Amendment Text: S.Amdt.4200 — 107th Congress (2001-2002)

There is one version of the amendment.

Shown Here:
Amendment as Submitted (07/10/2002)

This Amendment appears on page S6584-6586 in the following article from the Congressional Record.


[Pages S6575-S6590]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   AMENDMENTS SUBMITTED AND PROPOSED

       SA 4182. Mrs. HUTCHISON submitted an amendment intended to 
     be proposed by her to the bill S. 2673, to improve quality 
     and transparency in financial reporting and independent 
     audits and accounting services for public companies, to 
     create a Public Company Accounting Oversight Board, to 
     enhance the standard setting process for accounting 
     practices, to strengthen the independence of firms that audit 
     public companies, to increase corporate responsibility and 
     the usefulness of corporate financial disclosure, to protect 
     the objectivity and independence of securities analysts, to 
     improve Securities and Exchange Commission resources and 
     oversight, and for other purposes; which was ordered to lie 
     on the table.
       SA 4183. Mrs. BOXER submitted an amendment intended to be 
     proposed by her to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4184. Mr. GRAMM (for himself and Mr. Santorum) proposed 
     an amendment to amendment SA 4174 proposed by Mr. Daschle 
     (for Mr. Leahy (for himself, Mr. McCain, Mr. Daschle, Mr. 
     Durbin, Mr. Harkin, Mr. Cleland, Mr. Levin, Mr. Kennedy, Mr. 
     Biden, Mr. Feingold, Mr. Miller, Mr. Edwards, Mrs. Boxer, Mr. 
     Corzine, Mr. Kerry, Mr. Schumer, Mr. Brownback, and Mr. 
     Nelson of Florida)) to the bill (S. 2673) supra.
       SA 4185. Mr. DASCHLE (for Mr. Leahy (for himself, Mr. 
     McCain, Mr. Daschle, Mr. Durbin, Mr. Harkin, Mr. Cleland, Mr. 
     Levin, Mr. Kennedy, Mr. Biden, Mr. Feingold, Mr. Miller, Mr. 
     Edwards, Mrs. Boxer, Mr. Corzine, Mr. Kerry, Mr. Schumer, Mr. 
     Brownback, Mr. Nelson of Florida, Mr. Wellstone, Ms. 
     Stabenow, and Mr. Johnson)) proposed an amendment to the bill 
     S. 2673, supra.
       SA 4186. Mr. DASCHLE (for Mr. Biden (for himself and Mr. 
     Hatch)) proposed an amendment to the bill S. 2673, supra.
       SA 4187. Mr. EDWARDS (for himself, Mr. Enzi, and Mr. 
     Corzine) submitted an amendment intended to be proposed by 
     him to the bill S. 2673, supra.
       SA 4188. Mr. LOTT proposed an amendment to the bill S. 
     2673, supra.
       SA 4189. Mr. GRAMM proposed an amendment to amendment SA 
     4188 proposed by Mr. Lott to the bill (S. 2673) supra.
       SA 4190. Mr. DASCHLE (for Mr. Biden (for himself and Mr. 
     Hatch)) proposed an amendment to amendment SA 4186 proposed 
     by Mr. Daschle (for Mr. Biden (for himself and Mr. Hatch)) to 
     the bill (S . 2673) supra.
       SA 4191. Mr. ENSIGN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4192. Mr. McCAIN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4193. Mr. McCAIN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4194. Mr. McCAIN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4195. Mr. McCAIN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4196. Mr. McCAIN submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4197. Mr. SHELBY (for himself and Mr. Durbin) submitted 
     an amendment intended to be proposed by him to the bill S. 
     2673, supra; which was ordered to lie on the table.
       SA 4198. Mr. CLELAND submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4199. Mr. CLELAND submitted an amendment intended to be 
     proposed by him to the bill S. 2673, supra; which was ordered 
     to lie on the table.
       SA 4200. Mr. GRAMM (for Mr. McConnell) proposed an 
     amendment to amendment SA 4187 submitted by Mr. Edwards (for 
     himself, Mr. Enzi, and Mr. Corzine) to the bill (S. 2673) 
     supra.
       SA 4201. Mrs. CARNAHAN (for herself and Mr. Leahy) 
     submitted an amendment intended to be proposed by her to the 
     bill S. 2673, supra; which was ordered to lie on the table.
       SA 4202. Mrs. CARNAHAN (for herself and Mr. Nelson of 
     Florida) submitted an amendment intended to be proposed by 
     her to the bill S. 2673, supra; which was ordered to lie on 
     the table.

[[Page S6576]]

       SA 4203. Mr. MURKOWSKI (for himself, Mr. Stevens, Mr. 
     Craig, Mr. Burns, Mr. Crapo, Mr. Smith of Oregon, and Mr. 
     Inhofe) submitted an amendment intended to be proposed by him 
     to the bill S. 2673, supra; which was ordered to lie on the 
     table.
       SA 4204. Mr. SMITH of New Hampshire (for himself, Mrs. 
     Boxer, and Mr. Burns) submitted an amendment which was 
     ordered to lie on the table.
       SA 4205. Mr. SMITH of New Hampshire (for himself, Mrs. 
     Boxer, and Mr. Burns) submitted an amendment intended to be 
     proposed by him to the bill S. 2554, to amend title 49, 
     United States Code, to establish a program for Federal flight 
     deck officers, and for other purposes; which was referred to 
     the Committee on Commerce, Science, and Transportation.
       SA 4206. Mr. MILLER proposed an amendment to the bill S. 
     2673, to improve quality and transparency in financial 
     reporting and independent audits and accounting services for 
     public companies, to create a Public Company Accounting 
     Oversight Board, to enhance the standard setting process for 
     accounting practices, to strengthen the independence of firms 
     that audit public companies, to increase corporate 
     responsibility and the usefulness of corporate financial 
     disclosure, to protect the objectivity and independence of 
     securities analysts, to improve Securities and Exchange 
     Commission resources and oversight, and for other purposes.
       SA 4207. Mrs. FEINSTEIN submitted an amendment intended to 
     be proposed by her to the bill S. 2673, supra; which was 
     ordered to lie on the table.
       SA 4208. Mr. WELLSTONE submitted an amendment intended to 
     be proposed by him to the bill S. 2673, supra; which was 
     ordered to lie on the table.
  SA 4182. Mrs. HUTCHISON submitted an amendment intended to be 
proposed by her to the bill S. 2673, to improve quality and 
transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert:

                  TITLE ____--PENSION PLAN PROTECTION

     SEC. ____00. SHORT TITLE.

       This title may be cited as the ``Pension Plan Protection 
     Act''.

     Subtitle A--Provisions To Promote Ensuring Pension Plan Asset 
                            Diversification

     SEC. ____01. DIVERSIFICATION REQUIREMENTS FOR CERTAIN PLANS 
                   HOLDING EMPLOYER SECURITIES.

       Section 404 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1104) is amended by adding at the end the 
     following new subsection:
       ``(e)(1) An applicable individual account plan shall meet 
     the requirements of paragraphs (2), (3), and (4).
       ``(2) A plan meets the requirements of this paragraph if 
     the plan provides participants and beneficiaries with at 
     least 4 different investment options, including 3 options 
     which do not involve the acquisition or holding of qualifying 
     employer securities or qualifying employer real property.
       ``(3) A plan meets the requirements of this paragraph if 
     the plan provides that no employee contribution or elective 
     deferral may be required to be invested in qualifying 
     employer securities or qualifying employer real property 
     either--
       ``(A) pursuant to the terms of the plan, or
       ``(B) at the direction of a person other than the 
     participant making the employee contribution or elective 
     deferral or a beneficiary of the participant.
       ``(4)(A) A plan meets the requirements of this paragraph if 
     each employee who has a nonforfeitable right to 100 percent 
     of the employee's accrued benefit derived from employer 
     contributions may, at any time after the 90th day following 
     the allocation of any qualifying employer securities or 
     qualifying employer real property to the employee under the 
     plan, direct the plan to divest the employee's account of 
     such securities or property and reinvest an equivalent amount 
     in other assets.
       ``(B) The Secretary of the Treasury, in consultation with 
     the Secretary, shall prescribe regulations under which an 
     employee is given reasonable notice of the opportunity, and a 
     reasonable period of time, to make the divestiture and 
     reinvestment under subparagraph (A).
       ``(5) For purposes of this subsection--
       ``(A) The term `applicable individual account plan' means 
     any individual account plan, except that such term shall not 
     include an employee stock ownership plan (within the meaning 
     of section 4975(e)(7) of the Internal Revenue Code of 1986), 
     or a plan which meets the requirements of section 409(a) of 
     such Code, under which the only contributions which may be 
     made are qualified nonelective contributions (as defined in 
     section 401(m)(4)(C) of such Code).
       ``(B) Elective deferrals.--The term `elective deferrals' 
     has the meaning given such term by section 402(g)(3) of such 
     Code.
       ``(C) The terms `qualifying employer securities' and 
     `qualifying employer real property' have the meanings given 
     such terms by section 407(d).''

     SEC. ____02. MANDATORY QUARTERLY STATEMENTS.

       (a) In General.--Section 104 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1024) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively, and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c)(1) The plan administrator of an applicable individual 
     account plan shall, within a reasonable period of time 
     following the close of each calendar quarter, provide to each 
     participant or beneficiary a statement with respect to his or 
     her individual account which includes--
       ``(A) the fair market value as of the close of such quarter 
     of the assets in the account in each investment option,
       ``(B) the percentage as of such calendar quarter of assets 
     which each investment option is of the total assets in the 
     account,
       ``(C) any administrative and transaction fees incurred in 
     connection with the account during such quarter, and
       ``(D) such other information as the Secretary of the 
     Treasury may prescribe.
       ``(2) If, as of the close of any calendar quarter, the 
     aggregate fair market value of applicable securities held by 
     a participant or beneficiary in an applicable individual 
     account plan exceeds 25 percent of the aggregate value of all 
     assets held by the participant or beneficiary in the plan, 
     the plan administrator shall include with the statement under 
     paragraph (1) a separate notice which--
       ``(A) notifies the participant or beneficiary of such 
     percentage, and
       ``(B) reminds the participant or beneficiary of the right 
     to diversify plan assets and recommends that the participant 
     or beneficiary seek advice from a professional investment 
     advisor as to the need for a reassessment of the 
     participant's or beneficiary's investment diversification.
       ``(3) The Secretary of Labor may by regulation provide that 
     this subsection shall not apply to plans with fewer than 100 
     participants, except that any such exception shall not apply 
     for any requirement under this subsection to provide a 
     statement and notice to a participant or beneficiary under 
     the plan to whom paragraph (2) applies for any calendar 
     quarter.
       ``(4) Any statement or notice under this subsection shall 
     be written in a manner calculated to be understood by the 
     average plan participant.
       ``(5) For purposes of this subsection--
       ``(A) the term `applicable individual account plan' has the 
     meaning given such term by section 404(e), and
       ``(B) the term `applicable securities' means any securities 
     described in subparagraph (A), (B), or (C) of section 
     407(d)(5) which are issued by the same person or an affiliate 
     of, or related person to, such person.
       ``(6) For purposes of this subsection, all applicable 
     individual account plans maintained by the same employer 
     shall be treated as one employer.''
       (b) Enforcement.--Section 502(c)(1) of such Act (29 U.S.C. 
     1132(c)(1)) is amended by striking ``or section 101(e)(1)'' 
     and inserting ``, section 101(e)(1), or section 104(c)''.

     SEC. ____03. STUDY RELATING TO INDIVIDUAL ACCOUNT PLANS.

       (a) In General.--As soon as practicable after the date of 
     the enactment of this Act, the Secretary of Labor, in 
     consultation with the Secretary of the Treasury and the 
     Securities and Exchange Commission, shall conduct a study 
     relating to the investment of plan assets of individual 
     account plans in stock or other securities.
       (b) Matters To Be Studied.--In conducting the study under 
     subsection (a), the Secretary shall--
       (1) consider the feasibility and likely effects of a 
     statutory requirement that plan participants and 
     beneficiaries be allowed to trade securities on a daily 
     basis,
       (2) consider the feasibility and likely effects of a 
     mechanism to allow plan participants and beneficiaries to 
     sell employer securities during a period of high market 
     volatility if a blackout period is in effect,
       (3) consider the feasibility and likely effects of 
     establishing an insurance program to protect participants and 
     beneficiaries from losses of their initial investment of 
     employer and employee contributions in employer securities 
     due to fraud, and
       (4) consider such other matters as the Secretary determines 
     appropriate to ensure the protection of participants or 
     beneficiaries from insufficient diversification of plan 
     assets.
       (c) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the Secretary of Labor shall submit to 
     each House of Congress a report setting forth the results of 
     the study conducted under this section, including any 
     statutory or administrative changes as the Secretary 
     determines appropriate.

   Subtitle B--Prohibited Transaction Exemption For the Provision of 
                           Investment Advice

     SEC. ____11. PROHIBITED TRANSACTION EXEMPTION FOR THE 
                   PROVISION OF INVESTMENT ADVICE.

