For years, the location of this city's needle exchange program, in a nondescript strip mall close to highways and bus lines, was seen as a major asset. But now, AIDS activists say, that very location could undermine what happens inside the exchange. A bill working its way through Congress would lift a ban of more than 20 years on using federal money for needle exchange programs. But the bill would also ban federally financed exchanges from being within 1,000 feet of a school, park, library, college, video arcade or any place children might gather -- a provision that would apply to a majority of the country's approximately 200 exchanges. 'This 1,000-foot rule is simply instituting the ban in a different form,' said Rebecca Haag, executive director of the AIDS Action Council, an advocacy group based in Washington. 'Clearly the intent of this rule is to nullify the lifting of the ban.' Under a separate bill, all exchanges in Washington within the 1,000-foot perimeter would be barred from receiving city money as well as federal money. 'Let's protect these kids,' said Rep. Jack Kingston, R-Ga., who introduced the Washington bill. 'They don't need to be playing kickball in the playground and seeing people lined up for needle exchange.' Both bills have passed the House and a Senate subcommittee and await Senate action. Advocates and organizations including the NAACP are lobbying Congress to kill the 1,000-foot provisions. The promise of federal money could not come at a better time, these officials say, as states are cutting their health and human services budgets and private donations are dropping precipitously. At least four needle exchanges have closed this year because of a lack of financing. But officials at exchanges in cities like Chicago, New York and Washington say there are few, if any, places that could house a needle exchange under the rule. According to the Centers for Disease Control and Prevention, intravenous drug use directly or indirectly accounts for about one-fifth of the nation's 1.1 million HIV cases, and needle exchanges are an effective way to stem the spread of infection. The World Health Organization said in a 2004 report that there was 'compelling evidence' that increasing needle exchanges reduced HIV transmission. It cited studies showing that the rate of infection dropped up to 18 percent in cities with an exchange. 