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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2491 Reported in House (RH)]

                                                 Union Calendar No. 148

104th CONGRESS

  1st Session

                               H. R. 2491

                          [Report No. 104-280]

_______________________________________________________________________

To provide for reconciliation pursuant to section 105 of the concurrent 
             resolution on the budget for fiscal year 1996.

_______________________________________________________________________

                            October 17, 1995

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

                                                 Union Calendar No. 148
104th CONGRESS
  1st Session
                                H. R. 2491

                          [Report No. 104-280]
To provide for reconciliation pursuant to section 105 of the concurrent 
             resolution on the budget for fiscal year 1996.
_______________________________________________________________________
                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 1995

  Mr. Kasich from the Committee on the Budget, reported the following 
 bill; which was committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed
_______________________________________________________________________
                                 A BILL

 
To provide for reconciliation pursuant to section 105 of the concurrent 
             resolution on the budget for fiscal year 1996.

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

              TITLE I--PROVISIONS OF GENERAL APPLICABILITY

SECTION 1001. SHORT TITLE.

    This Act may be cited as the ``Seven-Year Balanced Budget 
Reconciliation Act of 1995''.

SEC. 1002. TABLE OF TITLES.

    This Act is organized into titles as follows:

              TITLE I--PROVISIONS OF GENERAL APPLICABILITY
         TITLE II--COMMITTEE ON BANKING AND FINANCIAL SERVICES
                    TITLE III--COMMITTEE ON COMMERCE
     TITLE IV--COMMITTEE ON ECONOMIC AND EDUCATIONAL OPPORTUNITIES
         TITLE V--COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
             TITLE VI--COMMITTEE ON INTERNATIONAL RELATIONS
                 TITLE VII--COMMITTEE ON THE JUDICIARY
               TITLE VIII--COMMITTEE ON NATIONAL SECURITY
                    TITLE IX--COMMITTEE ON RESOURCES
        TITLE X--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
                TITLE XI--COMMITTEE ON VETERANS' AFFAIRS
              TITLE XII--COMMITTEE ON WAYS AND MEANS-TRADE
            TITLE XIII--COMMITTEE ON WAYS AND MEANS-REVENUES
       TITLE XIV--COMMITTEE ON WAYS AND MEANS-TAX SIMPLIFICATION
                           TITLE XV--MEDICARE
           TITLE XVI--TRANSFORMATION OF THE MEDICAID PROGRAM
              TITLE XVII--DEPARTMENT OF COMMERCE ABOLITION
                      TITLE XVIII--WELFARE REFORM
                   TITLE XIX--CONTRACT TAX PROVISIONS
                        TITLE XX--BUDGET PROCESS

         TITLE II--COMMITTEE ON BANKING AND FINANCIAL SERVICES

SEC. 2001. TABLE OF CONTENTS.

    The table of contents for this title is as follows:

                     Subtitle A--Housing Provisions

Sec. 2101. Termination of RTC and FDIC affordable housing programs.
Sec. 2102. Elimination of FHA assignment program and foreclosure 
                            relief.
Sec. 2103. Reform of HUD-owned multifamily property disposition 
                            program.
Sec. 2104. Recapture of rural housing loan subsidies by Rural Housing 
                            and Community Development Service.
Sec. 2105. Reduction of section 8 annual adjustment factors for units 
                            without tenant turnover.
                 Subtitle B--Thrift Charter Conversion

Sec. 2200. Short title.
 Chapter 1--Bank Insurance Fund and Savings Association Insurance Fund

Sec. 2201. Special assessment.
Sec. 2202. Assessments on insured depository institutions.
Sec. 2203. Merger of Bank Insurance Fund and Savings Association 
                            Insurance Fund after recapitalization of 
                            SAIF.
Sec. 2204. Refund of amounts in deposit insurance fund in excess of 
                            designated reserve amount.
Sec. 2205. Assessments authorized only if needed to maintain the 
                            reserve ratio of a deposit insurance fund.
          Chapter 2--Status Of Banks and Savings Associations

Sec. 2221. Termination of Federal savings associations; treatment of 
                            State savings associations as banks for 
                            purposes of Federal banking law.
Sec. 2222. Treatment of certain activities and affiliations of bank 
                            holding companies resulting from this Act.
Sec. 2223. Transition provisions for activities of savings associations 
                            which convert into or become treated as 
                            banks.
Sec. 2224. Registration of bank holding companies resulting from 
                            conversions of savings associations to 
                            banks or treatment of savings associations 
                            as banks.
Sec. 2225. Additional transition provisions and special rules.
Sec. 2226. Technical and conforming amendments.
Sec. 2227. References to savings associations and State banks in 
                            Federal law.
Sec. 2228. Repeal of Home Owners' Loan Act.
Sec. 2229. Effective date; definitions.
       Chapter 3--Transfer Of Functions, Personnel, and Property

Sec. 2241. Office of Thrift Supervision abolished.
Sec. 2242. Determination of transferred functions and employees.
Sec. 2243. Savings provisions.
Sec. 2244. References in Federal law to Director of the Office of 
                            Thrift Supervision.
Sec. 2245. Reconfiguration of board of directors of FDIC as a result of 
                            removal of Director of the Office of Thrift 
                            Supervision.
                 Chapter 4--Loan Loss Reserve Treatment

Sec. 2261. Sense of the Congress.
           Subtitle C--Community Reinvestment Act Amendments

Sec. 2301. Expression of congressional intent.
Sec. 2302. Community Reinvestment Act exemption.
Sec. 2303. Self-certification of CRA compliance.
Sec. 2304. Community input and conclusive rating.
Sec. 2305. Special purpose financial institutions.
Sec. 2306. Increased incentives for lending to low- and moderate-income 
                            communities.
Sec. 2307. Prohibition on additional reporting under CRA.
Sec. 2308. Technical amendment.
Sec. 2309. Duplicative reporting.
Sec. 2310. CRA congressional oversight.
Sec. 2311. Consultation among examiners.
Sec. 2312. Limitation on regulations.

                     Subtitle A--Housing Provisions

SEC. 2101. TERMINATION OF RTC AND FDIC AFFORDABLE HOUSING PROGRAMS.

    (a) Repeal of Unified Program and Transfer of RTC Windup Authority 
to HUD.--Section 21A(c) of the Federal Home Loan Bank Act (12 U.S.C. 
1441a(c)) is amended by striking paragraph (17) and inserting the 
following new paragraph:
            ``(17) Transfer of authority.--The Secretary shall assume, 
        not later than December 31, 1995, and thereafter shall carry 
        out, any remaining authority and responsibilities of the 
        Corporation to recapture excess proceeds from resale of 
        properties and to monitor and enforce low-income occupancy 
        requirements or rent limitations under this subsection and 
        shall assume any direct or contingent liability of the 
        Corporation to carry out such authority and 
        responsibilities.''.
    (b) Termination of RTC Affordable Housing Program.--Section 21A(c) 
of the Federal Home Loan Bank Act (12 U.S.C. 1441a(c)) is amended by 
adding at the end the following new paragraph:
            ``(18) Termination.--
                    ``(A) In General.--On and after the date of the 
                enactment of the Seven-Year Balanced Budget 
                Reconciliation Act of 1995, the provisions of this 
                subsection (other than paragraph (17)) shall not apply 
                with respect to any eligible residential property or 
                eligible condominium property.
                    ``(B) Savings provision.--Notwithstanding 
                subparagraph (A), the provisions of this subsection 
                shall continue to apply on and after such date of 
                enactment to any eligible residential property or 
                eligible condominium property that--
                            ``(i) has been sold or otherwise disposed 
                        of by the Corporation before such date of 
                        enactment; or
                            ``(ii) is subject to a contract of sale or 
                        other disposition entered into before such date 
                        of enactment.''.
    (c) Termination of Affordable Housing Advisory Board.--Section 
14(b)(9) of the Resolution Trust Corporation Completion Act (12 U.S.C. 
1831q note) is amended by striking ``September 30, 1998'' and inserting 
``September 30, 1995''.
    (d) Repeal of FDIC Program and Transfer of Windup Authority to 
HUD.--
            (1) Repeal.--Section 40 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1831q) is hereby repealed.
            (2) Transfer of windup authority.--Notwithstanding 
        paragraph (1)--
                    (A) effective December 31, 1995, the Secretary 
                shall carry out any remaining authority and 
                responsibilities of the Federal Deposit Insurance 
                Corporation under section 40 of the Federal Deposit 
                Insurance Act to recapture excess proceeds from resale 
                of properties and to monitor and enforce low-income 
                occupancy requirements or rent limitations under such 
                section and shall assume any direct or contingent 
                liability of the Corporation to carry out such 
                authority and responsibilities; and
                    (B) the Federal Deposit Insurance Corporation shall 
                consummate any sales of property under section 40 of 
                such Act that were pending under contracts of sale on 
                September 30, 1995.
    (e) FDIC Disposition of Assets as Conservator or Receiver.--Section 
11(d)(13)(E) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(d)(13)(E)) is amended--
            (1) in clause (iii), by inserting ``and'' after the 
        semicolon;
            (2) in clause (iv), by striking ``; and'' and inserting a 
        period; and
            (3) by striking clause (v).
    (f) Disposition of FDIC Assets.--Section 13(d)(3)(D) of the Federal 
Deposit Insurance Act (12 U.S.C. 1823(d)(3)(D)) is amended--
            (1) in clause (iii), by inserting ``and'' after the 
        semicolon;
            (2) in clause (iv), by striking ``; and'' and inserting a 
        period; and
            (3) by striking clause (v).

SEC. 2102. ELIMINATION OF FHA ASSIGNMENT PROGRAM AND FORECLOSURE 
              RELIEF.

    (a) Elimination of TMAP and Assignment Program.--Section 230 of the 
National Housing Act (12 U.S.C. 1715u) is hereby repealed.
    (b) Prohibition of Foreclosure Avoidance Relief.--Section 204 of 
the National Housing Act (12 U.S.C. 1710) is amended by adding at the 
end the following new subsection:
    ``(m) Prohibition of Foreclosure Avoidance Relief.--Notwithstanding 
any provision of this section, any other provision of this Act, section 
2 of the Housing Act of 1949, section 2 of the Housing and Urban 
Development Act of 1968, or any other provision of law, after September 
30, 1995, the Secretary of Housing and Urban Development may not 
provide foreclosure avoidance relief to any mortgagor who has defaulted 
in making payments under a mortgage covering a 1-, 2-, 3-, or 4-family 
residence insured under this Act.''.

SEC. 2103. REFORM OF HUD-OWNED MULTIFAMILY PROPERTY DISPOSITION 
              PROGRAM.

    (a) In General.--Effective October 1, 1995, section 203 of the 
Housing and Community Development Amendments of 1978 (12 U.S.C. 1701z-
11) is amended to read as follows:

``SEC. 203. MANAGEMENT AND DISPOSITION OF HUD-OWNED MULTIFAMILY HOUSING 
              PROJECTS.

    ``(a) In General.--The Secretary of Housing and Urban Development 
may manage and dispose of (1) multifamily housing projects that are 
owned by the Secretary or that are subject to mortgages held by the 
Secretary, and (2) mortgages on multifamily housing projects that are 
held by the Secretary, without regard to any other provision of law.
    ``(b) Authority To Delegate.--The Secretary of Housing and Urban 
Development may delegate to one or more entities the authority to carry 
out some or all of the functions and responsibilities of the Secretary 
in connection with the foreclosure of mortgages on multifamily housing 
projects held by the Secretary.
    ``(c) Definition.--For purposes of this section, the term 
`multifamily housing project' means any multifamily rental housing 
project which is, or prior to acquisition by the Secretary was, 
assisted or insured under the National Housing Act, or was subject to a 
loan under section 202 of the Housing Act of 1959.''.
    (b) Conforming Amendments.--
            (1) Nondiscrimination against certificate and voucher 
        holders.--Section 183(c) of the Housing and Community 
        Development Act of 1987 (42 U.S.C. 1437f note) is amended by 
        striking ``section 203(i)(2) of the Housing and Community 
        Development Amendments of 1978, as amended by section 181(h) of 
        this Act'' and inserting ``section 203(b) of the Housing and 
        Community Development Amendments of 1978 (as in effect before 
        October 1, 1995)''.
            (2) LIHPRH act of 1990.--Section 212(c) of the Low-Income 
        Housing Preservation and Resident Homeownership Act of 1990 (12 
        U.S.C. 4102(c)) is amended by striking the last sentence.
            (3) Hope homeownership program.--Section 427 of the 
        Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
        12877) is amended by striking ``subject to--'' and all that 
        follows and inserting ``subject to the Low-Income Housing 
        Preservation and Resident Homeownership Act of 1990.''.
            (4) FHA multifamily housing mortgage insurance.--Section 
        207(k) of the National Housing Act (12 U.S.C. 1713(k)) is 
        amended by striking the third sentence.
            (5) Multifamily mortgage foreclosure act of 1981.--Section 
        367(b)(2) of the Multifamily Mortgage Foreclosure Act of 1981 
        (12 U.S.C.3706(b)(2)) is amended--
                    (A) by striking subparagraph (B); and
                    (B) by striking ``(A)''.
            (6) Preventing mortgage defaults on insured multifamily 
        projects.--Section 103(h)(2)(B) of the Multifamily Housing 
        Property Disposition Reform Act of 1994 (12 U.S.C. 1715z-1a 
        note) is amended by inserting ``(as in effect before October 1, 
        1995)'' after ``1978''.

SEC. 2104. RECAPTURE OF RURAL HOUSING LOAN SUBSIDIES BY RURAL HOUSING 
              AND COMMUNITY DEVELOPMENT SERVICE.

    The first sentence of section 521(a)(1)(D)(i) of the Housing Act of 
1949 (42 U.S.C. 1490a(a)(1)(D)(i)) is amended by inserting ``upon the 
repayment of any loan made under this title or'' after ``assistance 
rendered''.

SEC. 2105. REDUCTION OF SECTION 8 ANNUAL ADJUSTMENT FACTORS FOR UNITS 
              WITHOUT TENANT TURNOVER.

    Paragraph (2)(A) of section 8(c) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amended by striking the last 
sentence.

                 Subtitle B--Thrift Charter Conversion

SEC. 2200. SHORT TITLE.

    This subtitle may be cited as the ``Thrift Charter Conversion Act 
of 1995''.

 CHAPTER 1--BANK INSURANCE FUND AND SAVINGS ASSOCIATION INSURANCE FUND

SEC. 2201. SPECIAL ASSESSMENT.

    Section 7(b)(6) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(b)(6)) is amended--
            (1) by redesignating clauses (i), (ii), and (iii) of 
        subparagraph (A) as subclauses (I), (II), and (III), 
        respectively;
            (2) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (3) by moving the left margin of such clauses and 
        subclauses (as so redesignated) 2 ems to the right;
            (4) by striking ``special assessments.--In addition to'' 
        and inserting ``special assessments.--
                    ``(A) In general.--In addition to''; and
            (5) by adding at the end the following new subparagraphs:
                    ``(B) Single additional special assessment with 
                respect to certain accounts.--
                            ``(i) In general.--The Corporation shall 
                        impose, on the basis of such factors as the 
                        Board of Directors considers to be appropriate, 
                        a single special assessment on the institutions 
                        described in the following subclauses (other 
                        than institutions exempt under subparagraph 
                        (C)):
                                    ``(I) Each Savings Association 
                                Insurance Fund member (including any 
                                Savings Association Insurance Fund 
                                member referred to in section 
                                5(d)(2)(G)).
                                    ``(II) Each Bank Insurance Fund 
                                member which has deposits which are 
                                treated, under section 5(d)(3), as 
                                deposits which are insured by the 
                                Savings Association Insurance Fund.
                            ``(ii) Amount of assessment.--The 
                        assessment imposed under clause (i) shall be in 
                        an amount equal to such percentage of the 
                        Savings Association Insurance Fund assessment 
                        base (of the institutions subject to such 
                        assessment) as of March 31, 1995, as the Board 
                        of Directors determines, in the Board of 
                        Directors' discretion, to be necessary in order 
                        for the reserve ratio of the Savings 
                        Association Insurance Fund to meet the 
                        designated reserve ratio on the 1st business 
                        day of January, 1996.
                            ``(iii) Deposit of assessment.--
                        Notwithstanding any other provision of law, the 
                        proceeds of any assessment imposed under clause 
                        (i) shall be deposited in the Savings 
                        Association Insurance Fund.
                            ``(iv) Date payment due.--The special 
                        assessment imposed under this subparagraph 
                        shall be--
                                    ``(I) due on the 1st business day 
                                of January, 1996; and
                                    ``(II) paid to the Corporation on 
                                the later of the due date or such other 
                                date as the Corporation may prescribe 
                                which may not be later than the end of 
                                the 60-day period beginning on the date 
                                of the Thrift Charter Conversion Act of 
                                1995.
                            ``(v) Savings association insurance fund 
                        assessment base defined.--For purposes of this 
                        subparagraph, the term Savings Association 
                        Insurance Fund assessment base means--
                                    ``(I) the assessment base of 
                                Savings Association Insurance Fund 
                                members on which assessments are 
                                imposed under the risk-based assessment 
                                system established pursuant to 
                                paragraph (1); and
                                    ``(II) in the case of an 
                                institution described in clause 
                                (i)(II), the adjusted attributable 
                                deposit amount determined under 
                                subparagraph (C) of section 5(d)(3) for 
                                purposes of subparagraph (B)(i) of such 
                                section.
                    ``(C) Special rules for certain exempt 
                institutions.--
                            ``(i) In general.--The Board of Directors 
                        may exempt any weak insured depository 
                        institution from the payment of the assessment 
                        imposed under subparagraph (B)(i) if the 
                        exemption would reduce risk to the Savings 
                        Association Insurance Fund.
                            ``(ii) Continuation of assessment rates 
                        applicable as of june 30, 1995.--
                        Notwithstanding any other provision of this 
                        subsection or any determination by the 
                        Corporation pursuant to paragraph (2), the 
                        semiannual assessment rate applicable under 
                        paragraph (2) during the period beginning on 
                        January 1, 1996, and ending on December 31, 
                        1999, with respect to any insured depository 
                        institution which receives an exemption under 
                        clause (i) shall be the semiannual assessment 
                        rate which would be applicable to such 
institution under paragraph (2) if such assessment rate were calculated 
in the manner in which semiannual assessment rates for Savings 
Association Insurance Fund members were determined by the Corporation 
under such paragraph as of June 30, 1995.
                            ``(iii) Special rule for oakar banks.--If 
                        an insured depository institution to which 
                        clause (ii) applies is an institution described 
                        in subparagraph (B)(i)(II), section 5(d)(3) (as 
                        in effect on September 13, 1995) shall continue 
                        to apply with respect to such institution for 
                        purposes of clause (ii) without regard to the 
                        repeal of such section by section 2202(c) of 
                        the Thrift Charter Conversion Act of 1995.
                            ``(iv) Deposit of assessment.--Assessments 
                        imposed under paragraph (2) in accordance with 
                        clause (i) on depository institutions to which 
                        such clause applies shall be deposited--
                                    ``(I) in the Savings Association 
                                Insurance Fund until such fund is 
                                merged into the deposit insurance fund 
                                pursuant to section 2203(a)(2) of the 
                                Thrift Charter Conversion Act of 1995; 
                                and
                                    ``(II) after such merger, in the 
                                deposit insurance fund.
                            ``(v) Guidelines.--
                                    ``(I) Guidelines required.--Not 
                                later than 30 days after the date of 
                                the enactment of the Thrift Charter 
                                Conversion Act of 1995, the Board of 
                                Directors shall prescribe guidelines 
                                containing the criteria to be used by 
                                the Board of Directors in making any 
                                determination under clause (i).
                                    ``(II) Publication.--The guidelines 
                                prescribed under subclause (I) shall be 
                                published in the Federal Register.
                    ``(D) Pro rata payment of special assessment by 
                exempt institutions authorized.--In the case of any 
                depository institution which receives an exemption 
                under subparagraph (C)(i) from the special assessment 
                imposed under subparagraph (B) and any successor to 
                such institution, subparagraph (C)(ii) shall cease to 
                apply with respect to such institution as of the date 
                on which the institution makes a payment to the 
                Corporation, on such terms as the Board of Directors 
                may prescribe, in an amount equal to the product of--
                            ``(i) 12.5 percent of the product of--
                                    ``(I) the Savings Association 
                                Insurance Fund assessment base of the 
                                institution which would have been used 
                                in the calculation of the amount of 
                                such special assessment if the 
                                institution had not received the 
                                exemption from such assessment; and
                                    ``(II) the percentage rate 
                                calculated by the Board of Directors 
                                under subparagraph (B)(ii) for use in 
                                determining the amount of the special 
                                assessment for depository institutions 
                                which did not receive an exemption 
                                under subparagraph (C); and
                            ``(ii) the whole number of full semiannual 
                        periods which begin after the date of such 
                        payment and end before January 1, 2000.
                    ``(E) Assessment for certain deposits.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, in carrying out the 
                        special assessment under subparagraph (B), the 
                        Corporation may set assessment rates on the 
                        basis of the factors described in clause (iii) 
                        for deposits treated under section 5(d)(3) as 
                        deposits insured by the Savings Association 
                        Insurance Fund.
                            ``(ii) Minimum rate.--Notwithstanding 
                        clause (i), any rate assessed under such clause 
                        may not be less than 2/3 of the assessment rate 
                        imposed under subparagraph (B).
                            ``(iii) Factors.--In setting any assessment 
                        rate under clause (i), the Corporation shall 
                        consider the following factors:
                                    ``(I) The extent to which deposits 
                                treated under section 5(d)(3) as 
                                deposits insured by the Savings 
                                Association Insurance Fund do not 
                                reflect the actual amount of deposits 
                                insured by such fund because of the 
                                growth attribution rule contained in 
                                clause (iii) of such section.
                                    ``(II) The ability of an insured 
                                depository institution to demonstrate 
                                with deposit data the amount of actual 
                                deposits which should be treated as 
                                deposits insured by the Savings 
                                Association Insurance Fund 
                                notwithstanding the growth attribution 
                                rule referred to in subclause (I).
                            ``(iv) No net budget effect.--
                        Notwithstanding any other provision of this 
                        subparagraph, the Corporation shall not set any 
                        assessment rate under clause (i) that would 
                        result in an increased budget outlay or a 
                        decrease in offsetting receipts under this 
                        paragraph.''.

SEC. 2202. ASSESSMENTS ON INSURED DEPOSITORY INSTITUTIONS.

    (a) Financing Corporation Assessments on All FDIC-Insured 
Depository Institutions.--Section 21(f) of the Federal Home Loan Bank 
Act (12 U.S.C. 1441(f)) is amended--
            (1) in the portion of paragraph (2) which precedes 
        subparagraph (A)--
                    (A) by striking ``each Savings Association 
                Insurance Fund member'' and inserting ``each insured 
                depository institution (as defined in section 3(c)(2) 
                of the Federal Deposit Insurance Act)''; and
                    (B) by striking ``such members'' and inserting 
                ``such institutions''; and
            (2) by striking ``, except that--'' and all that follows 
        through the end of the paragraph and inserting ``, except that 
        the Financing Corporation shall have first priority to make the 
        assessment.''.
    (b) Assessment Rates for SAIF Members May Not Be Less Than 
Assessment Rates for BIF Members.--Section 7(b)(2)(F) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(b)(2)(F)) is amended--
            (1) by striking ``and'' at the end of clause (i);
            (2) by striking the period at the end of clause (ii) and 
        inserting ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(iii) notwithstanding any other provision 
                        of this subsection, assessment rates for 
                        Savings Association Insurance Fund members may 
                        not be less than assessment rates for Bank 
                        Insurance Fund members.''.
    (c) Repeal of Exit Moratorium and Oakar Bank Provisions.--Effective 
January 1, 1998, section 5(d) of the Federal Deposit Insurance Act (12 
U.S.C. 1815(d)) is amended by striking paragraphs (2) and (3).
    (d) Technical and Conforming Amendments.--
            (1) Section 7(b)(2)(D) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)(2)(D)) is amended by striking ``Savings 
        Association Insurance Fund members'' and inserting ``members of 
        a deposit insurance fund''.
            (2) Section 21(k) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441(k)) is amended--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (d) shall take effect on January 1, 1996.

SEC. 2203. MERGER OF BANK INSURANCE FUND AND SAVINGS ASSOCIATION 
              INSURANCE FUND AFTER RECAPITALIZATION OF SAIF.

    (a) Establishment of Deposit Insurance Fund.--
            (1) In general.--Effective January 1, 1998, section 
        11(a)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
        1821(a)(5)) is amended to read as follows:
            ``(5) Deposit insurance fund.--
                    ``(A) Establishment.--There is established a fund 
                to be known as the deposit insurance fund which shall--
                            ``(i) be maintained and administered by the 
                        Corporation; and
                            ``(ii) initially consist of the assets and 
                        liabilities of the Bank Insurance Fund and 
                        Savings Association Insurance Fund which have 
                        been merged by the Corporation into the deposit 
                        insurance fund pursuant to section 2203(a)(2) 
                        of the Thrift Charter Conversion Act of 1995, 
                        other than any assets of the Savings 
                        Association Insurance Fund which have been 
                        deposited in the special reserve of the deposit 
                        insurance fund pursuant to section 2203(b)(2) 
                        of such Act.
                    ``(B) Uses.--The deposit insurance fund shall be 
                available to the Corporation for use in carrying out 
                the insurance purposes of the Corporation in accordance 
                with this Act with respect to insured depository 
                institutions.
                    ``(C) Deposits.--All amounts assessed against 
                insured depository institutions by the Corporation 
                shall be deposited into the deposit insurance fund.''.
            (2) Merger by corporation.--Except with respect to any 
        assets of the Savings Association Insurance Fund which are 
        required to be deposited in the special reserve of the deposit 
        insurance fund pursuant to subsection (b)(2), the Corporation 
        shall merge the Bank Insurance Fund and the Savings Association 
        Insurance Fund on January 1, 1998, into the deposit insurance 
        fund established by the amendment made by paragraph (1).
    (b) Establishment of Special Reserve of the Deposit Insurance 
Fund.--
            (1) In general.--Effective January 1, 1998, section 
        11(a)(6) of the Federal Deposit Insurance Act (12 U.S.C. 
        1821(a)(6)) is amended to read as follows:
            ``(6) Special reserve of the deposit insurance fund.--
                    ``(A) In general.--There is established a fund to 
                be known as the special reserve of the deposit 
                insurance fund which shall--
                            ``(i) be maintained and administered by the 
                        Corporation; and
                            ``(ii) initially consist of amounts 
                        deposited in the special reserve pursuant to 
                        section 2203(b)(2) of the Thrift Charter 
                        Conversion Act of 1995.
                    ``(B) Emergency use of special reserve.--
                            ``(i) Use authorized.--Subject to clause 
                        (ii) and notwithstanding subparagraph (C), the 
                        Corporation may, in the sole discretion of the 
                        Board of Directors, transfer amounts from the 
                        special reserve for deposit in the deposit 
                        insurance fund for use in accordance with 
                        paragraph (5)(B).
                            ``(ii) Conditions on transfer.--The Board 
                        of Directors may authorize a transfer under 
                        clause (i) only if--
                                    ``(I) the Board of Directors 
                                determines that the reserve ratio of 
                                the deposit insurance fund is less than 
                                50 percent of the designated reserve 
                                ratio; and
                                    ``(II) the Board of Directors finds 
                                that the reserve ratio of the deposit 
                                insurance will likely be less than the 
                                designated reserve ratio of the fund 
                                for each of the 4 calendar quarters 
                                beginning after the date of such 
                                determination.
                    ``(C) No refunds or other uses authorized.--Except 
                as provided in subparagraph (B), the Corporation may 
                not make any payment from the special reserve, make any 
                refund or provide any credit to any insured depository 
                institution with respect to any amount in the special 
                reserve, or use any amount in the special reserve for 
                any other purpose (including the use of any such amount 
                as security for the repayment of any obligation of the 
                Corporation).
                    ``(D) Exclusion of special reserve in calculating 
                the reserve ratio.--No amount in the special reserve 
                may be taken into account in calculating the reserve 
                ratio of the deposit insurance fund under section 7.''.
            (2) Transfer and deposit by corporation.--If, at the time 
        of the merger of the Bank Insurance Fund and the Savings 
        Association Insurance Fund pursuant to subsection (a)(2), the 
        reserve ratio of the Savings Association Insurance Fund exceeds 
        the designated reserve ratio, the Corporation shall transfer 
        from such fund to the special reserve of the deposit insurance 
        fund established by the amendment made by paragraph (1) an 
        amount equal to the amount which causes the reserve ratio of 
        the Savings Association Insurance Fund to exceed the designated 
        reserve ratio.
    (c) Technical and Conforming Amendments.--
            (1) Section 3(y) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(y)) is amended by striking ``the Bank Insurance 
        Fund or the Savings Association Insurance Fund, as 
        appropriate'' and inserting ``the deposit insurance fund 
        established under section 11(a)(5)''.
            (2) Section 11(a) of the Federal Deposit Insurance Act (12 
        U.S.C. 1821(a)) is amended by striking paragraphs (4)(A) and 
        (7).
            (3) Section 5(d)(1) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1815(d)(1)) is amended--
                    (A) in subparagraph (A), by striking ``reserve 
                ratios'' and all that follows through the period and 
                inserting ``the reserve ratio of the deposit insurance 
                fund.'';
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).
            (4) Section 7 of the Federal Deposit Insurance Act (12 
        U.S.C. 1817) is amended by striking subsection (l).
            (5) Section 7(b)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)(2)) is amended--
                    (A) by striking subparagraphs (B), (F), and (G);
                    (B) in clauses (i) and (iv) of subparagraph (A), by 
                striking ``each deposit insurance fund'' and inserting 
                ``the deposit insurance fund'';
                    (C) in subparagraph (A)(iii), by striking ``a 
                deposit insurance fund'' and inserting ``the deposit 
                insurance fund''; and
                    (D) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Reserve ratio defined.--For purposes of this 
                subsection, the term `reserve ratio' means the ratio of 
                the net worth of the deposit insurance fund to the 
                aggregate estimated insured deposits held in all 
                insured depository institutions.''.
            (6) Section 7(b)(3) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)(3)) is amended--
                    (A) in subparagraph (A) by striking ``any deposit 
                insurance fund'' and inserting ``the deposit insurance 
                fund''; and
                    (B) by striking subparagraphs (C) and (D).
            (7) Subparagraph (A) of section 7(b)(6) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1817(b)(6)) (as so 
        redesignated by section 2201 of this subtitle) is amended--
                    (A) in clause (i)--
                            (i) by inserting ``or'' after the semicolon 
                        at the end of subclause (I);
                            (ii) by striking subclause (II); and
                            (iii) by striking ``; and'' at the end of 
                        subclause (III) and inserting a period; and
                    (B) by striking clause (ii).
            (8) Section 11(a)(4)(B) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1821(a)(4)(B)) is amended by striking ``Bank 
        Insurance Fund and the Savings Association Insurance Fund'' and 
        inserting ``deposit insurance fund''.
            (9) Paragraph (1) of section 11(f) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821(f)) is amended by striking 
        ``depositor, except that--'' and all that follows through the 
        period at the end of the paragraph and inserting 
        ``depositor.''.
            (10) Section 11(i)(3) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821(i)(3)) is amended--
                    (A) by striking subparagraph (B); and
                    (B) in subparagraph (C), by striking 
                ``subparagraphs (A) and (B)'' and inserting 
                ``subparagraph (A)''.
            (11) Section 11A(a)(3) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821a(a)(3)) is amended by striking ``Bank Insurance 
        Fund, the Savings Association Insurance Fund,'' and inserting 
        ``deposit insurance fund''.
            (12) Section 11A(f) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821a(f)) is amended by striking ``Savings 
        Association Insurance Fund'' and inserting ``deposit insurance 
        fund''.
            (13) Section 13(a)(1) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1823(a)(1)) is amended by striking ``Bank Insurance 
        Fund, the Savings Association Insurance Fund,'' and inserting 
        ``deposit insurance fund, the special reserve of the deposit 
        insurance fund,''.
            (14) Section 13(c)(4)(G)(ii) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)) is amended--
                    (A) by striking ``appropriate insurance fund'' and 
                inserting ``deposit insurance fund'';
                    (B) by striking ``the members of the insurance fund 
                (of which such institution is a member)'' and inserting 
                ``insured depository institutions'';
                    (C) by striking ``each member's'' and inserting 
                ``each insured depository institution's''; and
                    (D) by striking ``the member's'' each place such 
                term appears and inserting ``the institution's''.
            (15) Section 13(c) of the Federal Deposit Insurance Act (12 
        U.S.C. 1823(c)) is amended by striking paragraph (11).
            (16) Section 13(h) of the Federal Deposit Insurance Act (12 
        U.S.C. 1823(h)) is amended by striking ``Bank Insurance Fund'' 
        and inserting ``deposit insurance fund''.
            (17) Section 14(a) of the Federal Deposit Insurance Act (12 
        U.S.C. 1824(a)) is amended--
                    (A) by striking ``Bank Insurance Fund or the 
                Savings Association Insurance Fund'' and inserting 
                ``deposit insurance fund''; and
                    (B) by striking ``each such fund'' and inserting 
                ``the fund''.
            (18) Section 14(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1824(b)) is amended by striking ``Bank Insurance Fund or 
        Savings Association Insurance Fund'' and inserting ``deposit 
        insurance fund''.
            (19) Section 14(c) of the Federal Deposit Insurance Act (12 
        U.S.C. 1824(c)) is amended by striking paragraph (3).
            (20) Section 14 of the Federal Deposit Insurance Act (12 
        U.S.C. 1824) is amended by striking subsection (d).
            (21) Section 15(c)(5) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1825(c)(5)) is amended--
                    (A) by striking ``Bank Insurance Fund or Savings 
                Association Insurance Fund, respectively,'' and 
                inserting ``deposit insurance fund'';
                    (B) by striking ``Bank Insurance Fund or Savings 
                Association Insurance Fund, respectively;'' and 
                inserting ``deposit insurance fund;''; and
                    (C) by striking ``Bank Insurance Fund or the 
                Savings Association Insurance Fund, respectively,'' and 
                inserting ``deposit insurance fund,''.
            (22) Section 17(a)(1) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1827(a)(1)) is amended by striking ``Bank Insurance 
        Fund, the Savings Association Insurance Fund,'' each place such 
        term appears and inserting ``deposit insurance fund''.
            (23) Section 17(d) of the Federal Deposit Insurance Act (12 
        U.S.C. 1827(d)) is amended by striking ``Bank Insurance Fund, 
        the Savings Association Insurance Fund,'' each place such term 
        appears and inserting ``deposit insurance fund''.
            (24) The heading for section 17(a) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1827(a)) is amended by striking ``BIF, 
        SAIF,'' and inserting ``the Deposit Insurance Fund''.
            (25) Subsections (a)(1) and (d)(1)(A) of section 24 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1831a) are each 
        amended by striking ``appropriate''.
            (26) Section 24(e)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1831a(e)(2)) is amended--
                    (A) in subparagraph (A), by striking ``of which 
                such banks are members''; and
                    (B) in subparagraph (B)(ii), by striking ``of which 
                such bank is a member''.
            (27) Section 24(f)(6)(B) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1831a(f)(6)(B)) is amended by striking ``of 
        which such bank is a member''.
            (28) Section 31 of the Federal Deposit Insurance Act (12 
        U.S.C. 1831h) is hereby repealed.
            (29) Section 36(i)(3) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1831m(i)(3)) is amended by striking ``affected''.
            (30) Section 38 of the Federal Deposit Insurance Act (12 
        U.S.C. 1831o) is amended by striking subsection (o).
            (31) Section 21B(f)(2)(C)(ii) of the Federal Home Loan Bank 
        Act (12 U.S.C. 1441b(f)(2)(C)(ii)) is amended to read as 
        follows:
                            ``(C) Payments by federal home loan 
                        banks.--To the extent the amounts available 
                        pursuant to subparagraphs (A) and (B) are 
                        insufficient to cover the amount of interest 
                        payments, each Federal home loan bank shall pay 
                        to the Funding Corporation each calendar year 
                        an amount equal to 22.63 percent of the bank's 
                        net earnings for the year for which such amount 
                        is required to be paid.''.
    (d) Effective Date of Amendments.--The amendments made by 
subsection (c) shall take effect on January 1, 1998.

SEC. 2204. REFUND OF AMOUNTS IN DEPOSIT INSURANCE FUND IN EXCESS OF 
              DESIGNATED RESERVE AMOUNT.