       (a) Exemption From Prohibited Transactions.--Section 408(b) 
     of the Employee Retirement Income Security Act of 1974 (29

[[Page S6577]]

     U.S.C. 1108(b)) is amended by adding at the end the following 
     new paragraph:
       ``(14)(A) Any transaction described in subparagraph (B) in 
     connection with the provision of investment advice described 
     in section 3(21)(A)(ii), in any case in which--
       ``(i) the investment of assets of the plan is subject to 
     the direction of plan participants or beneficiaries,
       ``(ii) the advice is provided to the plan or a participant 
     or beneficiary of the plan by a fiduciary adviser in 
     connection with any sale, acquisition, or holding of a 
     security or other property for purposes of investment of plan 
     assets, and
       ``(iii) the requirements of subsection (g) are met in 
     connection with the provision of the advice.
       ``(B) The transactions described in this subparagraph are 
     the following:
       ``(i) the provision of the advice to the plan, participant, 
     or beneficiary;
       ``(ii) the sale, acquisition, or holding of a security or 
     other property (including any lending of money or other 
     extension of credit associated with the sale, acquisition, or 
     holding of a security or other property) pursuant to the 
     advice; and
       ``(iii) the direct or indirect receipt of fees or other 
     compensation by the fiduciary adviser or an affiliate thereof 
     (or any employee, agent, or registered representative of the 
     fiduciary adviser or affiliate) in connection with the 
     provision of the advice or in connection with a sale, 
     acquisition, or holding of a security or other property 
     pursuant to the advice.''.
       (b) Requirements.--Section 408 of such Act is amended 
     further by adding at the end the following new subsection:
       ``(g) Requirements Relating to Provision of Investment 
     Advice by Fiduciary Advisers.--
       ``(1) In general.--The requirements of this subsection are 
     met in connection with the provision of investment advice 
     referred to in section 3(21)(A)(ii), provided to an employee 
     benefit plan or a participant or beneficiary of an employee 
     benefit plan by a fiduciary adviser with respect to the plan 
     in connection with any sale, acquisition, or holding of a 
     security or other property for purposes of investment of 
     amounts held by the plan, if--
       ``(A) in the case of the initial provision of the advice 
     with regard to the security or other property by the 
     fiduciary adviser to the plan, participant, or beneficiary, 
     the fiduciary adviser provides to the recipient of the 
     advice, at a time reasonably contemporaneous with the initial 
     provision of the advice, a written notification (which may 
     consist of notification by means of electronic 
     communication)--
       ``(i) of all fees or other compensation relating to the 
     advice that the fiduciary adviser or any affiliate thereof is 
     to receive (including compensation provided by any third 
     party) in connection with the provision of the advice or in 
     connection with the sale, acquisition, or holding of the 
     security or other property,
       ``(ii) of any material affiliation or contractual 
     relationship of the fiduciary adviser or affiliates thereof 
     in the security or other property,
       ``(iii) of any limitation placed on the scope of the 
     investment advice to be provided by the fiduciary adviser 
     with respect to any such sale, acquisition, or holding of a 
     security or other property,
       ``(iv) of the types of services provided by the fiduciary 
     advisor in connection with the provision of investment advice 
     by the fiduciary adviser, and
       ``(v) that the adviser is acting as a fiduciary of the plan 
     in connection with the provision of the advice,
       ``(B) the fiduciary adviser provides appropriate 
     disclosure, in connection with the sale, acquisition, or 
     holding of the security or other property, in accordance with 
     all applicable securities laws,
       ``(C) the sale, acquisition, or holding occurs solely at 
     the direction of the recipient of the advice,
       ``(D) the compensation received by the fiduciary adviser 
     and affiliates thereof in connection with the sale, 
     acquisition, or holding of the security or other property is 
     reasonable, and
       ``(E) the terms of the sale, acquisition, or holding of the 
     security or other property are at least as favorable to the 
     plan as an arm's length transaction would be.
       ``(2) Standards for presentation of information.--The 
     notification required to be provided to participants and 
     beneficiaries under paragraph (1)(A) shall be written in a 
     clear and conspicuous manner and in a manner calculated to be 
     understood by the average plan participant and shall be 
     sufficiently accurate and comprehensive to reasonably apprise 
     such participants and beneficiaries of the information 
     required to be provided in the notification.
       ``(3) Exemption conditioned on continued availability of 
     required information on request for 1 year.--The requirements 
     of paragraph (1)(A) shall be deemed not to have been met in 
     connection with the initial or any subsequent provision of 
     advice described in paragraph (1) to the plan, participant, 
     or beneficiary if, at any time during the provision of 
     advisory services to the plan, participant, or beneficiary, 
     the fiduciary adviser fails to maintain the information 
     described in clauses (i) through (iv) of subparagraph (A) in 
     currently accurate form and in the manner described in 
     paragraph (2) or fails--
       ``(A) to provide, without charge, such currently accurate 
     information to the recipient of the advice no less than 
     annually,
       ``(B) to make such currently accurate information 
     available, upon request and without charge, to the recipient 
     of the advice, or
       ``(C) in the event of a material change to the information 
     described in clauses (i) through (iv) of paragraph (1)(A), to 
     provide, without charge, such currently accurate information 
     to the recipient of the advice at a time reasonably 
     contemporaneous to the material change in information.
       ``(4) Maintenance for 6 years of evidence of compliance.--A 
     fiduciary adviser referred to in paragraph (1) who has 
     provided advice referred to in such paragraph shall, for a 
     period of not less than 6 years after the provision of the 
     advice, maintain any records necessary for determining 
     whether the requirements of the preceding provisions of this 
     subsection and of subsection (b)(14) have been met. A 
     transaction prohibited under section 406 shall not be 
     considered to have occurred solely because the records are 
     lost or destroyed prior to the end of the 6-year period due 
     to circumstances beyond the control of the fiduciary adviser.
       ``(5) Exemption for plan sponsor and certain other 
     fiduciaries.--
       ``(A) In general.--Subject to subparagraph (B), a plan 
     sponsor or other person who is a fiduciary (other than a 
     fiduciary adviser) shall not be treated as failing to meet 
     the requirements of this part solely by reason of the 
     provision of investment advice referred to in section 
     3(21)(A)(ii) (or solely by reason of contracting for or 
     otherwise arranging for the provision of the advice), if--
       ``(i) the advice is provided by a fiduciary adviser 
     pursuant to an arrangement between the plan sponsor or other 
     fiduciary and the fiduciary adviser for the provision by the 
     fiduciary adviser of investment advice referred to in such 
     section,
       ``(ii) the terms of the arrangement require compliance by 
     the fiduciary adviser with the requirements of this 
     subsection, and
       ``(iii) the terms of the arrangement include a written 
     acknowledgment by the fiduciary adviser that the fiduciary 
     adviser is a fiduciary of the plan with respect to the 
     provision of the advice.
       ``(B) Continued duty of prudent selection of adviser and 
     periodic review.--Nothing in subparagraph (A) shall be 
     construed to exempt a plan sponsor or other person who is a 
     fiduciary from any requirement of this part for the prudent 
     selection and periodic review of a fiduciary adviser with 
     whom the plan sponsor or other person enters into an 
     arrangement for the provision of advice referred to in 
     section 3(21)(A)(ii). The plan sponsor or other person who is 
     a fiduciary has no duty under this part to monitor the 
     specific investment advice given by the fiduciary adviser to 
     any particular recipient of the advice.
       ``(C) Availability of plan assets for payment for advice.--
     Nothing in this part shall be construed to preclude the use 
     of plan assets to pay for reasonable expenses in providing 
     investment advice referred to in section 3(21)(A)(ii).
       ``(6) Definitions.--For purposes of this subsection and 
     subsection (b)(14)--
       ``(A) Fiduciary adviser.--The term `fiduciary adviser' 
     means, with respect to a plan, a person who is a fiduciary of 
     the plan by reason of the provision of investment advice by 
     the person to the plan or to a participant or beneficiary and 
     who is--
       ``(i) registered as an investment adviser under the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) or 
     under the laws of the State in which the fiduciary maintains 
     its principal office and place of business,
       ``(ii) a bank or similar financial institution referred to 
     in section 408(b)(4),
       ``(iii) an insurance company qualified to do business under 
     the laws of a State,
       ``(iv) a person registered as a broker or dealer under the 
     Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.),
       ``(v) an affiliate of a person described in any of clauses 
     (i) through (iv), or
       ``(vi) an employee, agent, or registered representative of 
     a person described in any of clauses (i) through (v) who 
     satisfies the requirements of applicable insurance, banking, 
     and securities laws relating to the provision of the advice.
       ``(B) Affiliate.--The term `affiliate' of another entity 
     means an affiliated person of the entity (as defined in 
     section 2(a)(3) of the Investment Company Act of 1940 (15 
     U.S.C. 80a-2(a)(3))).
       ``(C) Registered representative.--The term `registered 
     representative' of another entity means a person described in 
     section 3(a)(18) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(18)) (substituting the entity for the broker or 
     dealer referred to in such section) or a person described in 
     section 202(a)(17) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-2(a)(17)) (substituting the entity for the 
     investment adviser referred to in such section).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to advice referred to in section 
     3(21)(A)(ii) of the Employee Retirement Income Security Act 
     of 1974 provided on or after January 1, 2002.

                     Subtitle C--General Provisions

     SEC. ____21. EFFECTIVE DATE AND RELATED RULES.

       (a) In General.--Except as otherwise provided in this 
     title, the amendments made by this title shall apply with 
     respect to plan years beginning on or after January 1, 2002.

[[Page S6578]]

       (b) Special Rule for Collectively Bargained Plans.--In the 
     case of a plan maintained pursuant to 1 or more collective 
     bargaining agreements between employee representatives and 1 
     or more employers ratified on or before the date of the 
     enactment of this Act, subsection (a) shall be applied to 
     benefits pursuant to, and individuals covered by, any such 
     agreement by substituting for ``January 1, 2002'' the date of 
     the commencement of the first plan year beginning on or after 
     the earlier of--
       (1) the later of--
       (A) January 1, 2003, or
       (B) the date on which the last of such collective 
     bargaining agreements terminates (determined without regard 
     to any extension thereof after the date of the enactment of 
     this Act), or
       (2) January 1, 2004.
       (c) Plan Amendments.--If the amendments made by this title 
     require an amendment to any plan, such plan amendment shall 
     not be required to be made before the first plan year 
     beginning on or after January 1, 2004, if--
       (1) during the period after such amendments made by this 
     title take effect and before such first plan year, the plan 
     is operated in accordance with the requirements of such 
     amendments made by this title, and
       (2) such plan amendment applies retroactively to the period 
     after such amendments made by this title take effect and 
     before such first plan year.
                                  ____

  SA 4183. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 103, line 4, insert ``, or any household member of 
     the securities analyst,'' after ``analyst''.
                                  ____

  SA 4184. Mr. GRAMM (for himself and Mr. Santorum) proposed an 
amendment to SA 4174 proposed by Mr. Daschle (for Mr. Leahy (for 
himself, Mr. McCain, Mr. Daschle, Mr. Durbin, Mr. Harkin, Mr. Cleland, 
Mr. Levin, Mr. Kennedy, Mr. Biden, Mr. Feingold, Mr. Miller, Mr. 
Edwards, Mrs. Boxer, Mr. Corzine, Mr. Kerry, Mr. Schumer, Mr. 
Brownback, and Mr. Nelson of Florida)) to the bill (S. 2673) to improve 
quality and transparency in financial reporting and independent audits 
and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of the division, insert the following new 
     section:

     ``SEC.  . EXEMPTION AUTHORITY.

       ``(1) Case-by-Case Waivers.--Notwithstanding section 201(b) 
     of this Act, the Board may, on a case-by-case basis, exempt 
     any person, issuer, public accounting firm, or transaction 
     from the prohibition on the provision of services under 
     section 10A(g) of the Securities Exchange Act of 1934 (as 
     added by this section), to the extent that such exemption is 
     necessary or appropriate in the public interest and is 
     consistent with the protection of investors, and subject to 
     review by the Commission in the same manner as for rules of 
     the Board under section 107.
       ``(2) Small Business Exemption.--The Board may, by rule 
     exempt any person, issuer or public accounting firm (or 
     classes of such persons, issuers or public accounting firms) 
     from the prohibition on the provision of services under 
     section 10A(g) of the Securities Exchange Act of 1934 (as 
     added by this section), based upon the small business nature 
     of such person, issuer or public accounting firm, taking into 
     consideration applicable factors such as total asset size, 
     availability and cost of retaining multiple service 
     providers, number of public company audits performed, and 
     such other factors and conditions as the Board deems 
     appropriate consistent with the purposes of this Act.''.
                                  ____

  SA 4185. Mr. DASCHLE (for Mr. Leahy (for himself, Mr. McCain, Mr. 
Daschle, Mr. Durbin, Mr. Harkin, Mr. Cleland, Mr. Levin, Mr. Kennedy, 
Mr. Biden, Mr. Feingold, Mr. Miller, Mr. Edwards, Mrs. Boxer, Mr. 
Corzine, Mr. Kerry, Mr. Schumer, Mr. Brownback, Mr. Nelson of Florida, 
Mr. Wellstone, Ms. Stabenow, and Mr. Johnson)) proposed an amendment to 
the bill S. 2673, to improve quality and transparency in financial 
reporting and independent audits and accounting services for public 
companies, to create a Public Company Accounting Oversight Board, to 
enhance the standard setting process for accounting practices, to 
strengthen the independence of firms that audit public companies, to 
increase corporate responsibility and the usefulness of corporate 
financial disclosure, to protect the objectivity and independence of 
securities analysts, to improve Securities and Exchange Commission 
resources and oversight, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 117, strike Act and insert the following:

        TITLE VIII--CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Corporate and Criminal 
     Fraud Accountability Act of 2002''.

     SEC. 802. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1519. Destruction, alteration, or falsification of 
       records in Federal investigations and bankruptcy

       ``Whoever knowingly alters, destroys, mutilates, conceals, 
     covers up, falsifies, or makes a false entry in any record, 
     document, or tangible object with the intent to impede, 
     obstruct, or influence the investigation or proper 
     administration of any matter within the jurisdiction of any 
     department or agency of the United States or any case filed 
     under title 11, or in relation to or contemplation of any 
     such matter or case, shall be fined under this title, 
     imprisoned not more than 10 years, or both.

     ``Sec. 1520. Destruction of corporate audit records

       ``(a)(1) Any accountant who conducts an audit of an issuer 
     of securities to which section 10A(a) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78j-1(a)) applies, shall 
     maintain all audit or review workpapers for a period of 5 
     years from the end of the fiscal period in which the audit or 
     review was concluded.
       ``(2) The Securities and Exchange Commission shall 
     promulgate, within 180 days, after adequate notice and an 
     opportunity for comment, such rules and regulations, as are 
     reasonably necessary, relating to the retention of relevant 
     records such as workpapers, documents that form the basis of 
     an audit or review, memoranda, correspondence, 
     communications, other documents, and records (including 
     electronic records) which are created, sent, or received in 
     connection with an audit or review and contain conclusions, 
     opinions, analyses, or financial data relating to such an 
     audit or review, which is conducted by any accountant who 
     conducts an audit of an issuer of securities to which section 
     10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-
     1(a)) applies.
       ``(b) Whoever knowingly and willfully violates subsection 
     (a)(1), or any rule or regulation promulgated by the 
     Securities and Exchange Commission under subsection (a)(2), 
     shall be fined under this title, imprisoned not more than 5 
     years, or both.
       ``(c) Nothing in this section shall be deemed to diminish 
     or relieve any person of any other duty or obligation, 
     imposed by Federal or State law or regulation, to maintain, 
     or refrain from destroying, any document.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by adding at the end the following new items:

``1519. Destruction, alteration, or falsification of records in Federal 
              investigations and bankruptcy.
``1520. Destruction of corporate audit records.''.

     SEC. 803. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION OF 
                   SECURITIES FRAUD LAWS.

       Section 523(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (17), by striking ``or'' after the 
     semicolon;
       (2) in paragraph (18), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end, the following:
       ``(19) that--
       ``(A) arises under a claim relating to--
       ``(i) the violation of any of the Federal securities laws 
     (as that term is defined in section 3(a)(47) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), any 
     State securities laws, or any regulations or orders issued 
     under such Federal or State securities laws; or
       ``(ii) common law fraud, deceit, or manipulation in 
     connection with the purchase or sale of any security; and
       ``(B) results, in relation to any claim described in 
     subparagraph (A), from--

[[Page S6579]]

       ``(i) any judgment, order, consent order, or decree entered 
     in any Federal or State judicial or administrative 
     proceeding;
       ``(ii) any settlement agreement entered into by the debtor; 
     or
       ``(iii) any court or administrative order for any damages, 
     fine, penalty, citation, restitutionary payment, disgorgement 
     payment, attorney fee, cost, or other payment owed by the 
     debtor.''.

     SEC. 804. STATUTE OF LIMITATIONS FOR SECURITIES FRAUD.

