encryption, watermarking, and digital rights management systems have been and continue to be developed to protect copyrighted works, but these are just a portion of the possibilities that exist in making the digital environment safe for the delivery of valuable copyrighted works. If, for instance, computers and other digital devices recognized and responded to technological protection measures, a significant portion of the infringing activity that harms copyright owners could be prevented, and the Internet could be a much safer environment for the valuable and quality works that consumers want to enjoy and copyright owners want to deliver online. Therefore, the Undersecretary should include in its study so-called ``bilateral'' systems that have been or could be developed that would allow technology embedded in copyrighted works to communicate with computers and other devices with regard to the level of protection required for that work, as well as unilateral protection systems. The Undersecretary should also provide us information on robust and reliable protection systems that could be renewed or upgraded after subjected to cyberhacking, as opposed to becoming useless or obsolete. Some have raised concerns that such a study would only provide a snapshot in time, or would be out of date by the time it is finished due to continual advances in technology. This may be correct. However, despite these possible limitations, the study will be extremely useful in establishing a baseline of knowledge for the Committee and our constituents with regard to what technology is or could be made available and how it is or could be implemented. Perhaps the information contained in this report could be updated by the Undersecretary to address evolving technologies in this area. Overall, this legislation will make it easier for the teacher who connects with her students online to enhance the learning process by illustrating music appreciation principles with appropriately limited sound recordings or illustrate visual design or story-telling principles with appropriate movie clips. These wholly new interactive educational experiences, or more traditional ones now made available around the students' schedule, will be made more easily and more inexpensively by this legislation. Beyond the legislative safe harbor provided by this legislation, opportunities for students and lifetime learners of all kinds, in all kinds of locations, are limited only by the human imagination and the cooperative creativity of the creators and users of copyrighted works. The possibilities for everyone in the wired world are thrilling to contemplate. I strongly believe that this legislation is necessary to foster and promote distance education while at the same time maintains a careful balance between copyright owners and users. Through the increasing influence of educational technologies, virtual classrooms are popping up all over the country and what we do not want to do is stand in the way of the development and advancement of innovative technologies that offer new and exciting educational opportunities. I think we all agree that digital distance should be fostered and utilized to the greatest extent possible to deliver instruction to students in ways that could have been possible a few years ago. We live at a point in time when we truly have an opportunity to help shape the future by influencing how technology is used in education so I hope my colleagues will join us in supporting this modest update of the copyright law that offers to make more readily available distance education in a digital environment to all of our students. Exhibit 1.--Section-by-Section Analysis of S. 487, the Technology, Education, and Copyright Harmonization Act Subsection (a): Short Title This section provides that this Act may be cited as the ``Technology, Education and Copyright Harmonization Act of 2001.'' Subsection (b): Exemption of Certain Performances and Displays for Educational Uses Summary Section 1(b) of the TEACH Act amends section 110(2) of the Copyright Act to encompass performances and displays of copyrighted works in digital distance education under appropriate circumstances. The section expands the scope of works to which the amended section 110(2) exemption applies to include performances of reasonable and limited portions of works other than nondramatic literary and musical works (which are currently covered by the exemption), while also limiting the amount of any work that may be displayed under the exemption to what is typically displayed in the course of a live classroom session. At the same time, section 1(b) removes the concept of the physical classroom, while maintaining and clarifying the requirement of mediated instructional activity and limiting the availability of the exemption to mediated instructional activities of governmental bodies and ``accredited'' non-profit educational institutions. This section of the Act also limits the amended exemption to exclude performances and displays given by means of a copy or phonorecord that is not lawfully made and acquired, which the transmitting body or institution knew or had reason to believe was not lawfully made and acquired. In addition, section 1(b) requires the transmitting institution to apply certain technological protection measures to protect against retention of the work and further downstream dissemination. The section also clarifies that participants in authorized digital distance education transmissions will not be liable for any infringement by reason of transient or temporary reproductions that may occur through the automatic technical process of a digital transmission for the purpose of a performance or display permitted under the section. Obviously, with respect to such reproductions, the distribution right would not be infringed. Throughout the Act, the term ``transmission'' is intended to include transmissions by digital, as well as analog means. Works subject to the exemption and applicable portions The TEACH Act expands the scope of the section 110(2) exemption to apply to performances and displays of all categories of copyrighted works, subject to specific exclusions for works ``produced or marketed primarily for performance or display as part of mediated instructional activities transmitted via digital networks'' and performance or displays ``given by means of a copy or phonorecord that is not lawfully made and acquired,'' which the transmitting