    Subsection (e) of section 7 of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(e)) is amended to read as follows:
    ``(e) Refunds.--
            ``(1) Overpayments.--In the case of any payment of an 
        assessment by an insured depository institution in excess of 
        the amount due to the Corporation, the Corporation may--
                    ``(A) refund the amount of the excess payment to 
                the insured depository institution; or
                    ``(B) credit such excess amount toward the payment 
                of subsequent semiannual assessments until such credit 
                is exhausted.
            ``(2) Balance in insurance fund in excess of designated 
        reserve.--
                    ``(A) In general.--Subject to subparagraph (B), if 
                as of the end of any semiannual period the amount of 
                the actual reserves in--
                            ``(i) the Bank Insurance Fund (until the 
                        merger of such fund into the deposit insurance 
                        fund pursuant to section 2203(a)(2) of the 
                        Thrift Charter Conversion Act of 1995); or
                            ``(ii) the deposit insurance fund (after 
                        the establishment of such fund under section 
                        2203(a)(1) of such Act),
                exceeds the balance required to meet the designated 
                reserve ratio applicable with respect to such fund, 
                such excess amount shall be refunded to members of the 
                fund by the Corporation on such basis as the Board of 
                Directors determines to be appropriate, taking into 
                account the factors considered under the risk-based 
                assessment system.
                    ``(B) Refund not to exceed previous semiannual 
                assessment.--The amount of any refund under this 
                paragraph to any member of a deposit insurance fund for 
                any semiannual period may not exceed the total amount 
                of assessments paid by such member to the insurance 
                fund with respect to such period.''.

SEC. 2205. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO MAINTAIN THE 
              RESERVE RATIO OF A DEPOSIT INSURANCE FUND.

    (a) In General.--Section 7(b)(2)(A)(i) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)(A)(i)) is amended in the portion of 
such section preceding subclause (I) by inserting ``when necessary, and 
only to the extent necessary'' after ``insured depository 
institutions''.
    (b) Limitation on Assessment.--Section 7(b)(2)(A)(iii) of the 
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(iii)) is amended 
to read as follows:
                            ``(iii) Limitation on assessment.--The 
                        Board of Directors shall not set semiannual 
                        assessments with respect to a deposit insurance 
                        fund in excess of the amount needed--
                                    ``(I) to maintain the reserve ratio 
                                of the fund at the designated reserve 
                                ratio; or
                                    ``(II) if the reserve ratio is less 
                                than the designated reserve ratio, to 
                                increase the reserve ratio to the 
                                designated reserve ratio.''.

          CHAPTER 2--STATUS OF BANKS AND SAVINGS ASSOCIATIONS

SEC. 2221. TERMINATION OF FEDERAL SAVINGS ASSOCIATIONS; TREATMENT OF 
              STATE SAVINGS ASSOCIATIONS AS BANKS FOR PURPOSES OF 
              FEDERAL BANKING LAW.

    (a) Termination of Federal Savings Association Charters.--
            (1) In general.--Each Federal savings association shall--
                    (A) convert to a national bank charter;
                    (B) convert to a State depository institution 
                charter; or
                    (C) surrender the charter of such savings 
                association and liquidate the institution.
            (2) Conversion to national bank by operation of law.--If 
        any Federal savings association has not taken any action 
        required under paragraph (1) as of January 1, 1998, the savings 
        association shall--
                    (A) become a national bank on such date by 
                operation of law;
                    (B) immediately file articles of association and an 
                organizational certificate with the Comptroller of the 
                Currency in accordance with sections 5133, 5134, and 
                5135 of the Revised Statutes of the United States; and
                    (C) cease to exist as a Federal savings association 
                as of such date.
            (3) Prohibition on new charters of federal savings 
        associations.--The Director of the Office of Thrift Supervision 
        may not grant any charter for a Federal savings association for 
        which an application was received after the date of the 
        enactment of this Act.
    (b) Treatment of State Savings Associations as Banks For Purposes 
of Federal Banking Law.--
            (1) Amendments to federal deposit insurance act.--Section 3 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813) is 
        amended--
                    (A) by striking paragraph (2) of subsection (a) and 
                inserting the following new paragraph:
            ``(2) State bank.--
                    ``(A) In general.--The term `State bank' means any 
                bank, banking association, trust company, savings bank, 
                industrial bank (or similar depository institution 
                which the Board of Directors finds to be operating 
                substantially in the same manner as an industrial 
                bank), building and loan association, savings and loan 
                association, homestead association, cooperative bank, 
                or other banking institution--
                            ``(i) which is engaged in the business of 
                        receiving deposits, other than trust funds (as 
                        defined in this section); and
                            ``(ii) which--
                                    ``(I) is incorporated under the 
                                laws of any State;
                                    ``(II) is organized and operating 
                                according to the laws of the State in 
                                which such institution is chartered or 
                                organized; or
                                    ``(III) is operating under the Code 
                                of Law for the District of Columbia 
                                (except a national bank).
                    ``(B) Certain insured banks included.--The term 
                `State bank' includes any cooperative bank or other 
                unincorporated bank the deposits of which were insured 
                by the Corporation on the day before the date of the 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989.
                    ``(C) Certain uninsured banks excluded.--The term 
                `State bank' does not include any cooperative bank or 
                other unincorporated bank the deposits of which were 
                not insured by the Corporation on the day before the 
                date of the enactment of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989.''; and
                    (B) in subsection (q)--
                            (i) by inserting ``and'' after the 
                        semicolon at the end of paragraph (2);
                            (ii) by striking ``; and'' at the end of 
                        paragraph (3) and inserting a period; and
                            (iii) by striking paragraph (4).
            (2) Amendments to the bank holding company act of 1956.--
        Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841) is amended--
                    (A) by striking subparagraph (E) of subsection 
                (a)(5); and
                    (B) by striking subparagraphs (B) and (J) of 
                subsection (c)(2).
            (3) Amendments to the federal reserve act.--The 2d and 3d 
        paragraphs of the 1st section of the Federal Reserve Act (12 
        U.S.C. 221) are each amended by inserting ``(as defined in 
        section 3(a)(2) of the Federal Deposit Insurance Act)'' after 
        ``State bank''.

SEC. 2222. TREATMENT OF CERTAIN ACTIVITIES AND AFFILIATIONS OF BANK 
              HOLDING COMPANIES RESULTING FROM THIS ACT.

    Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) 
is amended by adding at the end the following new subsection:
    ``(k) Treatment of Companies Resulting From Savings and Loan 
Holding Companies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section (other than paragraph (5)) or any other provision 
        of Federal law including sections 20 and 32 of the Banking Act 
        of 1933, a qualified bank holding company may, after such 
        company becomes a bank holding company--
                    ``(A) maintain or enter into any nonbanking 
                affiliation which such company was authorized to 
                maintain or enter into as of September 22, 1995, or was 
                authorized to maintain following a merger of insured 
                depository institution subsidiaries pursuant to an 
                application filed no later than such date; and
                    ``(B) engage, directly or through any affiliate 
                described in subparagraph (A) which is not a bank, in 
                any activity in which such company or any affiliate 
                described in subparagraph (A) was authorized to engage 
                as of September 22, 1995, or in which such company was 
                authorized to engage following a merger of insured 
                depository institution subsidiaries pursuant to an 
                application filed no later than such date,
        if the requirements of paragraph (4) are met.
            ``(2) Qualified bank holding company defined.--For purposes 
        of this subsection, the term `qualified bank holding company' 
        means--
                    ``(A) any company which--
                            ``(i) as of September 13, 1995, is a 
                        savings and loan holding company and is not a 
                        bank holding company; and
                            ``(ii) becomes a bank holding company after 
                        such date; and
                    ``(B) any bank holding company which as of 
                September 13, 1995--
                            ``(i) is a savings and loan holding 
                        company; and
                            ``(ii) is exempt from this section pursuant 
                        to an order issued by the Board under 
                        subsection (d).
            ``(3) No loss of subsection (d) exemption.--No qualified 
        bank holding company described in paragraph (2)(B) shall lose 
        the grounds for the exemption under subsection (d) because a 
        savings association which such company controlled, directly or 
        indirectly, as of September 13, 1995, becomes a bank after such 
        date so long as such bank continues to meet the requirements of 
        subparagraphs (A) and (B) of paragraph (4).
            ``(4) Prerequisites for continuation of grandfathered 
        activities and affiliations.--This subsection shall cease to 
        apply with respect to a qualified bank holding company if, at 
        any time after such company first meets the definition of a 
        qualified bank holding company--
                    ``(A) any insured depository institution controlled 
                by such company which, as of the day before the company 
                first meets the definition of a qualified bank holding 
                company, was subject to the requirements contained in 
                section 10(m) of the Home Owners' Loan Act, as in 
                effect on such date, (and regulations in effect on such 
                date under such section) for treatment as a qualified 
                thrift lender under such section fails to meet such 
                requirements;
                    ``(B) any insured depository institution controlled 
                by such company fails to comply with any limitation or 
                restriction on the type or amounts of loans or 
                investments of the institution to which such 
                institution was subject as of the date of the enactment 
                of the Thrift Charter Conversion Act of 1995; or
                    ``(C) the company or any subsidiary of the company 
                acquires more than 5 percent of the shares or assets of 
                any bank or insured institution after September 13, 
                1995.
            ``(5) Nontransferable.--This subsection shall not apply 
        with respect to any qualified bank holding company if, after 
        September 13, 1995, any person acquires, directly or 
        indirectly, control of the company or the company is the 
        subject of any merger, consolidation, or other similar 
        transaction.
            ``(6) Prohibition on certain insured depository 
        institutions identifying themselves as national banks.--
                    ``(A) In general.--Notwithstanding the requirement 
                of section 5134 of the Revised Statutes of the United 
                States--
                            ``(i) the name of an insured depository 
                        institution subsidiary of a qualified bank 
                        holding company which--
                                    ``(I) as of the date of the 
                                enactment of the Thrift Charter 
                                Conversion Act of 1995, is a savings 
                                and loan holding company described in 
                                section 10(c)(3) of the Home Owners' 
                                Loan Act (as in effect on such date); 
                                and
                                    ``(II) is subject to the 
                                restrictions contained in paragraph 
                                (3),
                        may not include the term `national'; and
                            ``(ii) such insured depository institution 
                        may not be identified as a national bank on any 
                        sign displayed by the institution or in any 
                        advertisement or other publication of the 
                        institution.
                    ``(B) Depository institution not liable for 
                fraudulent misrepresentation for not representing 
                itself as a national bank.--An insured depository 
                institution which is subject to subparagraph (A) shall 
                not be liable for any civil or criminal penalty under 
                any Federal or State consumer protection law, or in any 
                criminal or civil action, for fraudulently 
                misrepresenting the nature of the charter of the 
                institution, for falsely advertising the status of the 
                institution, for making a false statement with respect 
                to the status of the institution, or for any similar 
                offense by reason of the institution's compliance with 
                such subparagraph.
            ``(7) Enforcement.--In addition to any other power of the 
        Board, the Board may enforce compliance with the provisions of 
        this subsection with respect to any qualified bank holding 
        company and any bank controlled by such company under section 8 
        of the Federal Deposit Insurance Act.''.

SEC. 2223. TRANSITION PROVISIONS FOR ACTIVITIES OF SAVINGS ASSOCIATIONS 
              WHICH CONVERT INTO OR BECOME TREATED AS BANKS.

    Notwithstanding any other provision of Federal law, any insured 
depository institution which, as of September 13, 1995, is a savings 
association (as defined in section 3(b) of the Federal Deposit 
Insurance Act (as in effect on such date)) and after such date converts 
to a national or State bank charter or becomes treated as a State bank 
pursuant to the amendment made by section 2221(b) may continue to 
engage, directly or indirectly, in any activity in which such 
institution was lawfully engaged as of such date during the 5-year 
period beginning on the effective date of such conversion or the 
effective date of such amendments, as the case may be.

SEC. 2224. REGISTRATION OF BANK HOLDING COMPANIES RESULTING FROM 
              CONVERSIONS OF SAVINGS ASSOCIATIONS TO BANKS OR TREATMENT 
              OF SAVINGS ASSOCIATIONS AS BANKS.

    Section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842) 
is amended by adding at the end the following new subsections:
    ``(h) Registration of Certain Bank Holding Companies.--A company 
which, as of September 13, 1995, is a savings and loan holding company 
(as defined in section 10(a)(1)(D) of Home Owners' Loan Act (as in 
effect on such date)) and is not a bank holding company shall not be 
required to obtain the approval of the Board under subsection (a) to 
become a bank holding company after September 13, 1995, as a result of 
the conversion of any insured depository institution subsidiary of such 
company into a bank or by virtue of the treatment of any insured 
depository institution subsidiary of such company as a bank pursuant to 
the amendments made by the Thrift Charter Conversion Act of 1995, if 
such company--
            ``(1) registers as a bank holding company with the Board in 
        accordance with section 5(a); and
            ``(2) does not acquire, directly or indirectly, ownership 
        or control of any additional insured depository institution or 
        other company in connection with such conversion or treatment.
    ``(i) Regulation of Qualified Bank Holding Companies.--The Board 
shall regulate qualified bank holding companies (as defined in section 
4(k)(2)) in a manner consistent with--
            ``(1) the regulation of such companies by the Director of 
        the Office of Thrift Supervision before the date of the 
        enactment of the Thrift Charter Conversion Act of 1995; and
            ``(2) the safety and soundness of insured depository 
        institution subsidiaries of such companies.''.

SEC. 2225. ADDITIONAL TRANSITION PROVISIONS AND SPECIAL RULES.

    (a) Mutual National Banks Authorized; Conversion of Mutual Savings 
Associations Into National Banks.--
            (1) In general.--Chapter one of title LXII of the Revised 
        Statutes of the United States (12 U.S.C. 21 et seq.) is amended 
        by inserting after section 5133 the following new section:

``SEC. 5133A. MUTUAL NATIONAL BANKS.

    ``(a) In General.--Notwithstanding the paragraph designated the 
``Third'' of section 5134, the Comptroller of the Currency may charter 
national banks organized in the mutual form either de novo or through a 
conversion of any stock national or State bank (as defined in section 3 
of the Federal Deposit Insurance Act) or any State mutual bank or 
credit union, subject to regulations prescribed by the Comptroller of 
the Currency in accordance with this section.
    ``(b) Regulations.--
            ``(1) Transition rules.--National banks organized in the 
        mutual form shall be subject to the regulations of the Director 
        of the Office of Thrift Supervision governing corporate 
        organization, governance, and conversion of mutual 
        institutions, as in effect on September 13, 1995, including 
        parts 543, 544, 546, 563b, and 563c of chapter V of title 12 of 
        the Code of Federal Regulations (as in effect on such date), 
        during the 3-year period beginning on the date of the enactment 
        of the Thrift Charter Conversion Act of 1995.
            ``(2) Regulations of the comptroller.--The Comptroller of 
        the Currency shall prescribe appropriate regulations for 
        national banks organized in the mutual form, effective as of 
        the end of the 3-year period referred to in paragraph (1).
            ``(3) Applicability of capital stock requirements.--The 
        Comptroller of the Currency shall prescribe regulations 
        regarding the manner in which requirements of title LXII of the 
        Revised Statutes of the United States with respect to capital 
        stock, and limitations imposed on national banks under such 
        title based on capital stock, shall apply to national banks 
        organized in mutual form pursuant to subsection (a).
    ``(c) Conversions.--
            ``(1) Conversion to stock national bank.--Subject to 
        subsection (b)(1) and, after the end of the 3-year period 
        referred to in such subsection, such regulations as the 
        Comptroller of the Currency may prescribe for the protection of 
        depositors' rights and for any other purpose the Comptroller of 
        the Currency may consider appropriate, any national bank which 
        is organized in mutual form pursuant to paragraph (1) may 
        reorganize as a stock national bank.
            ``(2) Conversions to state banks.--Any national mutual bank 
        may convert to a State bank charter in accordance with 
        regulations prescribed by the Comptroller of the Currency and 
        applicable State law.''.
            (2) Mutual bank holding companies.--Subsection (g) of 
        section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1842(g)) is amended to read as follows:
    ``(g) Mutual Bank Holding Companies.--
            ``(1) In general.--A national mutual bank may reorganize so 
        as to become a holding company by--
                    ``(A) chartering an interim national bank, the 
                stock of which is to be wholly owned, except as 
                otherwise provided in this section, by the national 
                mutual bank; and
                    ``(B) transferring the substantial part of the 
                national mutual bank's assets and liabilities, 
                including all of the bank's insured liabilities, to the 
                interim national bank.
            ``(2) Directors and certain account holders' approval of 
        plan required.--A reorganization is not authorized under this 
        subsection unless--
                    ``(A) a plan providing for such reorganization has 
                been approved by a majority of the board of directors 
                of the national mutual bank; and
                    ``(B) in the case of a national mutual bank in 
                which holders of accounts and obligors exercise voting 
                rights, such plan has been submitted to and approved by 
                a majority of such individuals at a meeting held at the 
                call of the directors in accordance with the procedures 
                prescribed by the bank's charter and bylaws.
            ``(3) Notice to the board; disapproval period.--
                    ``(A) Notice required.--
                            ``(i) In general.--At least 60 days before 
                        taking any action described in paragraph (1), a 
                        national mutual bank seeking to establish a 
                        mutual holding company shall provide written 
                        notice to the Board.
                            ``(ii) Contents of notice.--The notice 
                        shall contain such relevant information as the 
                        Board shall require by regulation or by 
                        specific request in connection with any 
                        particular notice.
                    ``(B) Transaction allowed if not disapproved.--
                Unless the Board within such 60-day notice period 
                disapproves the proposed holding company formation, or 
                extends for another 30 days the period during which 
                such disapproval may be issued, the national mutual 
                bank providing such notice may proceed with the 
                transaction, if the requirements of paragraph (2) have 
                been met.
                    ``(C) Grounds for disapproval.--The Board may 
                disapprove any proposed holding company formation only 
                if--
                            ``(i) such disapproval is necessary to 
                        prevent unsafe or unsound practices;
                            ``(ii) the financial or management 
                        resources of the national mutual bank involved 
                        warrant disapproval;
                            ``(iii) the national mutual bank fails to 
                        furnish the information required under 
                        subparagraph (A); or
                            ``(iv) the national mutual bank fails to 
                        comply with the requirement of paragraph (2).
                    ``(D) Retention of capital assets.--In connection 
                with the transaction described in paragraph (1), a 
                national mutual bank may, subject to the approval of 
                the Board, retain capital assets at the holding company 
                level to the extent that the capital retained at the 
                holding company is in excess of the amount of capital 
                required in order for the interim national bank to meet 
                all relevant capital standards established by the 
                Comptroller of the Currency for national banks.
            ``(4) Ownership.--
                    ``(A) In general.--Persons having ownership rights 
                in the national mutual bank under section 5133A of the 
                Revised Statutes of the United States (including 
                paragraph 575.5 of chapter V of title 12 of the Code of 
                Federal Regulations, as in effect on September 13, 
                1995, and applicable to national mutual banks pursuant 
                to such section) or State law shall have the same 
                ownership rights with respect to the mutual holding 
                company.
                    ``(B) Holders of certain accounts.--Holders of 
                savings, demand, or other accounts of--
                            ``(i) a national bank chartered as part of 
                        a transaction described in paragraph (1); or
                            ``(ii) a mutual bank acquired pursuant to 
                        paragraph (5)(B),
                shall have the same ownership rights with respect to 
                the mutual holding company as persons described in 
                subparagraph (A) of this paragraph.
            ``(5) Permitted activities.--A mutual holding company may 
        engage only in the following activities:
                    ``(A) Investing in the stock of a national or State 
                bank.
                    ``(B) Acquiring a mutual bank through the merger of 
                such bank into a national bank subsidiary of such 
                holding company or an interim national bank subsidiary 
                of such holding company.
                    ``(C) Subject to paragraph (6), merging with or 
                acquiring another holding company, one of whose 
                subsidiaries is a national mutual bank.
                    ``(D) Investing in a corporation the capital stock 
                of which is available for purchase by a national mutual 
                bank under Federal law or under the law of any State 
                where the home office of any subsidiary bank is 
                located.
                    ``(E) Engaging in the activities permitted under 
                section 4(c).
            ``(6) Limitations on certain activities of acquired holding 
        companies.--
                    ``(A) New activities.--If a mutual holding company 
                acquires or merges with another holding company under 
                paragraph (5)(C), the holding company acquired or the 
                holding company resulting from such merger or 
                acquisition may only invest in assets and engage in 
                activities which are authorized under paragraph (5).
                    ``(B) Grace period for divesting prohibited assets 
                or discontinuing prohibited activities.--Not later than 
                2 years following a merger or acquisition described in 
                paragraph (5)(C), the acquired holding company or the 
                holding company resulting from such merger or 
                acquisition shall--
                            ``(i) dispose of any asset which is an 
                        asset in which a mutual holding company may not 
                        invest under paragraph (5); and
                            ``(ii) cease any activity which is an 
                        activity in which a mutual holding company may 
                        not engage under paragraph (5).
            ``(7) Chartering and other requirements.--
                    ``(A) In general.--A mutual holding company shall 
                be chartered by the Board and shall be subject to such 
                regulations as the Board may prescribe.
                    ``(B) Other requirements.--Unless the context 
                otherwise requires, a mutual holding company shall be 
                subject to the other requirements of this Act regarding 
                regulation of holding companies.
            ``(8) Capital improvement.--
                    ``(A) Pledge of stock of savings association 
                subsidiary.--This section shall not prohibit a mutual 
                holding company from pledging all or a portion of the 
                stock of a national bank chartered as part of a 
                transaction described in paragraph (1) to raise capital 
                for such bank.
                    ``(B) Issuance of nonvoting shares.--No provision 
                of this Act shall be construed as prohibiting a 
                national bank chartered as part of a transaction 
                described in paragraph (1) from issuing any nonvoting 
                shares or less than 50 percent of the voting shares of 
                such bank to any person other than the mutual holding 
                company.
            ``(9) Insolvency and liquidation.--
                    ``(A) In general.--Notwithstanding any provision of 
                law, upon--
                            ``(i) the default of any national bank--
                                    ``(I) the stock of which is owned 
                                by any mutual holding company; and
                                    ``(II) which was chartered in a 
                                transaction described in paragraph (1);
                            ``(ii) the default of a mutual holding 
                        company; or
                            ``(iii) a foreclosure on a pledge by a 
                        mutual holding company described in paragraph 
                        (8)(A),
                a trustee shall be appointed receiver of such mutual 
                holding company and such trustee shall have the 
                authority to liquidate the assets of, and satisfy the 
                liabilities of, such mutual holding company pursuant to 
                title 11, United States Code.
                    ``(B) Distribution of net proceeds.--Except as 
                provided in subparagraph (C), the net proceeds of any 
                liquidation of any mutual holding company pursuant to 
                subparagraph (A) shall be transferred to persons who 
                hold ownership interests in such mutual holding 
                company.
                    ``(C) Recovery by corporation.--If the Corporation 
                incurs a loss as a result of the default of any savings 
                association subsidiary of a mutual holding company 
                which is liquidated pursuant to subparagraph (A), the 
                Corporation shall succeed to the ownership interests of 
                the depositors of such savings association in the 
                mutual holding company, to the extent of the 
                Corporation's loss.
            ``(10) State mutual bank holding company.--
                    ``(A) In general.--Notwithstanding any provision of 
                Federal law, a State bank operating in mutual form may 
                reorganize so as to form a holding company under State 
                law.
                    ``(B) Regulation of state mutual holding company.--
                A corporation organized as a holding company in 
                accordance with subparagraph (A) shall be regulated on 
                the same terms and be subject to the same limitations 
                as any other holding company which controls a bank.
            ``(11) Regulations.--
                    ``(A) Transition rules.--Mutual bank holding 
                companies organized under this subsection shall be 
                subject to the regulations of the Director of the 
                Office of Thrift Supervision governing corporate 
                organization, governance, and conversion of mutual 
                institutions, as in effect on September 13, 1995, 
                including part 575 of chapter V of title 12 of the Code 
                of Federal Regulations (as in effect on such date), 
                during the 3-year period beginning on the date of the 
                enactment of the Thrift Charter Conversion Act of 1995.
                    ``(B) Regulations of the board.--The Board shall 
                prescribe appropriate regulations for mutual holding 
                companies, effective at the end of the 3-year period 
                referred to in subparagraph (A).
            ``(12) Definitions.--For purposes of this subsection--
                    ``(A) Mutual holding company.--The term `mutual 
                holding company' means a corporation organized as a 
                holding company under this subsection.
                    ``(B) Default.--The term `default' means an 
                adjudication or other official determination of a court 
                of competent jurisdiction or other public authority 
                pursuant to which a conservator, receiver, or other 
                legal custodian is appointed.
                    ``(C) National mutual bank.--The term `national 
                mutual bank' means a national bank organized in mutual 
                form under section 5133A of the Revised Statutes of the 
                United States.''.
            (3) Limitation on federal regulation of state banks.--
        Except as otherwise provided in Federal law, the Comptroller of 
        the Currency, Board of Governors of the Federal Reserve System, 
        and Federal Deposit Insurance Corporation may not adopt or 
        enforce any regulation which contravenes the corporate 
        governance rules prescribed by State law or regulation for 
        State banks unless the Comptroller, Board, or Corporation finds 
        that such Federal regulation is necessary to assure the safety 
        and soundness of such State banks.
            (4) Conversions of mutual savings associations to mutual 
        national banks by operation of law.--Notwithstanding any other 
        provision of Federal or State law, any savings association (as 
        defined in section 3 of the Federal Deposit Insurance Act (as 
        in effect on September 13, 1995)) which is organized in mutual 
        form as of the date of the enactment of this Act may become a 
        national mutual bank by operation of law if the association--
                    (A) files the articles of association and 
                organization certificate with the Comptroller of the 
                Currency before January 1, 1998, in accordance with 
                chapter one of title LXII of the Revised Statutes of 
                the United States; and
                    (B) provides such other document or information as 
                the Comptroller of the Currency may prescribe in 
                regulations consistent with this section and section 
                5133A of the Revised Statutes of the United States (as 
                added by paragraph (1) of this subsection).
            (5) Clerical amendment.--The table of sections for chapter 
        one of title LXII of the Revised Statutes of the United States 
        (12 U.S.C. 21 et seq.) is amended by inserting after the item 
relating to section 5133 the following new item:

``5133A.  Mutual national banks.''.
    (b) Membership in Federal Home Loan Banks.--Any insured depository 
institution which--
            (1) as of the date of the enactment of this Act, is a 
        Federal savings association which, pursuant to section 6(e) of 
        the Federal Home Loan Bank Act, may not voluntarily withdraw 
        from membership in a Federal home loan bank; and
            (2) after such date converts from a Federal savings 
        association to a national bank,
shall continue to be subject to the prohibition under such section on 
voluntary withdrawal from such membership as though such bank were 
still a Federal savings association until the bank ceases to be a 
national bank.
    (c) Branches.--
            (1) In general.--Notwithstanding any provision of the 
        Federal Deposit Insurance Act, the Bank Holding Company Act of 
        1956, or any other Federal or State law, any depository 
        institution which--
                    (A) as of the date of the enactment of this Act, is 
                a savings association; and
                    (B) becomes a bank before January 1, 1998, or, 
                pursuant to the amendments made by this subsection, is 
                treated as a bank as of such date under the Federal 
                Deposit Insurance Act,
        and any depository institution or bank holding company which 
        acquires such depository institution, may continue, after the 
        depository institution becomes or commences to be treated as a 
        bank, to operate any branch which the savings association 
        operated as a branch on September 13, 1995.
            (2) No additional branches.--Paragraph (1) shall not be 
        construed as authorizing the establishment, acquisition, or 
        operation of any additional branch of a depository institution 
        in any State by virtue of the operation by such institution of 
        a branch in such State pursuant to such paragraph except to the 
        extent such establishment, acquisition, or operation is 
        permitted under the Federal Deposit Insurance Act, Bank Holding 
        Company Act of 1956, and any other applicable Federal or State 
        law without regard to such branch.
    (d) Transition Provision Relating to Limitations on Loans to 1 
Borrower.--Section 5200 of the Revised Statutes of the United States 
(12 U.S.C. 84) is amended by adding at the end the following new 
subsection:
    ``(e) Transition Provision for Savings Associations Converting to 
National Banks.--In the case of any depository institution which, as of 
September 13, 1995, is a savings association (as defined in section 
3(b) of the Federal Deposit Insurance Act (as in effect on such date)) 
and becomes a national bank on or before January 1, 1998, any loan, or 
legally binding commitment to make a loan, made or entered into by such 
institution which is outstanding on the date the institution becomes a 
national bank may continue to be held without regard to any limitation 
contained in this section during the 3-year period beginning on such 
date.''.

SEC. 2226. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to the Federal Deposit Insurance Act.--
            (1) Section 3(z) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(z)) is amended by striking ``the Director of the 
        Office of Thrift Supervision,''.
            (2) Section 8(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(b)) is amended by striking paragraph (9).
            (3) Section 13 of the Federal Deposit Insurance Act (12 
        U.S.C. 1823) is amended by striking subsection (k).
            (4) Subsections (c)(2) and (i)(2) of section 18 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828) are each 
        amended--
                    (A) in subparagraph (B), by inserting ``and'' after 
                the semicolon;
                    (B) in subparagraph (C), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (D).
            (5) Section 18 of the Federal Deposit Insurance Act (12 
        U.S.C. 1828) is amended by striking subsection (m).
            (6) The Federal Deposit Insurance Act (12 U.S.C. 1811 et 
        seq.) is amended by striking section 28.
    (b) Amendments to the Bank Holding Company Act of 1956.--
            (1) Section 2 of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841) is amended by striking subsections (i) and (j).
            (2) Section 4(c)(8) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(c)(8)) is amended by striking the sentence 
        preceding the penultimate sentence.
            (3) Section 4(f) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(f)) is amended--
                    (A) in paragraph (2)(A)(i), by striking ``or an 
                insured institution'' and all that follows through ``of 
                this subsection)'';
                    (B) in paragraph (2)(A)(ii)--
                            (i) by striking ``or a savings 
                        association'' where such term appears in the 
                        portion of such paragraph which precedes 
                        subclause (I);
                            (ii) by inserting ``and'' at the end of 
                        subclause (VI);
                            (iii) by striking subclauses (VIII), (IX), 
                        and (X); and
                            (iv) by striking ``(V), and (VIII)'', where 
                        such term appears in the portion of such 
                        paragraph which appears after the end of 
                        subclause (VII), and inserting ``and (V)''; and
                    (C) by striking paragraphs (10), (11), (12), and 
                (13).
            (4) Section 4(i) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(i)) is amended--
                    (A) by striking paragraphs (1) and (2); and
                    (B) in paragraph (3)(A), by striking ``any Federal 
                savings association'' and all that follows through the 
                period at the end of such paragraph and inserting 
                ``such association was authorized to engage under this 
                section as of September 15, 1995.''.
    (c) Other Technical and Conforming Amendments.--
            (1) Section 804(a) of the Alternative Mortgage Transaction 
        Parity Act of 1982 (12 U.S.C. 3803) is amended--
                    (A) in the portion of such subsection which 
                precedes paragraph (1)--
                            (i) by striking ``, and other nonfederally 
                        chartered housing creditors,''; and
                            (ii) by inserting ``and in order to permit 
                        other nonfederally chartered housing creditors 
                        to make, purchase, and enforce alternative 
                        mortgage transactions,'' after ``enforcing 
                        alternative mortgage transactions, ''; and
                    (B) in paragraph (1), by inserting ``(as such term 
                is defined in section 3(a) of the Federal Deposit 
                Insurance Act)'' after ``with respect to banks''.
            (2) Section 205 of the Depository Institution Management 
        Interlocks Act (12 U.S.C. 3204) is amended--
                    (A) in the portion of paragraph (8)(A) which 
                precedes clause (i), by striking ``A diversified 
                savings'' and all that follows through ``with respect 
                to'' and inserting ``A depository institution holding 
                company which, as of September 13, 1995, and at all 
                times thereafter, is a diversified savings and loan 
                holding company (as defined in section 10(1)(F) of Home 
                Owners' Loan Act, as such section is in effect on such 
                date) with respect to''; and
                    (B) by striking paragraph (9).
            (3) Section 19(b)(1)(A) of the Federal Reserve Act (12 
        U.S.C. 461(b)(1)(A)) is amended--
                    (A) by inserting ``and'' after the semicolon at the 
                end of clause (v); and
                    (B) by striking clause (vi).
            (4) Subparagraphs (A), (B), (C) of section 10(e)(5) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1430(e)(5)) are each 
        amended by inserting before the period at the end ``(as such 
        section is in effect on September 13, 1995)''.

SEC. 2227. REFERENCES TO SAVINGS ASSOCIATIONS AND STATE BANKS IN 
              FEDERAL LAW.

    Effective January 1, 1998, any reference in any Federal banking law 
to--
            (1) the term ``savings association'' shall be deemed to be 
        a reference to a bank as defined in section 3(a) of the Federal 
        Deposit Insurance Act; and
            (2) the term ``State bank'' shall be deemed to include any 
        depository institution included in the definition of such term 
        in section 3(a)(2) of such Act.

SEC. 2228. REPEAL OF HOME OWNERS' LOAN ACT.

    Effective January 1, 1998, the Home Owners' Loan Act (12 U.S.C. 
1461 et seq.) is hereby repealed.

SEC. 2229. EFFECTIVE DATE; DEFINITIONS.

    (a) Effective Date of Amendments.--The amendments made by this 
chapter shall take effect on January 1, 1998.
    (b) Definitions.--For purposes of this chapter, the terms 
``appropriate Federal banking agency'', ``bank holding company'', 
``depository institution'', ``Federal savings association'', ``insured 
depository institution'', ``savings association'', and ``State bank'' 
have the same meanings as in section 3 of the Federal Deposit Insurance 
Act (as in effect on the date of the enactment of this Act).

       CHAPTER 3--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 2241. OFFICE OF THRIFT SUPERVISION ABOLISHED.

    Effective January 1, 1998, the Office of Thrift Supervision and the 
position of Director of the Office of Thrift Supervision are hereby 
abolished.

SEC. 2242. DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.

    (a) All Office of Thrift Supervision Employees Shall Be 
Transferred.--All employees of the Office of Thrift Supervision shall 
be identified for transfer under subsection (b) to the Office of the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System.
    (b) Functions and Employees Transferred.--
            (1) In general.--The Director of the Office of Thrift 
        Supervision, the Comptroller of the Currency, the Chairperson 
        of the Federal Deposit Insurance Corporation, and the Chairman 
        of the Board of Governors of the Federal Reserve System shall 
        jointly determine the functions or activities of the Office of 
        Thrift Supervision, and the number of employees of such Office 
        necessary to perform or support such functions or activities, 
        which are transferred from the Office to the Office of the 
        Comptroller of the Currency, the Federal Deposit Insurance 
        Corporation, or the Board of Governors of the Federal Reserve 
        System, as the case may be.
            (2) Allocation of employees.--The Comptroller of the 
        Currency, the Chairperson of the Federal Deposit Insurance 
        Corporation, and the Chairman of the Board of Governors of the 
        Federal Reserve System shall allocate the employees of the 
        Office of Thrift Supervision consistent with the number 
        determined pursuant to paragraph (1) in a manner which such 
        Comptroller, Chairperson, and Chairman, in their sole 
        discretion, deem equitable, except that, within work units, the 
        agency preferences of individual employees shall be 
        accommodated as far as possible.
    (c) Disposition of Affairs.--
            (1) In general.--In winding up the affairs of the Office of 
        Thrift Supervision, the Director of the Office of Thrift 
        Supervision shall consult and cooperate with the Comptroller of 
        the Currency, the Federal Deposit Insurance Corporation, and 
        the Board of Governors of the Federal Reserve System, as the 
        case may be, to facilitate the orderly transfer of the 
        functions to such Comptroller, Corporation, or Board.
            (2) Continuing authority of director of the office of 
        thrift supervision.--Except as provided in paragraph (1), no 
        provision of this subtitle shall be construed as affecting the 
        authority vested in the Director of the Office of Thrift 
        Supervision before the date of enactment of this Act which is 
        necessary to carry out the duties of the position until the 
        date upon which the position of Director of the Office of 
        Thrift Supervision is abolished.
            (3) Continuation of agency services.--Any agency, 
        department, or other instrumentality of the United States, or 
        any successor to any such agency, department, or 
        instrumentality, which was providing support services to the 
        Director of the Office of Thrift Supervision on the day before 
        the date such position is abolished shall--
                    (A) continue to provide such services on a 
                reimbursable basis, in accordance with the terms of the 
                arrangement pursuant to which such services were 
                provided until the arrangement is modified or 
                terminated in accordance with such terms, except that 
                effective January 1, 1998, the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System, 
                as the case may be, shall be substituted for the 
                Director of the Office of Thrift Supervision as a party 
                to the arrangement; and
                    (B) consult with the Comptroller, the Corporation, 
                or the Board to coordinate and facilitate a prompt and 
                reasonable transition.
    (d) Transfer of Property.--Effective January 1, 1998, all property 
of the Office of Thrift Supervision shall be transferred to the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System, as determined 
in accordance with subsections (a) and (b).