       (a) In General.--Section 1658 of title 28, United States 
     Code, is amended--
       (1) by inserting ``(a)'' before ``Except''; and
       (2) by adding at the end the following:
       ``(b) Notwithstanding subsection (a), a private right of 
     action that involves a claim of fraud, deceit, manipulation, 
     or contrivance in contravention of a regulatory requirement 
     concerning the securities laws, as defined in section 
     3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c(a)(47)), may be brought not later than the earlier of--
       ``(1) Two years after the discovery of the facts 
     constituting the violation; or
       ``(2) Five years after such violation.''.
       (b) Effective Date.--The limitations period provided by 
     section 1658(b) of title 28, United States Code, as added by 
     this section, shall apply to all proceedings addressed by 
     this section that are commenced on or after the date of 
     enactment of this Act.
       (c) No Creation of Actions.--Nothing in this section shall 
     create a new, private right of action.

     SEC. 805. REVIEW OF FEDERAL SENTENCING GUIDELINES FOR 
                   OBSTRUCTION OF JUSTICE AND EXTENSIVE CRIMINAL 
                   FRAUD.

       Pursuant to section 994 of title 28, United States Code, 
     and in accordance with this section, the United States 
     Sentencing Commission shall review and amend, as appropriate, 
     the Federal Sentencing Guidelines and related policy 
     statements to ensure that--
       (1) the base offense level and existing enhancements 
     contained in United States Sentencing Guideline 2J1.2 
     relating to obstruction of justice are sufficient to deter 
     and punish that activity;
       (2) the enhancements and specific offense characteristics 
     relating to obstruction of justice are adequate in cases 
     where--
       (A) documents and other physical evidence are actually 
     destroyed, altered, or fabricated;
       (B) the destruction, alteration, or fabrication of evidence 
     involves--
       (i) a large amount of evidence, a large number of 
     participants, or is otherwise extensive;
       (ii) the selection of evidence that is particularly 
     probative or essential to the investigation; or
       (iii) more than minimal planning; or
       (C) the offense involved abuse of a special skill or a 
     position of trust;
       (3) the guideline offense levels and enhancements for 
     violations of section 1519 or 1520 of title 18, United States 
     Code, as added by this title, are sufficient to deter and 
     punish that activity;
       (4) the guideline offense levels and enhancements under 
     United States Sentencing Guideline 2B1.1 (as in effect on the 
     date of enactment of this Act) are sufficient for a fraud 
     offense when the number of victims adversely involved is 
     significantly greater than 50;
       (5) a specific offense characteristic enhancing sentencing 
     is provided under United States Sentencing Guideline 2B1.1 
     (as in effect on the date of enactment of this Act) for a 
     fraud offense that endangers the solvency or financial 
     security of a substantial number of victims; and
       (6) the guidelines that apply to organizations in United 
     States Sentencing Guidelines, chapter 8, are sufficient to 
     deter and punish organizational criminal misconduct.

     SEC. 806. PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED 
                   COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by inserting after section 1514 the 
     following:

     ``Sec. 1514A. Civil action to protect against retaliation in 
       fraud cases

       ``(a) Whistleblower Protection for Employees of Publicly 
     Traded Companies.--No company with a class of securities 
     registered under section 12 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78l), or that is required to file reports 
     under section 15(d) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78o(d)), or any officer, employee, contractor, 
     subcontractor, or agent of such company, may discharge, 
     demote, suspend, threaten, harass, or in any other manner 
     discriminate against an employee in the terms and conditions 
     of employment because of any lawful act done by the 
     employee--
       ``(1) to provide information, cause information to be 
     provided, or otherwise assist in an investigation regarding 
     any conduct which the employee reasonably believes 
     constitutes a violation of section 1341, 1343, 1344, or 1348, 
     any rule or regulation of the Securities and Exchange 
     Commission, or any provision of Federal law relating to fraud 
     against shareholders, when the information or assistance is 
     provided to or the investigation is conducted by--
       ``(A) a Federal regulatory or law enforcement agency;
       ``(B) any Member of Congress or any committee of Congress; 
     or
       ``(C) a person with supervisory authority over the employee 
     (or such other person working for the employer who has the 
     authority to investigate, discover, or terminate misconduct); 
     or
       ``(2) to file, cause to be filed, testify, participate in, 
     or otherwise assist in a proceeding filed or about to be 
     filed (with any knowledge of the employer) relating to an 
     alleged violation of section 1341, 1343, 1344, or 1348, any 
     rule or regulation of the Securities and Exchange Commission, 
     or any provision of Federal law relating to fraud against 
     shareholders.
       ``(b) Enforcement Action.--
       ``(1) In general.--A person who alleges discharge or other 
     discrimination by any person in violation of subsection (a) 
     may seek relief under subsection (c), by--
       ``(A) filing a complaint with the Secretary of Labor; or
       ``(B) if the Secretary has not issued a final decision 
     within 180 days of the filing of the complaint and there is 
     no showing that such delay is due to the bad faith of the 
     claimant, bringing an action at law or equity for de novo 
     review in the appropriate district court of the United 
     States, which shall have jurisdiction over such an action 
     without regard to the amount in controversy.
       ``(2) Procedure.--
       ``(A) In general.--An action under paragraph (1)(A) shall 
     be governed under the rules and procedures set forth in 
     section 42121(b) of title 49, United States Code.
       ``(B) Exception.--Notification made under section 
     42121(b)(1) of title 49, United States Code, shall be made to 
     the person named in the complaint and to the employer.
       ``(C) Burdens of proof.--An action brought under paragraph 
     (1)(B) shall be governed by the legal burdens of proof set 
     forth in section 42121(b) of title 49, United States Code.
       ``(D) Statute of limitations.--An action under paragraph 
     (1) shall be commenced not later than 90 days after the date 
     on which the violation occurs.
       ``(c) Remedies.--
       ``(1) In general.--An employee prevailing in any action 
     under subsection (b)(1) shall be entitled to all relief 
     necessary to make the employee whole.
       ``(2) Compensatory damages.--Relief for any action under 
     paragraph (1) shall include--
       ``(A) reinstatement with the same seniority status that the 
     employee would have had, but for the discrimination;
       ``(B) the amount of back pay, with interest; and
       ``(C) compensation for any special damages sustained as a 
     result of the discrimination, including litigation costs, 
     expert witness fees, and reasonable attorney fees.
       ``(d) Rights Retained by Employee.--Nothing in this section 
     shall be deemed to diminish the rights, privileges, or 
     remedies of any employee under any Federal or State law, or 
     under any collective bargaining agreement.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by inserting after the item relating to section 1514 
     the following new item:

``1514A. Civil action to protect against retaliation in fraud cases.''.

     SEC. 807. CRIMINAL PENALTIES FOR DEFRAUDING SHAREHOLDERS OF 
                   PUBLICLY TRADED COMPANIES.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1348. Securities fraud

       ``Whoever knowingly executes, or attempts to execute, a 
     scheme or artifice--
       ``(1) to defraud any person in connection with any security 
     of an issuer with a class of securities registered under 
     section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78l) or that is required to file reports under section 15(d) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)); or
       ``(2) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any money or property in 
     connection with the purchase or sale of any security of an 
     issuer with a class of securities registered under section 12 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78l) or 
     that is required to file reports under section 15(d) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o(d));
     shall be fined under this title, or imprisoned not more than 
     10 years, or both.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following new item:

``1348. Securities fraud.''.
  SA 4186. Mr. DASCHLE (for Mr. Biden (for himself and Mr. Hatch)) 
proposed an amendment to the bill S. 2673, to improve quality and 
transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure,

[[Page S6580]]

to protect the objectivity and independence of securities analysts, to 
improve Securities and Exchange Commission resources and oversight, and 
for other purposes; as follows:

       At the end, add the following:

          TITLE VIII--WHITE-COLLAR CRIME PENALTY ENHANCEMENTS.

     SEC. 801 SHORT TITLE.

       This title may be cited as the ``White-Collar Crime Penalty 
     Enhancement Act of 2002''.

     SEC. 802. CRIMINAL PENALTIES FOR CONSPIRACY TO COMMIT OFFENSE 
                   OR TO DEFRAUD THE UNITED STATES.

       Section 371 of title 18, United States Code, is amended by 
     striking ``If two or more'' and all that follows through 
     ``If, however,'' and inserting the following:
       ``(a) In General.--If 2 or more persons--
       ``(1) conspire to commit any offense against the United 
     States, in any manner or for any purpose, and 1 or more of 
     such persons do any act to effect the object of the 
     conspiracy, each person shall be fined or imprisoned, or 
     both, as set forth in the specific substantive offense which 
     was the object of the conspiracy; or
       ``(2) conspire to defraud the United States, or any agency 
     thereof in any manner or for any purpose, and 1 or more of 
     such persons do any act to effect the object of the 
     conspiracy, each person shall be fined under this title, or 
     imprisoned not more than 10 years, or both.
       ``(b) Misdemeanor Offense.--If, however,''.

     SEC. 803. CRIMINAL PENALTIES FOR MAIL AND WIRE FRAUD.

       (a) Mail Fraud.--Section 1341 of title 18, United States 
     Code, is amended by striking ``five years'' and inserting 
     ``10 years''.
       (b) Wire Fraud.--Section 1343 of title 18, United States 
     Code, is amended by striking ``five years'' and inserting 
     ``10 years''.

     SEC. 804. CRIMINAL PENALTIES FOR VIOLATIONS OF THE EMPLOYEE 
                   RETIREMENT INCOME SECURITY ACT OF 1974.

       Section 501 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1131) is amended--
       (1) by striking ``$5,000'' and inserting ``$100,000'';
       (1) by striking ``one year'' and inserting ``10 years''; 
     and
       (3) by striking ``$100,000'' and inserting ``$500,000''.

     SEC. 805. AMENDMENT TO SENTENCING GUIDELINES RELATING TO 
                   CERTAIN WHITE-COLLAR OFFENSES.

       (a) Directive to the United States Sentencing Commission.--
     Pursuant to its authority under section 994(p) of title 18, 
     United States Code, and in accordance with this section, the 
     United States Sentencing Commission shall review and, as 
     appropriate, amend the Federal Sentencing Guidelines and 
     related policy statements to implement the provisions of this 
     title.
       (b) Requirements.--In carrying out this section, the 
     Sentencing Commission shall--
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of the offenses and the 
     penalties set forth in this title, the growing incidence of 
     serious fraud offenses which are identified above, and the 
     need to modify the sentencing guidelines and policy 
     statements to deter, prevent, and punish such offenses;
       (2) consider the extent to which the guidelines and policy 
     statements adequately address--
       (A) whether the guideline offense levels and enhancements 
     for violations of the sections amended by this title are 
     sufficient to deter and punish such offenses, and 
     specifically, are adequate in view of the statutory increases 
     in penalties contained in this title; and
       (B) whether a specific offense characteristic should be 
     added in United States Sentencing Guideline section 2B1.1 in 
     order to provide for stronger penalties for fraud when the 
     crime is committed by a corporate officer or director;
       (3) assure reasonable consistency with other relevant 
     directives and sentencing guidelines;
       (4) account for any additional aggravating or mitigating 
     circumstances that might justify exceptions to the generally 
     applicable sentencing ranges;
       (5) make any necessary conforming changes to the sentencing 
     guidelines; and
       (6) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.

     SEC. 806. CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1348. Failure of corporate officers to certify 
       financial reports

       ``(a) Certification of Periodic Financial Reports.--Each 
     periodic report containing financial statements filed by an 
     issuer with the Securities Exchange Commission pursuant to 
     section 13(a) or 15(d) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78m(a) or 78o(d)) shall be accompanied by a 
     written statement by the chairman of the board, chief 
     executive officer, and chief financial officer (or equivalent 
     thereof) of the issuer.
       ``(b) Content.--The statement required under subsection (a) 
     shall certify the appropriateness of the financial statements 
     and disclosures contained in the periodic report or financial 
     report, and that those financial statements and disclosures 
     fairly present, in all material respects, the operations and 
     financial condition of the issuer.
       ``(c) Criminal Penalties.--Notwithstanding any other 
     provision of law--
       ``(1) any person who recklessly violates any provision of 
     this section shall upon conviction be fined not more than 
     $500,000, or imprisoned not more than 5 years, or both; or
       ``(2) any person who willfully violates any provision of 
     this section shall upon conviction be fined not more than 
     $1,000,000, or imprisoned not more than 10 years, or both.''.
       (b) Technical and Conforming Amendment.--The section 
     analysis for chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following:

``1348. Failure of corporate officers to certify financial reports.''.


                                  ____
  SA 4187. Mr. EDWARDS (for himself, Mr. Enzi, and Mr. Corzine) 
submitted an amendment intended to be proposed to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       On page 108, line 15, insert before the end quotation marks 
     the following:
       ``(c) Rules of Professional Responsibility for Attorneys.--
     Not later than 180 days after the date of enactment of this 
     section, the Commission shall establish rules, in the public 
     interest and for the protection of investors, setting forth 
     minimum standards of professional conduct for attorneys 
     appearing and practicing before the Commission in any way in 
     the representation of public companies, including a rule 
     requiring an attorney to report evidence of a material 
     violation of law by the company or any agent thereof to the 
     chief legal counsel or the chief executive officer of the 
     company (or the equivalent thereof) and, if the counsel or 
     officer does not appropriately respond to the evidence 
     (adopting, as necessary, appropriate remedial measures or 
     sanctions with respect to the violation), requiring the 
     attorney to report the evidence to the audit committee of the 
     board of directors or to another committee of the board of 
     directors comprised solely of directors not employed directly 
     or indirectly by the company, or to the board of directors.
                                  ____

  SA 4188. Mr. LOTT proposed an amendment to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       At the appropriate place, insert the following:

     SEC.  . HIGHER MAXIMUM PENALTIES FOR MAIL AND WIRE FRAUD.

       (a) Mail fraud.--Section 1341 is amended by striking 
     ``five'' and inserting ``ten''.
       (b) Wire fraud.--Section 1343 is amended by striking 
     ``five'' and inserting ``ten''.

     SEC.  . TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN 
                   OFFICIAL PROCEEDING.

       Section 1512 of title 18, United States Code is amended--
       (a) by re-designating subsections (c), (d), (e), (f), (g), 
     (h), and (i) as subsections (d), (e), (f), (g), (h), (i) and 
     (j);
       (b) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Whoever corruptly--
       ``(1) alters, destroys, mutilates or conceals a record, 
     document or other object, or attempts to do so, with the 
     intent to impair the object's integrity or availability for 
     use in an official proceeding; or
       ``(2) otherwise obstructs, influences, or impedes any 
     official proceeding, or attempts to do so;

     ``shall be fined under this title or imprisoned not more than 
     ten years, or both.''

     SEC.  . TEMPORARY FREEZE AUTHORITY FOR THE SECURITIES AND 
                   EXCHANGE COMMISSION.