body or institution ``knew or had reason to believe was not lawfully made and acquired.'' Unlike the current section 110(2), which applies only to public performances of non-dramatic literary or musical works, the amendment would apply to public performances of any type of work, subject to certain exclusions set forth in section 110(2), as amended. The performance of works other than non-dramatic literary or musical works is limited, however, to ``reasonable and limited portions'' of less than the entire work. What constitutes a ``reasonable and limited'' portion should take into account both the nature of the market for that type of work and the pedagogical purposes of the performance. In addition, because ``display'' of certain types of works, such as literary works using an ``e-book'' reader, could substitute for traditional purchases of the work (e.g., a text book), the display exemption is limited to ``an amount comparable to that which is typically displayed in the course of a live classroom setting.'' This limitation is a further implementation of the ``mediated instructional activity'' concept described below, and recognizes that a ``display'' may have a different meaning and impact in the digital environment than in the analog environment to which section 110(2) has previously applied. The ``limited portion'' formulation used in conjunction with the performance right exemption is not used in connection with the display right exemption, because, for certain works, display of the entire work could be appropriate and consistent with displays typically made in a live classroom setting (e.g., short poems or essays, or images of pictorial, graphic, or sculptural works, etc.). The exclusion for works ``produced or marketed primarily for performance or display as part of mediated instructional activities transmitted via digital networks'' is intended to prevent the exemption from undermining the primary market for (and, therefore, impairing the incentive to create, modify or distribute) those materials whose primary market would otherwise fall within the scope of the exemption. The concept of ``performance or display as part of mediated instructional activities'' is discussed in greater detail below, in connection with the scope of the exemption. It is intended to have the same meaning and application here, so that works produced or marketed primarily for activities covered by the exemption would be excluded from the exemption. The exclusion is not intended to apply generally to all educational materials or to all materials having educational value. The exclusion is limited to materials whose primary market is ``mediated instructional activities,'' i.e., materials performed or displayed as an integral part of the class experience, analogous to the type of performance or display that would take place in a live classroom setting. At the same time, the reference to ``digital networks'' is intended to limit the exclusion to materials whose primary market is the digital network environment, not instructional materials developed and marketed for use in the physical classroom. The exclusion of performances or displays ``given by means of a copy or phonorecord that is not lawfully made and acquired'' under Title 17 is based on a similar exclusion in the current language of section 110(1) for the performance or display of an audiovisual work in the classroom. Unlike the provision in section 110(1), the exclusion here applies to the performance or display of any work. But, as in section 110(1), the exclusion applies only where the transmitting body or institution ``knew or had reason to believe'' that the copy or phonorecord was not lawfully made and acquired. As noted in the Register's Report, the purpose of the exclusion is to reduce the likelihood that an exemption intended to cover only the equivalent of traditional concepts of performance and display would result in the proliferation or exploitation of unauthorized copies. An educator would typically purchase, license, rent, make a fair use copy, or otherwise lawfully acquire the copy to be used, and works not yet made available in the market (whether by distribution, performance or display) would, as a practical matter, be rendered ineligible for use under the exemption. Eligible transmitting entities As under the current section 110(2), the exemption, as amended, is limited to government bodies and non-profit educational institutions. However, due to the fact that, as the Register's Report points out, ``nonprofit educational institutions'' are no longer a closed and familiar group, and the ease with which anyone can transmit educational material over the Internet, the amendment would require non-profit educational institutions to be ``accredited'' in order to provide further assurances that the institution is a bona fide educational institution. It is not otherwise intended to alter the eligibility criteria. Nor is it intended to limit or affect any other provision of the Copyright Act that relates to non-profit educational institutions or to imply that non-accredited educational institutions are necessarily not bona fide. ``Accreditation'' is defined in section 1(b)(2) of the TEACH Act in terms of the qualification of the educational institution. It is not defined in terms of particular courses or programs. Thus, an accredited nonprofit educational institution qualifies for the exemption with respect to its courses whether or not the courses are part of a degree or certificate-granting program. Qualifying performances and displays; mediated instructional activities Subparagraph (2)(A) of the amended exemption provides that the exemption applies to a performance or display made ``by, at the direction of, or under the actual supervision of an instructor as an integral part of a class session offered as a regular part of . . . systematic mediated instructional activity.'' The subparagraph includes several requirements, all of which are intended to make clear that the transmission must be part of mediated instructional activity. First, the performance or display must be made by, under the direction of, or under the actual supervision of an instructor. The performance or display may be initiated by the instructor. It may also be initiated by a person enrolled in the class as long as it is done either at the direction, or under the actual supervision, of the instructor. ``Actual'' supervision is intended to require that the