SEC. 2243. SAVINGS PROVISIONS.

    (a) Existing Rights, Duties, and Obligations Not Affected.--No 
provision of this title shall be construed as affecting the validity of 
any right, duty, or obligation of the United States, the Director of 
the Office of Thrift Supervision, or any person, which existed on the 
day before the date upon which the position of Director of the Office 
of Thrift Supervision and the Office of Thrift Supervision are 
abolished.
    (b) Continuation of Suits.--No action or other proceeding commenced 
by or against the Director of the Office of Thrift Supervision shall 
abate by reason of enactment of this Act, except that, effective 
January 1, 1998, the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, or the Board of Governors of the Federal Reserve 
System, as the case may be, shall be substituted as a party to any such 
action or proceeding.
    (c) Continuation of Administrative Rules.--All orders, resolutions, 
determinations, regulations, interpretative rules, other 
interpretations, guidelines, procedures, supervisory and enforcement 
actions, and other advisory material (other than any regulation 
implementing or prescribed pursuant to section 3(f) of the Home Owners' 
Loan Act (as in effect on September 13, 1995)) which--
            (1) have been issued, made, prescribed, or permitted to 
        become effective by the Office of Thrift Supervision, and
            (2) are in effect on December 31, 1996, (or become 
        effective after such date pursuant to the terms of the order, 
        resolution, determination, rule, other interpretation, 
        guideline, procedure, supervisory or enforcement action, and 
        other advisory material, as in effect on such date), shall--
                    (A) continue in effect according to the terms of 
                such orders, resolutions, determinations, regulations, 
                interpretative rules, other interpretations, 
                guidelines, procedures, supervisory or enforcement 
                actions, or other advisory material;
                    (B) be administered by the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System; 
                and
                    (C) be enforceable by or against the Comptroller of 
                the Currency, the Federal Deposit Insurance 
                Corporation, or the Board of Governors of the Federal 
                Reserve System until modified, terminated, set aside, 
                or superseded in accordance with applicable law by the 
                Comptroller, Corporation, or Board, by any court of 
                competent jurisdiction, or by operation of law.
    (d) Treatment of References in Adjustable Rate Mortgages Issued 
Before FIRREA.--For purposes of section 402(e) of Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
1437 note), any reference in such section to--
                    (A) the Director of the Office of Thrift 
                Supervision shall be deemed to be a reference to the 
                Secretary of the Treasury; and
                    (B) a Savings Association Insurance Fund member 
                shall be deemed to be a reference to an insured 
                depository institution (as defined in section 3 of the 
                Federal Deposit Insurance Act).
    (e) Treatment of References in Adjustable Rate Mortgage Instruments 
Issued After FIRREA.--
            (1) In general.--For purposes of adjustable rate mortgage 
        instruments that are in effect as of the date of enactment of 
        this Act, any reference in the instrument to the Director of 
        the Office of Thrift Supervision or Savings Association 
        Insurance Fund members shall be treated as a reference to the 
        Secretary of the Treasury or insured depository institutions 
        (as defined in section 3 of the Federal Deposit Insurance Act), 
        as appropriate.
            (2) Substitution for indexes.--If any index used to 
        calculate the applicable interest rate on any adjustable rate 
        mortgage instrument is no longer calculated and made available 
        as a direct or indirect result of the enactment of this Act, 
        any index--
                    (A) made available by the Secretary of the 
                Treasury; or
                    (B) determined by the Secretary of the Treasury, 
                pursuant to paragraph (4), to be substantially similar 
                to the index which is no longer calculated or made 
                available,
        may be substituted by the holder of any such adjustable rate 
        mortgage instrument upon notice to the borrower.
            (3) Agency action required to provide continued 
        availability of indexes.--Promptly after the enactment of this 
        subsection, the Secretary of the Treasury, the Chairperson of 
        the Federal Deposit Insurance Corporation, and the Comptroller 
        of the Currency shall take such action as may be necessary to 
        assure that the indexes prepared by the Director of the Office 
        of Thrift Supervision immediately prior to the enactment of 
        this subsection and used to calculate the interest rate on 
        adjustable rate mortgage instruments continue to be available.
            (4) Requirements relating to substitute indexes.--If any 
        agency can no longer make available an index pursuant to 
        paragraph (3), an index that is substantially similar to such 
        index may be substituted for such index for purposes of 
        paragraph (2) if the Secretary of the Treasury determines, 
        after notice and opportunity for comment, that--
                    (A) the new index is based upon data substantially 
                similar to that of the original index; and
                    (B) the substitution of the new index will result 
                in an interest rate substantially similar to the rate 
                in effect at the time the original index became 
                unavailable.

SEC. 2244. REFERENCES IN FEDERAL LAW TO DIRECTOR OF THE OFFICE OF 
              THRIFT SUPERVISION.

    Any reference in any Federal law to the Director of the Office of 
Thrift Supervision or the Office of Thrift Supervision shall be deemed 
to be a reference to the appropriate Federal banking agency (as defined 
in section 3(q) of the Federal Deposit Insurance Act).

SEC. 2245. RECONFIGURATION OF BOARD OF DIRECTORS OF FDIC AS A RESULT OF 
              REMOVAL OF DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION.

    (a) In General.--Section 2(a)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1812(a)(1)) is amended to read as follows:
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board of Directors consisting of 3 members--
                    ``(A) 1 of whom shall be the Comptroller of the 
                Currency; and
                    ``(B) 2 of whom shall be appointed by the 
                President, by and with the advice and consent of the 
                Senate, from among individuals who are citizens of the 
                United States.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 2(a)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(a)(2)) is amended--
                    (A) by striking ``February 28, 1993'' and inserting 
                ``January 1, 1998''; and
                    (B) by striking ``3'' and inserting ``2''.
            (2) Section 2(d)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(d)(2)) is amended--
                    (A) by striking ``or the office of Director of the 
                Office of Thrift Supervision'';
                    (B) by striking ``or such Director'';
                    (C) by striking ``or the Acting Director of the 
                Office of Thrift Supervision, as the case may be''; and
                    (D) by striking ``or Director''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on January 1, 1998.
    (d) Designation of Abolished Position.--Unless there is a vacancy 
in the position of an appointed member of the Board of Directors as of 
January 1, 1998, the President, consistent with the requirements of 
section 2(a)(2) of the Federal Deposit Insurance Act, shall designate 
which of the 3 positions of appointed member of such Board of Directors 
shall be abolished pursuant to the amendment made by subsection (a).

                 CHAPTER 4--LOAN LOSS RESERVE TREATMENT

SEC. 2261. SENSE OF THE CONGRESS.

    It is the sense of the Congress that--
            (1) one of the major obstacles to the conversion of thrift 
        institutions into banks is the tax treatment of bad debt 
        reserve deductions of thrift institutions;
            (2) as part of a comprehensive solution to the merger of 
        the Federal deposit insurance funds and thrift and bank 
        charters, section 593 of the Internal Revenue Code of 1986 
        should be repealed; and
            (3) the repeal of section 593 of the Internal Revenue Code 
        of 1986 should be accomplished in such a fashion as would 
        neither threaten the economic viability of thrift institutions 
        which convert to bank charters nor cause the Federal Treasury 
        to lose revenue.

           Subtitle C--Community Reinvestment Act Amendments

SEC. 2301. EXPRESSION OF CONGRESSIONAL INTENT.

    Subsection (b) of section 802 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2901) is amended to read as follows:
    ``(b) It is the purpose of this title to require each appropriate 
Federal financial supervisory agency to use its authority, when 
examining financial institutions, to encourage such institutions to 
help meet the credit needs of the local communities in which they are 
chartered consistent with the safe and sound operation of such 
institutions. When examining financial institutions, a supervisory 
agency shall not impose additional burden, recordkeeping, or reporting 
upon such institutions.''.

SEC. 2302. COMMUNITY REINVESTMENT ACT EXEMPTION.

    The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is 
amended by adding at the end the following new section:

``SEC. 809. TREATMENT OF SMALL FINANCIAL INSTITUTIONS.

    ``(a) In General.--In lieu of being evaluated under section 806A 
and receiving a written evaluation under section 807, an eligible 
regulated financial institution shall make a notice, signed by the 
president, available to the public that--
            ``(1) lists the type of credit and services that the 
        institution provides to help meet the credit needs of the local 
        community; and
            ``(2) states that the institution helps meet the credit 
        needs of the local communities in which the institution 
        operates, including low- and moderate-income neighborhoods.
    ``(b) Eligible Regulated Financial Institutions.--
            ``(1) In general.--A regulated financial institution shall 
        be eligible for purposes of subsection (a) if the institution 
        and any bank holding company which controls such institution 
        have aggregate assets of not more than $100,000,000.
            ``(2) Annual adjustment.--The dollar amount in paragraph 
        (1) shall be adjusted annually after December 31, 1994, by the 
        annual percentage increase in the Consumer Price Index for 
        Urban Wage Earners and Clerical Workers published by the Bureau 
        of Labor Statistics.
    ``(c) Exemption From Other Requirements.--A regulated financial 
institution which has complied with the notice requirements of 
subsection (a) shall not be subject to section 804 and any regulations 
prescribed under section 806.''.

SEC. 2303. SELF-CERTIFICATION OF CRA COMPLIANCE.

    Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2903) is amended by adding at the end the following new subsection (c):
    ``(c) Self-Certification of CRA Compliance.--
            ``(1) Certification.--In lieu of being evaluated under 
        section 806A and receiving a written evaluation under section 
        807, a qualifying financial institution may elect to self-
        certify to the appropriate Federal financial supervisory agency 
        that such institution is in compliance with the goals of this 
        title.
            ``(2) Qualifying institution.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualifying institution' means a financial 
                institution which--
                            ``(i) has not more than $250 million in 
                        assets;
                            ``(ii) has not been found to have engaged 
                        in a pattern or practice of illegal 
                        discrimination under the Fair Housing Act or 
                        the Equal Credit Opportunity Act for the 
                        preceding 5-year calendar period; and
                            ``(iii) received rating under section 
                        807(b)(2) of `satisfactory' or `outstanding' in 
                        the most recent evaluation of such institution 
                        under this title.
                    ``(B) Annual adjustment.--The dollar amount in 
                subparagraph (A) shall be adjusted annually after 
                December 31, 1994, by the annual percentage increase in 
                the Consumer Price Index for Urban Wage Earners and 
                Clerical Workers published by the Bureau of Labor 
                Statistics.
            ``(3) Public notice.--
                    ``(A) In general.--A qualifying institution shall 
                maintain in every branch a public notice stating that--
                            ``(i) the institution has self-certified 
                        that the institution is satisfactorily helping 
                        to meet the credit needs of its community;
                            ``(ii) the institution maintains--
                                    ``(I) at the main office of such 
                                institution, a public file which 
                                contains a copy of the self-
                                certification to the appropriate 
                                Federal financial supervisory agency; 
                                and
                                    ``(II) a map delineating the 
                                community served by the institution;
                            ``(iii) a list of the types of credit and 
                        services that the institution provides to the 
                        community served by the institution;
                            ``(iv) such other information that the 
                        institution believes demonstrates the 
                        institution's record of helping to meet the 
                        credit needs of its community; and
                            ``(v) every public comment or letter to the 
                        institution (and any response by the 
                        institution) received within the previous 2-
                        year period about the record of the institution 
                        of helping to meet the credit needs of its 
                        community.
                    ``(B) Public file.--A qualifying institution shall 
                maintain a public file containing the contents 
                described in this paragraph at the institution's main 
                office.
            ``(4) Rating.--
                    ``(A) In general.--A qualifying institution shall 
                be deemed to have a rating of a `satisfactory record of 
                meeting community credit needs' for the purposes of 
                this section and section 806A(c).
                    ``(B) Publication.--Each Federal financial 
                supervisory agency shall publish in the Federal 
                Register once each month a list of institutions that 
                have self-certified during the previous month.
                    ``(C) Publication constitutes disclosure.--
                Publication of the name of the institution in the 
                Federal Register as having self-certified shall 
                constitute disclosure of the rating of the institution 
                to the public for purposes of sections 806A and 807.
            ``(5) Regulatory review.--
                    ``(A) Assessment.--During each examination for 
                safety and soundness, a qualifying institution's 
                supervisory agency shall, as part of the agency's 
                review of the institution's loans, assess whether the 
                institution's basis for its self-certification is 
                reasonable based on the public notice and the 
                information contained in the public file pursuant to 
                paragraph (3).
                    ``(B) Examination if self-certification is not 
                reasonable.--If the agency determines that the 
                institution's basis for the institution's self-
                certification is not reasonable, the agency shall 
                schedule an examination of the institution for the 
                purpose of assessing the institution's record of 
                helping to meet the credit needs of its community.
                    ``(C) Revocation of self-certification.--If an 
                assessment pursuant to subparagraph (B) results in a 
                less than `satisfactory' rating, the agency shall 
                revoke the institution's self-certification and 
                substitute a written evaluation as provided under 
                section 807.
                    ``(D) Period of ineligibility for self-
                certification.--An institution whose self-certification 
                has been revoked may not self-certify pursuant to this 
                subsection during the 5 years succeeding the year in 
                which the self-certification is revoked.
                    ``(E) Subsequent eligibility.--After the end of the 
                period of ineligibility described in subparagraph (D), 
                an institution which meets the requirements for self-
                certification may elect to self-certify.
            ``(6) Prohibition on additional requirements.--No 
        appropriate Federal financial supervisory agency may impose any 
        additional requirements, whether by regulation or otherwise, 
        relating to the self-certification procedure under this 
        subsection.''.

SEC. 2304. COMMUNITY INPUT AND CONCLUSIVE RATING.

    (a) Conforming Amendment.--Section 804(a) of the Community 
Reinvestment Act of 1977 (12 U.S.C. 2903) is amended by inserting 
``conducted in accordance with section 806A,'' after ``financial 
institution,''.
    (b) Community Input and Conclusive Rating.--The Community 
Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is amended by 
inserting after section 806 the following new section:

``SEC. 806A. COMMUNITY INPUT AND CONCLUSIVE RATING.

    ``(a) Publication of Exam Schedule and Opportunity for Comment.--
            ``(1) Publication of notice.--Each appropriate Federal 
        financial supervisory agency shall--
                    ``(A) publish in the Federal Register, 30 days 
                before the beginning of a calendar quarter, a listing 
                of institutions scheduled for evaluation for compliance 
                with this title during such calendar quarter; and
                    ``(B) provide opportunity for written comments from 
                the community on the performance, under this title, of 
                each institution scheduled for evaluation.
            ``(2) Comment period.--Written comments may not be 
        submitted to an appropriate Federal financial supervisory 
        agency pursuant to paragraph (1) after the end of the 30-day 
        period beginning on the first day of the calendar quarter.
            ``(3) Copy of comments.--The agency shall provide a copy of 
        such comments to the institution.
    ``(b) Evaluation.--The appropriate Federal financial supervisory 
agency shall--
            ``(1) evaluate the institution in accordance with the 
        standards contained in section 804; and
            ``(2) prepare and publish a written evaluation of the 
        institution as required under section 807.
    ``(c) Reconsideration of Rating.--
            ``(1) Request for reconsideration.--A reconsideration of an 
        institution's rating referred to in section 807(b)(1)(C), may 
        be requested within 30 days of the rating's disclosure to the 
        public.
            ``(2) Procedures for request.--Any such request shall be 
        made in writing and filed with the appropriate Federal 
        financial supervisory agency, and may be filed by the 
        institution or a member of the community.
            ``(3) Basis for request.--Any request for reconsideration 
        under this subsection shall be based on significant issues of a 
        substantive nature which are relevant to the delineated 
        community of the institution and, in the case of a request by a 
        member of the community, shall be limited to issues previously 
        raised in comments submitted pursuant to subsection (a).
            ``(4) Completion of review.--The appropriate Federal 
        financial supervisory agency shall complete any requested 
        reconsideration within 30 days of the filing of the request.
    ``(d) Conclusive Rating.--
            ``(1) In general.--An institution's rating shall become 
        conclusive on the later of--
                    ``(A) 30 days after the rating is disclosed to the 
                public; or
                    ``(B) the completion of any requested 
                reconsideration by the Federal financial supervisory 
                agency.
            ``(2) Rating conclusive of meeting community credit 
        needs.--An institution's rating shall be the conclusive 
        assessment of the institution's record of meeting the credit 
        needs of its community for purposes of section 804 until the 
        institution's next rating, developed pursuant to an 
        examination, becomes conclusive.
            ``(3) Safe harbor.--Institutions which have received a 
        `satisfactory' or `outstanding' rating shall be deemed to have 
        met the purposes of section 804.
            ``(4) Rule of construction.--Notwithstanding any other 
        provision of law, no provision of this section shall be 
        construed as granting a cause of action to any person.''.
    (c) Overall Evaluation of Institution.--Paragraph (2) of section 
804(a) of the Community Reinvestment Act of 1977 (12 U.S.C. 2903(a)) is 
amended to read as follows:
            ``(2) take such record into account in the overall 
        evaluation of the condition of the institution by the 
        appropriate Federal financial supervisory agency.''.

SEC. 2305. SPECIAL PURPOSE FINANCIAL INSTITUTIONS.

    (a) In General.--Section 804 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2903) is amended by inserting after subsection (c) (as 
added by section 2303 of this subtitle) the following new subsection:
    ``(d) Special Purpose Institutions.--
            ``(1) In general.--In conducting assessments pursuant to 
        this section at any special purpose institution, the 
        appropriate Federal financial supervisory agency shall--
                    ``(A) consider the nature of business such 
                institution is involved in; and
                    ``(B) assess and take into account the record of 
                the institution commensurate with the amount of 
                deposits (as defined in section 3(1) of the Federal 
                Deposit Insurance Act) received by such institution.
            ``(2) Standards.--Each appropriate Federal financial 
        supervisory agency shall develop standards under which special 
        purpose institutions may be deemed to have complied with the 
        requirements of this title which are consistent with the 
        specific nature of such businesses.''.
    (b) Special Purpose Institution Defined.--Section 803 of the 
Community Reinvestment Act of 1977 (12 U.S.C. 2902) is amended by 
adding at the end the following new paragraph:
            ``(5) Special purpose institutions.--The term `special 
        purpose institution' means a financial institution that does 
        not generally accept deposits from the public in amounts of 
        less than $100,000, such as wholesale, credit card, and trust 
        institutions.''.

SEC. 2306. INCREASED INCENTIVES FOR LENDING TO LOW- AND MODERATE-INCOME 
              COMMUNITIES.

    (a) In General.--Section 804(b) of the Community Reinvestment Act 
of 1977 (12 U.S.C. 2903(b)) is amended to read as follows:
    ``(b) Positive Consideration of Certain Loans and Investments.--In 
assessing and taking into account the records of a regulated financial 
institution under subsection (a), the appropriate Federal financial 
supervisory agency shall--
            ``(1) consider as a positive factor, consistent with the 
        safe and sound operation of the institution, the institution's 
        investment in or loan to--
                    ``(A) any minority depository institution or 
                women's depository institution (as such terms are 
                defined in section 808(b)) or any low-income credit 
                union;
                    ``(B) any joint venture or other entity or project 
                which promotes the public welfare in any distressed 
                community (as defined by such agency) whether or not 
                the distressed community is located in the local 
                community in which the regulated financial institution 
                is chartered to do business; and
                    ``(C) targeted low- and moderate-income 
                communities, including real property loans to such 
                communities; and
            ``(2) consider equally with other factors capital 
        investment, loan participation, and other ventures undertaken 
        by the institution in cooperation with--
                    ``(A) minority- and women-owned financial 
                institutions and low-income credit unions to the extent 
                that these activities help meet the credit needs of the 
                local communities in which such institutions are 
                chartered; and
                    ``(B) community development corporations in 
                extending credit and other financial services 
                principally to low- and moderate-income persons and 
                small businesses to the extent that such community 
                development corporations help meet the credit needs of 
                the local communities served by the majority-owned 
                institution.''.
    (b) Amendment to Definitions.--Section 803 of the Community 
Reinvestment Act of 1977 (12 U.S.C. 2902) is amended by inserting after 
paragraph (5) (as added by section 2305(b) of this subtitle) the 
following new paragraph:
            ``(6) State bank supervisor.--The term `State bank 
        supervisor' has the same meaning as in section 3(r) of the 
        Federal Deposit Insurance Act.''.
    (c) Technical Correction.--The 1st of the 2 paragraphs designated 
as paragraph (2) of section 803 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2902) is amended to read as follows:
                    ``(D) the Director of the Office of Thrift 
                Supervision with respect to any savings association 
                (the deposits of which are insured by the Federal 
                Deposit Insurance Corporation) and any savings and loan 
                holding company (other than a company which is a bank 
                holding company);''.

SEC. 2307. PROHIBITION ON ADDITIONAL REPORTING UNDER CRA.

    Section 806 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2905) is amended to read as follows:

``SEC. 806. REGULATIONS.

    ``(a) In General.--
            ``(1) Publication requirement.--Regulations to carry out 
        the purposes of this title shall be published by each 
        appropriate Federal financial supervisory agency.
            ``(2) Prohibition on additional recordkeeping.--Regulations 
        prescribed and policy statements, commentary, examiner 
        guidance, or other supervisory material issued under this title 
        shall not impose any additional recordkeeping on a financial 
        institution.
            ``(3) Prohibition on loan data collection.--No loan data 
        may be required to be collected and reported by a financial 
        institution and no such data may be made public by any Federal 
        financial supervisory agency under this title.''.

SEC. 2308. TECHNICAL AMENDMENT.

    Section 807(b)(1)(B) of the Community Reinvestment Act (12 U.S.C. 
2906) is amended by striking ``The information'' and inserting ``In the 
case of a regulated financial institution that maintains domestic 
branches in 2 or more States, the information''.

SEC. 2309. DUPLICATIVE REPORTING.

    Section 10(g) of the Federal Home Loan Bank Act (12 U.S.C. 1430(g)) 
is amended by adding at the end the following new paragraph (3):
            ``(3) Special rule.--This subsection shall not apply to 
        members receiving a grade of `outstanding' or `satisfactory' 
        under section 807 of the Community Reinvestment Act of 1977.''.

SEC. 2310. CRA CONGRESSIONAL OVERSIGHT.

    (a) Sense of Congress Relating to Aggressive Oversight.--It is the 
sense of the Congress that the appropriate committees of the House of 
Representatives and the Senate should exercise aggressive oversight of 
the adoption and implementation of any regulation by any appropriate 
Federal financial supervisory agency under the Community Reinvestment 
Act of 1977 after the date of the enactment of this Act.
    (b) Agency Reports Required.--
            (1) In general.--Each appropriate Federal financial 
        supervisory agency shall submit a report to the Congress by 
        December 31, 1996, and by December 31, 1997, on the 
        implementation of all regulations prescribed by such agency 
        under the Community Reinvestment Act of 1977 after the date of 
        the enactment of this Act.
            (2) Requirements relating to preparation of reports.--In 
        preparing each report required under paragraph (1), each 
        appropriate Federal financial supervisory agency shall--
                    (A) solicit and include comments from regulated 
                financial institutions with respect to the regulations 
                which are the subject of the report; and
                    (B) include quantifiable measures of the cost 
                savings achieved under the regulations which are the 
                subject of the report and the effectiveness of such 
                regulations in achieving the purposes of the Community 
                Reinvestment Act of 1977.
            (3) Definitions.--For purposes of this section, the terms 
        ``appropriate Federal financial supervisory agency'' and 
        ``regulated financial institution'' have the same meanings as 
        in section 803 of the Community Reinvestment Act of 1977.

SEC. 2311. CONSULTATION AMONG EXAMINERS.

    Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is 
amended by adding at the end the following new subsection:
    ``(j) Consultation Among Examiners.--
            ``(1) In general.--Each appropriate Federal banking agency 
        shall take such action as may be necessary to ensure that 
        examiners employed by the agency--
                    ``(A) consult on examination activities with 
                respect to any depository institution; and
                    ``(B) achieve an agreement and resolve any 
                inconsistencies on the recommendations to be given to 
                such institution as a consequence of any examinations.
            ``(2) Examiner-in-charge.--Each agency shall consider 
        appointing an examiner-in-charge with respect to a depository 
        institution to ensure consultation on examination activities 
        among all of the agency's examiners involved in examinations of 
        such institution.''.

SEC. 2312. LIMITATION ON REGULATIONS.

    Section 806 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2905) (as amended by section 2307) is amended by adding at the end the 
following new subsections:
    ``(b) Limitation on Regulations.--No regulation may be prescribed 
under this title by any Federal agency which would--
            ``(1) require any regulated financial institution to--
                    ``(A) make any loan or enter into any other 
                agreement on the basis of any discriminatory criteria 
                prohibited under any law of the United States; or
                    ``(B) make any loan to, or enter into any other 
                agreement with, any uncreditworthy person that would 
                jeopardize the safety and soundness of such 
                institution; or
            ``(2) prevent or hinder in any way a financial 
        institution's full responsibility to provide credit to all 
        segments of the community.
    ``(c) Encourage Loans to Creditworthy Borrowers.--Regulations 
prescribed under this title shall encourage regulated financial 
institutions to make loans and extend credit to all creditworthy 
persons, consistent with safety and soundness.''.

                    TITLE III--COMMITTEE ON COMMERCE

                       Subtitle A--Communications

                      CHAPTER 1--SPECTRUM AUCTIONS

SEC. 3001. SPECTRUM AUCTIONS.

    (a) Extension and Expansion of Auction Authority.--
            (1) Amendments.--Section 309(j) of the Communications Act 
        of 1934 (47 U.S.C. 309(j)) is amended--
                    (A) by striking paragraphs (1) and (2) and 
                inserting in lieu thereof the following:
            ``(1) General authority.--If, consistent with the 
        obligations described in paragraph (6)(E), mutually exclusive 
        applications are accepted for any initial license or 
        construction permit which will involve an exclusive use of the 
        electromagnetic spectrum, then the Commission shall grant such 
        license or permit to a qualified applicant through a system of 
        competitive bidding that meets the requirements of this 
        subsection.
            ``(2) Exemptions.--The competitive bidding authority 
        granted by this subsection shall not apply to licenses or 
        construction permits issued by the Commission--
                    ``(A) that, as the result of the Commission 
                carrying out the obligations described in paragraph 
                (6)(E), are not mutually exclusive;
                    ``(B) for public safety radio services, including 
                non-Government uses that protect the safety of life, 
                health, and property and that are not made commercially 
                available to the public; or
                    ``(C) for initial licenses or construction permits 
                for new terrestrial digital television services 
                assigned by the Commission to existing terrestrial 
                broadcast licensees to replace their current television 
                licenses.''; and
                    (B) by striking ``1998'' in paragraph (11) and 
                inserting ``2002''.
            (2) Conforming amendment.--Subsection (i) of section 309 of 
        such Act is repealed.
            (3) Effective date.--The amendment made by paragraph (1)(A) 
        shall not apply with respect to any license or permit for which 
        the Federal Communications Commission has accepted mutually 
        exclusive applications on or before the date of enactment of 
        this Act.
    (b) Commission Obligation To Make Additional Spectrum Available by 
Auction.--
            (1) In general.--The Federal Communications Commission 
        shall complete all actions necessary to permit the assignment, 
        by September 30, 2002, by competitive bidding pursuant to 
        section 309(j) of the Communications Act of 1934 (47 U.S.C. 
        309(j)) of licenses for the use of bands of frequencies that--
                    (A) individually span not less than 25 megahertz, 
                unless a combination of smaller bands can, 
                notwithstanding the provisions of paragraph (7) of such 
                section, reasonably be expected to produce greater 
                receipts;
                    (B) in the aggregate span not less than 100 
                megahertz;
                    (C) are located below 3 gigahertz; and
                    (D) have not, as of the date of enactment of this 
                Act--
                            (i) been designated by Commission 
                        regulation for assignment pursuant to such 
                        section; or
                            (ii) been identified by the Secretary of 
                        Commerce pursuant to section 113 of the 
                        National Telecommunications and Information 
                        Administration Organization Act.
                The Commission shall conduct the competitive bidding 
                for not less than one-half of such aggregate spectrum 
                by September 30, 2000.
            (2) Criteria for reassignment.--In making available bands 
        of frequencies for competitive bidding pursuant to paragraph 
        (1), the Commission shall--
                    (A) seek to promote the most efficient use of the 
                spectrum;
                    (B) take into account the cost to incumbent 
                licensees of relocating existing uses to other bands of 
                frequencies or other means of communication;
                    (C) take into account the needs of public safety 
                radio services; and
                    (D) comply with the requirements of international 
                agreements concerning spectrum allocations.
            (3) Notification to ntia.--The Commission shall notify the 
        Secretary of Commerce if--
                    (A) the Commission is not able to provide for the 
                effective relocation of incumbent licensees to bands of 
                frequencies that are available to the Commission for 
                assignment; and
                    (B) the Commission has identified bands of 
                frequencies that are--
                            (i) suitable for the relocation of such 
                        licensees; and
                            (ii) allocated for Federal Government use, 
                        but that could be reallocated pursuant to part 
                        B of the National Telecommunications and 
                        Information Administration Organization Act (as 
                        amended by this Act).
    (c) Identification and Reallocation of Frequencies.--The National 
Telecommunications and Information Administration Organization Act (47 
U.S.C. 901 et seq.) is amended--
            (1) in section 113, by adding at the end the following new 
        subsection:
    ``(f) Additional Reallocation Report.--If the Secretary receives a 
notice from the Commission pursuant to section 3001(b)(3) of the Seven-
Year Balanced Budget Reconciliation Act of 1995, the Secretary shall 
prepare and submit to the President and the Congress a report 
recommending for reallocation for use other than by Federal Government 
stations under section 305 of the 1934 Act (47 U.S.C. 305), bands of 
frequencies that are suitable for the uses identified in the 
Commission's notice.'';
            (2) in section 114(a)(1), by striking ``(a) or (d)(1)'' and 
        inserting ``(a), (d)(1), or (f)''.
    (d) Completion of C-Block PCS Auction.--The Federal Communications 
Commission shall commence the Broadband Personal Communications 
Services C-Block auction described in the Commission's Sixth Report and 
Order in DP Docket 93-253 (FCC 93-510, released July 18, 1995) not 
later than December 4, 1995. The Commission's competitive bidding rules 
governing such auction, as set forth in such Sixth Report and Order, 
are hereby ratified and adopted as a matter of Federal law.
    (e) Modification of Auction Policy To Preserve Auction Value of 
Spectrum.--The voluntary negotiation period for relocating fixed 
microwave licensees to frequency bands other than those allocated for 
licensed emerging technology services (including licensed personal 
communications services), established by the Commission's Third Report 
and Order in ET Docket No. 92-9, shall expire one year after the date 
of acceptance by the Commission of applications for such licensed 
emerging technology services. The mandatory negotiation period for 
relocating fixed microwave licensees to frequency bands other than 
those allocated for licensed emerging technology services (including 
licensed personal communications services), established in such Third 
Report and Order, shall expire two years after the date of acceptance 
by the Commission of applications for such licensed emerging technology 
services.
    (f) Identification and Reallocation of Auctionable Frequencies.--
The National Telecommunications and Information Administration 
Organization Act (47 U.S.C. 901 et seq.) is amended--
            (1) in section 113(b)--
                    (A) by striking the heading of paragraph (1) and 
                inserting ``Initial reallocation report'';
                    (B) by inserting ``in the first report required by 
                subsection (a)'' after ``recommend for reallocation'' 
                in paragraph (1);
                    (C) by inserting ``or (3)'' after ``paragraph (1)'' 
                each place it appears in paragraph (2); and
                    (D) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) Second reallocation report.--In accordance with the 
        provisions of this section, the Secretary shall recommend for 
        reallocation in the second report required by subsection (a), 
        for use other than by Federal Government stations under section 
        305 of the 1934 Act (47 U.S.C. 305), a single frequency band 
        that spans not less than an additional 20 megahertz, that is 
        located below 3 gigahertz, and that meets the criteria 
        specified in paragraphs (1) through (5) of subsection (a).''; 
        and
            (2) in section 115--
                    (A) in subsection (b), by striking ``the report 
                required by section 113(a)'' and inserting ``the 
                initial reallocation report required by section 
                113(a)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Allocation and Assignment of Frequencies Identified in the 
Second Reallocation Report.--With respect to the frequencies made 
available for reallocation pursuant to section 113(b)(3), the 
Commission shall, not later than 1 year after receipt of the second 
reallocation report required by such section, prepare, submit to the 
President and the Congress, and implement, a plan for the allocation 
and assignment under the 1934 Act of such frequencies. Such plan shall 
propose the immediate allocation and assignment of all such frequencies 
in accordance with section 309(j).''.

       CHAPTER 2--FEDERAL COMMUNICATIONS COMMISSION AUTHORIZATION

SEC. 3011. SHORT TITLE.

    This chapter may be cited as the ``Federal Communications 
Commission Authorization Act of 1995''.

SEC. 3012. EXTENSION OF AUTHORITY.

    (a) Authorization of Appropriations.--Section 6 of the 
Communications Act of 1934 (47 U.S.C. 156) is amended to read as 
follows:

``SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated for the administration of 
this Act by the Commission $186,000,000 for fiscal year 1996, together 
with such sums as may be necessary for increases resulting from 
adjustments in salary, pay, retirement, other employee benefits 
required by law, and other nondiscretionary costs, for fiscal year 
1996. Of the sum appropriated in each fiscal year under this section, a 
portion, in an amount determined under sections 8(b) and 9(b), shall be 
derived from fees authorized by sections 8 and 9.''.
    (b) Travel and Reimbursement Program.--Section 4(g)(2) of the 
Communications Act of 1934 (47 U.S.C. 154(g)(2)) is amended to read as 
follows:
    ``(2) The Commission shall submit to the appropriate committees of 
Congress, and publish in the Federal Register, semiannual reports 
specifying the reimbursements which the Commission has accepted under 
section 1353 of title 31, United States Code.''.
    (c) Communications Support From Older Americans.--Section 6(a) of 
the Federal Communications Commission Authorization Act of 1988 (47 
U.S.C. 154 note) is amended by striking ``fiscal years 1992 and 1993'' 
and inserting ``fiscal year 1996''.

SEC. 3013. APPLICATION FEES.

    (a) Adjustment of Application Fee Schedule.--Section 8(b) of the 
Communications Act of 1934 (47 U.S.C. 158(b)) is amended to read as 
follows:
    ``(b)(1) For fiscal year 1996 and each fiscal year thereafter, the 
Commission shall, by regulation, modify the application fees by 
proportionate increases or decreases so as to result in estimated total 
collections for the fiscal year equal to--
            ``(A) $40,000,000; plus
            ``(B) an additional amount, specified in an appropriation 
        Act for the Commission for that fiscal year to be collected and 
        credited to such appropriation, not to exceed the amount by 
        which the necessary expenses for the costs described in 
        paragraph (5) exceeds $40,000,000.
    ``(2) In making adjustments pursuant to this paragraph the 
Commission may round such fees to the nearest $5.00 in the case of fees 
under $100, or to the nearest $20 in the case of fees of $100 or more. 
The Commission shall transmit to the Congress notification of any 
adjustment made pursuant to this paragraph immediately upon the 
adoption of such adjustment.
    ``(3) The Commission is authorized to continue to collect fees at 
the prior year's rate until the effective date of fee adjustments or 
amendments made pursuant to paragraphs (1) and (4).
    ``(4) The Commission shall, by regulation, add, delete, or 
reclassify services, categories, applications, or other filings subject 
to application fees to reflect additions, deletions, or changes in the 
nature of its services or authorization of service processes as a 
consequence of Commission rulemaking proceedings or changes in law.
    ``(5) Any modified fees established under paragraph (4) shall be 
derived by determining the full-time equivalent number of employees 
performing application activities, adjusted to take into account other 
expenses that are reasonably related to the cost of processing the 
application or filing, including all executive and legal costs incurred 
by the Commission in the discharge of these functions, and other 
factors that the Commission determines are necessary in the public 
interest. The Commission shall--
            ``(A) transmit to the Congress notification of any proposed 
        modification made pursuant to this paragraph immediately upon 
        adoption of such proposal; and
            ``(B) transmit to the Congress notification of any 
        modification made pursuant to this paragraph immediately upon 
        adoption of such modification.
    ``(6) Increases or decreases in application fees made pursuant to 
this subsection shall not be subject to judicial review.''.
    (b) Treatment of Additional Collections.--Section 8(e) of such Act 
is amended to read as follows:
    ``(e) Of the moneys received from fees authorized under this 
section--
            ``(1) $40,000,000 shall be deposited in the general fund of 
        the Treasury to reimburse the United States for amounts 
        appropriated for use by the Commission in carrying out its 
        functions under this Act; and
            ``(2) the remainder shall be deposited as an offsetting 
        collection in, and credited to, the account providing 
        appropriations to carry out the functions of the Commission.''.
    (c) Schedule of Application Fees for PCS.--The schedule of 
application fees in section 8(g) of such Act is amended by adding, at 
the end of the portion under the heading ``common carrier services'', 
the following new item:

``23. Personal communications services
        ``a. Initial or new application....................     230.00 
        ``b. Amendment to pending application..............      35.00 
        ``c. Application for assignment or transfer of          230.00 
            control.
        ``d. Application for renewal of license............      35.00 
        ``e. Request for special temporary authority.......     200.00 
        ``f. Notification of completion of construction....      35.00 
        ``g. Request to combine service areas..............    50.00''.
    (d) Vanity Call Signs.--
            (1) Lifetime license fees.--
                    (A) Amendment.--The schedule of application fees in 
                section 8(g) of such Act is further amended by adding, 
                at the end of the portion under the heading ``private 
                radio services'', the following new item:

  ``11. Amateur vanity call signs..........................  150.00''. 
                    (B) Treatment of receipts.--Moneys received from 
                fees established under the amendment made by this 
                subsection shall be deposited as an offsetting 
                collection in, and credited to, the account providing 
                appropriations to carry out the functions of the 
                Commission.
            (2) Termination of annual regulatory fees.--The schedule of 
        regulatory fees in section 9(g) of such Act (47 U.S.C. 159(g)) 
        is amended by striking the following item from the fees 
        applicable to the Private Radio Bureau:

                                                                        
                                                                        
                                                                        
                              ``Amateur vanity call-signs.          7''.
                                                                        

SEC. 3014. REGULATORY FEES.