       (a) In General.--The Securities Exchange Act of 1934 is 
     amended by inserting after section 21C(c)(2) (15 U.S.C. 78u-
     3(c)(2)) the following:
       ``(3) Temporary freeze.--
       ``(A) Whenever during the course of a lawful investigation 
     involving possible violations of the federal securities laws 
     by an

[[Page S6581]]

     issuer of publicly traded securities or any of its directors, 
     officers, partners, controlling persons, agents or employees, 
     it shall appear to the Commission that it is likely that the 
     issuer will make extraordinary payments (whether compensation 
     or otherwise) to any of the foregoing persons, the Commission 
     may petition a federal district court for a temporary order 
     requiring the issuer to escrow, subject to court supervision, 
     those payments in an interest-bearing account for 45 days. 
     Such an order shall be entered, if the court finds that the 
     issuer is likely to make such extraordinary payments, only 
     after notice and opportunity for a hearing, unless the court 
     determines that notice and hearing prior to entry of the 
     order would be impracticable or contrary to the public 
     interest. A temporary order shall become effective 
     immediately and shall be served upon the parties subject to 
     it and, unless set aside, limited or suspended by court of 
     competent jurisdiction, shall remain effective and 
     enforceable for 45 days. The period of the order may be 
     extended by the court upon good cause shown for not longer 
     than 45 days, provided that the combined period of the order 
     not exceed 90 days.
       ``(B) If the individual affected by such order is charged 
     with violations of the federal securities laws by the 
     expiration of the 45 days (or the expiration of any extended 
     period), the escrow would continue, subject to court 
     approval, until the conclusion of any legal proceedings. The 
     issuer and the affected director, officer, partner, 
     controlling person, agent or employee would have the right to 
     petition the court for review of the order. If the individual 
     affected by such order is not charged, the escrow will 
     terminate at the expiration of the 45 days (or the expiration 
     of any extended period), and the payments (with accrued 
     interest) returned to the issuer.
       (b) Technical Amendment.--Section 21C(c)(2) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3(c)(2)) is 
     amended by striking ``This'' and inserting ``Paragraph (1) of 
     this''.

     SEC.  . AMENDMENT TO THE FEDERAL SENTENCING GUIDELINES.

       (a) Request for Immediate Consideration by the United 
     States Sentencing Commission.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code, and in 
     accordance with this section, the United States Sentencing 
     Commission is requested to--
       (1) promptly review the sentencing guidelines applicable to 
     securities and accounting fraud and related offenses;
       (2) expeditiously consider promulgation of new sentencing 
     guidelines or amendments to existing sentencing guidelines to 
     provide an enhancement for officers or directors of publicly 
     traded corporations who commit fraud and related offenses; 
     and
       (3) submit to Congress an explanation of actions taken by 
     the Commission pursuant to paragraph (2) and any additional 
     policy recommendations the Commission may have for combating 
     offenses described in paragraph (1).
       (b) Other.--In carrying out this section, the Sentencing 
     Commission is requested to:
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of securities, pension, 
     and accounting fraud and the need for aggressive and 
     appropriate law enforcement action to prevent such offenses;
       (2) assure reasonable consistency with other relevant 
     directives and with other guidelines;
       (3) account for any aggravating or mitigating circumstances 
     that might justify exceptions, including circumstances for 
     which the sentencing guidelines currently provide sentencing 
     enhancements;
       (4) make any necessary conforming changes to the sentencing 
     guidelines; and
       (5) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.
       (c) Emergency Authority and Deadline for Commission 
     Action.--The Commission is requested to promulgate the 
     guidelines or amendments provided for under this section as 
     soon as practicable, and in any event not later than the 120 
     days after the date of the enactment of this Act, in 
     accordance with the procedures set forth in section 21(a) of 
     the Sentencing Reform Act of 1987, as though the authority 
     under that Act had not yet expired.

     SEC.   . AUTHORITY OF THE COMMISSION TO PROHIBIT PERSONS FROM 
                   SERVING AS OFFICERS OR DIRECTORS.

       (a) In section 21C of the Exchange Act of 1934, add at the 
     end a new subsection as follows:
       ``( ) Authority of the Commission To Prohibit Persons From 
     Serving as Officers or Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b) of this title or 
     the rules or regulations thereunder from acting as an officer 
     or director of any issuer that has a class of securities 
     registered pursuant to section 12 of this title or that is 
     required to file reports pursuant to section 15(d) of this 
     title if the person's conduct demonstrates unfitness to serve 
     as an officer or director of any such issuer.''
       (b) In section 8A of the Securities Act add at the end a 
     new subsection as follows:
       ``( ) Authority of the Commission To Prohibit Persons From 
     Serving as Officers or Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) of this title 
     from acting as an officer or director of any issuer that has 
     a class of securities registered pursuant to section 12 of 
     the Securities Exchange Act of 1934 or that is required to 
     file reports pursuant to section 15(d) of that Act if the 
     person's conduct demonstrates unfitness to serve as an 
     officer or director of any such issuer.''
                                  ____

  SA 4189. Mr. GRAMM proposed an amendment to amendment SA 4188 
proposed by Mr. Lott to the bill (S. 2673) to improve quality and 
transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       Strike all after the first word, and insert the following:

     SEC.  . HIGHER MAXIMUM PENALTIES FOR MAIL AND WIRE FRAUD.

       (a) Mail fraud.--Section 1341 is amended by striking 
     ``five'' and inserting ``ten''.
       (b) Wire fraud.--Section 1343 is amended by striking 
     ``five'' and inserting ``ten''.

     SEC.  . TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN 
                   OFFICIAL PROCEEDING.

       Section 1512 of title 18, United States Code is amended--
       (a) by re-designating subsections (c), (d), (e), (f), (g), 
     (h), and (i) as subsections (d), (e), (f), (g), (h), (i) and 
     (j);
       (b) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Whoever corruptly--
       ``(1) alters, destroys, mutilates or conceals a record, 
     document or other object, or attempts to do so, with the 
     intent to impair the object's integrity or availability for 
     use in an official proceeding; or
       ``(2) otherwise obstructs, influences, or impedes any 
     official proceeding, or attempts to do so;

     ``shall be fined under this title or imprisoned not more than 
     ten years, or both.''

     SEC.  . TEMPORARY FREEZE AUTHORITY FOR THE SECURITIES AND 
                   EXCHANGE COMMISSION.

       (a) In General.--The Securities Exchange Act of 1934 is 
     amended by inserting after section 21C(c)(2) (15 U.S.C. 78u-
     3(c)(2)) the following:
       ``(3) Temporary freeze.--
       ``(A) Whenever during the course of a lawful investigation 
     involving possible violations of the federal securities laws 
     by an issuer of publicly traded securities or any of its 
     directors, officers, partners, controlling persons, agents or 
     employees, it shall appear to the Commission that it is 
     likely that the issuer will make extraordinary payments 
     (whether compensation or otherwise) to any of the foregoing 
     persons, the Commission may petition a federal district court 
     for a temporary order requiring the issuer to escrow, subject 
     to court supervision, those payments in an interest-bearing 
     account for 45 days. Such an order shall be entered, if the 
     court finds that the issuer is likely to make such 
     extraordinary payments, only after notice and opportunity for 
     a hearing, unless the court determines that notice and 
     hearing prior to entry of the order would be impracticable or 
     contrary to the public interest. A temporary order shall 
     become effective immediately and shall be served upon the 
     parties subject to it and, unless set aside, limited or 
     suspended by court of competent jurisdiction, shall remain 
     effective and enforceable for 45 days. The period of the 
     order may be extended by the court upon good cause shown for 
     not longer than 45 days, provided that the combined period of 
     the order not exceed 90 days.
       ``(B) If the individual affected by such order is charged 
     with violations of the federal securities laws by the 
     expiration of the 45 days (or the expiration of any extended 
     period), the escrow would continue, subject to court 
     approval, until the conclusion of any legal proceedings. The 
     issuer and the affected director, officer, partner, 
     controlling person, agent or employee would have the right to 
     petition the court for review of the order. If the individual 
     affected by such order is not charged, the escrow will 
     terminate at the expiration of the 46 days (or the expiration 
     of any extended period), and the payments (with accrued 
     interest) returned to the issuer.
       (b) Technical Amendment.--Section 21C(c)(2) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3(c)(2)) is 
     amended by striking ``This'' and inserting ``Paragraph (1) of 
     this''.

     SEC.  . AMENDMENT TO THE FEDERAL SENTENCING GUIDELINES.

       (a) Request for Immediate Consideration by the United 
     States Sentencing Commission.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code,

[[Page S6582]]

     and in accordance with this section, the United States 
     Sentencing Commission is requested to--
       (1) promptly review the sentencing guidelines applicable to 
     securities and accounting fraud and related offenses;
       (2) expeditiously consider promulgation of new sentencing 
     guidelines or amendments to existing sentencing guidelines to 
     provide an enhancement for officers or directors of publicly 
     traded corporations who commit fraud and related offenses; 
     and
       (3) submit to Congress an explanation of actions taken by 
     the Commission pursuant to paragraph (2) and any additional 
     policy recommendations the Commission may have for combating 
     offenses described in paragraph (1).
       (b) Other.--In carrying out this section, the Sentencing 
     Commission is requested to:
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of securities, pension, 
     and accounting fraud and the need for aggressive and 
     appropriate law enforcement action to prevent such offenses;
       (2) assure reasonable consistency with other relevant 
     directives and with other guidelines;
       (3) account for any aggravating or mitigating circumstances 
     that might justify exceptions, including circumstances for 
     which the sentencing guidelines currently provide sentencing 
     enhancements;
       (4) make any necessary conforming changes to the sentencing 
     guidelines; and
       (5) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.
       (c) Emergency Authority and Deadline for Commission 
     Action.--The Commission is requested to promulgate the 
     guidelines or amendments provided for under this section as 
     soon as practicable, and in any event not later than the 120 
     days after the date of the enactment of this Act, in 
     accordance with the procedures set forth in section 21(a) of 
     the Sentencing Reform Act of 1987, as though the authority 
     under that Act had not yet expired.

     SEC.   . AUTHORITY OF THE COMMISSION TO PROHIBIT PERSONS FROM 
                   SERVING AS OFFICERS OR DIRECTORS.

       (a) In section 21C of the Exchange Act of 1934, add at the 
     end a new subsection as follows:
       ``( ) Authority of the Commission To Prohibit Persons From 
     Serving as Officers or Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b) of this title or 
     the rules or regulations thereunder from acting as an officer 
     or director of any issuer that has a class of securities 
     registered pursuant to section 12 of this title or that is 
     required to file reports pursuant to section 15(d) of this 
     title if the person's conduct demonstrates unfitness to serve 
     as an officer or director of any such issuer.''
       (b) In section 8A of the Securities Act add at the end a 
     new subsection as follows:
       ``( ) Authority of the Commission To Prohibit Persons From 
     Serving as Officers or Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) of this title 
     from acting as an officer or director of any issuer that has 
     a class of securities registered pursuant to section 12 of 
     the Securities Exchange Act of 1934 or that is required to 
     file reports pursuant to section 15(d) of that Act if the 
     person's conduct demonstrates unfitness to serve as an 
     officer or director of any such issuer.''
                                  ____

  SA 4190. Mr. DASCHLE (for Mr. Biden (for himself and Mr. Hatch) 
proposed an amendment to amendment SA 4186 proposed by Mr. Daschle (for 
Mr. Biden (for himself and Mr. Hatch)) to the bill (S. 2673) to improve 
quality and transparency in financial reporting and independent audits 
and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       Strike all after the first word and insert the following:

             VIII--WHITE-COLLAR CRIME PENALTY ENHANCEMENTS.

     SEC. 801 SHORT TITLE.

       This title may be cited as the ``White-Collar Crime Penalty 
     Enhancement Act of 2002''.

     SEC. 802. CRIMINAL PENALTIES FOR CONSPIRACY TO COMMIT OFFENSE 
                   OR TO DEFRAUD THE UNITED STATES.

       Section 371 of title 18, United States Code, is amended by 
     striking ``If two or more'' and all that follows through 
     ``If, however,'' and inserting the following:
       ``(a) In General.--If 2 or more persons--
       ``(1) conspire to commit any offense against the United 
     States, in any manner or for any purpose, and 1 or more of 
     such persons do any act to effect the object of the 
     conspiracy, each person shall be fined or imprisoned, or 
     both, as set forth in the specific substantive offense which 
     was the object of the conspiracy; or
       ``(2) conspire to defraud the United States, or any agency 
     thereof in any manner or for any purpose, and 1 or more of 
     such persons do any act to effect the object of the 
     conspiracy, each person shall be fined under this title, or 
     imprisoned not more than 10 years, or both.
       ``(b) Misdemeanor Offense.--If, however,''.

     SEC. 803. CRIMINAL PENALTIES FOR MAIL AND WIRE FRAUD.

       (a) Mail Fraud.--Section 1341 of title 18, United States 
     Code, is amended by striking ``five years'' and inserting 
     ``10 years''.
       (b) Wire Fraud.--Section 1343 of title 18, United States 
     Code, is amended by striking ``five years'' and inserting 
     ``10 years''.

     SEC. 804. CRIMINAL PENALTIES FOR VIOLATIONS OF THE EMPLOYEE 
                   RETIREMENT INCOME SECURITY ACT OF 1974.

       Section 501 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1131) is amended--
       (1) by striking ``$5,000'' and inserting ``$100,000'';
       (1) by striking ``one year'' and inserting ``10 years''; 
     and
       (3) by striking ``$100,000'' and inserting ``$500,000''.

     SEC. 805. AMENDMENT TO SENTENCING GUIDELINES RELATING TO 
                   CERTAIN WHITE-COLLAR OFFENSES.

       (a) Directive to the United States Sentencing Commission.--
     Pursuant to its authority under section 994(p) of title 18, 
     United States Code, and in accordance with this section, the 
     United States Sentencing Commission shall review and, as 
     appropriate, amend the Federal Sentencing Guidelines and 
     related policy statements to implement the provisions of this 
     title.
       (b) Requirements.--In carrying out this section, the 
     Sentencing Commission shall--
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of the offenses and the 
     penalties set forth in this title, the growing incidence of 
     serious fraud offenses which are identified above, and the 
     need to modify the sentencing guidelines and policy 
     statements to deter, prevent, and punish such offenses;
       (2) consider the extent to which the guidelines and policy 
     statements adequately address--
       (A) whether the guideline offense levels and enhancements 
     for violations of the sections amended by this title are 
     sufficient to deter and punish such offenses, and 
     specifically, are adequate in view of the statutory increases 
     in penalties contained in this title; and
       (B) whether a specific offense characteristic should be 
     added in United States Sentencing Guideline section 2B1.1 in 
     order to provide for stronger penalties for fraud when the 
     crime is committed by a corporate officer or director;
       (3) assure reasonable consistency with other relevant 
     directives and sentencing guidelines;
       (4) account for any additional aggravating or mitigating 
     circumstances that might justify exceptions to the generally 
     applicable sentencing ranges;
       (5) make any necessary conforming changes to the sentencing 
     guidelines; and
       (6) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.