instructor is, in fact, supervising the class activities, and that supervision is not in name or theory only. It is not intended to require either constant, real-time supervision by the instructor or pre- approval by the instructor for the performance or display. Asynchronous learning, at the pace of the student, is a significant and beneficial characteristic of digital distance education, and the concept of control and supervision is not intended to limit the qualification of such asynchronous activities for this exemption. The performance or display must also be made as an ``integral part'' of a class session, so it must be part of a class itself, rather than ancillary to it. Further, it must fall within the concept of ``mediated instructional activities'' as described in section 1(b)(2) of the TEACH Act. This latter concept is intended to require the performance or display to be analogous to the type of performance or display that would take place in a live classroom setting. Thus, although it is possible to display an entire textbook or extensive course-pack material through an e-book reader or similar device or computer application, this type of use of such materials as supplemental reading would not be analogous to the type of display that would take place in the classroom, and therefore would not be authorized under the exemption. The amended exemption is not intended to address other uses of copyrighted works in the course of digital distance education, including student use of supplemental or research materials in digital form, such as electronic course packs, e-reserves, and digital library resources. Such activities do not involve uses analogous to the performances and displays currently addressed in section 110(2). The ``mediated instructional activity'' requirement is thus intended to prevent the exemption provided by the TEACH Act from displacing textbooks, course packs or other material in any media, copies or phonorecords of which are typically purchased or acquired by students for their independent use and retention (in most post-secondary and some elementary and secondary contexts). The Committee notes that in many secondary and elementary school contexts, such copies of such materials are not purchased or acquired directly by the students, but rather are provided for the students' independent use and possession (for the duration of the course) by the institution. The limitation of the exemption to systematic ``mediated instructional activities'' in subparagraph (2)(A) of the amended exemption operates together with the exclusion in the opening clause of section 110(2) for works ``produced or marketed primarily for performance or display as part of mediated instructional activities transmitted via digital networks'' to place boundaries on the exemption. The former relates to the nature of the exempt activity; the latter limits the relevant materials by excluding those primarily produced or marketed for the exempt activity. One example of the interaction of the two provisions is the application of the exemption to textbooks. Pursuant to subparagraph (2)(A), which limits the exemption to ``mediated instructional activities,'' the display of material from a textbook that would typically be purchased by students in the local classroom environment, in lieu of purchase by the students, would not fall within the exemption. Conversely, because textbooks typically are not primarily produced or marketed for performance or display in a manner analogous to performances or display in the live classroom setting, they would not per se be excluded from the exemption under the exclusion in the opening clause. Thus, an instructor would not be precluded from using a chart or table or other short excerpt from a textbook different from the one assigned for the course, or from emphasizing such an excerpt from the assigned textbook that had been purchased by the students. The requirement of subparagraph (2)(B), that the performance or display must be directly related and of material assistance to the teaching content of the transmission, is found in current law, and has been retained in its current form. As noted in the Register's Report, this test of relevance and materiality connects the copyrighted work to the curriculum, and it means that the portion performed or displayed may not be performed or displayed for the mere entertainment of the students, or as unrelated background material. Limitations on receipt of transmissions Unlike current section 110(2), the TEACH Act amendment removes the requirement that transmissions be received in classrooms or similar places devoted to instruction unless the recipient is an officer or employee of a governmental body or is prevented by disability or special circumstances from attending a classroom or similar place of instruction. One of the great potential benefits of digital distance education is its ability to reach beyond the physical classroom, to provide quality educational experiences to all students of all income levels, in cities and rural settings, in schools and on campuses, in the workplace, at home, and at times selected by students to meet their needs. In its place, the Act substitutes the requirement in subparagraph (2)(C) that the transmission be made solely for, and to the extent technologically feasible, the reception is limited to students officially enrolled in the course for which the transmission is made or governmental employees as part of their official duties or employment. This requirement is not intended to impose a general requirement of network security. Rather, it is intended to require only that the students or employees authorized to be recipients of the transmission should be identified, and the transmission should be technologically limited to such identified authorized recipients through systems such as password access or other similar measures. Additional safeguards to counteract new risks The digital transmission of works to students poses greater risks to copyright owners than transmissions through analog broadcasts. Digital technologies make possible the creation of multiple copies, and their rapid and widespread dissemination around the world. Accordingly, the TEACH Act includes several safeguards not currently present in section 110(2). First, a transmitting body or institution seeking to invoke the exemption is required to institute policies regarding copyright and to provide information to