    (a) Executive and Legal Costs.--Section 9(a)(1) of the 
Communications Act of 1934 (47 U.S.C. 159(a)(1)) is amended by 
inserting before the period at the end the following: ``, and all 
executive and legal costs incurred by the Commission in the discharge 
of these functions''.
    (b) Establishment and Adjustment.--Section 9(b) of such Act is 
amended--
            (1) in paragraph (4)(B), by striking ``90 days'' and 
        inserting ``45 days''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Effective date of adjustments.--The Commission is 
        authorized to continue to collect fees at the prior year's rate 
        until the effective date of fee adjustments or amendments made 
        pursuant to paragraph (2) or (3).''.
    (c) Regulatory Fees for Satellite TV Operations.--The schedule of 
regulatory fees in section 9(g) of such Act is amended, in the fees 
applicable to the Mass Media Bureau, by inserting after each of the 
items pertaining to construction permits in the fees applicable to VHF 
commercial and UHF commercial TV the following new item:

                                                                        
                                                                        
                                                                        
                                ``Terrestrial television                
                                 satellite operations.....        500''.
                                                                        

    (d) Governmental entities use for common carrier purposes.--Section 
9(h) of such Act is amended by adding at the end the following new 
sentence: ``The exceptions provided by this subsection for governmental 
entities shall not be applicable to any services that are provided on a 
commercial basis in competition with another carrier.''.
    (e) Information Required in Connection With Adjustment of 
Regulatory Fees.--Title I of such Act is amended--
            (1) in section 9, by striking subsection (i); and
            (2) by inserting after section 9 the following new section:

``SEC. 10. ACCOUNTING SYSTEM AND ADJUSTMENT INFORMATION.

    ``(a) Accounting System Required.--The Commission shall develop 
accounting systems for the purposes of making the adjustments 
authorized by sections 8 and 9. The Commission shall annually prepare 
and submit to the Congress an analysis of such systems and shall 
annually afford interested persons the opportunity to submit comments 
concerning the allocation of the costs of performing the functions 
described in section 8(a)(5) and 9(a)(1) in making such adjustments in 
the schedules required by sections 8 and 9.
    ``(b) Information Required in Connection with Adjustment of 
Application and Regulatory Fees.--
            ``(1) Schedule of requested amounts.--No later than May 1 
        of each calendar year, the Commission shall prepare and 
        transmit to the Committees of Congress responsible for the 
        Commission's authorization and appropriations a detailed 
        schedule of the amounts requested by the President's budget to 
        be appropriated for the ensuing fiscal year for the activities 
        described in sections 8(a)(5) and 9(a)(1), allocated by 
        bureaus, divisions, and offices of the Commission.
            ``(2) Explanatory statement.--If the Commission anticipates 
        increases in the application fees or regulatory fees applicable 
        to any applicant, licensee, or unit subject to payment of fees, 
        the Commission shall submit to the Congress by May 1 of such 
        calendar year a statement explaining the relationship between 
        any such increases and either (A) increases in the amounts 
        requested to be appropriated for Commission activities in 
        connection with such applicants, licensees, or units subject to 
        payment of fees, or (B) additional activities to be performed 
        with respect to such applicants, licensees, or units.
            ``(3) Definition.--For purposes of this subsection, the 
        term `amount requested by the President's budget' shall include 
        any adjustments to such requests that are made by May 1 of such 
        calendar year. If any such adjustment is made after May 1, the 
        Commission shall provide such Committees with updated schedules 
        and statements containing the information required by this 
        subsection within 10 days after the date of any such 
        adjustment.''.

SEC. 3015. INSPECTION OF SHIP RADIO STATIONS.

    (a) Authority To Designate Entities To Inspect.--Section 4(f)(3) of 
the Communications Act of 1934 (47 U.S.C. 154(f)(3)) is amended by 
inserting before the period at the end the following: ``: And provided 
further, That, in the alternative, an entity designated by the 
Commission may make the inspections referred to in this paragraph''.
    (b) Conduct of Inspections.--Section 362(b) of such Act (47 U.S.C. 
362(b)) is amended to read as follows:
    ``(b) Every ship of the United States that is subject to this part 
shall have the equipment and apparatus prescribed therein inspected at 
least once each year by the Commission or an entity designated by the 
Commission. If, after such inspection, the Commission is satisfied that 
all relevant provisions of this Act and the station license have been 
complied with, the fact shall be certified to on the station license by 
the Commission. The Commission shall make such additional inspections 
at frequent intervals as the Commission determines may be necessary to 
ensure compliance with the requirements of this Act. The Commission 
may, upon a finding that the public interest could be served thereby--
            ``(1) waive the annual inspection required under this 
        section for a period of up to 90 days for the sole purpose of 
        enabling a vessel to complete its voyage and proceed to a port 
        in the United States where an inspection can be held; or
            ``(2) waive the annual inspection required under this 
        section for a vessel that is in compliance with the radio 
        provisions of the Safety Convention and that is operating 
        solely in waters beyond the jurisdiction of the United States, 
        provided that such inspection shall be performed within 30 days 
        of such vessel's return to the United States.''.
    (c) Inspection By Other Entities.--Section 385 of such Act (47 
U.S.C. 385) is amended by inserting ``or an entity designated by the 
Commission'' after ``The Commission''.

SEC. 3016. EXPEDITED ITFS PROCESSING.

    Section 5(c)(1) of the Communications Act of 1934 (47 U.S.C. 
155(c)(1)) is amended by striking the last sentence and inserting the 
following: ``Except for cases involving the authorization of service in 
the Instructional Television Fixed Service, or as otherwise provided in 
this Act, nothing in this paragraph shall authorize the Commission to 
provide for the conduct, by any person or persons other than persons 
referred to in paragraph (2) or (3) of section 556(b) of title 5, 
United States Code, of any hearing to which such section applies.''.

SEC. 3017. TARIFF REJECTION AUTHORITY.

    Section 203(d) of the Communications Act of 1934 (47 U.S.C. 203(d)) 
is amended by inserting after the first sentence the following new 
sentences: ``The Commission may, after affording interested parties an 
opportunity to comment, reject a proposed tariff filing in whole or in 
part, if the filing or any part thereof is patently unlawful. In 
evaluating whether a proposed tariff filing is patently unlawful, the 
Commission may consider additional information filed by the carrier or 
any interested party and shall presume the facts alleged by the carrier 
to be true.''.

SEC. 3018. REFUND AUTHORITY.

    Title II of the Communications Act of 1934 (47 U.S.C. 201 et seq.) 
is amended by adding at the end thereof the following new section:

``SEC. 230. REFUND AUTHORITY.

    ``In addition to any other provision of this Act under which the 
Commission may order refunds, the Commission may require by order the 
refund of such portion of any charge by any carrier or carriers as 
results from a violation of section 220 (a), (b), or (d) or 221 (c) or 
(d) or of any of the rules promulgated pursuant to such sections or 
pursuant to section 215, 218, or 219. Such refunds shall be ordered 
only to the extent that the Commission or a court finds that such 
violation resulted in unlawful charges and shall be made to such 
persons or classes of persons as the Commission determines reasonably 
represent the persons from whom amounts were improperly received by 
reason of such violation. No refunds shall be required under this 
section unless--
            ``(1) the Commission issues an order advising the carrier 
        of its potential refund liability and provides the carrier with 
        an opportunity to file written comments as to why refunds 
        should not be required; and
            ``(2) such order is issued not later than 5 years after the 
        date the charge was paid.
In the case of a continuing violation, a violation shall be considered 
to occur on each date that the violation is repeated.''.

SEC. 3019. LICENSING OF AVIATION AND MARITIME SERVICES BY RULE.

    Section 307(e) of the Communications Act of 1934 (47 U.S.C. 307(e)) 
is amended to read as follows:
    ``(e)(1) Notwithstanding any license requirement established in 
this Act, if the Commission determines that such authorization serves 
the public interest, convenience, and necessity, the Commission may by 
rule authorize the operation of radio stations without individual 
licenses in the following radio services: (A) the aviation radio 
service for aircraft stations operated on domestic flights when such 
aircraft are not otherwise required to carry a radio station; and (B) 
the maritime radio service for ship stations navigated on domestic 
voyages when such ships are not otherwise required to carry a radio 
station.
    ``(2) Any radio station operator who is authorized by the 
Commission to operate without an individual license shall comply with 
all other provisions of this Act and with rules prescribed by the 
Commission under this Act.
    ``(3) For purposes of this subsection, the terms `aircraft station' 
and `ship station' shall have the meanings given them by the Commission 
by rule.''.

SEC. 3020. AUCTION TECHNICAL AMENDMENTS.

    (a) Funding Availability.--Section 309(j)(8)(B) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(8)(B)) is amended by 
adding at the end the following new sentence: ``Such offsetting 
collections are authorized to remain available until expended.''.
    (b) Escrow of Deposits.--Section 309(j)(8) of such Act is further 
amended by adding at the end the following new subparagraph:
                    ``(C) Escrow of deposit.--The Commission is 
                authorized, based on the competitive bidding 
                methodology selected, to provide for the deposit of 
                moneys for bids in an interest-bearing account until 
                such time as the Commission accepts a deposit from the 
                high bidder. All interest earned on bid moneys received 
                from the winning bidder shall be deposited into the 
                general fund of the Treasury. All interest earned on 
                bid moneys deposited from unsuccessful bidders, less 
                any applicable fees and penalties, shall be paid to 
                those bidders.''.

SEC. 3021. FORFEITURES FOR VIOLATIONS IMPERILING SAFETY OF LIFE.

    (a) Administrative Sanctions.--Section 312(a) of the Communications 
Act of 1934 (47 U.S.C. 312(a)) is amended--
            (1) by striking ``or'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting ``; or''; and
            (3) by adding at the end the following new paragraph:
            ``(8) for failure to comply with any requirement of this 
        Act or the Commission's rules that imperils the safety of 
        life.''.
    (b) Forfeitures.--Section 503(b)(1) of such Act (47 U.S.C. 
503(b)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (C);
            (2) by striking the semicolon at the end of subparagraph 
        (D) and inserting ``; or''; and
            (3) by adding after subparagraph (D) the following new 
        subparagraph:
            ``(E) failed to comply with any requirement of this Act or 
        the Commission's rules that imperils the safety of life;''.

SEC. 3022. USE OF EXPERTS AND CONSULTANTS.

    Section 4(f)(1) of the Communications Act of 1934 (47 U.S.C. 154) 
is amended by adding at the end thereof the following: ``The Commission 
may also procure the services of experts and consultants in accordance 
with section 3109 of title 5, United States Code, relating to 
appointments in the Federal Service, at rates of compensation for 
individuals not to exceed the daily rate equivalent to the maximum rate 
payable for senior-level positions under section 5276 of title 5, 
United States Code.''.

SEC. 3023. STATUTE OF LIMITATIONS FOR FORFEITURE PROCEEDINGS AGAINST 
              COMMON CARRIERS.

    Section 503(b)(6) of the Communications Act of 1934 (47 U.S.C. 
503(b)(6)) is amended--
            (1) by striking ``or'' at the end of subparagraph (A);
            (2) by inserting ``and is not a common carrier'' after 
        ``title III of this Act'' in subparagraph (B);
            (3) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (4) by inserting after subparagraph (A) the following new 
        subparagraph:
            ``(B) such person is a common carrier and the required 
        notice of apparent liability is issued more than 5 years after 
        the date the violation charged occurred; or''.

SEC. 3024. UTILIZATION OF FM BAND FOR ASSISTIVE DEVICES FOR HEARING 
              IMPAIRED INDIVIDUALS.

    Within 6 months after the date of enactment of this Act, the 
Federal Communications Commission shall report to the Congress on the 
existing and future use of the FM band to facilitate the use of 
auditory assistive devices for individuals with hearing impairments. In 
preparing such report, the Commission shall consider--
            (1) the potential for utilizing FM band auditory assistive 
        devices to comply with the American with Disabilities Act;
            (2) the impact on such compliance of the vulnerability of 
        such devices to harmful interference from radio licensees; and
            (3) alternative frequency allocations that could facilitate 
        such compliance.

SEC. 3025. TECHNICAL AMENDMENT.

    Section 302(d)(1) of the Communications Act of 1934 (47 U.S.C. 
309(d)(1)) is amended--
            (1) in subparagraph (A), by striking ``allocated to the 
        domestic cellular radio telecommunications service'' and 
        inserting ``utilized to provide commercial mobile service (as 
        defined in section 332(d))''; and
            (2) in subparagraph (C), by striking ``cellular'' and 
        inserting ``commercial mobile service''.

        Subtitle B--Nuclear Regulatory Commission Annual Charge

SEC. 3031. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.

    Section 6101(a)(3) of the Omnibus Budget Reconciliation Act of 1990 
(42 U.S.C. 2214(a)(3)) is amended by striking ``September 30, 1998'' 
and inserting ``September 30, 2002''.

            Subtitle C--United States Enrichment Corporation

SEC. 3035. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This subtitle may be cited as the ``USEC 
Privatization Act''.
    (b) Reference.--Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.).

SEC. 3036. PRODUCTION FACILITY.

    Paragraph v. of section 11 (42 U.S.C. 2014 v.) is amended by 
striking ``or the construction and operation of a uranium enrichment 
production facility using Atomic Vapor Laser Isotope Separation 
technology''.

SEC. 3037. DEFINITIONS.

    Section 1201 (42 U.S.C. 2297) is amended--
            (1) in paragraph (4), by inserting before the period the 
        following: ``and any successor corporation established through 
        privatization of the Corporation'';
            (2) by redesignating paragraphs (10) through (13) as 
        paragraphs (14) through (17), respectively, and by inserting 
        after paragraph (9) the following new paragraphs:
            ``(10) The term `low-level radioactive waste' has the 
        meaning given such term in section 102(9) of the Low-Level 
        Radioactive Waste Policy Amendments Act of 1985 (42 U.S.C. 
        2021b(9)).
            ``(11) The term `mixed waste' has the meaning given such 
        term in section 1004(41) of the Solid Waste Disposal Act (42 
        U.S.C. 6903(41)).
            ``(12) The term `privatization' means the transfer of 
        ownership of the Corporation to private investors pursuant to 
        chapter 25.
            ``(13) The term `privatization date' means the date on 
        which 100 percent of ownership of the Corporation has been 
        transferred to private investors.'';
            (3) by inserting after paragraph (17) (as redesignated) the 
        following new paragraph:
            ``(18) The term `transition date' means July 1, 1993.'';
            (4) by redesignating the unredesignated paragraph (14) as 
        paragraph (19); and
            (5) by adding the following new paragraphs after paragraph 
        (19):
            ``(20) The term `gaseous diffusion plants' means the 
        Paducah Gaseous Diffusion Plant at Paducah, Kentucky and the 
        Portsmouth Gaseous Diffusion Plant at Piketon, Ohio.
            ``(21) The term `private corporation' means the corporation 
        established under section 1503.
            ``(22) The term `Russian HEU agreement' means the Agreement 
        Between the Government of the United States of America and the 
        Government of the Russian Federation Concerning the Disposition 
        of Highly Enriched Uranium Extracted from Nuclear Weapons, 
        dated February 18, 1993.
            ``(23) The term `Suspension Agreement' means the Agreement 
        to Suspend the Antidumping Investigation on Uranium from the 
        Russian Federation, as amended.''.

SEC. 3038. EMPLOYEES OF THE CORPORATION.

    (a) Paragraphs (1) and (2).--Section 1305(e) (42 U.S.C. 2297b-4(e)) 
is amended by striking paragraphs (1) and (2) and inserting in thereof 
the following:
            ``(1) In general.--
                    ``(A) Privatization shall not diminish the accrued, 
                vested pension benefits of employees of the 
                Corporation's operating contractor at the two gaseous 
                diffusion plants.
                    ``(B) In the event that the private corporation 
                terminates or changes the contractor at either or both 
                of the gaseous diffusion plants, the plan sponsor or 
                other appropriate fiduciary of the pension plan 
                covering employees of the prior operating contractor 
                shall arrange for the transfer of all plan assets and 
                liabilities relating to accrued pension benefits of 
                such plan's participants and beneficiaries from such 
                plan to a pension plan sponsored by the new contractor 
or the private corporation, as the case may be.
                    ``(C) Any employer (including the private 
                corporation or any contractor of the private 
                corporation) at a gaseous diffusion plant shall abide 
                by the terms of any unexpired collective bargaining 
                agreement covering employees in bargaining units at the 
                plant and in effect on the privatization date until the 
                expiration of the agreement.
                    ``(D) In the event of a plant closing or mass 
                layoff (as such terms are defined in section 2101(a)(2) 
                and (3) of title 29, United States Code) at either of 
                the gaseous diffusion plants, the Secretary of Energy 
                shall treat such plant as a Department of Energy 
                defense nuclear facility and any person employed by an 
                operating contractor on the privatization date at 
                either plant as a Department of Energy employee for 
                purposes of sections 3161 through 3163 of the National 
                Defense Authorization Act for Fiscal Year 1993 (42 
                U.S.C. 7274h-7274j).
                    ``(E) The Department of Energy and the private 
                corporation shall continue to fund postretirement 
                health benefits for persons employed by an operating 
                contractor at either of the gaseous diffusion plants at 
                substantially the same level of coverage as eligible 
                retirees are entitled to receive on the privatization 
                date, consistent with clauses (i) through (iii), except 
                that the Department of Energy, the private corporations 
                and the operating contractor shall have the right to 
                implement cost-saving measures, including (but not 
                limited to) preferred provider organizations, managed 
                care programs, mandatory second opinions before surgery 
                or other medical procedures, and mandatory use of 
                generic drugs, that do not materially diminish the 
                overall quality of the medical care provided--
                            ``(i) persons eligible for this coverage 
                        shall be limited to persons who retired from 
                        active employment at one of the gaseous 
                        diffusion plants as of the privatization date, 
                        as vested participants in a pension plan 
                        maintained either by the Corporation's 
                        operating contractor or by a contractor 
                        employed prior to July 1, 1993, by the 
                        Department of Energy to operate either of the 
                        gaseous diffusion plants and persons who, as of 
                        the privatization date, are employed by the 
                        Corporation's operating contractor and are 
                        vested participants in a pension plan 
                        maintained either by the Corporation's 
                        operating contractor or by a contractor 
                        employed prior to July 1, 1993, by the 
                        Department of Energy to operate either of the 
                        gaseous diffusion plants;
                            ``(ii) for persons who retired from 
                        employment with an operating contractor prior 
                        to July 1, 1993, the Department of Energy shall 
                        fund the entire cost of postretirement health 
                        benefits; and
                            ``(iii) for persons who retire from 
                        employment with an operating contractor after 
                        July 1, 1993, the Department of Energy and the 
                        private corporation shall fund the cost of 
                        postretirement health benefits in proportion to 
                        the retired persons' years and months of 
                        service at a gaseous diffusion plant under 
                        their respective management.''.
    (b) Paragraph (4).--Paragraph (4) of section 1305(e) (42 U.S.C. 
2297b-4(e)(4)) is amended--
            (1) by striking ``and detailees'' in the heading;
            (2) by striking the first sentence;
            (3) in the second sentence, by inserting ``from other 
        Federal employment'' after ``transfer to the Corporation''; and
            (4) by striking the last sentence.

SEC. 3039. MARKETING AND CONTRACTING AUTHORITY.

    (a) Marketing Authority.--Section 1401(a) (42 U.S.C. 2297c(a)) is 
amended effective on the privatization date (as defined in section 
1201(13) of the Atomic Energy Act of 1954)--
            (1) by amending the subsection heading to read ``Marketing 
        Authority.--''; and
            (2) by striking the first sentence.
    (b) Transfer of Contracts.--Section 1401(b) (42 U.S.C. 2297c(b)) is 
amended--
            (1) in paragraph (2)(B), by adding at the end the 
        following: ``The privatization of the Corporation shall not 
        affect the terms of, or the rights or obligations of the 
        parties to, any such power purchase contract.''; and
            (2) by adding at the end the following:
            ``(3) Effect of transfer.--
                    ``(A) As a result of the transfer pursuant to 
                paragraph (1), all rights, privileges, and benefits 
                under such contracts, agreements, and leases, including 
the right to amend, modify, extend, revise, or terminate any of such 
contracts, agreements, or leases were irrevocably assigned to the 
Corporation for its exclusive benefit.
                    ``(B) Notwithstanding the transfer pursuant to 
                paragraph (1), the United States shall remain obligated 
                to the parties to the contracts, agreements, and leases 
                transferred pursuant to paragraph (1) for the 
                performance of the obligations of the United States 
                thereunder during the term thereof. The Corporation 
                shall reimburse the United States for any amount paid 
                by the United States in respect of such obligations 
                arising after the privatization date to the extent such 
                amount is a legal and valid obligation of the 
                Corporation then due.
                    ``(C) After the privatization date, upon any 
                material amendment, modification, extension, revision, 
                replacement, or termination of any contract, agreement, 
                or lease transferred under paragraph (1), the United 
                States shall be released from further obligation under 
                such contract, agreement, or lease, except that such 
                action shall not release the United States from 
                obligations arising under such contract, agreement, or 
                lease prior to such time.''.
    (c) Pricing.--Section 1402 (42 U.S.C. 2297c-1) is amended to read 
as follows:

``SEC. 1402. PRICING.

    ``The Corporation shall establish prices for its products, 
materials, and services provided to customers on a basis that will 
allow it to attain the normal business objectives of a profitmaking 
corporation.''.
    (d) Leasing of Gaseous Diffusion Facilities of Department.--
Effective on the privatization date (as defined in section 1201(13) of 
the Atomic Energy Act of 1954), section 1403 (42 U.S.C. 2297c-2) is 
amended by adding at the end the following:
    ``(h) Low-Level Radioactive Waste and Mixed Waste.--
            ``(1) Responsibility of the department; costs.--
                    ``(A) With respect to low-level radioactive waste 
                and mixed waste generated by the Corporation as a 
                result of the operation of the facilities and related 
                property leased by the Corporation pursuant to 
                subsection (a) or as a result of treatment of such 
                wastes at a location other than the facilities and 
                related property leased by the Corporation pursuant to 
                subsection (a) the Department, at the request of the 
                Corporation, shall--
                            ``(i) accept for treatment or disposal of 
                        all such wastes for which treatment or disposal 
                        technologies and capacities exist, whether 
                        within the Department or elsewhere; and
                            ``(ii) accept for storage (or ultimately 
                        treatment or disposal) all such wastes for 
                        which treatment and disposal technologies or 
                        capacities do not exist, pending development of 
                        such technologies or availability of such 
                        capacities for such wastes.
                    ``(B) All low-level wastes and mixed wastes that 
                the Department accepts for treatment, storage, or 
                disposal pursuant to subparagraph (A) shall, for the 
                purpose of any permits, licenses, authorizations, 
                agreements, or orders involving the Department and 
                other Federal agencies or State or local governments, 
                be deemed to be generated by the Department and the 
                Department shall handle such wastes in accordance with 
                any such permits, licenses, authorizations, agreements, 
                or orders. The Department shall obtain any additional 
                permits, licenses, or authorizations necessary to 
                handle such wastes, shall amend any such agreements or 
                orders as necessary to handle such wastes, and shall 
                handle such wastes in accordance therewith.
                    ``(C) The Corporation shall reimburse the 
                Department for the treatment, storage, or disposal of 
                low-level radioactive waste or mixed waste pursuant to 
                subparagraph (A) in an amount equal to the Department's 
                costs but in no event greater than an amount equal to 
                that which would be charged by commercial, State, 
                regional, or interstate compact entities for treatment, 
                storage, or disposal of such waste.
            ``(2) Agreements with other persons.--The Corporation may 
        also enter into agreements for the treatment, storage, or 
        disposal of low-level radioactive waste and mixed waste 
        generated by the Corporation as a result of the operation of 
        the facilities and related property leased by the Corporation 
        pursuant to subsection (a) with any person other than the 
        Department that is authorized by applicable laws and 
        regulations to treat, store, or dispose of such wastes.''.
    (e) Liabilities.--
            (1) Subsection (a) of section 1406 (42 U.S.C. 2297c-5(a)) 
        is amended--
                    (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                    (B) by adding at the end the following: ``As of the 
                privatization date, all liabilities attributable to the 
                operation of the Corporation from the transition date 
                to the privatization date shall be direct liabilities 
                of the United States.''.
            (2) Subsection (b) of section 1406 (42 U.S.C. 2297c-5(b)) 
        is amended--
                    (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                    (B) by adding at the end the following: ``As of the 
                privatization date, any judgment entered against the 
                Corporation imposing liability arising out of the 
                operation of the Corporation from the transition date 
                to the privatization date shall be considered a 
                judgment against the United States.''.
            (3) Subsection (d) of section 1406 (42 U.S.C. 2297c-5(d)) 
        is amended--
                    (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                    (B) by striking ``the transition date'' and 
                inserting ``the privatization date (or, in the event 
                the privatization date does not occur, the transition 
                date)''.
    (f) Transfer of Uranium.--
            (1) Amendment.--Title II (42 U.S.C. 2297 et seq.) is 
        amended by redesignating section 1408 as section 1409 and by 
        inserting after section 1407 the following:

``SEC. 1408. URANIUM TRANSFERS AND SALES.

    ``(a) Transfers and Sales by the Secretary.--The Secretary shall 
not provide enrichment services or transfer or sell any uranium 
(including natural or enriched uranium in any form) to any person 
except as provided in this section.
    ``(b) Russian HEU.--
            (1) Tranfers.--Prior to December 31, 1996, the United 
        States Executive Agent under the Russian HEU Agreement shall 
        transfer to the Secretary without charge an amount of uranium 
        hexafluoride equivalent to the natural uranium component of 
        low-enriched uranium derived from at least 18 metric tons of 
        highly enriched uranium purchased from the Russian Executive 
        Agent under the Russian HEU Agreement. The quantity of such 
        uranium hexafluoride delivered to the Secretary shall be based 
        on a tails assay of 0.30 U235. Title to uranium hexafluoride 
        delivered to the Secretary pursuant to this paragraph shall 
        transfer to the Secretary upon delivery of such material to the 
        Secretary. Uranium hexafluoride delivered to the Secretary 
        pursuant to this paragraph shall be deemed to be of Russian 
        origin.
            ``(2) Contracts.--Within 7 years of the date of enactment 
        of the USEC Privatization Act, the Secretary shall enter into 
        contracts to sell the uranium hexafluoride transferred to the 
        Secretary pursuant to paragraph (1). Such uranium hexafluoride 
        shall be sold--
                    ``(A) at any time for use in the United States for 
                the purpose of overfeeding;
                    ``(B) at any time for use outside the United 
                States; and
                    ``(C) for consumption by end users in the United 
                States not prior to January 1, 2002, in volumes not to 
                exceed 3 million pounds U3O8 equivalent per year.
            ``(3) Uranium hexafluoride.--With respect to all low-
        enriched uranium that is delivered to the United States 
        Executive Agent under the Russian HEU Agreement after January 
        1, 1997, the United States Executive Agent shall, upon request 
        of the Russian Executive Agent, deliver to the Russian 
        Executive Agent an amount of uranium hexafluoride equivalent to 
        the natural uranium component of such low-enriched uranium 
        simultaneously with the delivery of such low-enriched uranium. 
        The quantity of such uranium hexafluoride delivered to the 
        Russian Executive Agent shall be based on a tails assay of 0.30 
        U235. Title to uranium hexafluoride delivered to the Russian 
        Executive Agent pursuant to this paragraph shall transfer to 
        the Russian Executive Agent upon delivery of such material to 
        the Russian Executive Agent at a North American facility 
        designated by the Russian Executive Agent. Uranium hexafluoride 
        delivered to the Russian Executive Agent pursuant to this 
        paragraph shall be deemed to be of Russian origin. Such uranium 
        hexafluoride may be sold to any person or entity consistent 
        with the limitations on delivery to end users set forth in this 
        subsection. Nothing in this subsection shall restrict the sale 
        of the conversion component of such uranium hexafluoride.
            ``(4) Independent party.--In the event that the Russian 
        Executive Agent does not request delivery of the natural 
        uranium component of any low-enriched uranium, as contemplated 
        in paragraph (3), within 90 days of the date such low-enriched 
        uranium is delivered to the United States Executive Agent, then 
        the United States Executive Agent shall engage an independent 
        party through a competitive selection process to auction an 
        amount of uranium hexafluoride equivalent to the natural 
        uranium component of such low-enriched uranium. Such 
        independent party shall sell such uranium hexafluoride to any 
        person or entity consistent with the limitations set forth in 
        this subsection. The independent entity shall pay to the 
        Russian Executive Agent the proceeds of any such auction less 
        all transaction and other administrative costs. The quantity of 
        such uranium hexafluoride auctioned shall be based on a tails 
        assay of 0.30 U235. Title to uranium hexafluoride auctioned 
        pursuant to this paragraph shall transfer to the buyer of such 
        material upon delivery of such material to the buyer. Uranium 
        hexafluoride auctioned pursuant to this paragraph shall be 
        deemed to be of Russian origin.
            ``(5) Consumption.--Except as provided in paragraphs (6) 
        and (7), uranium hexafluoride delivered to the Secretary under 
        paragraph (1) or the Russian Executive Agent under paragraph 
        (3) or auctioned pursuant to paragraph (4), may not be 
        delivered for consumption by end users in the United States 
        prior to January 1, 1998 and thereafter only in accordance with 
        the following schedule:

                                    Annual Maximum Deliveries
                                        to End Users
``Year                              (millions lbs. U<INF>3O<INF>8 
                                            equivalent)
    1998-..........................
                                        2 million lbs. U<INF>3O<INF>8 
                                                equivalent
    1999-..........................
                                        4 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2000-..........................
                                        6 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2001-..........................
                                        8 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2002-..........................
                                        10 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2003-..........................
                                        12 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2004-..........................
                                        14 million lbs. U<INF>3O<INF>8 
                                                equivalent
    2005 and each year thereafter..
                                        16 million lbs. U<INF>3O<INF>8 
                                                equivalent
            ``(6) Matched Sales.--Uranium hexafluoride delivered to the 
        Secretary under paragraph (1) or the Russian Executive Agent 
        under paragraph (3) or auctioned pursuant to paragraph (4) may 
        be sold at any time as Russian-origin natural uranium in a sale 
        with an equal portion of U.S.-origin natural uranium pursuant 
        to the Suspension Agreement and in such case shall not be 
        counted against the annual maximum deliveries set forth in 
        paragraph (5).
            ``(7) Overfeeding.--Uranium hexafluoride delivered to the 
        Secretary under paragraph (1) or the Russian Executive Agent 
        under paragraph (3) or auctioned pursuant to paragraph (4) may 
        be sold at any time for use in the United States for the 
        purpose of overfeeding in the operations of enrichment 
        facilities.
    ``(c) Transfers to the corporation.--(1) Before the privatization 
date, the Secretary may transfer to the Corporation without charge the 
low enriched uranium from up to 50 metric tons of highly enriched 
uranium and up to 7,000 metric tons of natural uranium, subject to the 
restrictions in subsection (b)(2).
    ``(2) The Corporation (or its successor) may not deliver for 
commercial end use--
            ``(A) any of the natural uranium transferred under this 
        subsection before January 1, 1998;
            ``(B) more than 10 percent of the natural uranium (by 
        uranium hexafluoride equivalent content) transferred under this 
        subsection or more than 4 million pounds, whichever is less, in 
        any calendar year after 1997; or
            ``(C) more than 800,000 separative work units of low-
        enriched uranium transferred under this subsection in any 
        calendar year.
    ``(d) Inventory Sales.--(1) In addition to the transfers authorized 
under subsection (b), the Secretary may, from time to time, sell 
natural and low-enriched uranium (including low-enriched uranium 
derived from highly enriched uranium) from the Department of Energy s 
stockpile.
    ``(2) Except as provided in subsections (b) and (d), no sale or 
transfer of natural or low-enriched uranium shall be made unless--
            ``(A) the President determines that the material is not 
        necessary to national security needs,
            ``(B) the Secretary determines that the sale of the 
        material will not have an adverse impact on the domestic 
        uranium mining and enrichment industries, taking into account 
        the sales of uranium under the Russian HEU Agreement and the 
        Suspension Agreement, and
            ``(C) the price paid to the Secretary will not be less than 
        the fair market value of the material.
    ``(e) Government Transfers.--Notwithstanding subsection (c), the 
Secretary may transfer or sell low-enriched uranium--
            ``(1) to a federal agency if the material is transferred 
        for the use of the receiving agency without any resale or 
        transfer to another entity and the material does not meet 
        commercial specifications;
            ``(2) to any person for national security purposes, as 
        determined by the Secretary; or
            ``(3) to any state or local agency or nonprofit, 
        charitable, or educational institution for use other than the 
        generation of electricity for commercial use.''.
            (2) Conforming amendment.--The table of contents for 
        chapter 24 is amended by redesignating the item relating to 
        section 1408 as the item relating to section 1409 and by 
        inserting after the item for section 1407 the following:

``Sec. 1408. Uranium transfers and sales.''.

SEC. 3040. PRIVATIZATION OF THE CORPORATION.

    (a) Establishment of Private Corporation.--Chapter 25 (42 U.S.C. 
2297d et seq.) is amended by adding at the end the following new 
section:

``SEC. 1503. ESTABLISHMENT OF PRIVATE CORPORATION.