     SEC. 806. CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1348. Failure of corporate officers to certify 
       financial reports

       ``(a) Certification of Periodic Financial Reports.--Each 
     periodic report containing financial statements filed by an 
     issuer with the Securities Exchange Commission pursuant to 
     section 13(a) or 15(d) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78m(a) or 78o(d)) shall be accompanied by a 
     written statement by the chairman of the board, chief 
     executive officer, and chief financial officer (or equivalent 
     thereof) of the issuer.
       ``(b) Content.--The statement required under subsection (a) 
     shall certify the appropriateness of the financial statements 
     and disclosures contained in the periodic report or financial 
     report, and that those financial statements and disclosures 
     fairly present, in all material respects, the operations and 
     financial condition of the issuer.
       ``(c) Criminal Penalties.--Notwithstanding any other 
     provision of law--
       ``(1) any person who recklessly violates any provision of 
     this section shall upon conviction be fined not more than 
     $500,000, or imprisoned not more than 5 years, or both; or
       ``(2) any person who willfully violates any provision of 
     this section shall upon conviction be fined not more than 
     $1,000,000, or imprisoned not more than 10 years, or both.''.
       (b) Technical and Conforming Amendment.--The section 
     analysis for chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following:

``1348. Failure of corporate officers to certify financial reports.''.


[[Page S6583]]


       This section shall take effect one day after date of this 
     bill's enactment.
                                  ____

  SA 4191. Mr. ENSIGN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strenghten the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes, which was 
ordered to lie on the table; as follows:

       On page 78, strike lines 15 through 24, and insert the 
     following:
       In supervising public accounting firms that are not 
     registered by the Board and their associated persons, 
     appropriate State regulatory authorities should make an 
     independent determination of the proper standards applicable, 
     particularly taking into consideration the size and nature of 
     the business of the accounting firms they supervise and the 
     size and nature of the business of the clients of those 
     firms. The standards applied by the Board under this Act 
     could create undue burdens and costs if applied without 
     independent consideration to nonpublic accounting companies 
     and other accounting firms that provide services to small 
     business clients.
                                  ____

  SA 4192. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysis, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . STOCK OPTIONS MUST BE BOOKED AS EXPENSE WHEN 
                   GRANTED.

       Any corporation that grants a stock option to an officer or 
     employee to purchase a publicly traded security in the United 
     States shall record the granting of the option as an expense 
     in that corporation's income statement for the year in which 
     the option is granted.
                                  ____

  SA 4193. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysis, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 69, strike line 8 and all that follows through page 
     70, line 19, and insert ``any non-audit service.'.''.
                                  ____

  SA 4194. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 82, strike lines 19 through 24 and insert the 
     following:
       (b) Content.--The chief executive officer and chief 
     financial officer--
       (1) shall certify, under penalty of perjury, that the 
     reports and statements described in subsection (a) fairly 
     present, in all material respects, the operations and 
     financial condition of the issuer; and
       (2) shall include a brief narrative of the basis for the 
     decision to so certify, including a discussion of any 
     questionable accounting treatment.
                                  ____

  SA 4195. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 86, line 8, strike ``during'' and all that follows 
     through page 89, line 20 and insert the following: ``at any 
     time during the term of employment of that person by the 
     issuer, or service to that issuer as a director or executive 
     officer, or during the 90-day period following the date of 
     termination of such employment or service.
       ``(b) Exception.--Nothing in subsection (a) shall be 
     construed to prohibit the purchase, sale, acquisition, or 
     other transfer of equity securities of the issuer for the 
     purpose of avoiding expiration of stock options, but only to 
     the extent necessary to pay the option price of the 
     securities and any applicable taxes or to satisfy a court 
     ordered judgment.
       ``(c) Remedy.--
       ``(1) In general.--Any profit realized by a director or 
     executive officer referred to in subsection (a) from any 
     purchase, sale, or other acquisition or transfer in violation 
     of this section shall inure to and be recoverable by the 
     issuer, irrespective of any intention on the part of such 
     director or executive officer in entering into the 
     transaction.
       ``(2) Actions to recover profits.--An action to recover 
     profits in accordance with this section may be instituted at 
     law or in equity in any court of competent jurisdiction by 
     the issuer, or by the owner of any security of the issuer in 
     the name and in behalf of the issuer if the issuer fails or 
     refuses to bring such action within 60 days after the date of 
     request, or fails diligently to prosecute the action 
     thereafter.
       ``(d) Rulemaking Authorized.--The Commission may issue 
     rules to clarify the application of this subsection, to 
     ensure adequate notice to all persons affected by this 
     subsection, and to prevent evasion thereof.by the issuer.''.
                                  ____

  SA 4196. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 82, line 9, strike the quotation marks and the 
     final period and insert the following:
       ``(n) Standards Relating to Boards of Directors.--
       ``(1) Commission rules.--
       ``(A) In general.--Effective not later than 270 days after 
     the date of enactment of this subsection, the Commission 
     shall, by rule, direct the national securities exchanges and 
     national securities associations to prohibit the listing of 
     any security of an issuer that is not in compliance with the 
     requirements of any portion of paragraph (2).
       ``(B) Opportunity to cure defects.--The rules of the 
     Commission under subparagraph (A) shall provide for 
     appropriate procedures for an issuer to have an opportunity 
     to cure any defects that would be the basis for a prohibition 
     under subparagraph (A), before the imposition of such 
     prohibition.
       ``(2) Independence.--
       ``(A) In general.--Each member of the board of directors of 
     the issuer (other than the chief executive officer) shall be 
     independent.
       ``(B) Criteria.--In order to be considered independent for 
     purposes of this paragraph, a member of a board of directors 
     of an issuer may not, other than in his or her capacity as a 
     member of that board of directors--
       ``(i) accept any consulting, advisory, or other 
     compensatory fee from the issuer;

[[Page S6584]]

       ``(ii) be an affiliated person of the issuer or any 
     subsidiary thereof; or
       ``(iii) otherwise maintain any other material relationship 
     with the issuer or the management thereof.
       ``(C) Exemption authority.--The Commission may exempt from 
     the requirements of subparagraph (B) a particular 
     relationship with respect to members of a board of directors, 
     as the Commission determines appropriate in light of the 
     circumstances.''.
                                  ____

  SA 4197. Mr. SHELBY (for himself and Mr. Durbin) submitted an 
amendment intended to be proposed by him to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ____. LITIGATION PROVISIONS.

       (a) Commission Authority.--Section 20(e) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78t(e)) is amended by 
     striking ``knowingly'' and inserting ``recklessly''.
       (b) Private Litigation.--Section 21D of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-4) is amended--
       (1) in subsection (f)(10)(B), by inserting 
     ``notwithstanding subsection (g),'' before ``reckless''; and
       (2) by adding at the end the following:
       ``(g) Persons That Aid or Abet Violations.--Any person that 
     recklessly provides substantial assistance to another person 
     in violation of a provision of this title, or of any rule or 
     regulation issued under this title, shall be deemed to be in 
     violation of such provision to the same extent as the person 
     to whom such assistance is provided.''.
                                  ____

  SA 4198. Mr. CLELAND submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 84, strike lines 12 through 15, and insert the 
     following: ``executive officer, chief financial officer, and 
     any other officer or director of the corporation with 
     knowledge, at the time of the misconduct, of the material 
     noncompliance of the issuer shall reimburse the issuer for--
       ``(1) any bonus, compensation derived from a severance 
     agreement, or other incentive-based or equality-based 
     compensation received by that person''.
                                  ____

  SA 4199. Mr. CLELAND submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.______. INDIVIDUAL ACCOUNT PLANS REQUIRED TO GIVE 
                   PARTICIPANTS ADEQUATE INFORMATION TO ASSIST 
                   THEM IN DIVERSIFYING PENSION ASSETS.

       (a) In General.--Section 104 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1024) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively, and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c)(1) The plan administrator of an applicable individual 
     account plan shall, within a reasonable period of time 
     following the close of each calendar quarter, provide to each 
     participant or beneficiary a statement with respect to his or 
     her individual account which includes--
       ``(A) the fair market value as of the close of such quarter 
     of the assets in the account in each investment option,
       ``(B) the percentage as of such calendar quarter of assets 
     which each investment option is of the total assets in the 
     account,
       ``(C) the percentage of the investment in employer 
     securities which came from employer contributions other than 
     elective deferrals (and earnings thereon) and which came from 
     employee contributions and elective deferrals (and earnings 
     thereon), and
       ``(D) such other information as the Secretary may 
     prescribe.
       ``(2)(A) Each statement shall also include a separate 
     statement which is prominently displayed and which reads as 
     follows:
       `Under commonly accepted principles of good investment 
     advice, a retirement account should be invested in a broadly 
     diversified portfolio of stocks and bonds. It is unwise for 
     employees to hold significant concentrations of employer 
     stock in an account that is meant for retirement savings'.
       ``(B) The plan administrator of an applicable individual 
     account plan shall provide the separate statement described 
     in subparagraph (A) to an individual at the time the 
     individual first becomes a participant in the plan.
       ``(3) Any statement or notice under this subsection shall 
     be written in a manner calculated to be understood by the 
     average plan participant.
       ``(4) For purposes of this subsection--
       ``(A) The term `applicable individual account plan' means 
     an individual account plan to which section 404(c)(1) 
     applies.
       ``(B) The term `elective deferrals' has the meaning given 
     such term by section 402(g)(3) of such Code.
       ``(C) The term `employer securities' has the meaning given 
     such term by section 407(d)(1).''
       (b) Enforcement.--Section 502(c)(1) of such Act (29 U.S.C. 
     1132(c)(1)) is amended by striking ``or section 101(e)(1)'' 
     and inserting ``, section 101(e)(1), or section 104(c)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to calendar quarters beginning on and after 
     January 1, 2003.
                                  ____

  SA 4200. Mr. GRAMM (for Mr. McConnell) proposed an amendment to 
amendment SA 4187 submitted by Mr. Edwards (for himself, Mr. Enzi, and 
Mr. Corzine) to the bill (S. 2673) to improve quality and transparency 
in financial reporting and independent audits and accounting services 
for public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; as follows:

       On page 2, line 17, strike ``directors,'' and insert the 
     following:
       directors.

     SEC. ____. ATTORNEY PRACTICES RELATING TO CLIENTS.

       (a) Definitions.--In this section:
       (1) Agency.--The term ``agency'' means any agency or 
     department of the United States or State government including 
     a local government.
       (2) Attorney.--The term ``attorney'' means any natural 
     person, professional law association, corporation, or 
     partnership authorized under applicable law to practice law.
       (3) Attorney services.--The term ``attorney services''--
       (A) means the professional advice or counseling of or 
     representation by an attorney; and
       (B) shall not include services requiring out-of-pocket 
     expenses in connection with providing attorney services, such 
     as travel expenses, witness fees, copying, messengers, 
     postage, phone, or preparation by a person other than the 
     attorney of any study, analysis, report, or test.
       (4) Class action.--
       (A) In general.--The term ``class action'' means--
       (i) any civil action filed under rule 23 of the Federal 
     Rules of Civil Procedure or similar State statute or rule of 
     judicial procedure authorizing an action to be brought by 1 
     or more representative persons as a class action; or
       (ii) any civil action in which--

       (I) the named plaintiff purports to act for the interests 
     of its members (who are not named parties to the action) or 
     for the interests of the general public, seeks a remedy of 
     damages, restitution, disgorgement, or any other form of 
     monetary relief, and is not a State attorney general; or
       (II) monetary relief claims in the action are proposed to 
     be tried jointly in any respect with the claims of 100 or 
     more other persons on the ground that the claims involve 
     common questions of law or fact.

       (B) Class treatment.--In any civil action described under 
     subparagraph (A)(ii), the persons who allegedly were injured 
     shall be

[[Page S6585]]

     treated as members of a proposed plaintiff class and the 
     monetary relief that is sought shall be treated as the claims 
     of individual class members.
       (5) Contingent fee.--The term ``contingent fee''--
       (A) means the cost or price of attorney services determined 
     by applying a specified percentage, which may be a firm fixed 
     percentage, a graduated or sliding percentage, or any 
     combination thereof, to the amount of the settlement or 
     judgment obtained or otherwise allowing the attorney to share 
     in the proceeds of a settlement or judgment obtained which 
     the defendant was required to make payment in order to 
     satisfy an obligation to the plaintiff; and
       (B) includes any fees a defendant pays directly to an 
     attorney retained by a plaintiff outside the terms of a 
     settlement or judgment.
       (6) Hourly fee.--The term ``hourly fee'' means the cost or 
     price per hour of attorney services.
       (7) Local government.--The term ``local government''--
       (A) means a unit of government in a State and, if 
     chartered, established, or otherwise recognized by a State 
     for the performance of a governmental duty; and
       (B) includes--
       (i) a local public authority;
       (ii) a special district;
       (iii) an intrastate district;
       (iv) a council of governments;
       (v) a sponsor group representative organization; or
       (vi) any other instrumentality of a local government.
       (8) Payment.--The term ``payment'' means any gift, 
     subscription, loan, advance, or deposit of money or anything 
     of value.
       (9) Person.--The term ``person'' includes--
       (A) an individual, corporation, company, association, 
     authority, firm, partnership, or society, regardless of 
     whether such entity is operated for profit or not for profit; 
     and
       (B) the Federal Government or any State or local 
     government.
       (10) Plaintiff.--The term ``plaintiff'' means a person who 
     retains an attorney to represent that person in asserting or 
     bringing a civil claim or civil action.
       (11) Retain.--The term ``retain'' means the act of a 
     plaintiff in obtaining attorney services, whether by express 
     or implied agreement, by seeking and obtaining attorney 
     services.
       (12) State.--The term ``State'' means a State of the United 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, a territory or possession of the United States, an 
     agency or instrumentality of a State, and a multi-State, 
     regional, or interstate entity having governmental duties and 
     powers.
       (b) Applicability.--
       (1) In general.--This section shall apply to any cause of 
     action brought in Federal court or under Federal law, 
     including any related settlement.
       (2) Nonapplicability.--
       (A) Certain contracts.--Except in the case of class 
     actions, this section does not apply to agreements to provide 
     attorney services if the person who enters into such an 
     agreement is represented at that time by another attorney who 
     is retained for the purpose of negotiating a contingency fee 
     contract on behalf of that person.
       (B) Government attorneys.--This section does not apply to 
     attorneys who are classified as employees of the United 
     States Government, a State, or an agency thereof.
       (c) Disclosures by Attorney.--
       (1) Written disclosure.--
       (A) In general.--Before an attorney is retained by a 
     plaintiff, the attorney shall disclose in writing to the 
     potential plaintiff the plaintiff's rights under this 
     section, including the right to receive a written statement 
     of the information described in this subsection and 
     subsection (e).
       (B) Contents of disclosure.--Specifically, the attorney 
     shall provide a written statement to the potential plaintiff 
     containing--
       (i) the estimated number of hours of attorney services that 
     will be spent--

       (I) settling or attempting to settle the claim or action; 
     and
       (II) handling the claim or action through trial or appeal;