faculty, students and relevant staff members that accurately describe and promote compliance with copyright law. Further, the transmitting organization must provide notice to recipients that materials used in connection with the course may be subject to copyright protection. These requirements are intended to promote an environment of compliance with the law, inform recipients of their responsibilities under copyright law, and decrease the likelihood of unintentional and uninformed acts of infringement. Second, in the case of a digital transmission, the transmitting body or institution is required to apply technological measures to prevent (i) retention of the work in accessible form by recipients to which it sends the work for longer than the class session, and (ii) unauthorized further dissemination of the work in accessible form by such recipients. Measures intended to limit access to authorized recipients of transmissions from the transmitting body or institution are not addressed in this subparagraph (2)(D). Rather, they are the subjects of subparagraph (2)(C). The requirement that technological measures be applied to limit retention for no longer than the ``class session'' refers back to the requirement that the performance be made as an ``integral part of a class session.'' The duration of a ``class session'' in asynchronous distance education would generally be that period during which a student is logged on to the server of the institution or governmental body making the display or performance, but is likely to vary with the needs of the student and with the design of the particular course. It does not mean the duration of a particular course (i.e., a semester or term), but rather is intended to describe the equivalent of an actual single face-to-face mediated class session (although it may be asynchronous and one student may remain online or retain access to the performance or display for longer than another student as needed to complete the class session). Although flexibility is necessary to accomplish the pedagogical goals of distance education, the Committee expects that a common sense construction will be applied so that a copy or phonorecord displayed or performed in the course of a distance education program would not remain in the possession of the recipient in a way that could substitute for acquisition or for uses other than use in the particular class session. Conversely, the technological protection measure in subparagraph (2)(D)(ii) refers only to retention of a copy or phonorecord in the computer of the recipient of a transmission. The material to be performed or displayed may, under the amendments made by the Act to section 112 and with certain limitations set forth therein, remain on the server of the institution or government body for the duration of its use in one or more courses, and may be accessed by a student each time the student logs on to participate in the particular class session of the course in which the display or performance is made. The reference to ``accessible form'' recognizes that certain technological protection measures that could be used to comply with subparagraph (2)(D)(ii) do not cause the destruction or prevent the making of a digital file; rather they work by encrypting the work and limiting access to the keys and the period in which such file may be accessed. On the other hand, an encrypted file would still be considered to be in ``accessible form'' if the body or institution provides the recipient with a key for use beyond the class session. Paragraph (2)(D)(ii) provides, as a condition of eligibility for the exemption, that a transmitting body or institution apply technological measures that reasonably prevent both retention of the work in accessible form for longer than the class session and further dissemination of the work. This requirement does not impose a duty to guarantee that retention and further dissemination will never occur. Nor does it imply that there is an obligation to monitor recipient conduct. Moreover, the ``reasonably prevent'' standard should not be construed to imply perfect efficacy in stopping retention or further dissemination. The obligation to ``reasonably prevent'' contemplates an objectively reasonable standard regarding the ability of a technological protection measure to achieve its purpose. Examples of technological protection measures that exist today and would reasonably prevent retention and further dissemination, include measures used in connection with streaming to prevent the copying of streamed material, such as the Real Player ``Secret Handshake/Copy Switch'' technology discussed Real Networks v. Streambox, 2000 WL 127311 (Jan. 18, 2000) or digital rights management systems that limit access to or use of encrypted material downloaded onto a computer. It is not the Committee's intent, by noting the existence of the foregoing, to specify the use of any particular technology to comply with subparagraph (2)(D)(ii). Other technologies will certainly evolve. Further, it is possible that, as time passes, a technological protection measure may cease to reasonably prevent retention of the work in accessible form for longer than the class session and further dissemination of the work, either due to the evolution of technology or to the widespread availability of a hack that can be readily used by the public. In those cases, a transmitting organization would be required to apply a different measure. Nothing in section 110(2) should be construed to affect the application or interpretation of section 1201. Conversely, nothing in section 1201 should be construed to affect the application or interpretation of section 110(2). Transient and temporary copies Section 1(b)(2) of the TEACH Act implements the Register's recommendation that liability not be imposed upon those who participate in digitally transmitted performances and displays authorized under this subsection by reason of copies or phonorecords made through the automatic technical process of such transmission, or any distribution resulting therefrom. Certain modifications have been made to the Register's recommendations to accommodate instances where the recommendation was either too broad or not sufficiently broad to cover the appropriate activities. The third paragraph added to the amended exemption under section 1(b)(2) of the TEACH Act recognizes that transmitting organizations should not be responsible for copies or phonorecords