    ``(a) Establishment.--
            ``(1) In general.--In order to facilitate privatization, 
        the Corporation may provide for the establishment of a private 
        corporation organized under the laws of any of the several 
        States. Such corporation shall have among its purposes the 
        following:
                    ``(A) To help maintain a reliable and economical 
                domestic source of uranium enrichment services.
                    ``(B) To undertake any and all activities as 
                provided in its corporate charter.
            ``(2) Authorities.--The corporation established pursuant to 
        paragraph (1) shall be authorized to--
                    ``(A) enrich uranium, provide for uranium to be 
                enriched by others, or acquire enriched uranium 
                (including low-enriched uranium derived from highly 
                enriched uranium);
                    ``(B) conduct, or provide for conducting, those 
                research and development activities related to uranium 
                enrichment and related processes and activities the 
                corporation considers necessary or advisable to 
                maintain itself as a commercial enterprise operating on 
                a profitable and efficient basis;
                    ``(C) enter into transactions regarding uranium, 
                enriched uranium, or depleted uranium with--
                            ``(i) persons licensed under section 53, 
                        63, 103, or 104 in accordance with the licenses 
                        held by those persons;
                            ``(ii) persons in accordance with, and 
                        within the period of, an agreement for 
                        cooperation arranged under section 123; or
                            ``(iii) persons otherwise authorized by law 
                        to enter into such transactions;
                    ``(D) enter into contracts with persons licensed 
                under section 53, 63, 103, or 104, for as long as the 
                corporation considers necessary or desirable, to 
                provide uranium or uranium enrichment and related 
                services;
                    ``(E) enter into contracts to provide uranium or 
                uranium enrichment and related services in accordance 
                with, and within the period of, an agreement for 
                cooperation arranged under section 123 or as otherwise 
                authorized by law; and
                    ``(F) take any and all such other actions as are 
                permitted by the law of the jurisdiction of 
                incorporation of the corporation.
            ``(3) Transfer of assets.--For purposes of implementing the 
        privatization, the Corporation may transfer some or all of its 
        assets and obligations to the corporation established pursuant 
        to this section, including--
                    ``(A) all of the Corporation's assets and 
                obligations, including all of the Corporation's rights, 
                duties, and obligations accruing subsequent to the 
                privatization date under contracts, agreements, and 
                leases entered into by the Corporation before the 
                privatization date, including all uranium enrichment 
                contracts and power purchase contracts;
                    ``(B) all funds in accounts of the Corporation held 
                by the Treasury or on deposit with any bank or other 
                financial institution;
                    ``(C) all of the Corporation's rights, duties, and 
                obligations, accruing subsequent to the privatization 
                date, under the power purchase contracts covered by 
                section 1401(b)(2)(B);
                    ``(D) all of the Corporation's rights, duties, and 
                obligations, accruing subsequent to the privatization 
                date, under the lease agreement between the Department 
                and the Corporation executed by the Department and the 
                Corporation pursuant to section 1403; and
                    ``(E) all of the Corporation's records, including 
                all of the papers and other documentary materials, 
                regardless of physical form or characteristics, made or 
                received by the Corporation.
            ``(4) Merger or consolidation.--For purposes of 
        implementing the privatization, the Corporation may merge or 
        consolidate with the corporation established pursuant to 
subsection (a)(1) if such action is contemplated by the plan for 
privatization approved by the President under section 1502(b). The 
Board shall have exclusive authority to approve such merger or 
consolidation and to take all further actions necessary to consummate 
such merger or consolidation, and no action by or in respect of 
shareholders shall be required. The merger or consolidation shall be 
effected in accordance with, and have the effects of a merger or 
consolidation under, the laws of the jurisdiction of incorporation of 
the surviving corporation, and all rights and benefits provided under 
this title to the Corporation shall apply to the surviving corporation 
as if it were the Corporation.
    ``(b) OSHA Requirements.--For purposes of the regulation of 
radiological and nonradiological hazards under the Occupational Safety 
and Health Act of 1970, the corporation established pursuant to 
subsection (a)(1) shall be treated in the same manner as other 
employers licensed by the Nuclear Regulatory Commission. Any 
interagency agreement entered into between the Nuclear Regulatory 
Commission and the Occupational Safety and Health Administration 
governing the scope of their respective regulatory authorities shall 
apply to the corporation as if the corporation were a Nuclear 
Regulatory Commission licensee.
    ``(c) Legal Status of Private Corporation.--
            ``(1) Not federal agency.--The corporation established 
        pursuant to subsection (a)(1) shall not be an agency, 
        instrumentality, or establishment of the United States 
        Government and shall not be a Government corporation or 
        Government-controlled corporation.
            ``(2) No recourse against united states.--Obligations of 
        the Corporation established pursuant to subsection (a)(1) shall 
        not be obligations of, or guaranteed as to principal or 
        interest by, the Corporation or the United States, and the 
        obligations shall so plainly state.
            ``(3) No claims court jurisdiction.--No action under 
        section 1491 of title 28, United States Code, shall be 
        allowable against the United States based on the actions of the 
        Corporation established pursuant to subsection (a)(1).
    ``(d) Board of Director's Election After Public Offering.--In the 
event that the privatization is implemented by means of a public 
offering, an election of the members of the board of directors of the 
Corporation by the shareholders shall be conducted before the end of 
the 1-year period beginning the date shares are first offered to the 
public pursuant to such public offering.
    ``(e) Adequate Proceeds.--The Secretary of Energy shall not allow 
the privatization of the Corporation unless before the sale date the 
Secretary determines that the estimated sum of the gross proceeds from 
the sale of the Corporation will be an adequate amount.''.
    (b) Ownership Limitations.--Chapter 25 (as amended by subsection 
(a)) is amended by adding at the end the following new section:

``SEC. 1504. OWNERSHIP LIMITATIONS.

    ``(a) Securities Limitation.--In the event that the privatization 
is implemented by means of a public offering, during a period of 3 
years beginning on the privatization date, no person, directly or 
indirectly, may acquire or hold securities representing more than 10 
percent of the total votes of all outstanding voting securities of the 
Corporation.
    ``(b) Application.--Subsection (a) shall not apply--
            ``(1) to any employee stock ownership plan of the 
        Corporation,
            ``(2) to underwriting syndicates holding shares for resale, 
        or
            ``(3) in the case of shares beneficially held for others, 
        to commercial banks, broker-dealers, clearing corporations, or 
        other nominees.
    ``(c) Acquisitions.--No director, officer, or employee of the 
Corporation may acquire any securities, or any right to acquire 
securities, of the Corporation--
            ``(1) in the public offering of securities of the 
        Corporation in the implementation of the privatization,
            ``(2) pursuant to any agreement, arrangement, or 
        understanding entered into before the privatization date, or
            ``(3) before the election of directors of the Corporation 
        under section 1503(d) on any terms more favorable than those 
        offered to the general public.''.
    (c) Exemption From Liability.--Chapter 25 (as amended by subsection 
(b)) is amended by adding at the end the following new section:

``SEC. 1505. EXEMPTION FROM LIABILITY.

    ``(a) In General.--No director, officer, employee, or agent of the 
Corporation shall be liable, for money damages or otherwise, to any 
party if, with respect to the subject matter of the action, suit, or 
proceeding, such person was fulfilling a duty, in connection with any 
action taken in connection with the privatization, which such person in 
good faith reasonably believed to be required by law or vested in such 
person.
    ``(b) Exception.--The privatization shall be subject to the 
Securities Act of 1933 and the Securities Exchange Act of 1934. The 
exemption set forth in subsection (a) shall not apply to claims arising 
under such Acts or under the Constitution or laws of any State, 
territory, or possession of the United States relating to transactions 
in securities, which claims are in connection with a public offering 
implementing the privatization.
    ``(c) Securities Laws Applicable.--Any offering or sale of 
securities by the Corporation established pursuant to section 
1503(a)(1) shall be subject to the Securities Act of 1933, the 
Securities Exchange Act of 1934 and the provisions of the Constitution 
and laws of any State, territory, or possession of the United States 
relating to transactions in securities.''.
    (d) Resolution of Certain Issues.--Chapter 25 (as amended by 
subsection (c)) is amended by adding at the end the following new 
section:

``SEC. 1506. RESOLUTION OF CERTAIN ISSUES.

    ``(a) Corporation Actions.--Notwithstanding any provision of any 
agreement to which the Corporation is a party, the Corporation shall 
not be considered to be in breach, default, or violation of any such 
agreement because of any provision of this chapter or any action the 
Corporation is required to take under this chapter.
    ``(b) Right To Sue Withdrawn.--The United States hereby withdraws 
any stated or implied consent for the United States, or any agent or 
officer of the United States, to be sued by any person for any legal, 
equitable, or other relief with respect to any claim arising out of, or 
resulting from, acts or omissions under this chapter.''.
    (e) Additional Provisions.--Chapter 25 (as amended by subsection 
(d)) is amended by adding at the end the following:

``SEC. 1507. APPLICATION OF PRIVATIZATION PROCEEDS.

    ``The proceeds from the privatization shall be included in the 
budget baseline required by the Balanced Budget and Emergency Deficit 
Control Act of 1985 and shall be counted as an offset to direct 
spending for purposes of section 252 of such Act, notwithstanding 
section 257(e) of such Act.''.
    (f) Conforming Amendment.--The table of contents for chapter 25 is 
amended by inserting after the item for section 1502 the following:

``Sec. 1503. Establishment of private corporation.
``Sec. 1504. Ownership limitations.
``Sec. 1505. Exemption from liability.
``Sec. 1506. Resolution of certain issues.
``Sec. 1507. Application of privatization proceeds.''.
    (g) Section 193 (42 U.S.C. 2243) is amended by adding at the end 
the following:
    ``(f) Limitation.--If the privatization of the United States 
Enrichment Corporation results in the Corporation being--
            ``(1) owned, controlled, or dominated by a foreign 
        corporation or a foreign government, or
            ``(2) otherwise inimical to the common defense or security 
        of the United States,
any license held by the Corporation under sections 53 and 63 shall be 
terminated.''.
    (h) Period for Congressional Review.--Section 1502(d) (42 U.S.C. 
2297d-1(d)) is amended by striking ``less than 60 days after 
notification of the Congress'' and inserting ``less than 60 days after 
the date of the report to Congress by the Comptroller General under 
subsection (c)''.

SEC. 3041. PERIODIC CERTIFICATION OF COMPLIANCE.

    Section 1701(c)(2) (42 U.S.C. 2297f(c)(2)) is amended by striking 
``Annual application for certificate of compliance.--The Corporation 
shall apply at least annually to the Nuclear Regulatory Commission for 
a certificate of compliance under paragraph (1).'' and inserting 
``Periodic application for certificate of compliance.--The Corporation 
shall apply to the Nuclear Regulatory Commission for a certificate of 
compliance under paragraph (1) periodically, as determined by the 
Nuclear Regulatory Commission, but not less than every 5 years.''.

SEC. 3042. LICENSING OF OTHER TECHNOLOGIES.

    Subsection (a) of section 1702 (42 U.S.C. 2297f-1(a)) is amended by 
striking ``other than'' and inserting ``including''.

SEC. 3043. CONFORMING AMENDMENTS.

    (a) Repeals in Atomic Energy Act of 1954 as of the Privatization 
Date.--
            (1) Repeals.--As of the privatization date (as defined in 
        section 1201(13) of the Atomic Energy Act of 1954), the 
        following sections (as in effect on such privatization date) of 
        the Atomic Energy Act of 1954 are repealed:
                    (A) Section 1202.
                    (B) Sections 1301 through 1304.
                    (C) Sections 1306 through 1316.
                    (D) Sections 1404 and 1405.
                    (E) Section 1601.
                    (F) Sections 1603 through 1607.
            (2) Conforming amendment.--The table of contents of such 
        Act is amended by repealing the items referring to sections 
        repealed by paragraph (1).
    (b) Statutory Modifications.--As of such privatization date, the 
following shall take effect:
            (1) For purposes of title I of the Atomic Energy Act of 
        1954, all references in such Act to the ``United States 
        Enrichment Corporation'' shall be deemed to be references to 
        the corporation established pursuant to section 1503 of the 
        Atomic Energy Act of 1954 (as added by section 3036(a)).
            (2) Section 1018(1) of the Energy Policy Act of 1992 (42 
        U.S.C. 2296b-7(1)) is amended by striking ``the United States'' 
        and all that follows through the period and inserting ``the 
        corporation referred to in section 1201(4) of the Atomic Energy 
        Act of 1954.''.
            (3) Section 9101(3) of title 31, United States Code, is 
        amended by striking subparagraph (N), as added by section 
        902(b) of Public Law 102-486.
    (c) Revision of Section 1305.--As of such privatization date, 
section 1305 of the Atomic Energy Act of 1954 (42 U.S.C 2297b-4) is 
amended--
            (1) by repealing subsections (a), (b), (c), and (d), and
            (2) in subsection (e)--
                    (A) by striking the subsection designation and 
                heading,
                    (B) by redesignating paragraph (1) (as added by 
                section 3038(a)) as subsection (a), striking ``In 
                general.--'' and inserting ``In General.--'', 
                redesignating subparagraphs (A) through (E) as 
                paragraphs (1) through (5) (redesignating in such 
                paragraph, clauses (i) through (iii) as subparagraphs 
                (A) through (C)), striking ``clauses (i) through 
                (iii)'' in paragraph (5) and inserting ``subparagraphs 
                (A) through (C)'', and by moving the margins 2-ems to 
                the left,
                    (C) by striking paragraph (3), and
                    (D) by redesignating paragraph (4) (as amended by 
                section 3038(b)) as subsection (b), and by moving the 
                margins 2-ems to the left.

               Subtitle D--Waste Isolation Pilot Project

SEC. 3045. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This subtitle may be cited as the ``Waste 
Isolation Pilot Plant Land Withdrawal Amendment Act''.
    (b) Reference.--Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Waste Isolation Pilot Plant Land Withdrawal Act (Public Law 102-579).

SEC. 3046. DEFINITIONS.

    Paragraphs (18) and (19) of section 2 are repealed.

SEC. 3047. TEST PHASE AND RETRIEVAL PLANS.

    Section 5 is repealed.

SEC. 3048. TEST PHASE ACTIVITIES.

    Section 6 is amended--
            (1) by repealing subsections (a) and (b),
            (2) by repealing paragraph (1) of subsection (c),
            (3) by repealing subparagraph (A) of paragraph (2) of 
        subsection (c),
            (4) by redesignating subsection (c) as subsection (a), by 
        striking the subsection heading and the matter before paragraph 
        (1) and inserting ``Study.--The following study shall be 
        conducted:'', by striking ``(2) Remote-handled waste.--'', by 
        striking ``(B) Study.--'', and by redesignating clauses (i), 
        (ii), and (iii) as paragraphs (1), (2), and (3), respectively, 
        and moving them 4-ems to the left, and
            (5) by redesignating subsection (d) as subsection (b).

SEC. 3049. DISPOSAL OPERATIONS.

    Section 7(b) is repealed.

SEC. 3050. ENVIRONMENTAL PROTECTION AGENCY DISPOSAL REGULATIONS.

    (a) Section 8(d)(1).--Section 8(d)(1) is amended by striking 
subparagraphs (B), (C), and (D) and by adding after subparagraph (A) 
the following:
                    ``(B) Comments of Administrator.--Within 2 months 
                of receipt of the application under subparagraph (A), 
                the Administrator shall provide the Secretary with any 
                comments on the Secretary's application. Within one 
                month of the receipt of such comments, the Secretary 
                shall, to the extent practicable, incorporate the 
                Administrator's comments in the Secretary's 
                application. The comments of the Administrator provided 
                to the Secretary should also be transmitted to the 
                appropriate committees of jurisdiction in the House of 
                Representatives and the Senate.''.
    (b) Section 8(d) (2), (3).--Section 8(d) is amended by striking 
paragraphs (2) and (3), by striking ``(1) Compliance with disposal 
regulations.--'', and by redesignating subparagraphs (A) and (B) of 
paragraph (1), as amended by subsection (a), as paragraphs (1) and (2), 
respectively, and moving them 2-ems to the left.
    (c) Section 8(f).--Subsection (f) of section 8 is amended--
            (1) by amending the subsection heading to read ``Periodic 
        Review'', and
            (2) by amending paragraph (2) to read as follows:
            ``(2) Review by the administrator.--The Administrator 
        shall, not later than 6 months after receiving a submission 
        under paragraph (1), comment on whether or not the WIPP 
        facility continues to be in compliance with the final 
        disposition regulations.''.
    (d) Section 8(g).--Section 8(g) is amended to read as follows:
    ``(g) Engineered and Natural Barriers, Etc.--The Secretary should 
determine whether or not engineered barriers or natural barriers, or 
both, will be required at WIPP consistent with regulations published as 
part 191 of 40 C.F.R.''.

SEC. 3051. COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS.

    (a) Section 9(a)(1).--Section 9(a)(1) is amended by adding after 
and below subparagraph (H) the following:
        ``With respect to transuranic mixed waste designated by the 
        Secretary for disposal at WIPP, such waste is exempt from the 
        land disposal restrictions published at part 268 of 40 C.F.R. 
        because compliance with the environmental radiation protection 
        standards published at part 191 of 40 C.F.R. renders compliance 
        with the land disposal restrictions unnecessary to achieve 
        desired environmental protection and a no migration variance is 
        not required for disposal of transuranic mixed waste at 
        WIPP.''.
    (b) Section 9(b).--Subsection (b) of section 9 is repealed.
    (c) Sections 9(c), (d).--Subsections (c) and (d) of section 9 are 
repealed.

SEC. 3052. RETRIEVABILITY.

    Section 10 is amended to read as follows:

``SEC. 10. TRANSURANIC WASTE.

    ``It is the intent of Congress that a decision will be made by the 
Secretary with respect to the disposal of transuranic waste no later 
than March 31, 1997.''.

SEC. 3053. DECOMMISSIONING OF WIPP.

    Section 13 is amended--
            (1) by repealing subsection (a), and
            (2) in subsection (b), by striking ``(b) Management Plan 
        for the Withdrawal After Decommissioning.--Within 5 years after 
        the date of the enactment of this Act, the'' and inserting 
        ``The''.

SEC. 3054. ECONOMIC ASSISTANCE AND MISCELLANEOUS PAYMENTS.

    Section 15(a) is amended--
            (1) by striking ``to the Secretary for payments to the 
        State $20,000,000 for each of the 15 fiscal years beginning 
        with the fiscal year in which the transport of transuranic 
        waste to WIPP is initiated'' and inserting ``to the State 
        $20,000,000 for each of the 15 fiscal years beginning with the 
        date of the enactment of the Waste Isolation Pilot Plant Land 
        Withdrawal Amendment Act'', and
            (2) by adding at the end the following: ``An appropriation 
        to the State shall be in addition to any appropriation for 
        WIPP.''.

SEC. 3055. NON-DEFENSE WASTE.

    Section 7(a) is amended by redesignating paragraph (3) as paragraph 
(4) and by inserting after paragraph (2) the following:
            ``(3) Nondefense waste.--Within the capacity prescribed by 
        paragraph (4), WIPP may receive transuranic waste from the 
        Secretary which did not result from a defense activity.''.

                  Subtitle E--Naval Petroleum Reserves

SEC. 3071. SHORT TITLE.

    This subtitle may be cited as the ``Naval Petroleum Reserve 
Privatization Act of 1995''.

SEC. 3072. SALE OF NAVAL PETROLEUM RESERVES.

    (a) Sale of Reserves Required.--Chapter 641 of title 10, United 
States Code, is amended by inserting after section 7421 the following 
new section:
``Sec. 7421a. Sale of naval petroleum reserves
    ``(a) Sale Required.--(1) Notwithstanding any other provision of 
this chapter, the Secretary shall sell all right, title, and interest 
of the United States in and to the lands owned or controlled by the 
United States inside the naval petroleum and oil shale reserves 
established by this chapter. In the case of Naval Petroleum Reserve 
Numbered 1, the lands to be sold shall include sections 16 and 36 of 
township 30 south, range 23 east, Mount Diablo Principal Meridian, 
California.
    ``(2) Not later than December 31, 1996, the Secretary shall enter 
into one or more contracts for the sale of all of the interest of the 
United States in the naval petroleum reserves.
    ``(b) Timing and Administration of Sale.--(1) Not later than 
January 1, 1996, the Secretary shall retain the services of five 
independent experts in the valuation of oil and gas fields to conduct 
separate assessments, in a manner consistent with commercial practices, 
of the fair market value of the interest of the United States in each 
naval petroleum reserve. In making their assessments for each naval 
petroleum reserve, the independent experts shall consider (among other 
factors) all equipment and facilities to be included in the sale, the 
net present value of the reserve, and the net present value of the 
anticipated revenue stream that the Secretary determines the Treasury 
would receive from the reserve if it were not sold, adjusted for any 
anticipated increases in tax revenues that would result if it were 
sold. The independent experts shall complete their assessments not 
later than July 1, 1996. In setting the minimum acceptable price for 
each naval petroleum reserve, the Secretary shall consider the average 
of the five assessments regarding the reserve or, if more advantageous 
to the Government, the average of three assessments after excluding the 
high and low assessments.
    ``(2) Not later than March 1, 1996, the Secretary shall retain the 
services of an investment banker to independently administer, in a 
manner consistent with commercial practices and in a manner that 
maximizes sale proceeds to the Government, the sale of the naval 
petroleum reserves under this section. The Secretary may enter into the 
contracts required under this paragraph and paragraph (1) on a 
noncompetitive basis.
    ``(3) Not later than August 1, 1996, the sales administrator 
selected under paragraph (2) shall complete a draft contract for the 
sale of each naval petroleum reserve, which shall accompany the 
invitation for bids and describe the terms and provisions of the sale 
of the interest of the United States in the reserve. Each draft 
contract shall identify all equipment and facilities to be included in 
the sales. Each draft contract, including the terms and provisions of 
the sale of the interest of the United States in the naval petroleum 
reserves, shall be subject to review and approval by the Secretary, the 
Secretary of the Treasury, and the Director of the Office of Management 
and Budget.
    ``(4) Not later than September 1, 1996, the Secretary shall publish 
an invitation for bids for the purchase of the naval petroleum 
reserves.
    ``(5) Not later than November 1, 1996, the Secretary shall accept 
the highest responsible offer for purchase of the interest of the 
United States in the naval petroleum reserves, or a particular reserve, 
that meets or exceeds the minimum acceptable price determined under 
paragraph (1). The Secretary may accept an offer for only a portion of 
a reserve so long as the entire reserve is still sold under this 
section at a price that meets or exceeds the minimum acceptable price.
    ``(c) Future Liabilities.--The United States shall hold harmless 
and fully indemnify the purchaser of the interest of the United States 
in a naval petroleum reserve from and against any claim or liability as 
a result of ownership in the reserve by the United States.
    ``(d) Special Rules Preparatory to Sale of Naval Petroleum Reserve 
Numbered 1.--(1) Not later than June 1, 1996, the Secretary shall 
finalize equity interests of the known oil and gas zones in Naval 
Petroleum Reserve Numbered 1 in the manner provided by this subsection.
    ``(2) The Secretary shall retain the services of an independent 
petroleum engineer, mutually acceptable to the equity owners, who shall 
prepare a recommendation on final equity figures. The Secretary may 
accept the recommendation of the independent petroleum engineer for 
final equity in each known oil and gas zone and establish final equity 
interest in the Naval Petroleum Reserve Numbered 1 in accordance with 
such recommendation, or the Secretary may use such other method to 
establish final equity interest in that reserve as the Secretary 
considers appropriate. The Secretary may enter into the contract 
required under this paragraph on a noncompetitive basis.
    ``(3) If, on the effective date of this section, there is an 
ongoing equity redetermination dispute between the equity owners under 
section 9(b) of the unit plan contract, such dispute shall be resolved 
in the manner provided in the unit plan contract not later than June 1, 
1996. Such resolution shall be considered final for all purposes under 
this section.
    ``(4) In this section, the term `unit plan contract' means the unit 
plan contract between equity owners of the lands within the boundaries 
of Naval Petroleum Reserve Numbered 1 (Elk Hills) entered into on June 
19, 1944.
    ``(e) Production Allocation Regarding Naval Petroleum Reserve 
Numbered 1.--(1) As part of the contract for purchase of Naval 
Petroleum Reserve Numbered 1, the purchaser of the interest of the 
United States in that reserve shall agree to make up to 25 percent of 
the purchaser's share of annual petroleum production from the purchased 
lands available for sale to small refiners, which do not have their own 
adequate sources of supply of petroleum, for processing or use only in 
their own refineries. None of the reserved production sold to small 
refiners may be resold in kind. The purchaser of that reserve may 
reduce the quantity of petroleum reserved under this subsection in the 
event of an insufficient number of qualified bids. The seller of this 
petroleum production has the right to refuse bids that are less than 
the prevailing market price of comparable oil.
    ``(2) The purchaser of Naval Petroleum Reserve Numbered 1 shall 
also agree to ensure that the terms of every sale of the purchaser's 
share of annual petroleum production from the purchased lands shall be 
so structured as to give full and equal opportunity for the acquisition 
of petroleum by all interested persons, including major and independent 
oil producers and refiners alike.
    ``(f) Maintaining Production Pending Sale of Naval Petroleum 
Reserve Numbered 1.--Until the sale of Naval Petroleum Reserve Numbered 
1 is completed under this section, the Secretary shall continue to 
produce that reserve at the maximum daily oil or gas rate from a 
reservoir, which will permit maximum economic development of the 
reservoir consistent with sound oil field engineering practices in 
accordance with section 3 of the unit plan contract. The definition of 
maximum efficient rate in section 7420(6) of this title shall not apply 
to Naval Petroleum Reserve Numbered 1.
    ``(g) Effect on Existing Contracts.--(1) In the case of any 
contract, in effect on the effective date of this section, for the 
purchase of production from any part of the United States' share of the 
naval petroleum reserves, the sale of the interest of the United States 
in the reserves shall be subject to the contract for a period of three 
months after the closing date of the sale or until termination of the 
contract, whichever occurs first. The term of any contract entered into 
after the effective date of this section for the purchase of such 
production shall not exceed the anticipated closing date for the sale 
of the reserve.
    ``(2) In the case of Naval Petroleum Reserve Numbered 1, the 
Secretary shall exercise the termination procedures provided in the 
contract between the United States and Bechtel Petroleum Operation, 
Inc., Contract Number DE-ACO1-85FE60520 so that the contract terminates 
not later than the date of closing of the sale of that reserve.
    ``(3) In the case of Naval Petroleum Reserve Numbered 1, the 
Secretary shall exercise the termination procedures provided in the 
unit plan contract so that the unit plan contract terminates not later 
than the date of closing of the sale of that reserve.
    ``(h) Set Aside of Sale Proceeds on Account of California Claims 
Regarding Naval Petroleum Reserve Numbered 1.--(1) An amount equal to 
seven percent of the proceeds from the sale of Naval Petroleum Reserve 
Numbered 1 shall be retained in a special account in the Treasury for 
the purpose of paying any amount that may be owed by the United States 
as a result of legal action in connection with claims against the 
United States by the State of California and the Teachers' Retirement 
Fund of the State of California with respect to lands within Naval 
Petroleum Reserve Numbered 1, including sections 16 and 36 of township 
30 south, range 23 east, Mount Diablo Principal Meridian, California, 
or production or proceeds of sale from that reserve.
    ``(2) In determining the amount of the proceeds arising from the 
sale of Naval Petroleum Reserve Numbered 1, the Secretary shall deduct 
the costs incurred to conduct the sale of that reserve.
    ``(3) A payment may be made from the special account only to the 
extent that the aggregate amount of such payment is provided for in 
advance in an appropriations Act.
    ``(i) Effect on Antitrust Laws.--Nothing in this section shall be 
construed to alter the application of the antitrust laws of the United 
States to the purchaser of a naval petroleum reserve or to the lands in 
the naval petroleum reserves subject to sale under this section upon 
the completion of the sale.
    ``(j) Preservation of Private Right, Title, and Interest.--Nothing 
in this section shall be construed to adversely affect the ownership 
interest of any other entity having any right, title, and interest in 
and to lands within the boundaries of the naval petroleum reserves.
    ``(k) Congressional Notification.--Section 7431 of this title shall 
not apply to the sale of the naval petroleum reserves under this 
section. However, the Secretary may not enter into a contract for the 
sale of a naval petroleum reserve until the end of the 15-day period 
beginning on the date on which the Secretary notifies the Committee on 
Armed Services of the Senate and the Committee on National Security and 
the Committee on Commerce of the House of Representatives that the 
Secretary has accepted an offer under subsection (b)(5) for the sale of 
that reserve.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
7421 the following new item:

``7421a. Sale of naval petroleum reserves.''.

     TITLE IV--COMMITTEE ON ECONOMIC AND EDUCATIONAL OPPORTUNITIES

SEC. 4000. TABLE OF CONTENTS.

    The table of contents for this title is as follows:

            TITLE IV--ECONOMIC AND EDUCATIONAL OPPORTUNITIES

                      Subtitle A--Higher Education

Sec. 4001. Short title; effective date.
Sec. 4002. Termination of direct lending.
Sec. 4003. Elimination of grace period interest subsidies.
Sec. 4004. Plus program reductions.
Sec. 4005. Loan transfer fee.
Sec. 4006. Lender fees to guaranty agencies.
Sec. 4007. Additional loan program changes.
Sec. 4008. Use of reserve funds to purchase defaulted loans.
Sec. 4009. Extension of period a guaranty agency must hold a defaulted 
                            loan.
Sec. 4010. Privatization of College Construction Loan Insurance 
                            Association.
Sec. 4011. Eligible institution.
Sec. 4012. Extension of program duration.
          Subtitle B--Davis-Bacon and Service Contract Repeals

Sec. 4101. Davis-Bacon Act.
Sec. 4102. Service Contract Act of 1965.
   Subtitle C--Provisions Relating to the Employee Retirement Income 
                          Security Act of 1974

Sec. 4201. Waiver of minimum period for joint and survivor annuity 
                            explanation before annuity starting date.

                      Subtitle A--Higher Education

SEC. 4001. SHORT TITLE; EFFECTIVE DATE.

    (a) Short Title.--This subtitle may be cited as the ``Higher 
Education Program Efficiency Act of 1995''.
    (b) Effective Date.--Except as otherwise provided therein, the 
amendments made by this subtitle shall take effect on January 1, 1996.

SEC. 4002. TERMINATION OF DIRECT LENDING.

    (a) Termination of Authority.--
            (1) Program authority.--Section 451(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1087a(a)) is amended by 
        inserting ``and ending June 30, 1996'' after ``period beginning 
        July 1, 1994''.
            (2) Termination of funding.--Section 452 of such Act (20 
        U.S.C. 1087b) is amended by adding at the end the following new 
        subsection:
    ``(e) Termination of Funding.--The Secretary shall not provide 
funds under this section for loans for any academic year beginning on 
or after July 1, 1996. The Secretary shall not pay any fees pursuant to 
subsection (b) of this section on or after January 1, 1996.''.
            (3) Termination of authority to enter new agreements.--
        Section 453(a) of such Act (20 U.S.C. 1087c(a)) is amended--
                    (A) in paragraph (1), by inserting ``and ending 
                before July 1, 1996'' after ``academic years beginning 
                on or after July 1, 1994'';
                    (B) in paragraph (2)--
                            (i) by inserting ``and'' after the 
                        semicolon at the end of subparagraph (A);
                            (ii) by striking the semicolon at the end 
                        of subparagraph (B) and inserting a period; and
                            (iii) by striking subparagraphs (C) and 
                        (D); and
                    (C) by striking paragraph (3) and redesignating 
                paragraph (4) as paragraph (3).
    (b) Administrative Cost Amendments.--Section 458 of such Act (20 
U.S.C. 1087h) of such Act is amended--
            (1) by striking subsection (d);
            (2) by redesignating subsections (b) and (c) as subsections 
        (f) and (g), respectively; and
            (3) by striking subsection (a) and inserting the following:
    ``(a) In General.--
            ``(1) Direct administrative costs.--Each fiscal year there 
        shall be available to the Secretary of Education, from funds 
        not otherwise appropriated, funds to be obligated for the 
        subsidy costs of direct administrative costs under this part, 
        subject to subsection (b) of this section.
            ``(2) Indirect administrative costs.--There shall also be 
        available from funds available from funds not otherwise 
        appropriated, funds to be obligated for indirect administrative 
        costs under this part and part B, subject to subsection (c) of 
        this section, not to exceed (from such funds not otherwise 
        appropriated) $260,000,000 in fiscal year 1994, $345,000,000 in 
        fiscal year 1995, $110,000,000 in fiscal year 1996 (of which 
        $40,000,000 shall be available for administrative cost 
        allowances for guaranty agencies for October through December 
        of 1995), and $70,000,000 in each of the fiscal years 1997 
        through 2002.
            ``(3) Reduction.--The amount authorized to be made 
        available for fiscal year 1997 under paragraph (2) shall be 
        reduced by the amount of any unobligated unexpended funds 
        available to carry out this subsection for any fiscal year 
        prior to fiscal year 1996.
    ``(b) Subsidy Costs.--For purposes of this section, `subsidy cost' 
means the estimated long-term cost to the Federal Government of direct 
administrative expenses calculated on a net present value basis.
    ``(c) Direct Administrative Expenses.--For purposes of this 
section, `direct administrative expenses' shall consist of the cost 
of--
            ``(1) activities related to credit extension, loan 
        origination, loan servicing, management of contractors, and 
        payments to contractors, other government entities, and program 
        participants;
            ``(2) collection of delinquent loans; and
            ``(3) write-off and closeout of loans.
    ``(d) Indirect Administrative Expenses.--For purposes of this 
section, `indirect administrative expenses' shall consist of the cost 
of--
            ``(1) personnel engaged in developing program regulations, 
        policy, and administrative guidelines;
            ``(2) audits of institutions and contractors;
            ``(3) program reviews; and
            ``(4) other oversight of the program.
    ``(e) Limitation on Part D Expenditures.--For any fiscal year, 
expenditures for indirect administrative expenses and for loan 
servicing for loans made pursuant to this part shall not exceed 30 
percent of funds available pursuant to paragraph (2) for such fiscal 
year.''.
    (c) Elimination of Transition to Direct Loans.--Such Act is further 
amended--
            (1) in section 422(c)(7) (20 U.S.C. 1072(c)(7))--
                    (A) by striking ``during the transition'' and all 
                that follows through ``part D of this title'' in 
                subparagraph (A); and
                    (B) by striking ``section 428(c)(10)(F)(v)'' in 
                subparagraph (B) and inserting ``section 
                428(c)(9)(F)(v)'';
            (2) in section 428(c)(8) (20 U.S.C. 1078(c)(8)), by 
        striking subparagraph (B) and inserting the following:
            ``(B) Prior to making such determination for any guaranty 
        agency, the Secretary shall, in consultation with the guaranty 
        agency, develop criteria to determine whether such guaranty 
        agency has made adequate collection efforts. In determining 
        whether a guaranty agency's collection efforts have met such 
        criteria, the Secretary shall consider the agency's record of 
        success in collecting on defaulted loans, the age of the loans, 
        and the amount of recent payments received on the loans.'';
            (3) in section 428(c)(9)(E)--
                    (A) by inserting ``or'' after the semicolon at the 
                end of clause (iv);
                    (B) by striking ``; or'' at the end of clause (v) 
                and inserting a period; and
                    (C) by striking clause (vi);
            (4) in clause (vii) of section 428(c)(9)(F)--
                    (A) by inserting ``and'' before ``to avoid 
                disruption''; and
                    (B) by striking ``, and to ensure an orderly 
                transition'' and all that follows through the end of 
                such clause and inserting a period;
            (5) in section 428(c)(9)(K), by striking ``the progress of 
        the transition from the loan programs under this part to'' and 
        inserting ``the integrity and administration of'';
            (6) in section 428(e)(1)(B)(ii), by striking ``during the 
        transition'' and all that follows through ``part D of this 
        title'';
            (7) in section 428(e)(3), by striking ``of transition'';
            (8) in section 428(j)(3)--
                    (A) by striking ``during transition to direct 
                lending''; and
                    (B) by striking ``during the transition'' and all 
                that follows through ``part D of this title,'' in 
                subparagraph (A) and inserting a comma;
            (9) in section 453(c)(2) (20 U.S.C. 1087c(c)(2)), by 
        striking ``Transition'' and inserting ``Institutional'';
            (10) in section 453(c), by striking paragraph (3); and
            (11) in section 456(b) (20 U.S.C. 1087f(b))--
                    (A) by inserting ``and'' after the semicolon at the 
                end of paragraph (3);
                    (B) by striking paragraph (4);
                    (C) by redesignating paragraph (5) as paragraph 
                (4); and
                    (D) in such paragraph (4) (as redesignated), by 
                striking ``successful operation'' and inserting 
                ``integrity and efficiency''.
    (d) Additional Conforming Amendments.--
            (1) Ability of part d borrowers to obtain federal stafford 
        consolidation loans.--Section 428C(a)(4) of such Act (20 U.S.C. 
        1078-3(a)(4)) is amended--
                    (A) by redesignating subparagraphs (C) and (D) as 
                subparagraphs (D) and (E); and
                    (B) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) made under part D of this title;''.
            (2) Conforming amendments.--Section 428C(b) of such Act (20 
        U.S.C. 1078-3(b)) is amended by striking paragraph (5).

SEC. 4003. ELIMINATION OF GRACE PERIOD INTEREST SUBSIDIES.

    Section 428(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 
1078(a)(3)) is amended by adding at the end the following new 
subparagraph:
            ``(C) Notwithstanding subparagraph (A), no portion of the 
        interest which accrues after the student ceases to carry at an 
        eligible institution at least one-half the normal full-time 
        academic workload (as determined by the institution) and prior 
        to the beginning of the repayment period of the loan shall be 
        paid by the Secretary under this subsection on any loan made on 
        or after January 1, 1996. Interest on the unpaid principal 
        amount of any such loan during the interval described in the 
        preceding sentence shall, at the option of the borrower--
                    ``(i) be paid monthly or quarterly, or
                    ``(ii) be added by the lender to the principal 
                amount of the loan at the commencement of the repayment 
                period.''.

SEC. 4004. PLUS PROGRAM REDUCTIONS.