       (ii) the attorney's hourly fee or fees for services in 
     pursuing the claim or action and any conditions, limitations, 
     restrictions, or other qualifications on the fee including 
     likely expenses and the plaintiff's obligation for those 
     expenses;
       (iii) the attorney's contingent fee for services in 
     pursuing the claim or action and any conditions, limitations, 
     restrictions, or other qualifications on the fee, including 
     likely expenses and the plaintiff's obligation for those 
     expenses;
       (iv) the probability of a successful outcome in the case 
     (which may be expressed as a percentage);
       (v) the estimated recovery reasonably expected in the case 
     (which may be expressed as a range);
       (vi) the estimated costs or expenses that the plaintiff 
     will bear; and
       (vii) all fee agreements to be made concerning the case, 
     including the amount to be paid to any cocounsel associated 
     with the case or to refer the plaintiff to another attorney 
     in exchange for a referral fee.
       (2) Monthly statement.--In addition to the requirements 
     under paragraph (1), the attorney shall render monthly 
     statements to the plaintiff containing a description of the 
     amount of time expended and expenses incurred in the pursuit 
     of the plaintiff's claim or action by each attorney assigned 
     to the plaintiff's matter.
       (d) Agreement on Compensation.--
       (1) Contingent fee.--An attorney who has been retained on a 
     contingent fee basis may not be paid a contingent fee greater 
     than the attorney's contingent fee rate disclosed under 
     subsection (c).
       (2) Hourly fee.--An attorney representing a plaintiff in 
     connection with the claim or action may not be paid an hourly 
     fee greater than the attorney's hourly fee or fees disclosed 
     under subsection (c) multiplied by the total number of hours 
     spent by the attorney in connection with the claim or action.
       (3) Exceptions.--
       (A) Other requirements.--A plaintiff may not be given the 
     option of choosing to compensate the attorney on a contingent 
     fee basis for claims or actions where it would be a violation 
     of an applicable Code of Professional Responsibility or 
     otherwise illegal for an attorney to be compensated on a 
     contingent fee basis.
       (B) Government attorneys.--This section does not authorize 
     the United States or any State or subdivision thereof to 
     retain an attorney on a contingent fee basis.
       (e) Information About Settlement Offers, Settlement, or 
     Adjudication.--
       (1) Settlement offers.--An attorney retained by a plaintiff 
     shall immediately transmit to the plaintiff--
       (A) all written settlement offers to the plaintiff with an 
     estimate of the likelihood of achieving a more or less 
     favorable resolution to the claim or action;
       (B) the likely timing of such resolution; and
       (C) the likely attorney's fees and expenses required to 
     obtain such a resolution.
       (2) Settlement or adjudication.--An attorney retained by a 
     plaintiff shall, within a reasonable time not later than 30 
     days after the date on which the claim or action is finally 
     settled or adjudicated, provide a written statement to the 
     plaintiff containing--
       (A) in a case in which an attorney is compensated with an 
     hourly fee--
       (i) the actual number of hours expended by each attorney on 
     behalf of the plaintiff in connection with the claim or 
     action and such attorney's hourly rate, as set forth in the 
     written disclosure statement required to be provided under 
     subsection (c); and
       (ii) the total amount of the hourly fees;
       (B) in a case in which an attorney is compensated with a 
     contingent fee--
       (i) the contingent fee rate, as set forth in the written 
     disclosure statement required to be provided under subsection 
     (c);
       (ii) the total amount of the contingent fee;
       (iii) the number of hours expended in the case; and
       (iv) the effective hourly rate, determined by dividing the 
     total amount of the contingent fee by the number of hours 
     expended in the case; and
       (C) the expenses to be charged to the plaintiff under the 
     agreement for attorney services consistent with this section.
       (f) Reasonableness of Attorneys Fees.--
       (1) In general.--Notwithstanding any other provision of 
     this section, an attorney to whom this section applies may 
     not charge an unreasonable or excessive fee.
       (2) Right to review.--A plaintiff may request an objective 
     review of his attorney's fee by a court of competent 
     jurisdiction to assure that it is reasonable and fair in 
     light of the circumstances, based on such factors as whether 
     liability was contested, whether the amount of damages was 
     clear, and how much actual time a lawyer reasonably spent on 
     the case.
       (g) Class Actions.--
       (1) In general.--An attorney representing a class in a 
     civil action shall make the disclosures, transmittals, and 
     provisions of information required under this section to the 
     presiding judge. The presiding judge shall determine, upon 
     certifying the action as a class action, the appropriate 
     hourly fee or fees and the maximum percentage of the recovery 
     to be paid in attorney's fees. Notwithstanding any other 
     provision of law or agreement to the contrary, the presiding 
     judge shall award attorneys fees consistent with this 
     section.
       (2) Limitation.--Attorneys fees described under paragraph 
     (1) may not exceed a reasonable fee, based on--
       (A) the number of hours of nonduplicative, professional 
     quality legal work, provided by the attorney of material 
     value to the outcome of the representation of the class; and
       (B) reasonable hourly rates for the individuals performing 
     such work, based on hourly rates charged by other attorneys 
     for the rendition of comparable services including rates 
     charged by adversary defense counsel in the class action.
       (3) Adjustment factor.--To the extent that items are not 
     taken into account in establishing the reasonable hourly 
     rates referred to in this subsection, an appropriate 
     adjustment factor, including reasonable multipliers, to 
     compensate the attorney for risks of nonpayment of fees and, 
     when clearly established, for exceptionally skillful or 
     innovative services provided during such periods of risk, may 
     be employed, except that--
       (A) in no case shall the appropriate adjustment factor be 
     greater than 6; and
       (B) in all cases, the appropriate adjustment factor shall 
     be determined in accordance with the strict standards 
     established by the Federal courts for permissible lodestar 
     multipliers.
       (h) Resignation or Discharge.--If an attorney who is 
     retained on a contingent fee

[[Page S6586]]

     basis is discharged or resigns, any fee owed to that attorney 
     shall be based on that attorney's contribution to the 
     plaintiff's ultimate success.
       (i) Unsolicited Communications During Bereavement Period.--
       (1) In general.--In the event of a death or personal injury 
     resulting in bodily harm, no unsolicited communication 
     concerning a potential civil action for personal injury or 
     wrongful death may be made by an attorney (including any 
     associate, agent, employee, or other representative of an 
     attorney) or any potential party to the litigation to an 
     individual injured in that event, or to a relative of an 
     individual killed or injured in that event, before the 45th 
     day following the date of the death or injury.
       (2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to authorize a communication otherwise 
     prohibited by Federal or State or local government law or a 
     rule or standard of any bar association or similar entity.
       (j) Enforcement.--
       (1) In general.--The Attorney General of the United States 
     may file a civil action in an appropriate district court of 
     the United States to enforce this section.
       (2) Civil penalty.--A person violating this section is 
     liable to the United States Government for a civil penalty of 
     not more than $5,000 for each violation.
                                  ____

  SA 4201. Mrs. CARNAHAN (for herself and Mr. Leahy) submitted an 
amendment intended to be proposed by her to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ____. FAIR TREATMENT OF COMPENSATION IN BANKRUPTCY.

       (a) Increased Priority Claim Amount for Employee Wages and 
     Benefits.--Section 507(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (3), by striking ``$4,000'' and inserting 
     ``$13,500''; and
       (2) in paragraph (4), by striking ``$4,000'' and inserting 
     ``$13,500''.
       (b) Recovery of Excessive Compensation.--Section 547 of 
     title 11, United States Code, is amended by adding at the end 
     the following:
       ``(h) The court, on motion of a party of interest, may 
     avoid any transfer of compensation made to a member of the 
     board of directors or an employee of the debtor on or within 
     90 days before the date of the filing of the petition that 
     the court finds, after notice and a hearing, to be--
       ``(1) out of the ordinary course of business; or
       ``(2) unjust enrichment.''.
                                  ____

  SA 4202. Mrs. CARNAHAN (for herself and Mr. Nelson of Florida) 
submitted an amendment intended to be proposed by her to the bill S. 
2673, to improve quality and transparency in financial reporting and 
independent audits and accounting services for public companies, to 
create a Public Company Accounting Oversight Board, to enhance the 
standard setting process for accounting practices, to strengthen the 
independence of firms that audit public companies, to increase 
corporate responsibility and the usefulness of corporate financial 
disclosure, to protect the objectivity and independence of securities 
analysts, to improve Securities and Exchange Commission resources and 
oversight, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 89, after line 20, insert the following:

     SEC. 307. PUBLIC COMPANY COMPENSATION COMMITTEES.

       Section 10A of the Securities Exchange Act of 1934 (15 
     U.S.C. 78f) is amended by adding at the end the following:
       ``(n) Standards Relating to Compensation Committees.--
       ``(1) Commission rules.--
       ``(A) In general.--Effective not later than 270 days after 
     the date of enactment of this subsection, the Commission 
     shall, by rule, direct the national securities exchanges and 
     national securities associations to prohibit the listing of 
     any security of an issuer that is not in compliance with the 
     requirements of any portion of paragraphs (2) through (6).
       ``(B) Opportunity to cure defects.--The rules of the 
     Commission under subparagraph (A) shall provide for 
     appropriate procedures for an issuer to have an opportunity 
     to cure any defects that would be the basis for a prohibition 
     under subparagraph (A), before the imposition of such 
     prohibition.
       ``(2) Independence.--
       ``(A) In general.--Each member of the compensation 
     committee of the issuer shall be a member of the board of 
     directors of the issuer, and shall otherwise be independent.
       ``(B) Criteria.--In order to be considered to be 
     independent for purposes of this paragraph, a member of a 
     compensation committee of an issuer may not, other than in 
     his or her capacity as a member of the compensation 
     committee, the board of directors, or any other board 
     committee--
       ``(i) accept any consulting, advisory, or other 
     compensatory fee from the issuer; or
       ``(ii) be an affiliated person of the issuer or any 
     subsidiary thereof.
       ``(C) Exemption authority.--The Commission may exempt from 
     the requirements of subparagraph (B) a particular 
     relationship with respect to compensation committee members, 
     as the Commission determines appropriate in light of the 
     circumstances.
       ``(3) Compensation committee.--For purposes of this 
     subsection, the term `compensation committee' means--
       ``(A) a committee (or equivalent body) established by and 
     amongst the board of directors of an issuer for the purpose 
     of overseeing the establishment of compensation for employees 
     of the issuer; and
       ``(B) if no such committee exists with respect to an 
     issuer, the entire board of directors of the issuer.''.
                                  ____

  SA 4203. Mr. MURKOWSKI (for himself, Mr. Stevens, Mr. Craig, Mr. 
Burns, Mr. Crapo, Mr. Smith of Oregon, and Mr. Inhofe) submitted an 
amendment intended to be proposed by him to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. ____. NINTH CIRCUIT COURT OF APPEALS REORGANIZATION.

       (a) Short Title.--This section may be cited as the ``Ninth 
     Circuit Court of Appeals Reorganization Act of 2002''.
       (b) Number and Composition of Circuits.--Section 41 of 
     title 28, United States Code, is amended--
       (1) in the matter before the table, by striking 
     ``thirteen'' and inserting ``fourteen''; and
       (2) in the table--
       (A) by striking the item relating to the ninth circuit and 
     inserting the following:

Arizona, California, Nevada.'';........................................
       and
       (B) by inserting after the item relating to the eleventh 
     circuit the following:

Alaska, Guam, Hawaii, Idaho, Montana, Northern Mariana Islands, Oregon, 
  Washington.''.
       (c) Number of Circuit Judges.--The table in section 44(a) 
     of title 28, United States Code, is amended--
       (1) by striking the item relating to the ninth circuit and 
     inserting the following:

``Ninth.......................................................20'';....

       and
       (2) by inserting after the item relating to the eleventh 
     circuit the following:

``Twelfth......................................................8''.....

       (d) Places of Circuit Court.--The table in section 48(a) of 
     title 28, United States Code, is amended--
       (1) by striking the item relating to the ninth circuit and 
     inserting the following:

San Francisco, Los Angeles.'';.........................................
       and
       (2) by inserting after the item relating to the eleventh 
     circuit the following:

Portland, Seattle.''...................................................
       (e) Assignment of Circuit Judges.--Each circuit judge in 
     regular active service of the former ninth circuit whose 
     official station on the day before the effective date of this 
     section--
       (1) is in Arizona, California, or Nevada is assigned as a 
     circuit judge of the new ninth circuit; and
       (2) is in Alaska, Guam, Hawaii, Idaho, Montana, Northern 
     Mariana Islands, Oregon, or Washington is assigned as a 
     circuit judge of the twelfth circuit.
       (f) Election of Assignment by Senior Judges.--Each judge 
     who is a senior judge of the former ninth circuit on the day 
     before the effective date of this section may elect to be 
     assigned to the new ninth circuit or to the twelfth circuit 
     and shall notify the Director of the Administrative Office of 
     the United States Courts of such election.
       (g) Seniority of Judges.--The seniority of each judge--
       (1) who is assigned under subsection (e); or
       (2) who elects to be assigned under subsection (f);

[[Page S6587]]

     shall run from the date of commission of such judge as a 
     judge of the former ninth circuit.
       (h) Application to Cases.--The provisions of the following 
     paragraphs of this subsection apply to any case in which, on 
     the day before the effective date of this section, an appeal 
     or other proceeding has been filed with the former ninth 
     circuit:
       (1) If the matter has been submitted for decision, further 
     proceedings in respect of the matter shall be had in the same 
     manner and with the same effect as if this section had not 
     been enacted.
       (2) If the matter has not been submitted for decision, the 
     appeal or proceeding, together with the original papers, 
     printed records, and record entries duly certified, shall, by 
     appropriate orders, be transferred to the court to which the 
     matter would have been submitted had this section been in 
     full force and effect at the time such appeal was taken or 
     other proceeding commenced, and further proceedings in 
     respect of the case shall be had in the same manner and with 
     the same effect as if the appeal or other proceeding had been 
     filed in such court.
       (3) A petition for rehearing or a petition for rehearing en 
     banc in a matter decided before the effective date of this 
     section, or submitted before the effective date of this 
     section and decided on or after the effective date as 
     provided in paragraph (1), shall be treated in the same 
     manner and with the same effect as though this section had 
     not been enacted. If a petition for rehearing en banc is 
     granted, the matter shall be reheard by a court comprised as 
     though this section had not been enacted.
       (i) Definitions.--In this section, the term--
       (1) ``former ninth circuit'' means the ninth judicial 
     circuit of the United States as in existence on the day 
     before the effective date of this section;
       (2) ``new ninth circuit'' means the ninth judicial circuit 
     of the United States established by the amendment made by 
     subsection (b)(2); and
       (3) ``twelfth circuit'' means the twelfth judicial circuit 
     of the United States established by the amendment made by 
     subsection (b)(3).
       (j) Administration.--The court of appeals for the ninth 
     circuit as constituted on the day before the effective date 
     of this section may take such administrative action as may be 
     required to carry out this section and the amendments made by 
     this section. Such court shall cease to exist for 
     administrative purposes on July 1, 2004.
       (k) Effective Date.--This section and the amendments made 
     by this section shall take effect 60 days after the date of 
     enactment of this Act.
                                  ____

  SA 4204. Mr. SMITH of New Hampshire (for himself, Mrs. Boxer, and Mr. 
Burns) submitted an amendment which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert the following new title:

      TITLE ____--FLIGHT AND CABIN SECURITY ON PASSENGER AIRCRAFT

     SECTION ____1. SHORT TITLE.