made by third parties, beyond the control of the transmitting organization. However, consistent with the Register's concern that the exemption should not be transformed into a mechanism for obtaining copies, the paragraph also requires that such transient or temporary copies stored on the system or network controlled or operated by the transmitting body or institution shall not be maintained on such system or network ``in a manner ordinarily accessible to anyone other than anticipated recipients'' or ``in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary to facilitate the transmissions'' for which they are made. The liability of intermediary service providers remains governed by section 512, but, subject to section 512(d) and section 512(e), section 512 will not affect the legal obligations of a transmitting body or institution when it selects material to be used in teaching a course, and determines how it will be used and to whom it will be transmitted as a provider of content. The paragraph refers to ``transient'' and ``temporary'' copies consistent with the terminology used in section 512, including transient copies made in the transmission path by conduits and temporary copies, such as caches, made by the originating institution, by service providers or by recipients. Organizations providing digital distance education will, in many cases, provide material from source servers that create additional temporary or transient copies or phonorecords of the material in storage known as ``caches'' in other servers in order to facilitate the transmission. In addition, transient or temporary copies or phonorecords may occur in the transmission stream, or in the computer of the recipient of the transmission. Thus, by way of example, where content is protected by a digital rights management system, the recipient's browser may create a cache copy of an encrypted file on the recipient's hard disk, and another copy may be created in the recipient's random access memory at the time the content is perceived. The third paragraph added to the amended exemption by section 1(b)(2) of the TEACH Act is intended to make clear that those authorized to participate in digitally transmitted performances and displays as authorized under section 110(2) are not liable for infringement as a result of such copies created as part of the automatic technical process of the transmission if the requirements of that language are met. The paragraph is not intended to create any implication that such participants would be liable for copyright infringement in the absence of the paragraph. subsection (c): ephemeral recordings One way in which digitally transmitted distance education will expand America's educational capacity and effectiveness is through the use of asynchronous education, where students can take a class when it is convenient for them, not at a specific hour designated by the body or institution. This benefit is likely to be particularly valuable for working adults. Asynchronous education also has the benefit of proceeding at the student's own pace, and freeing the instructor from the obligation to be in the classroom or on call at all hours of the day or night. In order for asynchronous distance education to proceed, organizations providing distance education transmissions must be able to load material that will be displayed or performed on their servers, for transmission at the request of students. The TEACH Act's amendment to section 112 makes that possible. Under new subsection 112(f)(1), transmitting organizations authorized to transmit performances or displays under section 110(2) may load on their servers copies or phonorecords of the performance or display authorized to be transmitted under section 110(2) to be used for making such transmissions. The subsection recognizes that it often is necessary to make more than one ephemeral recording in order to efficiently carry out digital transmissions, and authorizes the making of such copies or phonorecords. Subsection 112(f) imposes several limitations on the authorized ephemeral recordings. First, they may be retained and used solely by the government body or educational institution that made them. No further copies or phonorecords may be made from them, except for copies or phonorecords that are authorized by subsection 110(2), such as the copies that fall within the scope of the third paragraph added to the amended exemption under section 1(b)(2) of the TEACH Act. The authorized ephemeral recordings must be used solely for transmissions authorized under section 110(2). The Register's Report notes the sensitivity of copyright owners to the digitization of works that have not been digitized by the copyright owner. As a general matter, subsection 112(f) requires the use of works that are already in digital form. However, the Committee recognizes that some works may not be available for use in distance education, either because no digital version of the work is available to the institution, or because available digital versions are subject to technological protection measures that prevent their use for the performances and displays authorized by section 110(2). In those circumstances where no digital version is available to the institution or the digital version that is available is subject to technological measures that prevent its use for distance education under the exemption, section 112(f)(2) authorizes the conversion from an analog version, but only conversion of the portion or amount of such works that are authorized to be performed or displayed under section 110(2). It should be emphasized that subsection 112(f)(2) does not provide any authorization to convert print or other analog versions of works into digital format except as permitted in section 112(f)(2). Relationship to fair use and contractual obligations As the Register's Report makes clear ``critical to [its conclusion and recommendations] is the continued availability of the fair use doctrine.'' Nothing in this Act is intended to limit or otherwise to alter the scope of the fair use doctrine. As the Register's Report explains: ``Fair use is a critical part of the distance education landscape. Not only instructional performances and displays, but also other educational uses of works, such as the provision of supplementary materials or student downloading of course materials, will continue to be subject to the fair use doctrine. Fair use could apply as well to instructional