To require the establishment of regional consumer price indices to compute cost-of-living increases under the programs for Social Security and Medicare and other medical benefits under titles II and XVIII of the Social Security Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``COLA Fairness Act of 2001''.

SEC. 2. REGIONAL CONSUMER PRICE INDEX.

    (a) Recognition of Regions.--The Bureau of Labor Statistics of the 
Department of Labor shall establish and publish a mapping of the United 
States under which 14 regions are recognized comprising the United 
States. Each region shall include one of the cities listed in 
subsection (b).
    (b) Specified Cities.--The cities specified in this subsection are 
the following:
            (1) Atlanta, Georgia;
            (2) Boston, Massachusetts;
            (3) Chicago, Illinois;
            (4) Cleveland, Ohio;
            (5) Dallas, Texas;
            (6) Detroit, Michigan;
            (7) Philadelphia, Pennsylvania;
            (8) Houston, Texas;
            (9) Los Angeles, California;
            (10) Miami, Florida;
            (11) New York, New York;
            (12) San Francisco, California;
            (13) Seattle, Washington; and
            (14) Washington, District of Columbia.
    (c) Establishment of Regional Consumer Price Indices.--The Bureau 
shall establish and publish for each region recognized pursuant to 
subsection (a) a monthly index for the region, to be known as the 
``Regional Consumer Price Index'' for the region, that indicates 
changes over time in expenditures for consumption which are typical for 
individuals residing in the region.
    (d) Effective Date.--The preceding provisions of this section shall 
apply with respect to calendar months beginning on or after January 1, 
2003.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out the provisions of 
this section.

SEC. 3. COMPUTATION OF SOCIAL SECURITY COST-OF-LIVING INCREASES.

    (a) Amendments to Title II.--
            (1) In general.--Section 215(i) of the Social Security Act 
        (42 U.S.C. 415(i)) is amended--
                    (A) in paragraph (1)(G), by inserting before the 
                period the following: ``, and, with respect to an 
                individual who, at the time he initially becomes 
                eligible for old-age insurance benefits or disability 
                insurance benefits (or dies before initially becoming 
                so eligible), resides in a region of the United States 
                recognized by the Bureau of Labor Statistics pursuant 
                to section 2(a) of the COLA Fairness Act of 2001, the 
                applicable Consumer Price Index shall be deemed to be 
                the Regional Consumer Price Index for such region''; 
                and
                    (B) in paragraph (4), by striking ``and by section 
                9001'' and inserting ``, by section 9001'', and by 
                inserting after ``1986,'' the following: ``and by 
                section 3(a) of the COLA Fairness Act of 2001,''.
            (2) Conforming amendments relating to applicable former 
        law.--Section 215(i)(4) of such Act (42 U.S.C. 415(i)(4)) is 
        amended by adding at the end the following new sentence: ``For 
        purposes of computing adjustments under this subsection as so 
        in effect, the applicable Consumer Price Index shall be deemed 
        to be the Regional Consumer Price Index for the region in which 
        such individual resides at the time he becomes eligible for 
        old-age insurance benefits or disability insurance benefits (or 
        dies before initially becoming so eligible).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to determinations made by the Commissioner of Social Security 
under section 215(i)(2) of the Social Security Act (42 U.S.C. 
415(i)(2)) with respect to cost-of-living computation quarters ending 
on or after September 30 of the second calendar year following the 
calendar year in which this Act is enacted.

SEC. 4. AMENDMENTS TO TITLE XVIII OF THE SOCIAL SECURITY ACT.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended--
            (1) in section 1814(i)(2)(B), by inserting ``(i) for 
        accounting years ending before October 1 of the second calendar 
        year following the calendar year in which the COLA Fairness Act 
        of 2001 was enacted,'' after ``for a year is'', and by 
        inserting after ``fifth month of the accounting year'' the 
        following: ``, and (ii) for accounting years ending after 
        October 1 of such calendar year, the cap amount determined 
        under clause (i) for the last accounting year referred to in 
        such clause, increased or decreased by the same percentage as 
        the percentage increase or decrease, respectively, in the 
        medical care expenditure category (or corresponding category) 
        of the applicable consumer price index, published by the Bureau 
        of Labor Statistics, from March of such calendar year to the 
        fifth month of the accounting year'';
            (2) in section 1833(h)(2)(A)(i), by striking ``Consumer 
        Price Index for All Urban Consumers (United States city 
        average)'' and inserting ``applicable consumer price index'';
            (3) in section 1833(i)(2)(C), by striking ``consumer price 
        index for all urban consumers (U.S. city average)'' and 
        inserting ``applicable consumer price index'';
            (4) in section 1834(a)(14)(F), by striking ``consumer price 
        index for all urban consumers (United States city average)'' 
        and inserting ``applicable consumer price index'';
            (5) in section 1834(h)(4)(A)(viii), by striking ``consumer 
        price index for all urban consumers (United States city 
        average)'' and inserting ``applicable consumer price index'';
            (6) in section 1834(l)(3)(A), by striking ``consumer price 
        index for all urban consumers (U.S. city average)'' and 
        inserting ``applicable consumer price index'';
            (7) in section 1834(l)(3)(B), by striking ``consumer price 
        index for all urban consumers (U.S. city average)'' and 
        inserting ``applicable consumer price index'';
            (8) in section 1842(s)(1), by striking ``consumer price 
        index for all urban consumers (United States city average)'' 
        and inserting ``applicable consumer price index''; and
            (9) in section 1886(h)(5)(B), by striking ``Consumer Price 
        Index for All Urban Consumers (United States city average)'' 
        and inserting ``applicable consumer price index''.
    (b) Definition of Applicable Consumer Price Index.--Section 1861 of 
such Act (42 U.S.C. 1395x) is amended by adding at the end the 
following new subsection:

                   ``Applicable Consumer Price Index

    ``(uu) The term `applicable consumer price index' means, in 
connection with any person affected by an adjustment to be made under 
this title based on such index, the Regional Consumer Price Index (as 
prescribed from time to time by the Bureau of Labor Statistics pursuant 
to section 2(c) of the COLA Fairness Act of 2001) for the region in 
which such person resides (in the case of an individual) or maintains 
principal offices (in any other case) at the time the adjustment takes 
effect. The Secretary of Health and Human Services shall prescribe by 
regulation, in connection with each requirement for an adjustment under 
this title based a Regional Consumer Price Index, the manner in which 
such adjustment is to be determined to affect particular persons for 
purposes of this subsection.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to determinations made for periods ending after 
December 31 of the second calendar year following the calendar year in 
which this Act was enacted.

Summary: COLA Fairness Act of 2001 - Requires the Bureau of Labor Statistics of the Department of Labor to establish, for 14 specified regions in the United States, monthly regional consumer price indices for computation of cost-of-living increases for Social Security and Medicare benefits.