       This title may be cited as the ``Arming Pilots Against 
     Terrorism and Cabin Defense Act of 2002''.

     SEC. ____2. FINDINGS.

       Congress makes the following findings:
       (1) Terrorist hijackers represent a profound threat to the 
     American people.
       (2) According to the Federal Aviation Administration, 
     between 33,000 and 35,000 commercial flights occur every day 
     in the United States.
       (3) The Aviation and Transportation Security Act (public 
     law 107-71) mandated that air marshals be on all high risk 
     flights such as those targeted on September 11, 2001.
       (4) Without air marshals, pilots and flight attendants are 
     a passenger's first line of defense against terrorists.
       (5) A comprehensive and strong terrorism prevention program 
     is needed to defend the Nation's skies against acts of 
     criminal violence and air piracy. Such a program should 
     include--
       (A) armed Federal air marshals;
       (B) other Federal agents;
       (C) reinforced cockpit doors;
       (D) properly-trained armed pilots;
       (E) flight attendants trained in self-defense and terrorism 
     prevention; and
       (F) electronic communications devices, such as real-time 
     video monitoring and hands-free wireless communications 
     devices to permit pilots to monitor activities in the cabin.

     SEC. ____3. FEDERAL FLIGHT DECK OFFICER PROGRAM.

       (a) In General.--Subchapter I of chapter 449 of title 49, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 44921. Federal flight deck officer program

       ``(a) Establishment.--Not later than 90 days after the date 
     of enactment of the Arming Pilots Against Terrorism and Cabin 
     Defense Act of 2002, the Under Secretary of Transportation 
     for Security shall establish a program to deputize qualified 
     pilots of commercial cargo or passenger aircraft who 
     volunteer for the program as Federal law enforcement officers 
     to defend the flight decks of commercial aircraft of air 
     carriers engaged in air transportation or intrastate air 
     transportation against acts of criminal violence or air 
     piracy. Such officers shall be known as `Federal flight deck 
     officers'. The program shall be administered in connection 
     with the Federal air marshal program.
       ``(b) Qualified Pilot.--Under the program described in 
     subsection (a), a qualified pilot is a pilot of an aircraft 
     engaged in air transportation or intrastate air 
     transportation who--
       ``(1) is employed by an air carrier;
       ``(2) has demonstrated fitness to be a Federal flight deck 
     officer in accordance with regulations promulgated pursuant 
     to this title; and
       ``(3) has been the subject of an employment investigation 
     (including a criminal history record check) under section 
     44936(a)(1).
       ``(c) Training, Supervision, and Equipment.--The Under 
     Secretary of Transportation for Security shall provide or 
     make arrangements for training, supervision, and equipment 
     necessary for a qualified pilot to be a Federal flight deck 
     officer under this section at no expense to the pilot or the 
     air carrier employing the pilot. The Under Secretary may 
     approve private training programs which meet the Under 
     Secretary's specifications and guidelines. Air carriers shall 
     make accommodations to facilitate the training of their 
     pilots as Federal flight deck officers and shall facilitate 
     Federal flight deck officers in the conduct of their duties 
     under this program.
       ``(d) Deputization.--
       ``(1) In general.--The Under Secretary of Transportation 
     for Security shall train and deputize, as a Federal flight 
     deck officer under this section, any qualified pilot who 
     submits to the Under Secretary a request to be such an 
     officer.
       ``(2) Initial deputization.--Not later than 120 days after 
     the date of enactment of this section, the Under Secretary 
     shall deputize not fewer than 500 qualified pilots who are 
     former military or law enforcement personnel as Federal 
     flight deck officers under this section.
       ``(3) Full implementation.--Not later than 24 months after 
     the date of enactment of this section, the Under Secretary 
     shall deputize any qualified pilot as a Federal flight deck 
     officer under this section.
       ``(e) Compensation.--Pilots participating in the program 
     under this section shall not be eligible for compensation 
     from the Federal Government for services provided as a 
     Federal flight deck officer.
       ``(f) Authority To Carry Firearms.--The Under Secretary of 
     Transportation for Security shall authorize a Federal flight 
     deck officer under this section to carry a firearm to defend 
     the flight deck of a commercial passenger or cargo aircraft 
     while engaged in providing air transportation or intrastate 
     air transportation. No air carrier may prohibit a Federal 
     flight deck officer from carrying a firearm in accordance 
     with the provisions of the Arming Pilots Against Terrorism 
     and Cabin Defense Act of 2002.
       ``(g) Authority To Use Force.--Notwithstanding section 
     44903(d), a Federal flight deck officer may use force 
     (including lethal force) against an individual in the defense 
     of a commercial aircraft in air transportation or intrastate 
     air transportation if the officer reasonably believes that 
     the security of the aircraft is at risk.
       ``(h) Limitation on Liability.--
       ``(1) Liability of air carriers.--An air carrier shall not 
     be liable for damages in any action brought in a Federal or 
     State court arising out of the air carrier employing a pilot 
     of an aircraft who is a Federal flight deck officer under 
     this section or out of the acts or omissions of the pilot in 
     defending an aircraft of the air carrier against acts of 
     criminal violence or air piracy.
       ``(2) Liability of federal flight deck officers.--A Federal 
     flight deck officer shall not be liable for damages in any 
     action brought in a Federal or State court arising out of the 
     acts or omissions of the officer in defending an aircraft 
     against acts of criminal violence or air piracy unless the 
     officer is guilty of gross negligence or willful misconduct.
       ``(3) Employee status of federal flight deck officers.--A 
     Federal flight deck officer shall be considered an `employee 
     of the Government while acting within the scope of his office 
     or employment' with respect to any act or omission of the 
     officer in defending an aircraft against acts of criminal 
     violence or air piracy, for purposes of sections 
     1346(b), 2401(b), and 2671 through 2680 of title 28 United 
     States Code.
       ``(i) Regulations.--Not later than 90 days after the date 
     of enactment of this section, the Under Secretary of 
     Transportation for Security, in consultation with the 
     Firearms Training Unit of the Federal Bureau of 
     Investigation, shall issue regulations to carry out this 
     section.
       ``(j) Pilot Defined.--In this section, the term `pilot' 
     means an individual who is responsible for the operation of 
     an aircraft, and includes a co-pilot or other member of the 
     flight deck crew.''.
       (b) Conforming Amendments.--
       (1) Chapter analysis.--The analysis for such chapter 449 is 
     amended by inserting after the item relating to section 44920 
     the following new item:

``44921. Federal flight deck officer program.''.

       (2) Employment investigations.--Section 44936(a)(1)(B) is 
     amended--
       (A) by aligning clause (iii) with clause (ii);
       (B) by striking ``and'' at the end of clause (iii);
       (C) by striking the period at the end of clause (iv) and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(v) qualified pilots who are deputized as Federal flight 
     deck officers under section 44921.''.

[[Page S6588]]

       (3) Flight deck security.--Section 128 of the Aviation and 
     Transportation Security Act (49 U.S.C. 44903 note) is 
     repealed.

     SEC. ____4. CABIN SECURITY.

       (a) Technical Amendments.--Section 44903, of title 49, 
     United States Code, is amended--
       (1) by redesignating subsection (h) (relating to authority 
     to arm flight deck crew with less-than-lethal weapons, as 
     added by section 126(b) of public law 107-71) as subsection 
     (j); and
       (2) by redesignating subsection (h) (relating to limitation 
     on liability for acts to thwart criminal violence or aircraft 
     piracy, as added by section 144 of public law 107-71) as 
     subsection (k).
       (b) Aviation Crewmember Self-Defense Division.--Section 
     44918 of title 49, United States Code, is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) In General.--
       ``(1) Requirement for air carriers.--Not later than 60 days 
     after the date of enactment of the Arming Pilots Against 
     Terrorism and Cabin Defense Act of 2002, the Under Secretary 
     of Transportation for Security, shall prescribe detailed 
     requirements for an air carrier cabin crew training program, 
     and for the instructors of that program as described in 
     subsection (b) to prepare crew members for potential threat 
     conditions. In developing the requirements, the Under 
     Secretary shall consult with appropriate law enforcement 
     personnel who have expertise in self-defense training, 
     security experts, and terrorism experts, and representatives 
     of air carriers and labor organizations representing 
     individuals employed in commercial aviation.
       ``(2) Aviation crewmember self-defense division.--Not later 
     than 60 days after the date of enactment of the Arming Pilots 
     Against Terrorism and Cabin Defense Act of 2002, the Under 
     Secretary of Transportation for Security shall establish an 
     Aviation Crew Self-Defense Division within the Transportation 
     Security Administration. The Division shall develop and 
     administer the implementation of the requirements described 
     in this section. The Under Secretary shall appoint a Director 
     of the Aviation Crew Self-Defense Division who shall be the 
     head of the Division. The Director shall report to the Under 
     Secretary. In the selection of the Director, the Under 
     Secretary shall solicit recommendations from law enforcement, 
     air carriers, and labor organizations representing 
     individuals employed in commercial aviation. The Director 
     shall have a background in self-defense training, including 
     military or law enforcement training with an emphasis in 
     teaching self-defense and the appropriate use force. Regional 
     training supervisors shall be under the control of the 
     Director and shall have appropriate training and experience 
     in teaching self-defense and the appropriate use of force.'';
       (2) by striking subsection (b), and inserting the following 
     new subsection:
       ``(b) Program Elements.--
       ``(1) In general.--The requirements prescribed under 
     subsection (a) shall include, at a minimum, 28 hours of self-
     defense training that incorporates classroom and situational 
     training that contains the following elements:
       ``(A) Determination of the seriousness of any occurrence.
       ``(B) Crew communication and coordination.
       ``(C) Appropriate responses to defend oneself, including a 
     minimum of 16 hours of hands-on training, with reasonable and 
     effective requirements on time allotment over a 4 week 
     period, in the following levels of self-defense:
       ``(i) awareness, deterrence, and avoidance;
       ``(ii) verbalization;
       ``(iii) empty hand control;
       ``(iv) intermediate weapons and self-defense techniques; 
     and
       ``(v) deadly force.
       ``(D) Use of protective devices assigned to crewmembers (to 
     the extent such devices are approved by the Administrator or 
     Under Secretary).
       ``(E) Psychology of terrorists to cope with hijacker 
     behavior and passenger responses.
       ``(F) Live situational simulation joint training exercises 
     regarding various threat conditions, including all of the 
     elements required by this section.
       ``(G) Flight deck procedures or aircraft maneuvers to 
     defend the aircraft.
       ``(2) Program elements for instructors.--The requirements 
     prescribed under subsection (a) shall contain program 
     elements for instructors that include, at a minimum, the 
     following:
       ``(A) A certification program for the instructors who will 
     provide the training described in paragraph (1).
       ``(B) A requirement that no training session shall have 
     fewer than 1 instructor for every 12 students.
       ``(C) A requirement that air carriers provide certain 
     instructor information, including names and qualifications, 
     to the Aviation Crew Member Self-Defense Division within 30 
     days after receiving the requirements described in subsection 
     (a).
       ``(D) Training course curriculum lesson plans and 
     performance objectives to be used by instructors.
       ``(E) Written training bulletins to reinforce course 
     lessons and provide necessary progressive updates to 
     instructors.
       ``(3) Recurrent training.--Each air carrier shall provide 
     the training under the program every 6 months after the 
     completion of the initial training.
       ``(4) Initial training.--Air carriers shall provide the 
     initial training under the program within 24 months of the 
     date of enactment of the Arming Pilots Against Terrorism and 
     Cabin Defense Act of 2002.
       ``(5) Communication devices.--The requirements described in 
     subsection (a) shall include a provision mandating that air 
     carriers provide flight and cabin crew with a discreet, 
     hands-free, wireless method of communicating with the flight 
     deck.
       ``(6) Real-time video monitoring.--The requirements 
     described in subsection (a) shall include a program to 
     provide flight deck crews with real-time video surveillance 
     of the cabins of commercial airline flights. In developing 
     this program, the Under Secretary shall consider--
       ``(A) maximizing the security of the flight deck;
       ``(B) enhancing the safety of the flight deck crew;
       ``(C) protecting the safety of the passengers and crew;
       ``(D) preventing acts of criminal violence or air piracy;
       ``(E) the cost of the program;
       ``(F) privacy concerns; and
       ``(G) the feasibility of installing such a device in the 
     flight deck.''; and
       (3) by adding at the end the following new subsections:
       ``(f) Rulemaking Authority.--Notwithstanding subsection (j) 
     (relating to authority to arm flight deck crew with less 
     than-lethal weapons) of section 44903, of this title, within 
     180 days after the date of enactment of the Arming Pilots 
     Against Terrorism and Cabin Defense Act of 2002, the Under 
     Secretary of Transportation for Security, in consultation 
     with persons described in subsection (a)(1), shall prescribe 
     regulations requiring air carriers to--
       ``(1) provide adequate training in the proper conduct of a 
     cabin search and allow adequate duty time to perform such a 
     search; and
       ``(2) conduct a preflight security briefing with flight 
     deck and cabin crew and, when available, Federal air marshals 
     or other authorized law enforcement officials.
       ``(g) Limitation on Liability.--
       ``(1) Air carriers.--An air carrier shall not be liable for 
     damages in any action brought in a Federal or State court 
     arising out of the acts or omissions of the air carrier's 
     training instructors or cabin crew using reasonable and 
     necessary force in defending an aircraft of the air carrier 
     against acts of criminal violence or air piracy.
       ``(2) Training instructors and cabin crew.--An air 
     carrier's training instructors or cabin crew shall not be 
     liable for damages in any action brought in a Federal or 
     State court arising out of an act or omission of a training 
     instructor or a member of the cabin crew regarding the 
     defense of an aircraft against acts of criminal violence or 
     air piracy unless the crew member is guilty of gross 
     negligence or willful misconduct.''.
       (c) Nonlethal Weapons for Flight Attendants.--
       (1) Study.--The Under Secretary of Transportation for 
     Security shall conduct a study to determine whether 
     possession of a nonlethal weapon by a member of an air 
     carrier's cabin crew would aid the flight deck crew in 
     combating air piracy and criminal violence on commercial 
     airlines.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Under Secretary of Transportation 
     for Security shall prepare and submit to Congress a report on 
     the study conducted under paragraph (1).
                                  ____

  SA 4205. Mr. SMITH of New Hampshire (for himself, Mrs. Boxer, and Mr. 
Burns) submitted an amendment intended to be proposed by him to the 
bill S. 2554, to amend title 49, United States Code, to establish a 
program for Federal flight deck officers, and for other purposes; which 
was referred to the Committee on Commerce, Science, and Transportation; 
as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Arming Pilots Against 
     Terrorism and Cabin Defense Act of 2002''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Terrorist hijackers represent a profound threat to the 
     American people.
       (2) According to the Federal Aviation Administration, 
     between 33,000 and 35,000 commercial flights occur every day 
     in the United States.
       (3) The Aviation and Transportation Security Act (public 
     law 107-71) mandated that air marshals be on all high risk 
     flights such as those targeted on September 11, 2001.
       (4) Without air marshals, pilots and flight attendants are 
     a passenger's first line of defense against terrorists.
       (5) A comprehensive and strong terrorism prevention program 
     is needed to defend the Nation's skies against acts of 
     criminal violence and air piracy. Such a program should 
     include--
       (A) armed Federal air marshals;
       (B) other Federal agents;
       (C) reinforced cockpit doors;
       (D) properly-trained armed pilots;
       (E) flight attendants trained in self-defense and terrorism 
     prevention; and

[[Page S6589]]

       (F) electronic communications devices, such as real-time 
     video monitoring and hands-free wireless communications 
     devices to permit pilots to monitor activities in the cabin.