    (a) Loan Limits.--Section 428B(b) of the Higher Education Act of 
1965 (20 U.S.C. 1078-2(b)) is amended--
            (1) by striking ``(b) Limitation Based on Need.--'' and 
        inserting the following:
    ``(b) Annual Limits.--
            ``(1) Limitation based on need.--'';
            (2) by inserting before the last sentence thereof the 
        following:
            ``(3) Limitation computed on basis of actual payments.--''; 
        and
            (3) by inserting before paragraph (3) (as designated by the 
        amendment made by paragraph (2) of this subsection) the 
        following new paragraph:
            ``(2) Dollar limitation.--Subject to paragraph (1), the 
        maximum amount parents may borrow for one student in any 
        academic year or its equivalent (as defined by regulations of 
        the Secretary) is $15,000.''.
    (b) Interest Rebate.--Section 428B of such Act is further amended 
by adding at the end the following new subsection:
    ``(f) Interest Rebate.--
            ``(1) Rebate required.--Each holder of a loan under this 
        section made on or after the date of enactment of the Omnibus 
        Budget Reconciliation Act of 1995, shall pay, on June 30 and 
        December 31 of each year, to the Secretary a rebate of 
        subsidies in an amount equal to 0.8 percent of the outstanding 
        principal balance of loans held on such date. Payment of such 
        rebate shall be made not later than 60 days after each such 
        date.
            ``(2) Deposit of rebates.--The Secretary shall deposit all 
        fees collected pursuant to paragraph (1) into the insurance 
        fund established in section 431.''.
    (c) Plus Loans Interest Rates.--Section 427A(c)(4) of such Act (20 
U.S.C. 1077a(c)(4)) is amended by adding at the end the following new 
subparagraph:
            ``(F) Notwithstanding subparagraphs (A), (D), and (E), for 
        any loan made pursuant to section 428B for which the first 
        disbursement is made on or after January 1, 1996--
                    ``(i) subparagraph (B) shall be applied by 
                substituting `4.0' for `3.25'; and
                    ``(ii) the interest rate shall not exceed 11 
                percent.''.
    (d) Conforming Amendment.--Section 427A(h) of such Act (20 U.S.C. 
1077a(h)) is amended--
            (1) by striking paragraph (2); and
            (2) by redesignating paragraph (3) as paragraph (2).

SEC. 4005. LOAN TRANSFER FEE.

    Section 428(b)(2) of the Higher Education Act of 1965 (20 U.S.C. 
1078(b)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end thereof the following new 
        subparagraph:
                    ``(G) provide that, if a lender or holder, on or 
                after January 1, 1996, sells, transfers, or assigns a 
                loan under this part, then the transferee shall pay to 
                the Secretary a transfer fee in an amount equal to 0.20 
                percent of the principal of the loan, which transfer 
                fee shall be deposited into the insurance fund 
                established in section 431, except that the provisions 
                of this subparagraph shall not apply to any such sale, 
                transfer, or assignment by a lender or holder to such 
                lender's or holder's affiliate or pursuant to a merger 
                or other consolidation transaction.''.

SEC. 4006. LENDER FEES TO GUARANTY AGENCIES.

    Subsection (f) of section 428 of the Higher Education Act of 1965 
(20 U.S.C. 1078(f)) is amended to read as follows:
    ``(f) Payments of Certain Costs.--
            ``(1) Payments from lenders.--With respect to any loan 
        under this part for which the first disbursement is made on or 
        after January 1, 1996, the originating lender shall remit to 
        the guaranty agency which guarantees the loan, a fee equal to 
        0.70 percent of the principal amount of the loan.
            ``(2) Use of payments.--Payments made pursuant to paragraph 
        (1) shall be used for the purposes of--
                    ``(A) the administrative costs of collections of 
                loans;
                    ``(B) the administrative costs of preclaim 
                assistance and other predefault activities;
                    ``(C) the administrative costs of monitoring the 
                enrollment and repayment status of students; and
                    ``(D) other such costs related to the student loan 
                insurance program.
            ``(3) Timing of payments.--Payments made pursuant to 
        paragraph (1) shall be made at the time insurance premiums on 
        such loans are paid to the guaranty agency.
            ``(4) Prohibition on pass-through.--No part of any payments 
        required by this section shall be assessed or collected, 
        directly or indirectly, from any borrower under this part.''.

SEC. 4007. ADDITIONAL LOAN PROGRAM CHANGES.

    (a) Reserve Funds.--
            (1) Amendments to section 422.--Section 422 of the Higher 
        Education Act of 1965 (20 U.S.C. 1072) is amended--
                    (A) in the last sentence of subsection (a)(2), by 
                striking ``Except as provided in section 428(c)(10)(E) 
                or (F), such unencumbered'' and inserting ``Such'';
                    (B) in subsection (g)(1), by striking ``or the 
                program authorized by part D of this title'' each place 
                it appears;
                    (C) in subsection (g)(1)(D), by striking ``(A) or 
                (B)'' and inserting ``(A), (B), or (C)''; and
                    (D) in subsection (g), by striking paragraph (4) 
                and inserting the following:
            ``(4) Disposition of funds returned to or recovered by the 
        secretary.--Any funds that are returned to or otherwise 
        recovered by the Secretary pursuant to this subsection shall be 
        returned to the Treasury of the United States for purposes of 
        reducing the Federal debt and shall be deposited into the 
        special account under section 3113(d) of title 31, United 
        States Code.''.
            (2) Amendments to section 428.--Section 428(c)(9)(A) of 
        such Act (20 U.S.C. 1078(c)(9)(A)) is amended--
                    (A) by inserting ``and'' after the semicolon at the 
                end of clause (i);
                    (B) by striking ``; and'' at the end of clause (ii) 
                and inserting a period; and
                    (C) by striking clause (iii).
    (b) Application for Part B Loans Using Free Federal Application.--
            (1) Single form required.--Section 483(a) of such Act (20 
        U.S.C. 1090(a)) is amended--
                    (A) in paragraph (1)--
                            (i) by inserting ``B,'' after ``assistance 
                        under parts A,'';
                            (ii) by striking ``and to determine the 
                        need of a student for the purpose of part B of 
                        this title''; and
                            (iii) by striking the last sentence and 
                        inserting the following: ``Such form may be in 
                        an electronic or any other format (subject to 
                        section 485B) in order to facilitate use by 
                        borrowers and institutions.''; and
                    (B) in paragraph (3), by striking ``and States 
                shall receive,'' and inserting ``, any guaranty agency 
                authorized by any such institution, and States shall 
                receive, at their request and''.
            (2) Use of electronic forms.--Section 483(a) of such Act is 
        further amended by adding the following new paragraph after 
        paragraph (4):
            ``(5) Electronic forms.--(A) The Secretary, in cooperation 
        with representatives of institutions of higher education, 
        eligible lenders, and guaranty agencies, shall prescribe an 
        electronic version of the form described in subsection (a)(1). 
        Such electronic form shall not require signatures to be 
        collected at the time such form is submitted if the data 
        contained in the electronic form is certified in one or more 
        separate writings. The Secretary shall prescribe the initial 
        electronic form not later than 90 days after the date of 
        enactment of this paragraph.
            ``(B) Nothing in this Act shall preclude the use of the 
        electronic form prescribed under subparagraph (A) through 
        software developed, produced, distributed (including by 
        diskette, modem or network communication, or otherwise) or 
        collected by eligible lenders, guaranty agencies, eligible 
        institutions, or consortia thereof. Such organization or 
        consortium shall submit such electronic form to the Secretary 
        for review prior to its use. If such electronic form is 
        inconsistent with the provisions of this part, the Secretary 
        shall notify the submitting organization or consortium of his 
        objection within 30 days of such submission, and shall 
        specifically identify the necessary changes. In the absence of 
        such an objection the organization or consortium may use the 
        electronic form as submitted. No fee may be charged in 
        connection with use of the electronic form, or of any other 
        electronic forms used in conjunction with such form in applying 
        for Federal or State student financial assistance.''.
    (c) Amendments to Eligible Lender Definition.--Section 435(d)(1) of 
such Act (20 U.S.C. 1085) is amended--
            (1) by inserting before the semicolon at the end of 
        subparagraph (A) the following: ``; and in determining whether 
        the making or holding of loans to students and parents under 
        this part is the primary consumer credit function of the 
        eligible lender, loans made or held as trustee or in a trust 
        capacity for the benefit of a third party shall not be 
        considered'';
            (2) by striking ``and'' at the end of subparagraph (I);
            (3) in subparagraph (J), by striking the period and 
        inserting ``; and''; and
            (4) by adding at the end the following new subparagraph:
                    ``(K) a wholly owned subsidiary of a publicly-held 
                holding company which, as of the date of enactment of 
                this subparagraph, through one or more subsidiaries (i) 
                acts as a finance company, and (ii) participates in the 
                program authorized by this part pursuant to 
                subparagraph (C).''.
    (d) Additional Amendments to Section 428.--
            (1) Amendments.--Section 428 of such Act is further 
        amended--
                    (A) in subsection (b)(1)(G), by striking ``98 
                percent'' and inserting ``95 percent'';
                    (B) in subsection (b)(1)(X), by striking ``section 
                428(c)(10)'' and inserting ``section 428(c)(9)'';
                    (C) in subsection (c)(1)(A), by striking ``98 
                percent'' and inserting ``96 percent'';
                    (D) in subsection (c)(1)(B)(i), by striking ``88 
                percent'' and inserting ``86 percent'';
                    (E) in subsection (c)(1)(B)(ii), by striking ``78 
                percent'' and inserting ``76 percent'';
                    (F) in subsection (c)(9)(C)(ii), by striking ``80 
                percent'' and inserting ``76 percent'';
                    (G) in subsection (c)(9)(I) by inserting ``on the 
                record'' after ``for a hearing'';
                    (H) in subsection (j)(2)(A), by striking ``60'' and 
                inserting ``15'';
                    (I) in subsection (j)(2)(B), by striking ``two 
                rejections'' and inserting ``one rejection''; and
                    (J) in subsection (l)--
                            (i) by striking paragraph (2); and
                            (ii) by striking ``(1) Assistance 
                        required.--''.
            (2) Effective date.--The amendments made by paragraph (1) 
        of this subsection shall apply to loans on which the first 
        disbursement of principal is made on or after January 1, 1996.
    (e) Reinsurance Percentage Under Section 428I.--Section 428I of 
such Act (20 U.S.C. 1078-9) is amended in subsection (b)(1)--
            (1) by striking ``100 percent'' in the heading and 
        inserting ``95 percent''; and
            (2) by striking ``100 percent'' and inserting ``95 
        percent''.
    (f) Loan Fees From Lenders.--Section 438(d)(2) of such Act (20 
U.S.C. 1087-1(d)(2)) is amended to read as follows:
            ``(2) Amount of loan fees.--The amount of the loan fee 
        which shall be deducted under paragraph (1) shall be--
                    ``(A) 0.50 percent of the principal amount of the 
                loan, for any loan under this part for which the first 
                disbursement was made on or after October 1, 1993, and 
                before January 1, 1996; or
                    ``(B) 0.30 percent of the principal amount of the 
                loan, for any loan under this part for which the first 
                disbursement was made on or after January 1, 1996.''.
    (g) Small Lender Audit Exemption.--Section 428(b)(1)(U)(iii) of 
such Act (20 U.S.C. 1078(b)(1)(U)(iii)) is amended--
            (1) by inserting ``in the case of any lender that 
        originates or holds more than $5,000,000 in principal on loans 
        made under this title in any fiscal year,'' before ``for (I)'';
            (2) by inserting ``such'' before ``lender at least once'';
            (3) by inserting ``such'' before ``a lender that is 
        audited''; and
            (4) by striking ``if the lender'' and inserting ``if such 
        lender''.

SEC. 4008. USE OF RESERVE FUNDS TO PURCHASE DEFAULTED LOANS.

    Section 422 of the Higher Education Act of 1965 (20 U.S.C. 1072) is 
amended by adding at the end the following new subsection:
    ``(h) Use of Reserve Funds to Purchase Defaulted Loans.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        guaranty agency shall use not less than 50 percent of such 
        agency's reserve funds to purchase and hold defaulted loans 
        that are guaranteed by such agency and for which a claim for 
        insurance is filed with such agency by an eligible lender after 
        the date of enactment of this subsection. The amount of such 
        purchases shall be considered as reserve funds under this 
        section and used in the calculation of the minimum reserve 
        level under section 428(c)(9).
            ``(2) Special rule.--A guaranty agency shall not be 
        required to use its reserve funds to purchase and hold 
        defaulted loans in accordance with paragraph (1) to the extent 
        that--
                    ``(A) the dollar volume of insurance claims filed 
                with such agency does not amount to 50 percent of such 
                agency's available reserve funds; or
                    ``(B) such use is prohibited by State law; or
                    ``(C) such use will compromise the ability of the 
                guaranty agency to pay program expenses.''.

SEC. 4009. EXTENSION OF PERIOD A GUARANTY AGENCY MUST HOLD A DEFAULTED 
              LOAN.

    (a) Exemption for Extended Holding Period.--The last sentence of 
section 428(c)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 
1078(c)(1)(A)) is amended by striking out ``A guaranty agency'' and 
inserting ``Except as provided in section 428K, a guaranty agency''.
    (b) New Extended Holding Period Program.--Part B of title IV of 
such Act (20 U.S.C. 1071 et seq.) is amended by inserting after section 
428J the following new section:

``SEC. 428K. GUARANTOR PURCHASE OF CLAIMS WITH RESERVE FUNDS.

    ``(a) Loans Subject to Extended Holding Period.--Except as provided 
in subsection (b), a guaranty agency shall file a claim for 
reimbursement with respect to losses (resulting from the default of a 
student borrower) subject to reimbursement by the Secretary pursuant to 
section 428(c)(1) not less than 180 days nor more than 225 days after 
the guaranty agency discharges such agency's insurance obligation on a 
loan insured under this part. Such claim shall include losses on the 
unpaid principal and accrued interest of any such loan, including 
interest accrued from the date of such discharge to the date such 
agency files the claim for reimbursement from the Secretary.
    ``(b) Loans Excluded From Extended Holding.--A guaranty agency may 
file a claim with respect to losses subject to reimbursement by the 
Secretary pursuant to section 428(c)(1) prior to 180 days after the 
date the guaranty agency discharges such agency's insurance obligation 
on a loan insured under this part, if--
            ``(1) such agency used 50 percent or more of such agency's 
        reserve funds to purchase or hold loans in accordance with 
        section 422(h);
            ``(2) such claim is based on an inability to locate the 
        borrower and the guaranty agency certifies to the Secretary 
        that--
                    ``(A) diligent attempts were made to locate the 
                borrower through the use of reasonable skip-tracing 
                techniques in accordance with section 428(c)(2)(G); and
                    ``(B) such skip-tracing attempts to locate the 
                borrower were unsuccessful; or
            ``(3) the guaranty agency determines that the borrower is 
        unlikely to possess the financial resources to begin repaying 
        the loan prior to 180 days after default by the borrower.
    ``(c) Guaranty Agency Efforts During Extended Holding Period.--A 
guaranty agency shall attempt to bring a loan described in subsection 
(a) into repayment status prior to 180 days after the date the guaranty 
agency discharges its insurance obligation on the loan, so that no 
claim for reimbursement by the Secretary is necessary. Upon securing 
payment satisfactory to the guaranty agency during the 180-day period, 
such agency shall, if practicable, sell such loan to an eligible 
lender. Such loan shall not be sold to an eligible lender that the 
guaranty agency determines has substantially failed to exercise the due 
diligence required of lenders under this part.
    ``(d) Regulation Prohibited.--The Secretary shall not regulate the 
collection activities of a guaranty agency with respect to a loan 
described in subsection (a) for which reinsurance has not been paid 
under section 428(c)(1).''.

SEC. 4010. PRIVATIZATION OF COLLEGE CONSTRUCTION LOAN INSURANCE 
              ASSOCIATION.

    (a) Repeal of Statutory Restrictions.--Part D of title VII of the 
Higher Education Act of 1965 (20 U.S.C. 1132f et seq.) is repealed.
    (b) Status of the Corporation.--
            (1) Status of the corporation.--The Corporation shall not 
        be an agency, instrumentality, or establishment of the United 
        States Government and shall not be a ``Government corporation'' 
        nor a ``Government controlled corporation'' as defined in 
        section 103 of title 5, United States Code. No action under 
        section 1491 of title 28, United States Code (commonly known as 
        the Tucker Act) shall be allowable against the United States 
        based on the actions of the Corporation.
            (2) Corporate powers.--The Corporation shall have the power 
        to engage in any business or other activities for which 
        corporations may be organized under the laws of any State of 
        the United States or the District of Columbia. The Corporation 
        shall have the power to enter into contracts, to execute 
        instruments, to incur liabilities, to provide products and 
        services, and to do all things as are necessary or incidental 
        to the proper management of its affairs and the efficient 
        operation of a private, for-profit business.
            (3) Limitation on ownership of stock.--Except as provided 
        in subsection (d)(2) of this section, no stock of the 
        Corporation may be sold or issued to an agency, 
        instrumentality, or establishment of the United States 
        Government, to a Government corporation or a Government 
        controlled corporation (as such terms are defined in section 
        103 of title 5, United States Code), or to a Government 
        sponsored enterprise (as such term is defined in section 622 of 
        title 2, United States Code). The Student Loan Marketing 
        Association shall not own any stock of the Corporation, except 
        that it may retain the stock it owns on the date of enactment. 
        The Student Loan Marketing Association shall not control the 
        operation of the Corporation, except that the Student Loan 
        Marketing Association may participate in the election of 
        directors as a shareholder, and may continue to exercise its 
        right to appoint directors under section 754 of the Higher 
        Education Act of 1965 as long as that section is in effect. The 
        Student Loan Marketing Association shall not provide financial 
        support or guarantees to the Corporation. Notwithstanding the 
        prohibitions in this subsection, the United States may pursue 
        any remedy against a holder of the Corporation's stock to which 
        it would otherwise be entitled.
    (c) Related Privatization Requirements.--
            (1) Notice requirements.--During the 5-year period 
        following the date of the enactment of this Act, the 
        Corporation shall include in any document offering the 
        Corporation's securities, in any contracts for insurance, 
        guarantee, or reinsurance of obligations, and in any 
        advertisement or promotional material, a statement that--
                    (A) the Corporation is not a Government-sponsored 
                enterprise or instrumentality of the United States; and
                    (B) the Corporation's obligations are not 
                guaranteed by the full faith and credit of the United 
                States.
            (2) Corporate charter.--The Corporation's charter shall be 
        amended as necessary and without delay to conform the 
        requirements of this Act.
            (3) Corporate name.--The name of the Corporation, or of any 
        direct or indirect subsidiary thereof, may not contain the term 
        ``College Construction Loan Insurance Association''.
            (4) Articles of incorporation.--The Corporation shall amend 
        its articles of incorporation without delay to reflect that one 
        of the purposes of the Corporation shall be to guarantee, 
        insure and reinsure bonds, leases, and other evidences of debt 
        of educational institutions, including Historically Black 
        Colleges and Universities and other academic institutions which 
        are ranked in the lower investment grade category using a 
        nationally recognized credit rating system.
            (5) Transition requirements.--
                    (A) Requirements until stock sale.--Notwithstanding 
                subsection (a), the requirements of section 754 of the 
                Higher Education Act of 1965 (20 U.S.C. 1132f-3), as in 
                existence as of the day before enactment of this Act, 
                shall continue to be effective until the day 
                immediately following the date of closing of the 
                purchase of the Secretary's stock (or the date of 
                closing of the final purchase, in the case of multiple 
                transactions) pursuant to subsection (d) of this 
                section.
                    (B) Reports after stock sale.--The Corporation 
                shall, not later than March 30 of the first full 
                calendar year immediately following the sale pursuant 
                to subsection (d), and each of the 2 succeeding years, 
                submit to the Secretary of Education a report 
                describing the Corporation's efforts to assist in the 
                financing of education facilities projects, including 
                projects for elementary, secondary, and postsecondary 
                educational institution infrastructure, and detailing, 
                on a project-by-project basis, the Corporation's 
                business dealings with educational institutions that 
                are rated by a nationally recognized statistical rating 
                organization at or below the organization's third 
                highest ratings.
    (d) Sale of Federally Owned Stock.--
            (1) Sale of stock required.--The Secretary of the Treasury 
        shall make every effort to sell, pursuant to section 324 of 
        title 31, United States Code, the stock of the Corporation 
        owned by the Secretary of Education not later than 6 months 
        after the date of the enactment of this Act.
            (2) Purchase by the corporation.--In the event that the 
        Secretary of the Treasury is unable to sell the stock, or any 
        portion thereof, at a price acceptable to the Secretary of 
        Education and the Secretary of the Treasury, the Corporation 
        shall purchase, within the period specified in paragraph (1), 
such stock at a price determined by the Secretary of the Treasury and 
acceptable to the Corporation based on independent appraisal by one or 
more nationally recognized financial firms, except that such price 
shall not exceed the value of the Secretary's stock as determined by 
the Congressional Budget Office in House Report 104-153, dated June 22, 
1995. Such firms shall be selected by the Secretary of the Treasury in 
consultation with the Secretary of Education and the Corporation.
    (e) Assistance by the Corporation.--The Corporation shall provide 
such assistance as the Secretary of the Treasury and the Secretary of 
Education may require to facilitate the sale of the stock under this 
section.
    (f) Definition.--As used in this section, the term ``Corporation'' 
means the Corporation established pursuant to the provision of law 
repealed by subsection (a).

SEC. 4011. ELIGIBLE INSTITUTION.

    (a) Amendments.--Section 481(b) of the Higher Education Act of 1965 
(20 U.S.C. 1088(b)) is amended--
            (1) by inserting before the period at the end of the first 
        sentence the following: ``on the basis of a review by the 
        institution's independent auditor using generally accepted 
        accounting principles''; and
            (2) by inserting after the end of such first sentence the 
        following new sentences: ``For the purposes of clause (6), 
        revenues from sources that are not derived from funds provided 
        under this title include revenues from programs of education or 
        training that do not meet the definition of an eligible program 
        in subsection (e), but are provided on a contractual basis 
        under Federal, State, or local training programs, or to 
        business and industry. For the purposes of determining whether 
        an institution meets the requirements of clause (6), the 
        Secretary shall not consider the financial information of any 
        institution for a fiscal year began on or before April 30, 
        1994.''.
    (b) Effective Date.--Notwithstanding section 713 of this Act, the 
amendments made by subsection (a) shall apply to any determination made 
on or after July 1, 1994, by the Secretary of Education pursuant to 
section 481(b)(6) of the Higher Education Act of 1965.

SEC. 4012. EXTENSION OF PROGRAM DURATION.

    Part B of title IV of the Higher Education Act of 1965 is amended--
            (1) in section 424(a) (20 U.S.C. 1074(a)), by striking 
        ``1998'' and inserting ``2002'';
            (2) in section 428(a)(5) (20 U.S.C. 1078(a)(5))--
                    (A) by striking ``2002'' and inserting ``2006''; 
                and
                    (B) by striking ``1998'' and inserting ``2002''; 
                and
            (3) in section 428C(e) (20 U.S.C. 1078-3(e)), by striking 
        the first sentence and inserting ``The authority to make loans 
        under this section expires at the close of September 30, 
        2002.''.

          Subtitle B--Davis-Bacon and Service Contract Repeals

SEC. 4101. DAVIS-BACON ACT.

    (a) Repeal.--The Act of March 3, 1931 (40 U.S.C. 276a et seq.) 
(commonly referred to as the Davis-Bacon Act) is repealed.
    (b) References.--Any reference in any law to a wage requirement of 
the Act of March 3, 1931, shall, 45 days after the date of the 
enactment of this Act, be null and void.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect 45 days after the date of the enactment of this Act but 
shall not affect any contract in existence on the expiration of such 
days or made pursuant to an invitation for bids outstanding on the 
expiration of such days.

SEC. 4102. SERVICE CONTRACT ACT OF 1965.

    (a) Repeal.--The Service Contract Act of 1965 (41 U.S.C. 351 et 
seq.) is repealed.
    (b) Application.--The amendment made by subsection (a) shall not 
apply to a contract which was entered into before the 45th day after 
the date of the enactment of this Act and to which the Service Contract 
Act of 1965 applied.

   Subtitle C--Provisions Relating to the Employee Retirement Income 
                          Security Act of 1974

SEC. 4201. WAIVER OF MINIMUM PERIOD FOR JOINT AND SURVIVOR ANNUITY 
              EXPLANATION BEFORE ANNUITY STARTING DATE.

    (a) General Rule.--For purposes of section 205(c)(3)(A) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1055(c)(3)(A)), the minimum period prescribed by the Secretary of the 
Treasury between the date that the explanation referred to in such 
section is provided and the annuity starting date shall not apply if 
waived by the participant and, if applicable, the participant's spouse.
    (b) Effective Date.--Subsection (a) shall apply to plan years 
beginning after December 31, 1995.

         TITLE V--COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

    [Text to be supplied.]

             TITLE VI--COMMITTEE ON INTERNATIONAL RELATIONS

SEC. 6001. RECOVERY OF COSTS OF HEALTH CARE SERVICES FOR PERSONNEL OF 
              THE FOREIGN SERVICE OF THE UNITED STATES AND OTHER 
              ELIGIBLE INDIVIDUALS.

    (a) Authorities.--Section 904 of the Foreign Service Act of 1980 
(22 U.S.C. 4084) is amended--
            (1) in subsection (a) by--
                    (A) striking ``and'' before ``members of the 
                families of such members and employees''; and
                    (B) by inserting immediately before the period ``, 
                and for care provided abroad) such other persons as are 
                designated by the Secretary of State, except that such 
                persons shall be considered persons other than covered 
                beneficiaries for purposes of subsections (g) and 
                (h)'';
            (2) in subsection (d) by inserting ``, subject to the 
        provisions of subsections (g) and (h)'' after ``treatment''; 
        and
            (3) by adding the following new subsections:
    ``(g)(1) In the case of a person who is a covered beneficiary, the 
Secretary of State is authorized to collect from a third-party payer 
the reasonable costs incurred by the Department of State on behalf of 
such person for health care services to the same extent that the 
covered beneficiary would be eligible to receive reimbursement or 
indemnification from the third-party payer for such costs.
    ``(2) If the insurance policy, plan, contract, or similar agreement 
of that third-party payer includes a requirement for a deductible or 
copayment by the beneficiary of the plan, then the Secretary of State 
may collect from the third-party payer only the reasonable costs of the 
care provided less the deductible or copayment amount.
    ``(3) A covered beneficiary shall not be required to pay any 
deductible or copayment for health care services under this subsection.
    ``(4) No provision of any insurance, medical service, or health 
plan contract or agreement having the effect of excluding from coverage 
or limiting payment of charges for care in the following circumstances 
shall operate to prevent collection by the Secretary of State under 
paragraph (1)--
            ``(A) care provided directly or indirectly by a 
        governmental entity;
            ``(B) care provided to an individual who has not paid a 
        required deductible or copayment; or
            ``(C) care provided by a provider with which the third-
        party payer has no participation agreement.
    ``(5) No law of any State, or of any political subdivision of a 
State, and no provision of any contract or agreement shall operate to 
prevent or hinder recovery or collection by the United States under 
this section.
    ``(6) As to the authority provided in paragraph (1) of this 
subsection--
            ``(A) the United States shall be subrogated to any right or 
        claim that the covered beneficiary may have against a third-
        party payer;
            ``(B) the United States may institute and prosecute legal 
        proceedings against a third-party payer to enforce a right of 
        the United States under this subsection; and
            ``(C) the Secretary may compromise, settle, or waive a 
        claim of the United States under this subsection.
    ``(7) The Secretary shall prescribe regulations for the 
administration of this subsection and subsection (h). Such regulations 
shall provide for computation of the reasonable cost of health care 
services.
    ``(8) Regulations prescribed under this subsection shall provide 
that medical records of a covered beneficiary receiving health care 
under this subsection shall be made available for inspection and review 
by representatives of the payer from which collection by the United 
States is sought for the sole purpose of permitting the third party to 
verify--
            ``(A) that the care or services for which recovery or 
        collection is sought were furnished to the covered beneficiary; 
        and
            ``(B) that the provisions of such care or services to the 
        covered beneficiary meets criteria generally applicable under 
        the health plan contract involved, except that this paragraph 
        shall be subject to the provisions of paragraphs (2) and (4).
    ``(9) Amounts collected under this subsection or under subsection 
(h) from a third party payer or from any other payer shall be deposited 
in the Treasury as a miscellaneous offsetting receipt.
    ``(10) For purposes of this section--
            ``(A) the term `covered beneficiary' means an individual 
        eligible to receive health care under this section whose health 
        care costs are to be paid by a third-party payer under a 
        contractual agreement with such payer;
            ``(B) the term `services', as used in `health care 
        services' includes products; and
            ``(C) the term `third-party payer' means an entity that 
        provides a fee-for-service insurance policy, contract, or 
        similar agreement through the Federal Employees Health Benefit 
        program, under which the expenses of health care services for 
        individuals are paid.
    ``(h) In the case of a person, other than a covered beneficiary, 
who receives health care services pursuant to this section, the 
Secretary of State is authorized to collect from such person the 
reasonable costs of health care services incurred by the Department of 
State on behalf of such person. The United States shall have the same 
rights against persons subject to the provisions of this subsection as 
against third-party payers covered by subsection (g).''.
    (b) Effective Date.--The authorities of this section shall be 
effective beginning on the date of the enactment of this Act.

SEC. 6002. ENACTMENT INTO LAW OF DIVISION A OF H.R. 1561.

    Division A of H.R. 1561, as passed the House of Representatives on 
June 8, 1995 (relating to consolidation of foreign affairs agencies), 
is hereby enacted into law.

                 TITLE VII--COMMITTEE ON THE JUDICIARY

SEC. 7001. PATENT AND TRADEMARK FEES.

    Section 10101 of the Omnibus Budget Reconciliation Act of 1990 (35 
U.S.C. 41 note) is amended--
            (1) in subsection (a) by striking ``1998'' and inserting 
        ``2002'';
            (2) in subsection (b)(2) by striking ``1998'' and inserting 
        ``2002''; and
            (3) in subsection (c)--
                    (A) by striking ``through 1998'' and inserting 
                ``through 2002''; and
                    (B) by adding at the end the following:
            ``(9) $119,000,000 in fiscal year 1999.
            ``(10) $119,000,000 in fiscal year 2000.
            ``(11) $119,000,000 in fiscal year 2001.
            ``(12) $119,000,000 in fiscal year 2002.''.

               TITLE VIII--COMMITTEE ON NATIONAL SECURITY

                    Subtitle A--Military Retired Pay

SEC. 8001. ELIMINATION OF DISPARITY BETWEEN EFFECTIVE DATES FOR 
              MILITARY AND CIVILIAN RETIREE COST-OF-LIVING ADJUSTMENTS 
              FOR FISCAL YEARS 1996, 1997, AND 1998.

    (a) Conformance With Schedule for Civil Service COLAs.--
Subparagraph (B) of section 1401a(b)(2) of title 10, United States 
Code, is amended--
            (1) by striking out ``through 1998'' the first place it 
        appears and all that follows through ``In the case of'' the 
        second place it appears and inserting in lieu thereof ``through 
        1996.--In the case of'';
            (2) by striking ``of 1994, 1995, 1996, or 1997'' and 
        inserting in lieu thereof ``of 1993, 1994, or 1995''; and
            (3) by striking out ``September'' and inserting in lieu 
        thereof ``March''.
    (b) Repeal of Prior Conditional Enactment.--Section 8114A(b) of 
Public Law 103-335 (108 Stat. 2648) is repealed.

                  Subtitle B--Naval Petroleum Reserves

SEC. 8011. SALE OF NAVAL PETROLEUM RESERVES.

    (a) Sale of Reserves Required.--Chapter 641 of title 10, United 
States Code, is amended by inserting after section 7421 the following 
new section:
``Sec. 7421a. Sale of naval petroleum reserves
    ``(a) Sale Required.--(1) Notwithstanding any other provision of 
this chapter, the Secretary shall sell all right, title, and interest 
of the United States in and to the lands owned or controlled by the 
United States inside the naval petroleum and oil shale reserves 
established by this chapter. In the case of Naval Petroleum Reserve 
Numbered 1, the lands to be sold shall include sections 16 and 36 of 
township 30 south, range 23 east, Mount Diablo Principal Meridian, 
California.
    ``(2) Not later than September 30, 1996, the Secretary shall enter 
into one or more contracts for the sale of all of the interest of the 
United States in the naval petroleum reserves.
    ``(b) Timing and Administration of Sale.--(1) Not later than 
January 1, 1996, the Secretary shall retain the services of five 
independent experts in the valuation of oil and gas fields to conduct 
separate assessments, in a manner consistent with commercial practices, 
of the fair market value of the interest of the United States in each 
naval petroleum reserve. In making their assessments for each naval 
petroleum reserve, the independent experts shall consider (among other 
factors) all equipment and facilities to be included in the sale, the 
net present value of the reserve, and the net present value of the 
anticipated revenue stream that the Secretary determines the Treasury 
would receive from the reserve if it were not sold, adjusted for any 
anticipated increases in tax revenues that would result if it were 
sold. The independent experts shall complete their assessments not 
later than June 1, 1996. In setting the minimum acceptable price for 
each naval petroleum reserve, the Secretary shall consider the average 
of the five assessments regarding the reserve or, if more advantageous 
to the Government, the average of three assessments after excluding the 
high and low assessments.
    ``(2) Not later than March 1, 1996, the Secretary shall retain the 
services of an investment banker to independently administer, in a 
manner consistent with commercial practices and in a manner that 
maximizes sale proceeds to the Government, the sale of the naval 
petroleum reserves under this section. The Secretary may enter into the 
contracts required under this paragraph and paragraph (1) on a 
noncompetitive basis.
    ``(3) Not later than June 1, 1996, the sales administrator selected 
under paragraph (2) shall complete a draft contract for the sale of 
each naval petroleum reserve, which shall accompany the invitation for 
bids and describe the terms and provisions of the sale of the interest 
of the United States in the reserve. Each draft contract shall identify 
all equipment and facilities to be included in the sales. Each draft 
contract, including the terms and provisions of the sale of the 
interest of the United States in the naval petroleum reserves, shall be 
subject to review and approval by the Secretary, the Secretary of the 
Treasury, and the Director of the Office of Management and Budget.
    ``(4) Not later than July 1, 1996, the Secretary shall publish an 
invitation for bids for the purchase of the naval petroleum reserves.
    ``(5) Not later than September 1, 1996, the Secretary shall accept 
the highest responsible offer for purchase of the interest of the 
United States in the naval petroleum reserves, or a particular reserve, 
that meets or exceeds the minimum acceptable price determined under 
paragraph (1). The Secretary may accept an offer for only a portion of 
a reserve so long as the entire reserve is still sold under this 
section at a price that meets or exceeds the minimum acceptable price.
    ``(c) Future Liabilities.--To effectuate the sale of the interest 
of the United States in a naval petroleum reserve, the Secretary may 
extend such indemnities and warranties as the Secretary considers 
reasonable and necessary to protect the purchaser from claims arising 
from the ownership in the reserve by the United States.
    ``(d) Special Rules Preparatory to Sale of Naval Petroleum Reserve 
Numbered 1.--(1) Not later than June 1, 1996, the Secretary shall 
finalize equity interests of the known oil and gas zones in Naval 
Petroleum Reserve Numbered 1 in the manner provided by this subsection.
    ``(2) The Secretary shall retain the services of an independent 
petroleum engineer, mutually acceptable to the equity owners, who shall 
prepare a recommendation on final equity figures. The Secretary may 
accept the recommendation of the independent petroleum engineer for 
final equity in each known oil and gas zone and establish final equity 
interest in the Naval Petroleum Reserve Numbered 1 in accordance with 
such recommendation, or the Secretary may use such other method to 
establish final equity interest in that reserve as the Secretary 
considers appropriate. The Secretary may enter into the contract 
required under this paragraph on a noncompetitive basis.
    ``(3) If, on the effective date of this section, there is an 
ongoing equity redetermination dispute between the equity owners under 
section 9(b) of the unit plan contract, such dispute shall be resolved 
in the manner provided in the unit plan contract not later than June 1, 
1996. Such resolution shall be considered final for all purposes under 
this section.
    ``(4) In this section, the term `unit plan contract' means the unit 
plan contract between equity owners of the lands within the boundaries 
of Naval Petroleum Reserve Numbered 1 (Elk Hills) entered into on June 
19, 1944.
    ``(e) Production Allocation Regarding Naval Petroleum Reserve 
Numbered 1.--(1) As part of the contract for purchase of Naval 
Petroleum Reserve Numbered 1, the purchaser of the interest of the 
United States in that reserve shall agree to make up to 25 percent of 
the purchaser's share of annual petroleum production from the purchased 
lands available for sale to small refiners, which do not have their own 
adequate sources of supply of petroleum, for processing or use only in 
their own refineries. None of the reserved production sold to small 
refiners may be resold in kind. The purchaser of that reserve may 
reduce the quantity of petroleum reserved under this subsection in the 
event of an insufficient number of qualified bids. The seller of this 
petroleum production has the right to refuse bids that are less than 
the prevailing market price of comparable oil.
    ``(2) The purchaser of Naval Petroleum Reserve Numbered 1 shall 
also agree to ensure that the terms of every sale of the purchaser's 
share of annual petroleum production from the purchased lands shall be 
so structured as to give full and equal opportunity for the acquisition 
of petroleum by all interested persons, including major and independent 
oil producers and refiners alike.
    ``(f) Maintaining Production Pending Sale of Naval Petroleum 
Reserve Numbered 1.--Until the sale of Naval Petroleum Reserve Numbered 
1 is completed under this section, the Secretary shall continue to 
produce that reserve at the maximum daily oil or gas rate from a 
reservoir, which will permit maximum economic development of the 
reservoir consistent with sound oil field engineering practices in 
accordance with section 3 of the unit plan contract. The definition of 
maximum efficient rate in section 7420(6) of this title shall not apply 
to Naval Petroleum Reserve Numbered 1.
    ``(g) Effect on Existing Contracts.--(1) In the case of any 
contract, in effect on the effective date of this section, for the 
purchase of production from any part of the United States' share of the 
naval petroleum reserves, the sale of the interest of the United States 
in the reserves shall be subject to the contract for a period of three 
months after the closing date of the sale or until termination of the 
contract, whichever occurs first. The term of any contract entered into 
after the effective date of this section for the purchase of such 
production shall not exceed the anticipated closing date for the sale 
of the reserve.
    ``(2) In the case of Naval Petroleum Reserve Numbered 1, the 
Secretary shall exercise the termination procedures provided in the 
contract between the United States and Bechtel Petroleum Operation, 
Inc., Contract Number DE-ACO1-85FE60520 so that the contract terminates 
not later than the date of closing of the sale of that reserve.
    ``(3) In the case of Naval Petroleum Reserve Numbered 1, the 
Secretary shall exercise the termination procedures provided in the 
unit plan contract so that the unit plan contract terminates not later 
than the date of closing of the sale of that reserve.
    ``(h) Offer of Settlement of State of California Claims Regarding 
Naval Petroleum Reserve Numbered 1.--(1) In connection with the sale of 
Naval Petroleum Reserve Numbered 1, the Secretary shall offer to settle 
all claims against the United States by the State of California and the 
Teachers' Retirement Fund of the State of California with respect to 
lands within that reserve, including sections 16 and 36 of township 30 
south, range 23 east, Mount Diablo Principal Meridian, California, or 
production or proceeds of sale from that reserve. Subject to paragraph 
(2), the Secretary shall offer in settlement of such claims--
            ``(A) a payment from funds provided for this purpose in 
        advance in appropriation Acts;
            ``(B) a grant of land pursuant to sections 2275 and 2276 of 
        the Revised Statutes of the United States (43 U.S.C. 851 and 
        852) so long as such land is not generating revenue for the 
        United States;
            ``(C) any other option that would not be inconsistent with 
        the Congressional Budget Act of 1974 (2 U.S.C. 621 et seq.); or
            ``(D) any combination of subparagraphs (A), (B), and (C).
    ``(2) The value of any payment, grant, or option (or combination 
thereof) offered as settlement under paragraph (1) may not exceed an 
amount equal to seven percent of the proceeds from the sale of Naval 
Petroleum Reserve Numbered 1, after deducting the costs incurred to 
conduct the sale of that reserve.
    ``(3) Acceptance of the settlement offered under paragraph (1) 
shall be subject to the condition that all claims against the United 
States by the State of California or the Teachers' Retirement Fund of 
the State of California are released with respect to lands within the 
Naval Petroleum Reserve Numbered 1, including sections 16 and 36 of 
township 30 south, range 23 east, Mount Diablo Principal Meridian, 
California, or production or proceeds of sale from that reserve. The 
Secretary may specify the manner in which the release of such claims 
shall be evidenced.
    ``(i) Effect on Antitrust Laws.--Nothing in this section shall be 
construed to alter the application of the antitrust laws of the United 
States to the purchaser of a naval petroleum reserve or to the lands in 
the naval petroleum reserves subject to sale under this section upon 
the completion of the sale.
    ``(j) Preservation of Private Right, Title, and Interest.--Nothing 
in this section shall be construed to adversely affect the ownership 
interest of any other entity having any right, title, and interest in 
and to lands within the boundaries of the naval petroleum reserves.
    ``(k) Congressional Notification.--Section 7431 of this title shall 
not apply to the sale of the naval petroleum reserves under this 
section. However, the Secretary may not enter into a contract for the 
sale of a naval petroleum reserve until the end of the 15-day period 
beginning on the date on which the Secretary notifies the Committee on 
Armed Services of the Senate and the Committee on National Security and 
the Committee on Commerce of the House of Representatives that the 
Secretary has accepted an offer under subsection (b)(5) for the sale of 
that reserve.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
7421 the following new item:

``7421a. Sale of naval petroleum reserves.''.