transmissions not covered by the changes to section 110(2) recommended above. Thus, for example, the performance of more than a limited portion of a dramatic work in a distance education program might qualify as fair use in appropriate circumstances.'' The Register's Report also recommends that the legislative history of legislation implementing its distance education requirements make certain points about fair use. Specifically, this legislation is enacted in recognition of the following: (a) The fair use doctrine is technologically neutral and applies to activities in the digital environment; and (b) the lack of established guidelines for any particular type of use does not mean that fair use is inapplicable. While the Register's Report also examined and discussed a variety of licensing issues with respect to educational uses not covered by exemptions or fair use, these issues were not included in the Report's legislative recommendations that formed the basis for the TEACH Act. It is the view of the Committee that nothing in this Act is intended to affect in any way the relationship between express copyright exemptions and license restrictions. Nonapplicability to secure tests The Committee is aware and deeply concerned about the phenomenon of school officials who are entrusted with copies of secure test forms solely for use in actual test administrations and using those forms for a completely unauthorized purpose, namely helping students to study the very questions they will be asked on the real test. The Committee does not in any way intend to change current law with respect to application of the Copyright Act or to undermine or lessen in any way the protection afforded to secure tests under the Copyright Act. Specifically, this section would not authorize a secure test acquired solely for use in an actual test administration to be used for any other purpose. Subsection (d): PTO Report The report requested in subsection (d) requests information about technological protection systems to protect digitized copyrighted works and prevent infringement. The report is intended for the information of Congress and shall not be construed to have any effect whatsoever on the meaning, applicability, or effect of any provision of the Copyright Act in general or the TEACH Act in particular.

Mr. HATCH. Madam President, I am pleased that we will pass out of the Senate today S. 487, the ``Technology Education and Copyright Harmonization Act'' or fittingly abbreviated as the ``TEACH Act,'' which updates the educational use provisions of the copyright law to account for advancements in digital transmission technologies that support distance learning. But first I want to thank the Ranking Member for his work and partnership on this legislation. We have done it in a bipartisan, consensus-building manner. I would also like to thank the various representatives of the copyright owner and education communities who have worked so hard with us to achieve this consensus and move this legislation forward. They have worked in the spirit of cooperation toward the shared goal of helping our students learn better through technology and the media. I would also like to thank the Register of Copyrights, and her staff at the Copyright Office, for their help and technical assistance. They have done an admirable job in helping us move forward the deployment of the Internet and digital transmissions systems in education. Because of their hard work, I am confident we have an important education reform that can be sent to, and signed by, the President with broad, bipartisan support in the coming month. Distance education, and the use of high technology tools such as the Internet in education, hold great promise for students in States like Utah, where distances can be great between students and learning opportunities. I think it is similarly important for any State that has students who seek broader learning opportunities than they can reach in their local area. Any education reforms moved in the Congress this year should include provisions that help deploy high technology tools, including the Internet, to give our students the very best educational experience we can offer. I believe this legislation is an important part of truly effective education reform that can open up new vistas to all our students, while potentially costing less in the long run to provide a full education experience. By using these tools, students in remote areas of my home State of Utah are becoming able to link up to resources previously available only to those in cities or at prestigious educational institutions. Limited access to language instructors in remote areas or particle accelerators in most high schools limit access to educational opportunity. These limits can be overcome to a revolutionary degree by online offerings, which can combine sound, video, and interactivity in exciting new ways. And new experiences that transcend what is possible in the classroom, such as hypertexts linked directly to secondary sources, are possible only in the online world. With the advent of the Internet and other communication technologies, classrooms need no longer be tied to a specific location or time. As exciting as distance education is, online education will only thrive if teachers and students have affordable and convenient access to the highest quality educational materials. The goal of the TEACH Act is to update the educational provisions of the copyright law for the 21st century, allowing students and teachers to benefit from deployment of advanced digital technologies. Specifically, the TEACH Act amends sections 110(2) and 112 of the Copyright Act to facilitate the growth and development of digital distance learning. First, the legislation expands the scope of the section 110(2) exemption to apply to performances and displays of all categories of copyrighted works subject to reasonable limitations on the portion or amount of the work that can be digitally transmitted. Thus, for example, the Act allows transmissions to locations other than the physical classroom, and includes audiovisual works, sound recordings and other works within the exemption. At the same time, the bill maintains and clarifies the concept of ``mediated instructional activities,'' which requires that the performance or display be analogous to the type of performance or display that would take place in a live classroom setting. Moreover, of utmost significance