     SEC. 3. FEDERAL FLIGHT DECK OFFICER PROGRAM.

       (a) In General.--Subchapter I of chapter 449 of title 49, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 44921. Federal flight deck officer program

       ``(a) Establishment.--Not later than 90 days after the date 
     of enactment of the Arming Pilots Against Terrorism and Cabin 
     Defense Act of 2002, the Under Secretary of Transportation 
     for Security shall establish a program to deputize qualified 
     pilots of commercial cargo or passenger aircraft who 
     volunteer for the program as Federal law enforcement officers 
     to defend the flight decks of commercial aircraft of air 
     carriers engaged in air transportation or intrastate air 
     transportation against acts of criminal violence or air 
     piracy. Such officers shall be known as `Federal flight deck 
     officers'. The program shall be administered in connection 
     with the Federal air marshal program.
       ``(b) Qualified Pilot.--Under the program described in 
     subsection (a), a qualified pilot is a pilot of an aircraft 
     engaged in air transportation or intrastate air 
     transportation who--
       ``(1) is employed by an air carrier;
       ``(2) has demonstrated fitness to be a Federal flight deck 
     officer in accordance with regulations promulgated pursuant 
     to this title; and
       ``(3) has been the subject of an employment investigation 
     (including a criminal history record check) under section 
     44936(a)(1).
       ``(c) Training, Supervision, and Equipment.--The Under 
     Secretary of Transportation for Security shall provide or 
     make arrangements for training, supervision, and equipment 
     necessary for a qualified pilot to be a Federal flight deck 
     officer under this section at no expense to the pilot or the 
     air carrier employing the pilot. The Under Secretary may 
     approve private training programs which meet the Under 
     Secretary's specifications and guidelines. Air carriers shall 
     make accommodations to facilitate the training of their 
     pilots as Federal flight deck officers and shall facilitate 
     Federal flight deck officers in the conduct of their duties 
     under this program.
       ``(d) Deputization.--
       ``(1) In general.--The Under Secretary of Transportation 
     for Security shall train and deputize, as a Federal flight 
     deck officer under this section, any qualified pilot who 
     submits to the Under Secretary a request to be such an 
     officer.
       ``(2) Initial deputization.--Not later than 120 days after 
     the date of enactment of this section, the Under Secretary 
     shall deputize not fewer than 500 qualified pilots who are 
     former military or law enforcement personnel as Federal 
     flight deck officers under this section.
       ``(3) Full implementation.--Not later than 24 months after 
     the date of enactment of this section, the Under Secretary 
     shall deputize any qualified pilot as a Federal flight deck 
     officer under this section.
       ``(e) Compensation.--Pilots participating in the program 
     under this section shall not be eligible for compensation 
     from the Federal Government for services provided as a 
     Federal flight deck officer.
       ``(f) Authority To Carry Firearms.--The Under Secretary of 
     Transportation for Security shall authorize a Federal flight 
     deck officer under this section to carry a firearm to defend 
     the flight deck of a commercial passenger or cargo aircraft 
     while engaged in providing air transportation or intrastate 
     air transportation. No air carrier may prohibit a Federal 
     flight deck officer from carrying a firearm in accordance 
     with the provisions of the Arming Pilots Against Terrorism 
     and Cabin Defense Act of 2002.
       ``(g) Authority To Use Force.--Notwithstanding section 
     44903(d), a Federal flight deck officer may use force 
     (including lethal force) against an individual in the defense 
     of a commercial aircraft in air transportation or intrastate 
     air transportation if the officer reasonably believes that 
     the security of the aircraft is at risk.
       ``(h) Limitation on Liability.--
       ``(1) Liability of air carriers.--An air carrier shall not 
     be liable for damages in any action brought in a Federal or 
     State court arising out of the air carrier employing a pilot 
     of an aircraft who is a Federal flight deck officer under 
     this section or out of the acts or omissions of the pilot in 
     defending an aircraft of the air carrier against acts of 
     criminal violence or air piracy.
       ``(2) Liability of federal flight deck officers.--A Federal 
     flight deck officer shall not be liable for damages in any 
     action brought in a Federal or State court arising out of the 
     acts or omissions of the officer in defending an aircraft 
     against acts of criminal violence or air piracy unless the 
     officer is guilty of gross negligence or willful misconduct.
       ``(3) Employee status of federal flight deck officers.--A 
     Federal flight deck officer shall be considered an `employee 
     of the Government while acting within the scope of his office 
     or employment' with respect to any act or omission of the 
     officer in defending an aircraft against acts of criminal 
     violence or air piracy, for purposes of sections 
     1346(b), 2401(b), and 2671 through 2680 of title 28 United 
     States Code.
       ``(i) Regulations.--Not later than 90 days after the date 
     of enactment of this section, the Under Secretary of 
     Transportation for Security, in consultation with the 
     Firearms Training Unit of the Federal Bureau of 
     Investigation, shall issue regulations to carry out this 
     section.
       ``(j) Pilot Defined.--In this section, the term `pilot' 
     means an individual who is responsible for the operation of 
     an aircraft, and includes a co-pilot or other member of the 
     flight deck crew.''.
       (b) Conforming Amendments.--
       (1) Chapter analysis.--The analysis for such chapter 449 is 
     amended by inserting after the item relating to section 44920 
     the following new item:

``44921. Federal flight deck officer program.''.

       (2) Employment investigations.--Section 44936(a)(1)(B) is 
     amended--
       (A) by aligning clause (iii) with clause (ii);
       (B) by striking ``and'' at the end of clause (iii);
       (C) by striking the period at the end of clause (iv) and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(v) qualified pilots who are deputized as Federal flight 
     deck officers under section 44921.''.
       (3) Flight deck security.--Section 128 of the Aviation and 
     Transportation Security Act (49 U.S.C. 44903 note) is 
     repealed.

     SEC. 4. CABIN SECURITY.

       (a) Technical Amendments.--Section 44903, of title 49, 
     United States Code, is amended--
       (1) by redesignating subsection (h) (relating to authority 
     to arm flight deck crew with less-than-lethal weapons, as 
     added by section 126(b) of public law 107-71) as subsection 
     (j); and
       (2) by redesignating subsection (h) (relating to limitation 
     on liability for acts to thwart criminal violence or aircraft 
     piracy, as added by section 144 of public law 107-71) as 
     subsection (k).
       (b) Aviation Crewmember Self-Defense Division.--Section 
     44918 of title 49, United States Code, is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) In General.--
       ``(1) Requirement for air carriers.--Not later than 60 days 
     after the date of enactment of the Arming Pilots Against 
     Terrorism and Cabin Defense Act of 2002, the Under Secretary 
     of Transportation for Security, shall prescribe detailed 
     requirements for an air carrier cabin crew training program, 
     and for the instructors of that program as described in 
     subsection (b) to prepare crew members for potential threat 
     conditions. In developing the requirements, the Under 
     Secretary shall consult with appropriate law enforcement 
     personnel who have expertise in self-defense training, 
     security experts, and terrorism experts, and representatives 
     of air carriers and labor organizations representing 
     individuals employed in commercial aviation.
       ``(2) Aviation crewmember self-defense division.--Not later 
     than 60 days after the date of enactment of the Arming Pilots 
     Against Terrorism and Cabin Defense Act of 2002, the Under 
     Secretary of Transportation for Security shall establish an 
     Aviation Crew Self-Defense Division within the Transportation 
     Security Administration. The Division shall develop and 
     administer the implementation of the requirements described 
     in this section. The Under Secretary shall appoint a Director 
     of the Aviation Crew Self-Defense Division who shall be the 
     head of the Division. The Director shall report to the Under 
     Secretary. In the selection of the Director, the Under 
     Secretary shall solicit recommendations from law enforcement, 
     air carriers, and labor organizations representing 
     individuals employed in commercial aviation. The Director 
     shall have a background in self-defense training, including 
     military or law enforcement training with an emphasis in 
     teaching self-defense and the appropriate use force. Regional 
     training supervisors shall be under the control of the 
     Director and shall have appropriate training and experience 
     in teaching self-defense and the appropriate use of force.'';
       (2) by striking subsection (b), and inserting the following 
     new subsection:
       ``(b) Program Elements.--
       ``(1) In general.--The requirements prescribed under 
     subsection (a) shall include, at a minimum, 28 hours of self-
     defense training that incorporates classroom and situational 
     training that contains the following elements:
       ``(A) Determination of the seriousness of any occurrence.
       ``(B) Crew communication and coordination.
       ``(C) Appropriate responses to defend oneself, including a 
     minimum of 16 hours of hands-on training, with reasonable and 
     effective requirements on time allotment over a 4 week 
     period, in the following levels of self-defense:
       ``(i) awareness, deterrence, and avoidance;
       ``(ii) verbalization;
       ``(iii) empty hand control;
       ``(iv) intermediate weapons and self-defense techniques; 
     and
       ``(v) deadly force.
       ``(D) Use of protective devices assigned to crewmembers (to 
     the extent such devices are approved by the Administrator or 
     Under Secretary).
       ``(E) Psychology of terrorists to cope with hijacker 
     behavior and passenger responses.
       ``(F) Live situational simulation joint training exercises 
     regarding various threat conditions, including all of the 
     elements required by this section.

[[Page S6590]]

       ``(G) Flight deck procedures or aircraft maneuvers to 
     defend the aircraft.
       ``(2) Program elements for instructors.--The requirements 
     prescribed under subsection (a) shall contain program 
     elements for instructors that include, at a minimum, the 
     following:
       ``(A) A certification program for the instructors who will 
     provide the training described in paragraph (1).
       ``(B) A requirement that no training session shall have 
     fewer than 1 instructor for every 12 students.
       ``(C) A requirement that air carriers provide certain 
     instructor information, including names and qualifications, 
     to the Aviation Crew Member Self-Defense Division within 30 
     days after receiving the requirements described in subsection 
     (a).
       ``(D) Training course curriculum lesson plans and 
     performance objectives to be used by instructors.
       ``(E) Written training bulletins to reinforce course 
     lessons and provide necessary progressive updates to 
     instructors.
       ``(3) Recurrent training.--Each air carrier shall provide 
     the training under the program every 6 months after the 
     completion of the initial training.
       ``(4) Initial training.--Air carriers shall provide the 
     initial training under the program within 24 months of the 
     date of enactment of the Arming Pilots Against Terrorism and 
     Cabin Defense Act of 2002.
       ``(5) Communication devices.--The requirements described in 
     subsection (a) shall include a provision mandating that air 
     carriers provide flight and cabin crew with a discreet, 
     hands-free, wireless method of communicating with the flight 
     deck.
       ``(6) Real-time video monitoring.--The requirements 
     described in subsection (a) shall include a program to 
     provide flight deck crews with real-time video surveillance 
     of the cabins of commercial airline flights. In developing 
     this program, the Under Secretary shall consider--
       ``(A) maximizing the security of the flight deck;
       ``(B) enhancing the safety of the flight deck crew;
       ``(C) protecting the safety of the passengers and crew;
       ``(D) preventing acts of criminal violence or air piracy;
       ``(E) the cost of the program;
       ``(F) privacy concerns; and
       ``(G) the feasibility of installing such a device in the 
     flight deck.''; and
       (3) by adding at the end the following new subsections:
       ``(f) Rulemaking Authority.--Notwithstanding subsection (j) 
     (relating to authority to arm flight deck crew with less 
     than-lethal weapons) of section 44903, of this title, within 
     180 days after the date of enactment of the Arming Pilots 
     Against Terrorism and Cabin Defense Act of 2002, the Under 
     Secretary of Transportation for Security, in consultation 
     with persons described in subsection (a)(1), shall prescribe 
     regulations requiring air carriers to--
       ``(1) provide adequate training in the proper conduct of a 
     cabin search and allow adequate duty time to perform such a 
     search; and
       ``(2) conduct a preflight security briefing with flight 
     deck and cabin crew and, when available, Federal air marshals 
     or other authorized law enforcement officials.
       ``(g) Limitation on Liability.--
       ``(1) Air carriers.--An air carrier shall not be liable for 
     damages in any action brought in a Federal or State court 
     arising out of the acts or omissions of the air carrier's 
     training instructors or cabin crew using reasonable and 
     necessary force in defending an aircraft of the air carrier 
     against acts of criminal violence or air piracy.
       ``(2) Training instructors and cabin crew.--An air 
     carrier's training instructors or cabin crew shall not be 
     liable for damages in any action brought in a Federal or 
     State court arising out of an act or omission of a training 
     instructor or a member of the cabin crew regarding the 
     defense of an aircraft against acts of criminal violence or 
     air piracy unless the crew member is guilty of gross 
     negligence or willful misconduct.''.
       (c) Nonlethal Weapons for Flight Attendants.--
       (1) Study.--The Under Secretary of Transportation for 
     Security shall conduct a study to determine whether 
     possession of a nonlethal weapon by a member of an air 
     carrier's cabin crew would aid the flight deck crew in 
     combating air piracy and criminal violence on commercial 
     airlines.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Under Secretary of Transportation 
     for Security shall prepare and submit to Congress a report on 
     the study conducted under paragraph (1).
                                  ____

  SA 4206. Mr. MILLER proposed an amendment to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       At the end add the following new title:

                   TITLE VIII--CORPORATE TAX RETURNS

     SEC. 801. SENSE OF THE SENATE REGARDING THE SIGNING OF 
                   CORPORATE TAX RETURNS BY CHIEF EXECUTIVE 
                   OFFICERS.

       It is the sense of the Senate that the Federal income tax 
     return of a corporation should be signed by the chief 
     executive officer of such corporation.
                                  ____

  SA 4207. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed by her to the bill S. 2673, to improve quality and 
transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 101, line 25, insert after ``dealers'' the 
     following: ``, or who have conducted advisory assignments 
     with respect to mergers and acquisitions, divestitures, 
     corporate defense activities, restructurings, or spin-offs on 
     behalf of the issuer,''.
                                  ____

  SA 4208. Mr. WELLSTONE submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . ADMINISTRATIVE SUBPOENAS.

       (a) Civil Money Penalties.--Section 21(c) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(c)) is amended by 
     inserting before the final period ``, and the court may 
     impose civil money penalties pursuant to subsection (d)(3)''.
       (b) Failure To Comply Without Just Cause.--Section 
     21(d)(3)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78u(d)(3)(A)) is amended by inserting ``or without just 
     cause, has failed or refused to attend and testify or to 
     answer any lawful inquiry or to produce books, papers, 
     correspondence, memoranda, and other records, if in his power 
     so to do, in obedience to the subpoena of the Commission,'' 
     after ``pursuant to section 21A,''.

                          ____________________