                 Subtitle C--National Defense Stockpile

SEC. 8021. DISPOSAL OF CERTAIN MATERIALS IN NATIONAL DEFENSE STOCKPILE 
              FOR DEFICIT REDUCTION.

    (a) Disposals Required.--(1) During fiscal year 1996, the President 
shall dispose of all cobalt contained in the National Defense Stockpile 
that, as the date of the enactment of this Act, is authorized for 
disposal under any law (other than this Act).
    (2) In addition to the disposal of cobalt under paragraph (1), the 
President shall dispose of additional quantities of cobalt and 
quantities of aluminum, ferro columbium, germanium, palladium, 
platinum, and rubber contained in the National Defense Stockpile so as 
to result in receipts to the United States in amounts equal to--
            (A) $21,000,000 during the fiscal year ending September 30, 
        1996;
            (B) $338,000,000 during the five-fiscal year period ending 
        on September 30, 2000; and
            (C) $649,000,000 during the seven-fiscal year period ending 
        on September 30, 2002.
    (3) The President is not required to include the disposal of the 
materials identified in paragraph (2) in an annual materials plan for 
the National Defense Stockpile. Disposals made under this section may 
be made without consideration of the requirements of an annual 
materials plan.
    (b) Limitation on Disposal Quantity.--The total quantities of 
materials authorized for disposal by the President under subsection 
(a)(2) may not exceed the amounts set forth in the following table:

                     Authorized Stockpile Disposals                     
------------------------------------------------------------------------
   Material for disposal                              Quantity          
------------------------------------------------------------------------
Aluminum..................................  62,881 short tons           
Cobalt....................................  42,482,323 pounds contained 
Ferro Columbium...........................  930,911 pounds contained    
Germanium.................................  68,207 kilograms            
Palladium.................................  1,264,601 troy ounces       
Platinum..................................  452,641 troy ounces         
Rubber....................................  125,138 long tons           
------------------------------------------------------------------------

    (c) Deposit of Receipts.--Notwithstanding section 9 of the 
Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h), 
funds received as a result of the disposal of materials under 
subsection (a)(2) shall be deposited into the general fund of the 
Treasury for the purpose of deficit reduction.
    (d) Relationship to Other Disposal Authority.--The disposal 
authority provided in subsection (a)(2) is new disposal authority and 
is in addition to, and shall not affect, any other disposal authority 
provided by law regarding the materials specified in such subsection.
    (e) Termination of Disposal Authority.--The President may not use 
the disposal authority provided in subsection (a)(2) after the date on 
which the total amount of receipts specified in subparagraph (C) of 
such subsection is achieved.
    (f) Definition.--The term ``National Defense Stockpile'' means the 
National Defense Stockpile provided for in section 4 of the Strategic 
and Critical Materials Stock Piling Act (50 U.S.C. 98c).

                    TITLE IX--COMMITTEE ON RESOURCES

SEC. 9000. TABLE OF CONTENTS.

    The table of contents for this title is as follows:

                    TITLE IX--COMMITTEE ON RESOURCES

Sec. 9000. Table of contents.
              Subtitle A--Alaska and Helium Privatization

                             Part 1--Alaska

Sec. 9001. Exports of Alaskan North Slope oil.
Sec. 9002. Arctic Coastal Plain leasing and revenue.
Sec. 9003. Alaska Power Administration sale.
                      Part 2--Helium Privatization

Sec. 9011. Short title.
Sec. 9012. Amendment of Helium Act.
Sec. 9013. Authority of Secretary.
Sec. 9014. Sale of crude helium.
Sec. 9015. Elimination of stockpile.
Sec. 9016. Repeal of authority to borrow.
Sec. 9017. Reports.
Sec. 9018. Land conveyance in Potter County, Texas.
                      Subtitle B--Water and Power

                Part 1--Power Marketing Administrations

Sec. 9201. Short title.
Sec. 9202. Sale of the Southeastern Power Administration.
Sec. 9203. Federal Energy Regulatory Commission jurisdiction.
Sec. 9204. Evaluation of sales of Southwestern Power Administration and 
                            Western Area Power Administration 
                            facilities.
Sec. 9205. Bonneville Power Administration appropriations refinancing.
                          Part 2--Reclamation

Sec. 9211. Prepayment of certain repayment contracts between the United 
                            States and the Central Utah Water 
                            Conservancy District.
Sec. 9212. Treatment of city of Folsom as a Central Valley Project 
                            contractor.
Sec. 9213. Sly Park.
Sec. 9214. Hetch Hetchy Dam.
         Subtitle C--National Parks, Forests, and Public Lands

                       Part 1--Concession Reform

Sec. 9301. Short title.
Sec. 9302. Purpose.
Sec. 9303. Definitions.
Sec. 9304. Nature and types of concession authorizations.
Sec. 9305. Competitive selection process for concession service 
                            agreements.
Sec. 9306. Concessioner evaluations.
Sec. 9307. Capital improvements.
Sec. 9308. Duration of concession authorization.
Sec. 9309. Rates and charges to the public.
Sec. 9310. Transferability of concession authorizations.
Sec. 9311. Fees charged by the United States for concession 
                            authorizations.
Sec. 9312. Disposition of fees.
Sec. 9313. Dispute resolution.
Sec. 9314. Recordkeeping.
Sec. 9315. Application of general governmental acquisition 
                            requirements.
Sec. 9316. Rules of construction.
Sec. 9317. Regulations.
Sec. 9318. Relationship to other existing laws.
                   Part 2--National Forest Ski Areas

Sec. 9321. Privatization of Forest Service ski areas.
Sec. 9322. Ski area permit fees and withdrawal of ski areas from 
                            operation of mining laws.
                   Part 3--Domestic Livestock Grazing

Sec. 9331. Applicable regulations.
Sec. 9332. Fees and charges.
Sec. 9333. Animal unit month.
Sec. 9334. Term of grazing permits or grazing leases.
Sec. 9335. Conformance with land use plan.
Sec. 9336. Effective date.
     Part 4--Regional Disposal Facility of Southwestern Low Level 
                   Radioactive Waste Disposal Compact

Sec. 9341. Conveyance of property.
Sec. 9342. Conveyance of easements.
                        Subtitle D--Territories

          Part 1--Commonwealth of the Northern Mariana Islands

Sec. 9401. Termination of annual direct grant assistance.
            Part 2--Territorial Administrative Cessation Act

Sec. 9421. Short title.
Sec. 9422. Congressional findings.
Sec. 9423. Elimination of Office of Territorial and International 
                            Affairs.
Sec. 9424. Certain activities not funded.
                          Subtitle E--Minerals

                        Part 1--Hardrock Mining

Sec. 9501. Findings and purpose.
Sec. 9502. Patents under the general mining law.
Sec. 9503. Royalty under the general mining law.
Sec. 9504. Mineral materials.
Sec. 9505. Claim maintenance requirements.
                 Part 2--Federal Oil and Gas Royalties

Sec. 9511. Short title.
Sec. 9512. Definitions.
Sec. 9513. Limitation periods.
Sec. 9514. Adjustment and refunds.
Sec. 9515. Required recordkeeping.
Sec. 9516. Royalty interest, penalties, and payments.
Sec. 9517. Limitation on assessments.
Sec. 9518. Alternatives for marginal properties.
Sec. 9519. Royalty in kind.
Sec. 9520. Royalty simplification and cost-effective audit and 
                            collection requirements.
Sec. 9521. Repeals.
Sec. 9522. Delegation to States.
Sec. 9523. Performance standard.
Sec. 9524. Indian lands.
Sec. 9525. Private lands.
Sec. 9526. Effective date.
                  Subtitle F--Indian Gaming and Health

                         Part 1--Indian Gaming

Sec. 9601. Indian gaming.
                    Part 2--Indian Health: Medicaid

Sec. 9611. Health care facilities.
Sec. 9612. Provider reimbursement.
Sec. 9613. Study.
                    Part 3--Indian Health: Medicare

Sec. 9621. Health care facilities.
Sec. 9622. Provider reimbursement.
                        Subtitle G--Consultation

Sec. 9701. Consultation.
                          Subtitle H--Mapping

Sec. 9801. Short title.
Sec. 9802. Surveying and mapping contracting program.
Sec. 9803. Inventory of activities.
Sec. 9804. Plan to increase use of contracts.
Sec. 9805. Reports.
Sec. 9806. Definitions.
                Subtitle I--National Park System Reform

Sec. 9901. Short title.
Sec. 9902. Definitions.
                   Part 1--National Park System Plan

Sec. 9911. Preparation of National Park System plan.
Sec. 9912. Management review of National Park System.
Sec. 9913. National Park System Review Commission.
Sec. 9914. Subsequent Act of Congress required to modify or terminate a 
                            park.
Sec. 9915. Authorization of appropriations.
Sec. 9916. Commendation and protection of National Park rangers.
                     Part 2--New Area Establishment

Sec. 9921. Study of new Park System areas.

              Subtitle A--Alaska and Helium Privatization

                             PART 1--ALASKA

SEC. 9001. EXPORTS OF ALASKAN NORTH SLOPE OIL.

    (a) Amendment of Mineral Leasing Act.--Section 28(s) of the Mineral 
Leasing Act (30 U.S.C. 185(s)) is amended to read as follows:

                  ``exports of alaskan north slope oil

    ``(s)(1) Subject to paragraphs (2) through (6) of this subsection 
and notwithstanding any other provision of this Act or any other 
provision of law (including any regulation) applicable to the export of 
oil transported by pipeline over right-of-way granted pursuant to 
section 203 of the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 
1652), such oil may be exported unless the President finds that 
exportation of this oil is not in the national interest. The President 
shall make his national interest determination within 5 months after 
the date of enactment of this subsection. In evaluating whether exports 
of this oil are in the national interest, the President shall at a 
minimum consider--
            ``(A) whether exports of this oil would diminish the total 
        quantity or quality of petroleum available to the United 
        States;
            ``(B) the results of an appropriate environmental review, 
        including consideration of appropriate measures to mitigate any 
        potential adverse effects of exports of this oil on the 
        environment, which shall be completed within four months of the 
        date of the enactment of this subsection; and
            ``(C) whether exports of this oil are likely to cause 
        sustained material oil supply shortages or sustained oil prices 
        significantly above world market levels that would cause 
        sustained material adverse employment effects in the United 
        States or that would cause substantial harm to consumers, 
        including in noncontiguous States and Pacific territories.
If the President determines that exports of this oil are in the 
national interest, he may impose such terms and conditions (other than 
a volume limitation) as are necessary or appropriate to ensure that 
such exports are consistent with the national interest.
    ``(2) Except in the case of oil exported to a country with which 
the United States entered into a bilateral international oil supply 
agreement before November 26, 1979, or to a country pursuant to the 
International Emergency Oil Sharing Plan of the International Energy 
Agency, any oil transported by pipeline over right-of-way granted 
pursuant to section 203 of the Trans-Alaska Pipeline Authorization Act 
(43 U.S.C. 1652) shall, when exported, be transported by a vessel 
documented under the laws of the United States and owned by a citizen 
of the United States (as determined in accordance with section 2 of the 
Shipping Act, 1916 (46 U.S.C. App. 802)).
    ``(3) Nothing in this subsection shall restrict the authority of 
the President under the Constitution, the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.), or the National 
Emergencies Act (50 U.S.C. 1601 et seq.) to prohibit exports of this 
oil or under Part B of title II of the Energy Policy and Conservation 
Act (42 U.S.C. 6271-76).
    ``(4) The Secretary of Commerce shall issue any rules necessary for 
implementation of the President's national interest determination, 
including any licensing requirements and conditions, within 30 days of 
the date of such determination by the President. The Secretary of 
Commerce shall consult with the Secretary of Energy in administering 
the provisions of this subsection.
    ``(5) If the Secretary of Commerce finds that exporting oil under 
authority of this subsection has caused sustained material oil supply 
shortages or sustained oil prices significantly above world market 
levels and further finds that these supply shortages or price increases 
have caused or are likely to cause sustained material adverse 
employment effects in the United States, the Secretary of Commerce, in 
consultation with the Secretary of Energy, shall recommend, and the 
President may take, appropriate action concerning exports of this oil, 
which may include modifying or revoking authority to export such oil.
    ``(6) Administrative action under this subsection is not subject to 
sections 551 and 553 through 559 of title 5, United States Code.''.
    (b) GAO Report.--
            (1) Review.--The Comptroller General of the United States 
        shall conduct a review of energy production in California and 
        Alaska and the effects of Alaskan North Slope oil exports, if 
        any, on consumers, independent refiners, and shipbuilding and 
        ship repair yards on the West Coast and in Hawaii. The 
        Comptroller General shall commence this review 2 years after 
        the date of enactment of this Act and, within 6 months after 
        commencing the review, shall provide a report to the Committee 
        on Resources and the Committee on Commerce of the House of 
        Representatives and the Committee on Energy and Natural 
        Resources of the Senate.
            (2) Contents of Report.--The report shall contain a 
        statement of the principal findings of the review and 
        recommendations for Congress and the President to address job 
        loss in the shipbuilding and ship repair industry on the West 
        Coast, as well as adverse impacts on consumers and refiners on 
        the West Coast and in Hawaii, that the Comptroller General 
        attributes to Alaska North Slope oil exports.

SEC. 9002. ARCTIC COASTAL PLAIN LEASING AND REVENUE.

    (a) Purpose.--It is the purpose of this section to reduce the 
Federal deficit by an estimated $1,300,000,000 over the next 5 years. 
This revenue will be derived from competitive bonus bids for oil and 
gas leases in the Coastal Plain area of Alaska's North Slope.
    (b) Definitions.--For the purposes of this section:
            (1) The term ``Secretary'' means the Secretary of the 
        Interior.
            (2) The term ``Coastal Plain'' means that portion of the 
        Arctic National Wildlife Refuge identified in section 
        1002(b)(1) of the Alaska National Interest Lands Conservation 
        Act of 1980 (Public Law 96-487; 16 U.S.C. 3142(b)(1)) 
        consisting of approximately 1,549,000 acres.
    (c) Compatibility.--Congress hereby determines that the oil and gas 
leasing program and activities authorized by this section in the 
Coastal Plain are compatible with the purposes for which the Arctic 
National Wildlife Refuge was established, and that no further findings 
or decisions are required to implement this determination.
    (d) Authorization.--(1) Congress hereby authorizes and directs the 
Secretary to establish and promptly implement a program to assure the 
expeditious competitive leasing exploration, development, production, 
and transportation of the oil and gas resources of the Coastal Plain. 
Regulations to implement this program and to govern oil and gas 
leasing, exploration, development and production shall be promulgated 
by the Secretary within 6 months of the date of enactment of this 
section.
    (2) The Coastal Plain leasing program required by paragraph (1) 
shall include the following:
            (A) The first lease sale of not less than 200,000 acres 
        shall be conducted within 12 months of the date of enactment of 
        this section.
            (B) The lease sales shall be based upon an industry 
        nomination process.
            (C) The Secretary is directed to grant to the highest 
        responsible qualified bidder or bidders by competitive bidding, 
        under regulations promulgated in advance, any oil and gas lease 
        on unleased Federal lands within the Coastal Plain. These 
        regulations may provide for the deposit of cash bids in an 
        interest-bearing account until the Secretary accepts the bids, 
        with interest earned paid to the General Treasury for bids that 
        are accepted, and to the unsuccessful bidders for bids that are 
        rejected.
            (D) Royalty payments shall not be less than 12\1/2\ 
        percent, and rental payments shall be prescribed by the 
        Secretary.
            (E) The Attorney General of the United States and the 
        Federal Trade Commission may conduct such review of lease terms 
        and lease sale activities as are necessary to ensure compliance 
        with the antitrust laws.
            (F) The size of lease tracts may be up to 11,520 acres but 
        not less than 2,560 acres, as determined by the Secretary, 
        except that the Secretary may lease smaller tracts if he 
        determines smaller tracts are necessary to promote a more 
        competitive leasing program or are necessary in certain 
        locations to mitigate reasonably foreseeable impacts on the 
        environment.
            (G) Each lease shall be issued for an initial period of up 
        to 10 years and shall be extended as long as oil or gas is 
        produced in paying quantities from the lease or unit area to 
        which the lease is committed or as drilling or reworking 
        operations as approved by the Secretary are conducted thereon.
            (H) The Secretary is authorized and directed to promulgate 
        regulations and to include terms in leases to ensure that--
                    (i) activities are conducted pursuant to an 
                approved exploration or development plan;
                    (ii) lessees secure an appropriate performance bond 
                to cover activities;
                    (iii) provision is made for the suspension, 
                cancellation, assignment, relinquishment and 
                unitization of leases; and
                    (iv) the Secretary has access to lease information 
                and that confidential, privileged or proprietary 
                information furnished by lessees is adequately 
                protected.
    (e) Judicial Review.--Any complaint filed seeking judicial review 
of an action of the Secretary in promulgating any regulation under this 
section may be filed only in the United States Court of Appeals for the 
District of Columbia, and such complaint shall be filed within 90 days 
from the date of such promulgation, or after such date if such 
complaint is based solely on grounds arising after such 90th day, in 
which case the complaint must be filed within 90 days after the 
complainant knew or reasonably should have known of the grounds for the 
complaint. Any complaint seeking judicial review of any other actions 
of the Secretary under this section may be filed in any appropriate 
district court of the United States, and such complaint must be filed 
within 90 days from the date of the action being challenged, or after 
such date if such complaint is based solely on grounds arising after 
such 90th day, in which case the complaint must be filed within 90 days 
after the complainant knew or reasonably should have known of the 
grounds for the complaint.
    (f) Administration.--(1) Section 1003 of the Alaska National 
Interest Lands Conservation Act of 1980 (94 Stat. 2452; 16 U.S.C. 3143) 
is repealed.
    (2) This section shall be considered the primary land management 
authorization for all activities associated with exploration, 
development, and production from the Coastal Plain. No land management 
review, determination, or other action shall be required except as 
specifically authorized by this section.
    (g) Protection of Fish and Wildlife Resources and Other 
Environmental Values.--(1) Before conducting a competitive oil and gas 
lease sale under this section, the Secretary shall promulgate, within 6 
months, as provided in subsection (d)(1), such rules and regulations as 
are necessary to ensure that oil and gas exploration, development, 
production, and transportation activities undertaken in the Coastal 
Plain achieve the reasonable protection of the fish and wildlife 
resources, environment and subsistence uses of the Coastal Plain.
    (2) The Secretary shall administer the provisions of this section 
through regulations and lease terms that the Secretary determines to be 
necessary to mitigate reasonably foreseeable and significantly adverse 
effects on the fish and wildlife, surface resources and subsistence 
resources of the Coastal Plain.
    (3)(A) The Secretary, after consultation with the State of Alaska, 
the city of Kaktovik, Alaska, and the North Slope Borough, is 
authorized to close to leasing and designate up to 30,000 acres of the 
Coastal Plain as Special Areas if the Secretary determines that these 
lands are of such unique character and interest so as to require 
special management and regulatory protection. The Secretary shall 
notify the Committee on Energy and Natural Resources of the Senate and 
the Committee on Resources of the House of Representatives 90 days in 
advance of making such designations. The Secretary may permit leasing 
of all or portions of any lands within the Coastal Plain designated as 
Special Areas by setting lease terms that limit or condition surface 
use and occupancy by lessees of such lands but permit the use of 
horizontal drilling technology from sites on leases located outside the 
designated Special Areas.
    (B) Notwithstanding any other provision of law or any international 
agreement to which the United States is a party, the Secretary's sole 
authority to close lands within the Coastal Plain to oil and gas 
leasing and to exploration, development, and production as provided for 
in this part is set forth in subparagraph (A).
    (4) The Secretary shall, in consultation with the State of Alaska, 
the city of Kaktovik, Alaska, and the North Slope Borough, develop 
guidelines to encourage the siting of facilities having common use 
characteristics (service bases, ports and docks, airports, major 
pipelines and roads) in a manner which leads to facility consolidation, 
avoids unnecessary duplication, utilizes existing facilities, minimizes 
impacts on fish, wildlife, habitat and the subsistence activities of 
residents of Native communities, and avoids disruption of the lives of 
the residents of the Village of Kaktovik and other communities.
    (5) Notwithstanding title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (94 Stat. 2457; 16 U.S.C. 3161 et seq.), the 
Secretary is authorized and directed to grant, under sections 28(a) 
through (t) and (v) through (y) of the Mineral Leasing Act (30 U.S.C. 
185), rights-of-way and easements across the Coastal Plain for the 
purposes of this section, for pipeline construction, and the 
transportation of oil and gas and related purposes.
    (6) The Secretary is authorized to close, on a seasonal basis, 
portions of the Coastal Plain to exploratory drilling activities as 
necessary to protect caribou calving areas and other species of fish 
and wildlife.
    (h) Application of Environmental Laws.--The ``Final Legislative 
Environmental Impact Statement'' (April 1987) prepared pursuant to 
section 1002 of the Alaska National Interest Lands Conservation Act of 
1980 (94 Stat. 2449; 16 U.S.C. 3142) and section 102(2)(C) of the 
National Environmental Policy Act of 1969 (89 Stat. 424; 42 U.S.C. 
4332(2)(C)) is hereby determined to be adequate and legally sufficient 
for all actions authorized pursuant to this section, including all 
phases of oil and gas leasing, exploration, development, production, 
transportation and related activities, including the granting of 
rights-of-way, use permits and other authorizations.
    (i) New Revenues.--(1) Notwithstanding any other provision of law, 
all revenues received from competitive bids, sales, bonuses, royalties, 
rents, fees, interest or other income derived from the leasing of oil 
and gas resources within the Coastal Plain shall be deposited into the 
Treasury of the United States: Provided, That 50 percent of all such 
Coastal Plain revenues shall be paid by the Secretary of the Treasury 
semiannually, on March 30th and on September 30th of each year, to the 
State of Alaska.
    (2) On March 1st of each year following the date of enactment of 
this section, the Secretary shall prepare and submit to the Congress an 
annual report on the revenues derived and on the leasing program 
authorized by this section.
    (j) Conveyance.--Notwithstanding the provisions of section 
1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 
U.S.C. 3192(h)(2)), the Secretary is authorized and directed to convey 
(1) to the Kaktovik Inupiat Corporation the surface estate of the lands 
described in paragraph 2 of Public Land Order 6959, to the extent 
necessary to fulfill the corporation's entitlement under section 12 of 
the Alaska Native Claims Settlement Act (43 U.S.C. 1611), and (2) to 
the Arctic Slope Regional Corporation the subsurface estate beneath 
such surface estate pursuant to the August 9, 1983, agreement between 
the Arctic Slope Regional Corporation and the United States of America.
    (k) Penalty.--Any person, including any Federal official, who fails 
to comply with any provision or mandate of this section, a lease term, 
or a regulation promulgated under this section, after notice of such 
failure and expiration of a reasonable period for corrective action, 
shall be liable, after hearing, for a civil penalty of not more than 
$10,000 for each day of the continuance of such failure.
    (l) Community Assistance.--There is hereby established a Community 
Assistance Fund in the Treasury which shall be maintained at a level of 
$5,000,000 annually from the Federal share of Coastal Plain revenues 
and shall be available to the Secretary for the purposes of this 
section. Organized boroughs, other municipal subdivisions of the State 
of Alaska, and recognized Indian Reorganization Act entities which are 
impacted by activities authorized under this section shall be eligible, 
on application to the Secretary, for local assistance from the 
Community Assistance Fund for needed social services and to provide 
public services and facilities required in connection with supporting 
exploration and development of the Coastal Plain.
    (m) Employment and Contracting.--As a condition of any leases, 
permits, or other Federal authorizations granted or issued pursuant to 
this section, a recipient of those leases, permits, or authorizations 
shall be required to use its best efforts to assure that the lessee and 
its agents and contractors provide a fair share of employment and 
contracting for Alaska Natives and Alaska Native Corporations from 
throughout the State.
    (n) Use of ANWR Revenues.--
            (1) Establishment of endowment.--There is hereby 
        established in the general fund of the Treasury a separate 
        account which shall be known as the National Endowment for Fish 
        and Wildlife.
            (2) Contents.--(A) Except as provided in subparagraph (B), 
        the Endowment shall consist of revenues received from the 
        following sources:
                    (i) Gifts, devises, and bequests to the Endowment.
                    (ii) Amounts appropriated by the Congress to the 
                Endowment.
                    (iii) Any revenues deposited into the Treasury of 
                the United States under subsection (i), from the 
                Federal share of revenues derived from oil and gas 
                leasing within the Coastal Plain, that exceed 
                $1,300,000,000.
            (B) After the Endowment has reached a level of $250,000,000 
        in principal, further payments to the Endowment shall consist 
        only of the following:
                    (i) Gifts, devises, and bequests to the Endowment.
                    (ii) Amounts appropriated by the Congress to the 
                Endowment.
                    (iii) 5 percent of the Federal royalties derived 
                from commercial production of oil and gas on Federal 
                leases on the Coastal Plain.
            (3) Establishment of fish and wildlife conservation 
        commission.--(A) To carry out the purposes of this subsection, 
        there is hereby established a commission to be known as the 
        Fish and Wildlife Conservation Commission.
            (B) The Commission shall consist of--
                    (i) the Secretary of the Interior, who shall be the 
                chairman,
                    (ii) 3 Members of the Senate selected by the 
                President of the Senate, and
                    (iii) 3 Members of the House of Representatives 
                selected by the Speaker.
            (C) At least 1 member of the Commission selected from each 
        House of Congress shall be a member of the minority party in 
        that House.
            (D) Any Member of the House of Representatives who is a 
        member of the Commission, if reelected to the succeeding 
        Congress, may serve on the Commission notwithstanding the 
        expiration of a Congress.
            (E) Any vacancy on the Commission shall be filled in the 
        same manner as the original appointment.
            (4) Expenditures by commission.--(A) The Fish and Wildlife 
        Commission may make expenditures from the Endowment for the 
        following fish and wildlife conservation purposes:
                    (i) Acquisition of important habitat lands for 
                endangered species or threatened species from owners of 
                private property. Such lands may be acquired solely on 
                a willing seller basis and shall be managed by the 
                Secretary of the Interior for the conservation of such 
                species pursuant to the terms of section 5 of the 
                Endangered Species Act of 1973 (16 U.S.C. 1534).
                    (ii) Provision of funding for purposes authorized 
                under the Endangered Species Act of 1973.
                    (iii) Provision of funds to the North American 
                Wetlands Conservation Fund pursuant to the North 
                American Wetlands Conservation Act (16 U.S.C. 4401 et 
                seq.).
            (B) The amount expended under subparagraph (A)(iii) each 
        fiscal year shall equal or exceed 25 percent of the total 
        expenditures from the Endowment in that fiscal year.
            (C) The Secretary of the Interior may not recommend any 
        lands or interest in lands for purchase or other forms of 
        acquisition using funds made available under the terms of this 
        section unless the Secretary of the Interior--
                    (i) has determined that such lands are necessary 
                for the conservation of endangered species or other 
                fish and wildlife; and
                    (ii) has consulted with the county or other unit of 
                local government in which such lands are located and 
                with the Governor of the State concerned.
            (D) Land or an interest in land may not be acquired with 
        moneys from the Endowment unless--
                    (i) the acquisition thereof has been approved by 
                the Governor of the State in which the land is located; 
                and
                    (ii) the owner of the land or interest has offered 
                the land or interest for acquisition under this 
                subsection and consented to the acquisition.
            (5) Annual report.--The Commission shall, through its 
        chairman, annually report in detail to the Congress, by not 
        later than the first Monday in December, regarding the 
        operations of the Commission during the preceding fiscal year.
            (6) State law.--The jurisdiction of any State, both civil 
        and criminal, over persons upon areas acquired under this 
        subsection shall not be changed or otherwise affected by reason 
        of the acquisition and administration of the areas by the 
        United States as endangered species habitat. Nothing in this 
        subsection is intended to interfere with the operation of the 
        game laws of the States.
            (7) Administration of areas acquired.--Areas of lands, 
        waters, or interest therein acquired or reserved pursuant to 
        this subsection shall, unless otherwise provided by law, be 
        administered by the Secretary of the Interior under rules and 
        regulations prescribed by the Secretary to conserve and protect 
        endangered species in accordance with the Endangered Species 
        Act of 1973, or to restore or develop adequate wildlife 
        habitat.
            (8) Definitions.--In this subsection:
                    (A) The term ``Commission'' means the Fish and 
                Wildlife Conservation Commission established by this 
                subsection.
                    (B) The term ``Endowment'' means the National 
                Endowment for Fish and Wildlife established by this 
                subsection.
            (9) Conforming amendment.--Section 7 of the North American 
        Wetlands Conservation Act of 1989 (16 U.S.C. 4406) is amended 
        by adding at the end the following:
    ``(e) Fish and Wildlife Commission Funding.--In addition to the 
amounts made available under subsections (a), (b), and (c) of this 
section, the Council may receive funds from the Fish and Wildlife 
Commission to carry out the purposes of this Act. Use of such funds 
shall not be subject to the cost allocation requirements of section 8 
of this Act.''.

SEC. 9003. ALASKA POWER ADMINISTRATION SALE.