to the copyright owners, the legislation adds new safeguards to counteract the risks posed by digital transmissions in an educational setting. For example, the bill imposes obligations to implement technological protection measures as well as certain limitations relating to accessibility and duration of transient copies. The Act also amends section 112 of the Copyright Act to permit storage of copyrighted material on servers in order to permit asynchronous use of material in distance education. This legislation was reported unanimously by the Judiciary Committee, and we expect it will pass the full Senate unanimously, too. Today we will make two non-controversial changes to the legislation as passed by the Committee. First, Senator Leahy and I have a technical amendment to the title of the bill, which corrects a non-substantive scrivener's error. Second, we are making a change in the legislative language regarding technological protection measures which makes our intention clearer by bringing the statutory language into closer conformity with our understanding of the provision. These changes are non-controversial and have the same support among the affected parties as the rest of the bill. For the information of my colleagues and those who may use the legislation, I am including a section by section analysis of the bill as amended following my comments, and asked that a copy of that section by section analysis and copies of the two amendments be published immediately following my remarks in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I am grateful that I was a conferee in this monumental historic event. I personally congratulate Chairman Grassley and the ranking member, Senator Baucus. Both worked very well together. Of course, Chairman Thomas and House Leader Armey and Speaker Hastert did a terrific job, as did John Breaux, who has worked so magnificently through the years. Six months ago nobody thought the President would win on a $1.35 trillion tax cut. It is amazing. He hung in there. He stood for what he believed, and I believe the American people are going to be the beneficiaries. I want to highlight one thing. There are 16 million additional children who directly benefit from the refundable child credit contained in this comprise. This is one of the best bills for children and families I have seen in years and I just wanted to make that clear to everybody. The rate reductions and every other provision will benefit America. This conference report is not perfect, just as no political compromise is perfect. I, like many of our colleagues, would have greatly preferred a larger tax cut of at least $1.6 trillion. Ideally, the top marginal rate should have come down to no more than 33 percent, with corresponding reductions in all the other brackets. The alternative minimum tax still will afflict millions of Americans. And, I greatly regret that the permanent extension of the research and experimentation credit was not accommodated in the final product. On the other hand, Mr. President, this conference report includes the necessary elements that will make it stand out as landmark legislation. It does so much for the people of Utah and for the people of America. It begins to reverse the flawed philosophy that says the government knows best how to spend the taxpayers' hard-earned money. It cuts taxes for every American who pays them. It will stimulate the economy and provide incentives to keep it strong in the future. It acknowledges the importance of families, as well as the need for providing a good education for our people. It also includes strong incentives for all Americans to increase their savings and prepare for their own retirements. It recognizes the gross unfairness of the confiscatory death tax and begins immediate relief with repeal within a decade. It makes great strides against the unfairness of the marriage tax penalty in a way that does not punish those families where one spouse chooses to stay at home. On the whole, it is a very good bill. Although this tax cut bill is the capstone of our budget agreement, I also look at it as just the beginning. The beginning of what I hope will be more bipartisan work this Congress to make the tax code even more fair and certainly more simple. And, what I hope will be continuing cooperation between the President and the Congress. I again want to extent my congratulations and gratitude to the chairman of the Finance Committee, Senator Grassley, for his extraordinary dedication to bipartisanship and his tireless dedication to accomplishing the triumph that is represented in the conference report that lies before the Senate today. Without his perseverance and persistence in sticking to the goal at hand despite many obstacles, this victory for the American taxpayer would not have been possible. Likewise, I thank Senator Baucus for the major role he played in getting us to this point today, and for his courage in the face of opposition of many in his own party. He, along with Senator Breaux, have shown all of us what it means to rise above partisanship and pure politics for the sake of what is good for the nation. They, together with the others in the soon-to-be majority party who supported this bipartisan tax cut, have my respect, my gratitude, and my promise that I will continue to reach across the aisle to work with them to further improve our tax system in the future. My fellow conferees deserve a lot of credit for accomplishing this difficult task. Congressman Thomas, the new chairman of the Ways and Means Committee, demonstrated toughness, dedication, knowledge, and compassion in representing the House position. I also want to commend Speaker Hastert and Leader Armey for their tireless support and contributions. On the Senate side, Senators Murkowski, Nickles, and Gramm put in many long, difficult, and late hours in helping us find our way through the differences in the House and Senate bills to reach the compromise. Mr. President, most of all, I want to extend my congratulations to President George W. Bush. The tax cut the Senate just passed is a testament to his vision and his willingness to carry out with single- mindedness a campaign promise that many, frankly, took lightly and considered highly unlikely if not impossible. This is what real leadership is all about, and I commend him for it. This is a great day in the United States Congress. I am proud that I was able to be part of it. I thank my colleagues.

Mr. HATCH

Mr. HATCH. If the Senator will yield, I do not mean to keep interrupting, I want to express my gratitude that he is willing to go head with this and the Senate can vote on these nominees because I want to get that Justice Department--and I know the distinguished Senator from Vermont does also--up and running in the fullest sense we can. That is my only interest in this, other than I do like all three of these nominees. I thank my colleague. Forgive me for interrupting.

Mr. HATCH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the Subcommittee on Securities and Investment of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on May 24, 2001 to conduct a hearing on ``The Implementation and Future of Decimalized Markets.''

Mr. HATCH. Mr. President, I ask unanimous consent that the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs be authorized to meet during the session of the Senate on Thursday, May 24, 2001, 9:30 a.m., for a hearing entitled ``Tissue Banks: Is the Federal Government's Oversight Adequate?''

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet to hold a markup on the following nominations for the Department of Veterans Affairs: Leo S. Mackay, Jr. to be Deputy Secretary; Robin L. Higgins to be Under Secretary for Memorial Affairs; Maureen P. Cragin to be Assistant Secretary for Public and Intergovernmental Affairs; and Jacob Lozada to be Assistant Secretary for Human Resources and Administration. The markup will be held on Thursday, May 24, 2001, at 3:00 p.m., in room 418 of the Russell Senate Office Building.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on Thursday, May 24, 2001, at 2:00 p.m. in Dirksen Building, Room 226.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, May 24, 2001, at 10:00 a.m. in Dirksen Building, Room 226.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet for a hearing on Patient Safety: What is the role for Congress? during the session of the Senate on Thursday, May 24, 2001, at 9:30 a.m.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, May 24, 2001 at 10:30 a.m. and 2:45 p.m. to hold a business meeting and a hearing as follows: At 10:30 a.m. in room S-116, the committee will consider and vote on the following agenda items: legislation S. Con. Res. 35, A concurrent resolution expressing the sense of Congress that Lebanon, Syria, and Iran should allow representatives of the International Committee of the Red Cross to visit the four Israelis, Adi Avitan, Binyamin Avraham, Omar Souad, and Eichanan Tannenbaum, presently held by Hezbollah forces in Lebanon. S. Con. Res. 42, A concurrent resolution condemning the practices of the Taleban. S. Res. 88, A resolution expressing the sense of the Senate on the importance of membership of the United States on the United Nations Human Rights Commission. S. Res. 91, A resolution condemning the murder of a United States citizen and other civilians, and expressing the sense of the Senate regarding the failure of the Indonesian judicial system to hold accountable those responsible for the killings, as amended. nominations The Honorable Thelma J. Askey, of Tennessee, to be Director of the Trade and Development Agency; Mr. Stephen Brauer, of Missouri, to be Ambassador to Belgium; The Honorable William J. Burns, of the District of Columbia, to be Assistant Secretary of State for Near Eastern Affairs; Mr. Lorne W. Craner, of Virginia, to be Assistant Secretary of State for Democracy, Human Rights, and Labor; The Honorable Ruth A. Davis, of Georgia, to be Director General of the Foreign Service; The Honorable Donald Burnham Ensenat, of Louisiana, to be Chief of Protocol, with Rank of Ambassador; Mr. Carl W. Ford, Jr., of Arkansas, to be Assistant Secretary of State for Intelligence and Research; The Honorable A. Elizabeth Jones, of Maryland, to be Assistant Secretary of State for European Affairs; Mr. Walter H. Kansteiner, of Virginia, to be Assistant Secretary of State for African Affairs; Mr. Paul Vincent Kelly, of Virginia, to be Assistant Secretary of State for Legislative Affairs; Mrs. Christina B. Rocca, of Virginia, to be Assistant Secretary of State for South Asian Affairs; The Honorable Peter S. Watson, of California, to be President of the Overseas Private Investment Corporation; FSO Promotion Lists: Mr. Jensen, et al., dated April 23, 2001; Mr. Bean, et al., dated April 23, 2001.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Thursday, May 24 at 9:30 to conduct a hearing. The committee will receive testimony on the research and development, workforce training, and Price-Anderson Act provisions of pending energy legislation, including S. 242, Department of Energy University Nuclear Science and Engineering Act; S. 388, the National Energy Security Act of 2001; S. 472, Nuclear Energy Electricity Supply Assurance Act of 2001; and S. 597, the Comprehensive and Balanced Energy Policy Act of 2001.