    (a) Definitions.--For purposes of this section:
            (1) The term ``Eklutna assets'' means the Eklutna 
        Hydroelectric Project and related assets as described in 
section 4 and Exhibit A of the Eklutna Purchase Agreement.
            (2) The term ``Eklutna Purchase Agreement'' means the 
        August 2, 1989, Eklutna Purchase Agreement between the Alaska 
        Power Administration of the Department of Energy and the 
        Eklutna Purchasers, together with any amendments thereto which 
        were adopted before the enactment of this section.
            (3) The term ``Eklutna Purchasers'' means the Municipality 
        of Anchorage doing business as Municipal Light and Power, the 
        Chugach Electric Association, Inc. and the Matanuska Electric 
        Association, Inc.
            (4) The term ``Secretary'' means the Secretary of Energy 
        except where otherwise specified.
            (5) The term ``Snettisham assets'' means the Snettisham 
        Hydroelectric Project and related assets as described in 
        section 4 and Exhibit A of the Snettisham Purchase Agreement.
            (6) The term ``Snettisham Purchase Agreement'' means the 
        February 10, 1989, Snettisham Purchase Agreement between the 
        Alaska Power Administration of the Department of Energy and the 
        Alaska Power Authority and its successors in interest, together 
        with any amendments thereto which were adopted before the 
        enactment of this section.
    (b) Sale of Snettisham and Eklunta Assets.--
            (1) Snettisham.--The Secretary is authorized and directed 
        to sell and transfer the Snettisham assets to the State of 
        Alaska in accordance with the terms of this section and the 
        Snettisham Purchase Agreement.
            (2) Eklutna.--The Secretary is authorized and directed to 
        sell and transfer the Eklutna assets to the Eklutna Purchasers 
        in accordance with the terms of this section and the Eklutna 
        Purchase Agreement.
            (3) Cooperation of other agencies.--Other departments, 
        agencies, and instrumentalities of the United States shall 
        cooperate with the Secretary in implementing the sales and 
        transfers under this section.
            (4) Authorization of appropriations; contributed funds.--
        (A) There are authorized to be appropriated such sums as may be 
        necessary to prepare, survey, or acquire Snettisham and Eklutna 
        assets for sale and transfer under this section. Such 
        preparations and acquisitions shall provide sufficient title in 
        the assets to ensure beneficial use, enjoyment, and occupancy 
        thereof to the purchasers.
            (B) Notwithstanding any other provision of law, the Alaska 
        Power Administration is authorized to receive, administer, and 
        expend such contributed funds as may be provided by the Eklutna 
        Purchasers or customers or the Snettisham Purchasers or 
        customers for the purposes of upgrading, improving, 
        maintaining, or administering Eklutna or Snettisham. Upon the 
        termination of the Alaska Power Administration required under 
        subsection (d), the Secretary of Energy shall administer and 
        expend any remaining balances of such contributed funds for the 
        purposes intended by the contributors.
    (c) General Provisions.--
            (1) Rights-of-way and other lands for the eklutna 
        project.--With respect to Eklutna lands described in Exhibit A 
        of the Eklutna Purchase Agreement:
                    (A) The Secretary of the Interior shall issue 
                rights-of-way to the Alaska Power Administration for 
                subsequent reassignment to the Eklutna Purchasers at no 
                cost to the Eklutna Purchasers.
                    (B) Such rights-of-way shall remain effective for a 
                period equal to the life of the Eklutna hydroelectric 
                project as extended by improvements, repairs, renewals, 
                or replacements.
                    (C) Such rights-of-way shall be sufficient for the 
                operation, maintenance, repair, and replacement of, and 
                access to, the facilities of the Eklutna hydroelectric 
                project located on military lands and lands managed by 
                the Bureau of Land Management, including land selected 
                by, but not yet conveyed to, the State of Alaska.
                    (D) If the Eklutna Purchasers subsequently sell or 
                transfer the Eklutna hydroelectric project to private 
                ownership, the Bureau of Land Management may assess 
                reasonable and customary fees for continued use of the 
                rights-of-way on lands managed by the Bureau of Land 
                Management and military lands in accordance with 
                applicable law.
                    (E) The Secretary shall transfer fee title to lands 
                at Anchorage Substation to the Eklutna Purchasers at no 
                additional cost if the Secretary of the Interior 
                determines that pending claims to and selections of 
                those lands are invalid or relinquished.
                    (F) With respect only to the Eklutna lands 
                identified in Exhibit A of the Eklutna Purchase 
                Agreement, the State of Alaska may select, and the 
                Secretary of the Interior shall convey, to the State, 
                improved lands under the selection entitlements in 
                section 6 of the Alaska Statehood Act (Public Law 85-
                508; 72 Stat. 339) and the North Anchorage Land 
                Agreement of January 31, 1983. The conveyance of such 
                lands is subject to the rights-of-way provided to the 
                Eklutna Purchasers under subparagraph (A).
            (2) Lands for the snettisham project.--With respect to the 
        Snettisham lands identified in Exhibit A of the Snettisham 
        Purchase Agreement, the State of Alaska may select, and the 
        Secretary of the Interior shall convey to the State, improved 
        lands under the selection entitlement in section 6 of the 
        Alaska Statehood Act (Public Law 85-508; 72 Stat. 339).
            (3) Effect on state selections.--Notwithstanding the 
        expiration of the right of the State of Alaska to make 
        selections under section 6 of the Alaska Statehood Act (Public 
        Law 85-508; 72 Stat. 339), the State of Alaska may select lands 
        authorized for selection under this section or any Purchase 
        Agreement incorporated into or ratified by this section. The 
        State shall complete such selections within one year after the 
        date of the enactment of this section. The Secretary of the 
        Interior shall convey lands selected by the State under this 
        section notwithstanding the limitation contained in section 
        6(b) of the Alaska Statehood Act (Public Law 85-508; 72 Stat. 
        339) regarding the occupancy, appropriation, or reservation of 
        selected lands. Nothing in this subsection shall be construed 
        to authorize the Secretary of the Interior to convey to the 
        State of Alaska a total acreage of selected lands in excess of 
        the total acreage which could be transferred to the State of 
        Alaska pursuant to the Alaska Statehood Act (Public Law 85-508; 
        72 Stat. 339), and other applicable law.
            (4) Repeal of act of august 9, 1955.--The Act of August 9, 
        1955 (69 Stat. 618), concerning water resources investigations 
        in Alaska, is repealed.
            (5) Treatment of asset sale.--The sales of assets under 
        this section shall not be considered a disposal of Federal 
        surplus property under the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 484) or the Surplus Property 
        Act of 1944 (50 U.S.C. App. 1622).
            (6) Application of certain laws.--(A) The Act of July 31, 
        1950 (64 Stat. 382), shall cease to apply on the date, as 
        determined by the Secretary, when all Eklutna assets have been 
        conveyed to the Eklutna Purchasers.
            (B) Section 204 of the Flood Control Act of 1962 (Public 
        Law 87-874; 76 Stat. 1193) shall cease to apply effective on 
        the date, as determined by the Secretary, when all Snettisham 
        assets have been conveyed to the State of Alaska.
    (d) Termination of Alaska Power Administration.--
            (1) Termination of alaska power administation.--Not later 
        than one year after both of the sales authorized in this 
        section have occurred, as measured by the Transaction Dates 
        stipulated in the Purchase Agreements, the Secretary shall--
                    (A) complete the business of, and close out, the 
                Alaska Power Administration;
                    (B) prepare and submit to Congress a report 
                documenting the sales; and
                    (C) return unobligated balances of funds 
                appropriated for the Alaska Power Administration to the 
                Treasury of the United States.
            (2) DOE organization act.--Section 302(a) of the Department 
        of Energy Organization Act (42 U.S.C. 7152(a)) is amended as 
        follows:
                    (A) In paragraph (1)--
                            (i) by striking out subparagraph (C); and
                            (ii) by redesignating subparagraphs (D), 
                        (E), and (F) as subparagraphs (C), (D), and (E) 
                        respectively.
                    (B) In paragraph (2), by striking out ``the 
                Bonneville Power Administration, and the Alaska Power 
                Administration'' and inserting in lieu thereof ``and 
                the Bonneville Power Administration''.
        The amendments made by this paragraph shall take effect on the 
        date on which the Secretary submits the report referred to in 
        subparagraph (B) of paragraph (1).
    (e) Proceeds.--The proceeds from the sale of Snettisham and Eklutna 
assets under this section shall be credited to miscellaneous receipts 
in the Treasury.

                      PART 2--HELIUM PRIVATIZATION

SEC. 9011. SHORT TITLE.

    This part may be cited as the ``Helium Privatization Act of 1995''.

SEC. 9012. AMENDMENT OF HELIUM ACT.

    Except as otherwise expressly provided, whenever in this part an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Helium Act (50 U.S.C. 
167 to 167n).

SEC. 9013. AUTHORITY OF SECRETARY.

    Sections 3, 4, and 5 are amended to read as follows:

``SEC. 3. AUTHORITY OF SECRETARY.

    ``(a) Extraction and Disposal of Helium on Federal Lands.--(1) The 
Secretary may enter into agreements with private parties for the 
recovery and disposal of helium on Federal lands upon such terms and 
conditions as he deems fair, reasonable and necessary. The Secretary 
may grant leasehold rights to any such helium. The Secretary may not 
enter into any agreement by which the Secretary sells such helium other 
than to a private party with whom the Secretary has an agreement for 
recovery and disposal of helium. Such agreements may be subject to such 
rules and regulations as may be prescribed by the Secretary.
    ``(2) Any agreement under this subsection shall be subject to the 
existing rights of any affected Federal oil and gas lessee. Each such 
agreement (and any extension or renewal thereof) shall contain such 
terms and conditions as deemed appropriate by the Secretary.
    ``(3) This subsection shall not in any manner affect or diminish 
the rights and obligations of the Secretary and private parties under 
agreements to dispose of helium produced from Federal lands in 
existence at the enactment of the Helium Privatization Act of 1995 
except to the extent that such agreements are renewed or extended after 
such date.
    ``(b) Storage, Transportation, and Sale.--The Secretary is 
authorized to store, transport, and sell helium only in accordance with 
this Act.
    ``(c) Monitoring and Reporting.--The Secretary is authorized to 
monitor helium production and helium reserves in the United States and 
to periodically prepare reports regarding the amounts of helium 
produced and the quantity of crude helium in storage in the United 
States.

``SEC. 4. STORAGE, TRANSPORTATION, AND WITHDRAWAL OF CRUDE HELIUM.

    ``(a) Storage, Transportation, and Withdrawal.--The Secretary is 
authorized to store and transport crude helium and to maintain and 
operate existing crude helium storage at the Bureau of Mines Cliffside 
Field, together with related helium transportation and withdrawal 
facilities.
    ``(b) Cessation of Production, Refining, and Marketing.--Effective 
18 months after the date of enactment of the Helium Privatization Act 
of 1995, the Secretary shall cease producing, refining and marketing 
refined helium and shall cease carrying out all other activities 
relating to helium which the Secretary was authorized to carry out 
under this Act before the date of enactment of the Helium Privatization 
Act of 1995, except those activities described in subsection (a). The 
amount of helium reserves owned by the United States and stored in the 
Bureau of Mines Cliffside Field at such date of cessation, less 
600,000,000 cubic feet, shall be the helium reserves owned by the 
United States required to be sold pursuant to section 8(b) hereof.
    ``(c) Disposal of Facilities.--(1) Within two years after the date 
on which the Secretary ceases producing, refining and marketing refined 
helium and ceases all other activities relating to helium in accordance 
with subsection (b), the Secretary shall dispose of all facilities, 
equipment, and other real and personal property, together with all 
interests therein, held by the United States for the purpose of 
producing, refining and marketing refined helium. The disposal of such 
property shall be in accordance with the provisions of law governing 
the disposal of excess or surplus properties of the United States.
    ``(2) All proceeds accruing to the United States by reason of the 
sale or other disposal of such property shall be treated as moneys 
received under this chapter for purposes of section 6(f). All costs 
associated with such sale and disposal (including costs associated with 
termination of personnel) and with the cessation of activities under 
subsection (b) shall be paid from amounts available in the helium 
production fund established under section 6(f).
    ``(3) Paragraph (1) shall not apply to any facilities, equipment, 
or other real or personal property, or any interest therein, necessary 
for the storage and transportation of crude helium or any equipment 
needed to maintain the purity, quality control, and quality assurance 
of helium in the reserve.
    ``(d) Existing Contracts.--All contracts which were entered into by 
any person with the Secretary for the purchase by such person from the 
Secretary of refined helium and which are in effect on the date of the 
enactment of the Helium Privatization Act of 1995 shall remain in force 
and effect until the date on which the facilities referred to in 
subsection (c) are disposed of. Any costs associated with the 
termination of such contracts shall be paid from the helium production 
fund established under section 6(f).

``SEC. 5. FEES FOR STORAGE, TRANSPORTATION AND WITHDRAWAL.

    ``Whenever the Secretary provides helium storage, withdrawal, or 
transportation services to any person, the Secretary is authorized and 
directed to impose fees on such person to reimburse the Secretary for 
the full costs of providing such storage, transportation, and 
withdrawal. All such fees received by the Secretary shall be treated as 
moneys received under this Act for purposes of section 6(f).''.

SEC. 9014. SALE OF CRUDE HELIUM.

    Section 6 is amended as follows:
            (1) Subsection (a) is amended by striking out ``from the 
        Secretary'' and inserting ``from persons who have entered into 
        enforceable contracts to purchase an equivalent amount of crude 
        helium from the Secretary''.
            (2) Subsection (b) is amended by inserting ``crude'' before 
        ``helium'' and by adding the following at the end thereof: 
        ``Except as may be required by reason of subsection (a), the 
        Secretary shall not make sales of crude helium under this 
        section in such amounts as will disrupt the market price of 
        crude helium.''.
            (3) Subsection (c) is amended by inserting ``crude'' before 
        ``helium'' the first place it appears and by striking 
        ``together with interest as provided in subsection (d) of this 
        section'' and all that follows down through the period at the 
        end of such subsection and inserting the following:
``all funds required to be repaid to the United States as of October 1, 
1995, under this section (hereinafter referred to as `repayable 
amounts'). The price at which crude helium is sold by the Secretary 
shall not be less than the amount determined by the Secretary as 
follows:
            ``(1) Divide the outstanding amount of such repayable 
        amounts by the volume (in mcf) of crude helium owned by the 
        United States and stored in the Bureau of Mines Cliffside Field 
        at the time of the sale concerned.
            ``(2) Adjust the amount determined under paragraph (1) by 
        the Consumer Price Index for years beginning after December 31, 
        1995.''.
            (4) Subsection (d) is amended to read as follows:
    ``(d) Extraction of Helium From Deposits on Federal Lands.--All 
moneys received by the Secretary from the sale or disposition of helium 
on Federal lands shall be paid to the Treasury and credited against the 
amounts required to be repaid to the Treasury under subsection (c) of 
this section.''.
            (5) Subsection (e) is repealed.
            (6) Subsection (f) is amended by inserting ``(1)'' after 
        ``(f)'' and by adding the following at the end thereof:
    ``(2) Within 7 days after the commencement of each fiscal year 
after the disposal of the facilities referred to in section 4(c), all 
amounts in such fund in excess of $2,000,000 (or such lesser sum as the 
Secretary deems necessary to carry out this Act during such fiscal 
year) shall be paid to the Treasury and credited as provided in 
paragraph (1). Upon repayment of all amounts referred to in subsection 
(c), the fund established under this section shall be terminated and 
all moneys received under this Act shall be deposited in the Treasury 
as General Revenues.''.

SEC. 9015. ELIMINATION OF STOCKPILE.

    Section 8 is amended to read as follows:

``SEC. 8. ELIMINATION OF STOCKPILE.

    ``(a) Review of Reserves.--The Secretary shall review annually the 
known helium reserves in the United States and make a determination as 
to the expected life of the domestic helium reserves (other than 
Federally owned helium stored at the Cliffside Reservoir) at that time.
    ``(b) Stockpile Sales.--Not later than January 1, 2005, the 
Secretary shall commence offering for sale crude helium from helium 
reserves owned by the United States in such minimum annual amounts as 
would be necessary to dispose of all such helium reserves in excess of 
600,000,000 cubic feet (mcf) on a straight-line basis between such date 
and January 1, 2015: Provided, That the minimum price for all such 
sales, as determined by the Secretary in consultation with the helium 
industry, shall be such as will ensure repayment of the amounts 
required to be repaid to the Treasury under section 6(c): And provided 
further, That the minimum annual sales requirement may be deferred only 
if, and to the extent that, the Secretary is unable to arrange sales at 
the minimum price. The sales shall be at such times during each year 
and in such lots as the Secretary determines, in consultation with the 
helium industry, are necessary to carry out this subsection with 
minimum market disruption.
    ``(c) Discovery of Additional Reserves.--The discovery of 
additional helium reserves shall not affect the duty of the Secretary 
to make sales of helium as provided in subsection (b), as the case may 
be.''.

SEC. 9016. REPEAL OF AUTHORITY TO BORROW.

    Sections 12 and 15 are repealed.

SEC. 9017. REPORTS.

    Section 16 is amended by redesignating existing section 16 as 
section 16(a) and inserting the following at the end thereof:
    ``(b)(1) The Inspector General of the Department of the Interior 
shall cause to be prepared, not later than March 31 following each 
fiscal year commencing with the date of enactment of the Helium 
Privatization Act of 1995, annual financial statements for the Helium 
Operations of the Bureau of Mines. The Director of the Bureau of Mines 
shall cooperate with the Inspector General in fulfilling this 
requirement, and shall provide him with such personnel and accounting 
assistance as may be necessary for that purpose. The financial 
statements shall be audited by the General Accounting Office, and a 
report on such audit shall be delivered by the General Accounting 
Office to the Secretary of the Interior and Congress, not later than 
June 30 following the end of the fiscal year for which they are 
prepared. The audit shall be prepared in accordance with generally 
accepted government auditing standards.
    ``(2) The financial statements shall be comprised of the following:
            ``(A) A balance sheet reflecting the overall financial 
        position of the Helium Operations, including assets and 
        liabilities thereof;
            ``(B) the Statement of Operations, reflecting the fiscal 
        period results of the Helium Operations;
            ``(C) a statement cash flows or changes in financial 
        position of the Helium Operations; and
            ``(D) a reconciliation of budget reports of the Helium 
        Operations.
    ``(3) The Statement of Operations shall include but not be limited 
to the revenues from, and costs of, sales of crude helium, the storage 
and transportation of crude helium, the production, refining and 
marketing of refined helium, and the maintenance and operation of 
helium storage facilities at the Bureau of Mines Cliffside Field. The 
term `revenues' for this purpose shall exclude (A) royalties paid to 
the United States for production of helium or other extraction of 
resources, except to the extent that the Helium Operations incur direct 
costs in connection therewith, and (B) proceeds from sales of assets 
other than inventory. The term `expenses' shall include, but not be 
limited to (i) all labor costs of the Bureau of Mines Helium 
Operations, and of the Department of the Interior in connection 
therewith, and (ii) for financial reporting purposes but not in 
connection with the determination of sales prices in section 6(c), all 
current-period interest on outstanding repayable amounts (as described 
in section 6(c)) calculated at the same rates as such interest was 
calculated prior to the enactment of the Helium Privatization Act of 
1995.
    ``(4) The balance sheet shall include, but not be limited to, on 
the asset side, the present discounted market value of crude helium 
reserves; and on the liability side, the accrued liability for 
principal and interest on debt to the United States. For financial 
reporting purposes but not in connection with the determination of 
sales prices in section 6(c), the balance sheet shall also include 
accrued but unpaid interest on outstanding repayable amounts (as 
described in section 6(c)) through the date of the report, calculated 
at the same rates as such interest was calculated prior to the 
enactment of the Helium Privatization Act of 1995.''.

SEC. 9018. LAND CONVEYANCE IN POTTER COUNTY, TEXAS.

    (a) In General.--The Secretary of the Interior shall transfer all 
right, title, and interest of the United States in and to the parcel of 
land described in subsection (b) to the Texas Plains Girl Scout Council 
for consideration of $1, reserving to the United States such easements 
as may be necessary for pipeline rights-of-way.
    (b) Land Description.--The parcel of land referred to in subsection 
(a) is all those certain lots, tracts or parcels of land lying and 
being situated in the County of Potter and State of Texas, and being 
the East Three Hundred Thirty-One (E331) acres out of Section Seventy-
eight (78) in Block Nine (9), B.S. & F. Survey, (sometimes known as the 
G. D. Landis pasture) Potter County, Texas, located by certificate No. 
1/39 and evidenced by letters patents Nos. 411 and 412 issued by the 
State of Texas under date of November 23, 1937, and of record in Vol. 
66A of the Patent Records of the State of Texas. The metes and bounds 
description of such lands is as follows:
            (1) First tract.--One Hundred Seventy-one (171) acres of 
        land known as the North part of the East part of said survey 
        Seventy-eight (78) aforesaid, described by metes and bounds as 
        follows:
                Beginning at a stone 20 x 12 x 3 inches marked X, set 
                by W. D. Twichell in 1905, for the Northeast corner of 
                this survey and the Northwest corner of Section 59;
                Thence, South 0 degrees 12 minutes East with the West 
                line of said Section 59, 999.4 varas to the Northeast 
                corner of the South 160 acres of East half of Section 
                78:
                Thence, North 89 degrees 47 minutes West with the North 
                line of the South 150 acres of the East half, 956.8 
                varas to a point in the East line of the West half 
                Section 78:
                Thence North 0 degrees 10 minutes West with the East 
                line of the West half 999.4 varas to a stone 18 x 14 x 
                3 inches in the middle of the South line of Section 79;
                Thence South 89 degrees 47 minutes East 965 varas to 
                the place of beginning.
            (2) Second tract.--One Hundred Sixty (160) acres of land 
        known as the South part of the East part of said survey No. 
        Seventy-eight (78) described by metes and bounds as follows:
                Beginning at the Southwest corner of Section 59, a 
                stone marked X and a pile of stones;
                Thence North 89 degrees 47 minutes West with the North 
                line of Section 77, 966.5 varas to the Southeast corner 
                of the West half of Section 78; Thence North 0 degrees 
                10 minutes West with the East line of the West half of 
                Section 78;
                Thence South 89 degrees 47 minutes East 965.8 varas to 
                a point in the East line of Section 78;
                Thence South 0 degrees 12 minutes East 934.6 varas to 
                the place of beginning.
        Containing an area of 331 acres, more or less.

                      Subtitle B--Water and Power

                PART 1--POWER MARKETING ADMINISTRATIONS

SEC. 9201. SHORT TITLE.

    This part may be cited as the ``Power Administration Act''.

SEC. 9202. SALE OF THE SOUTHEASTERN POWER ADMINISTRATION.

    (a) Sale of the Southeastern Power Administration Assets.--The 
Secretary of Energy (hereafter in this part referred to as the 
``Secretary'') is authorized and directed to sell the facilities used 
to generate the electric power marketed by the Southeastern Power 
Administration, including all dams, locks, reservoirs, and related 
transmission and generation structures, equipment, facilities and real 
property (including rights-of-way) which are used in connection with 
the operation of such power generation facilities. The sale shall also 
include all contracts, marketing agreements, and any and all other 
rights, interests, and obligations held or owed by the Southeastern 
Power Administration. Each sale shall be subject to all existing 
storage rights in such reservoirs acquired by local interests pursuant 
to the Water Supply Act of 1958 (Public Law 85-500; 43 U.S.C. 390b) and 
sections 1, 2, and 3 of Public Law 88-140 (43 U.S.C. 390c through 390e) 
for water supply or other purposes and all such rights shall survive 
such sale; all obligations of the United States under contracts with 
such local interests for the use of such storage shall be assumed by 
any purchaser so that such local interests may continue to operate and 
utilize their storage in accordance with their existing contracts with 
the United States without entering into an additional contract with the 
United States or the purchaser, notwithstanding any provision of law or 
contract to the contrary. In order to assure that the facilities are 
transferred in a manner that provides a reasonable payment to the 
United States, sales under this section shall be made through a 
competitive bidding process open to all bidders determined by the 
Secretary to be financially qualified and who have the experience and 
resources necessary to manage the transferred assets. No facility or 
group of facilities may be sold for an amount less than the minimum bid 
established and published by the Secretary. The minimum bid shall be 
equal to the net present value of the outstanding debt repayable to the 
United States and attributable to the facility or group of facilities 
concerned.
    (b) Cooperation of Other Agencies.--The heads of other affected 
Federal departments and agencies shall assist the Secretary in 
implementing the sales authorized by this section. Upon receiving a 
written request from the Secretary, the head of any such department or 
agency having administrative jurisdiction over any facility to be sold 
under this section shall transfer (at such time as may be specified by 
the Secretary in such request) such facility to the Secretary for 
purposes of effectuating such sale.
    (c) Financial and Bid Management Advisor.--
            (1) Retention of advisor.--Within six months of the date of 
        enactment of this Act, the Secretary shall retain an 
        experienced private sector firm to serve as financial and bid 
        management advisor (hereinafter ``advisor'') to the Secretary 
        with respect to such sales. The advisor shall not have any 
        substantial financial interest in the existing assets, their 
        operation or the ultimate purchasers.
            (2) Notice.--Within six months after the date of enactment 
        of this Act, the Secretary shall also publish a notice in the 
        Federal Register soliciting all parties which have an 
        operational or ownership interest in the Southeast Power 
        Administration to provide evidence of such interest within 90 
        days of the published notice.
            (3) Advisor's report.--Within six months of being retained 
        by the Secretary and based on information provided by the 
        Secretary and the information obtained in paragraph (2), the 
        advisor shall provide to the Secretary a report containing each 
        of the following:
                    (A) A plan for the competitive sale of all assets 
                and interests, held by the Southeastern Power 
                Administration, out of Federal ownership and operation.
                    (B) An estimate of the net present value of the 
                income expected to be derived over the next 50 years 
                from each facility or group of facilities to be sold 
                under this section.
                    (C) An estimate of the net present value of the 
                expenses expected to be incurred over the next 50 years 
                in connection with each facility or group of facilities 
                to be sold under this section.
                    (D) a comparison between the net of subparagraphs 
                (A) and (B) and the net present value of the 
                outstanding debt which the Federal government 
                attributes to the asset being sold.
                    (E) The options for the grouping of facilities to 
                be sold under this section. The transfer shall be 
                structured to transfer assets and interests of the 
                Southeast Power Administration by watershed or by 
                project unless the Advisor can provide satisfactory 
                information to the Secretary that another alternative 
                should be used. Groupings of assets shall specifically 
                be designed to transfer all assets in a manner that 
                provides reasonable payment to the United States of all 
                assets within the Southeast Power Administration.
    (d) Proceeds.--The Secretary is directed to use up to $6,000,000 
from unobligated balances available to the Department of Energy to fund 
any sale preparation costs or studies provided for in this section, and 
shall provide an accounting of all sale preparation costs and studies 
to the Committee on Resources of the House of Representatives and to 
the Committee on Energy and Natural Resources of the Senate within 60 
days after completion of the sale or study. The proceeds of any sale of 
a facility or group of facilities under this section shall be used 
first to offset the costs of carrying out such sale or study and the 
remaining net proceeds shall be deemed to extinguish the outstanding 
debt repayable to the United States and attributable to such facility 
or group of facilities. Any portion of such net proceeds which exceeds 
the net present value of the outstanding debt repayable to the United 
States and attributable to the facility or group of facilities 
concerned shall be deposited in the Treasury of the United States as 
miscellaneous receipts.
    (e) Treatment of Sales for Purposes of Certain Laws.--The sales of 
assets under this part shall not be considered a disposal of Federal 
surplus property under the following provisions of law:
            (1) Section 203 of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 484).
            (2) Section 13 of the Surplus Property Act of 1944 (50 
        U.S.C. App. 1622).
    (f) Existing Contracts, Uses, Etc.--All sales of assets and rights 
under this section shall be subject to all contracts, debt obligations 
to non-Federal entities, and other binding agreements which apply, as 
of the date of such sale, to the facilities concerned and to the sale 
of electric power from such facilities. The purchaser of each such 
facility shall assume all liabilities and obligations of the United 
States under such contracts, obligations or other agreements. The 
Southeastern Power Administration shall not, after the date of 
enactment of this Act, enter into a long-term agreement, contract, or 
other long-term obligation or responsibility, except to the extent that 
such an obligation is essential to the continued operation of the 
Southeastern Power Administration or will significantly enhance or 
maintain the value of a facility after it is transferred. The United 
States shall remain responsible for concluding all lawsuits associated 
with the assets which are the subject of a transfer and which are 
extant as of the date of the enactment of this Act, whether in its 
capacity of plaintiff or defendant. Any right, title, or interest of 
the United States which exists at the conclusion of such lawsuits and 
which would otherwise have been transferred, but for the lawsuit, shall 
be transferred to the party in interest who acquired the related asset 
from the United States. The United States shall remain responsible for 
any outstanding Indian trust responsibilities, unless the transfer in 
question specifically identifies the obligation being transferred.
    (g) Report to FERC.--Not later than June 30, 1997, the Secretary 
shall provide each of the following to the Federal Energy Regulatory 
Commission each of the following:
            (1) A description of--
                    (A) all the assets tangible and intangible that 
                comprise each hydroelectric project to be sold under 
                this section;
                    (B) the existing terms of operation with respect to 
                such hydroelectric project; and
                    (C) any other interest being proposed for transfer.
            (2) The information pertaining to such hydroelectric 
        project required by title 18 of the Code of Federal 
        Regulations, subparts B and F, or G, as appropriate, except 
        exhibit E.
            (3) The date when an offer for purchase of the assets must 
        be submitted.
    (h) Notice of Sale and Solicitation of Bids.--Not later than March 
31, 1998, the Secretary shall publish a notice in the Federal Register 
which includes each of the following:
            (1) A description of--
                    (A) all the assets tangible and intangible that 
                comprise each hydroelectric project to be sold under 
                this section;
                    (B) the existing terms of operation with respect to 
                such hydroelectric project; and
                    (C) any other interest being proposed for transfer.
            (2) The date, time, and conditions of the bids that must be 
        met to submit a successful bid for the assets to be sold under 
        this part.
            (3) The terms and conditions identified in the proposed 
        license provided from the Federal Energy Regulatory Commission 
        to the Secretary under this part.
    (i) Date of Sale.--All sales under this section shall be completed 
between July 1, 1999, and September 30, 1999.
    (j) Termination of the Southeastern Power Administration.--
Following the sale of all facilities referred to in subsection (a), the 
Secretary shall complete the business of and close out the Southeast 
Power Administration and return the unexpended balances of funds 
appropriated for the Administration to the Treasury of the United 
States. To the extent practical, the purchasers under this section 
should, consistent with good business practices, attempt to offer to 
employ those former employees of the Southeastern Power Administration 
who are necessary to the continued operation of such facilities 
following the sale of the facilities.

SEC. 9203. FEDERAL ENERGY REGULATORY COMMISSION JURISDICTION.

    (a) Regulation of Rates and Charges.--All rates and charges 
established for the wholesale sale of electric power from facilities 
sold under section 9202 shall be subject to part 2 of the Federal Power 
Act. This subsection shall take effect upon the expiration of any 
contract which is applicable to the sale of such electric power on the 
date of the sale of the facility concerned. In approving, disapproving 
or establishing rates and charges for the sale of electric power from 
any facility sold under section 9202, the Federal Energy Regulatory 
Commission shall determine the extent to which any proposed increase in 
any such rate or charge is attributable to the sale of such facility. 
The Commission shall disallow any such increase to the extent the 
increase is attributable to such sale and is greater than \1/2\ of the 
increase (between the date of sale of the facility and the date on 
which the application for a rate increase is filed) in the Consumer 
Price Index (published by the Bureau of Labor Statistics) for the 
region in which such power is sold. For purposes of determining the 
amount of a proposed increase in a rate or charge for the sale of 
electric power from any facility sold under section 9202, the increase 
shall be measured from the rates and charges in effect on date of the 
sale of the facility. This subsection applies to all wholesale 
purchasers who, for the calendar year ending immediately prior to the 
year in which this Act is enacted, received at least 20 percent of 
their power from the Southeastern Power Administration.
    (b) Original License.--Not later than January 1, 1998, the Federal 
Energy Regulatory Commission shall provide the Secretary with a 
proposed license for each hydroelectric project to be sold under 
section 9202. Not later than September 30, 1999, the Commission shall 
issue to the purchaser of each hydroelectric project sold under section 
9202 a license under part I of the Federal Power Act (16 U.S.C. 791a-
823b) authorizing the continued operation and maintenance of such 
project for a term of 30 years. Such license shall--
            (1) be for the project purposes established by the existing 
        terms of operation and shall be consistent with the proposed 
        license provided to the Secretary;
            (2) be conditioned upon the requirement that the licensed 
        project continue to be operated and maintained in accordance 
        with the existing terms of operation, except that the licensee 
        may make improvements to the project which increase capacity 
        without amendment to the license so long as existing minimum 
        flows are not affected;
            (3) be subject only to the appropriate standard ``L-Form'' 
        license conditions, published at 54 FPC 1792-1928 (1975), 
        except that the license may not be reopened for any purpose for 
        the first 10 years of the license;
            (4) provide a 10-year period for the licensee to meet the 
        Commission's dam safety regulations, set forth at title 18 of 
        the Code of Federal Regulations, part 12;
            (5) not be subject to: the word ``constructed'' in section 
        3(10), the 4 provisos of section 4(e); section 6 to the extent 
        it requires the licensee's acceptance of those terms and 
        conditions of the Act that this subsection waives; section 
        10(e) as it concerns annual charges for the use and occupancy 
        of Federal lands and facilities; section 10(f), section 10(j), 
        section 18, section 19, section 20, and section 22 of the 
        Federal Power Act (16 U.S.C. 796(10), 797(e), 799, 803(e), 
        803(f), 803(j), 811, 812, 813, and 815); and
            (6) contain minimum flow restrictions no more restrictive 
        than those currently in effect, if any, such minimum flow 
        restrictions may not be altered during the primary term of the 
        license.
    (c) Acts Applicable to Licensing.--The issuance of a license 
pursuant to subsection (b) shall not be subject to the provisions of 
the Federal Land Policy and Management Act of 1976, section 2402 of the 
Energy Policy Act of 1992, the National Environmental Policy Act of 
1969, the Endangered Species Act of 1973, the Wild and Scenic Rivers 
Act, the Federal Water Pollution Control Act, the National Historic 
Preservation Act, the Coastal Zone Management Act, the Fish and 
Wildlife Coordination Act, or any other Act otherwise applicable to the 
licensing of the projects.
    (d) Effect of License.--A license issued under subsection (b)--
            (1) is deemed to meet the licensing standards of the 
        Federal Power Act, including section 10(a) and the last 
        sentence of section 4(e) (16 U.S.C. 797(e)); and
            (2) shall constitute the sole and exclusive source for a 
        transferred hydroelectric project of authorizations and 
        requirements with respect to project operation.
    (e) Reservations.--Any power site reservation established by the 
President, the Department of the Interior, or pursuant to section 24 of 
the Federal Power Act (16 U.S.C. 818), or any other law, which exists 
on any lands, whether Federally or privately owned, that are included 
within the final project boundaries of a transferred hydroelectric 
project as approved by the Commission shall be vacated by operation of 
law upon issuance of a license for such project.
    (f) Relicensing.--All requirements of part I of the Federal Power 
Act and of any other Act applicable to the licensing of a hydroelectric 
project shall apply to a transferred hydroelectric project upon 
expiration of an original license issued under this section.
    (g) Definitions.--For purposes of this section:
            (1) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (2) The term ``existing terms of operation'' means any 
        applicable statutes, executive department regulations, orders, 
        rule curves and the like, memoranda of agreement, and 
        contractual arrangements pertaining to a transferred 
        hydroelectric project that were in effect as of the date of 
        enactment of this Act.
            (3) The term ``transferred hydroelectric project'' means 
        the facilities, land, and other assets sold or to be sold to a 
        transferee under this part and noticed by the Secretary, 
        including any such land, facilities, or assets that comprise a 
        project as defined in section 3(11) of the Federal Power Act 
        (16 U.S.C. 796(11)).

SEC. 9204. EVALUATION OF SALES OF SOUTHWESTERN POWER ADMINISTRATION AND 
              WESTERN AREA POWER ADMINISTRATION FACILITIES.

    (a) Enabling Federal Studies.--Section 505 of the Energy and Water 
Development Appropriations Act of 1993 (Public Law 102-377) is hereby 
repealed.
    (b) Evaluation of Issues.--The Secretary of Energy and the 
Secretary of the Interior shall enter into arrangements with an 
experienced private sector firm to serve as advisor to the Secretary 
with respect to the sale of the facilities used to generate and 
transmit the electric power marketed by the Southwestern Power 
Administration and the Western Area Power Administration, including all 
dams, locks, reservoirs, transmission and related structures, 
equipment, facilities and all real and tangible property (including 
rights-of-way) which are used in connection with such power generation 
and transmission facilities. Prior to December 31, 1996, the advisor 
shall provide to the Secretary and the Congress a report identifying 
all recipients of water and power from such facilities, all contracts, 
debt obligations, equity interests, and other binding agreements which 
apply to the facilities concerned and to the sale of electric power 
from such facilities, all assets tangible and intangible, all 
applicable requirements relating to environmental mitigation, Indian 
trust responsibilities, land ownership or use rights relevant to the 
proposed transfers which could terminate based on a transfer out of 
Federal ownership, and navigational requirements which affect the 
operation of such facilities. Such evaluation shall also include an 
evaluation of the tax consequences, and the revenue impacts of such 
consequences for the United States, of possible arrangements for the 
sale of such facilities to potential transferees. The report shall also 
investigate alternative groupings of the facilities for purposes of 
sale in order to determine which groupings would be most desirable for 
purposes of effectuating such sales. Proposed transfers should be 
structured by watershed or by project unless the advisor can provide 
satisfactory information to the Secretary that another alternative 
should be used. Asset groupings shall specifically be designed to 
effectuate the maximum return for all of the assets.

SEC. 9205. BONNEVILLE POWER ADMINISTRATION APPROPRIATIONS REFINANCING.

    (a) Definitions.--For the purposes of this section:
            (1) The term ``Administrator'' means the Administrator of 
        the Bonneville Power Administration.
            (2) The term ``capital investment'' means a capitalized 
        cost funded by Federal appropriations that--
                    (A) is for a project, facility, or separable unit 
                or feature of a project or facility;
                    (B) is a cost for which the Administrator is 
                required by law to establish rates to repay to the 
                United States Treasury through the sale of electric 
                power, transmission, or other services;
                    (C) excludes a Federal irrigation investment; and
                    (D) excludes an investment financed by the current 
                revenues of the Administrator or by bonds issued and 
                sold, or authorized to be issued and sold, by the 
                Administrator under section 13 of the Federal Columbia 
                River Transmission System Act (16 U.S.C. 838(k)).
            (3) The term ``new capital investment'' means a capital 
        investment for a project, facility, or separable unit or 
        feature of a project or facility, placed in service after 
        September 30, 1995.
            (4) The term ``old capital investment'' means a capital 
        investment whose capitalized cost--
                    (A) was incurred, but not repaid, before October 1, 
                1995; and
                    (B) was for a project, facility, or separable unit 
                or feature of a project or facility, placed in service 
                before October 1, 1995.
            (5) The term ``repayment date'' means the end of the period 
        within which the Administrator's rates are to assure the 
        repayment of the principal amount of a capital investment.
            (6) The term ``Treasury rate'' means--
                    (A) for an old capital investment, a rate 
                determined by the Secretary of the Treasury, taking 
                into consideration prevailing market yields, during the 
                month preceding October 1, 1995, on outstanding 
                interest-bearing obligations of the United States with 
                periods to maturity comparable to the period between 
                October 1, 1995, and the repayment date for the old 
                capital investment; and
                    (B) for a new capital investment, a rate determined 
                by the Secretary of the Treasury, taking into 
                consideration prevailing market yields, during the 
                month preceding the beginning of the fiscal year in 
                which the related project, facility, or separable unit 
                or feature is placed in service, on outstanding 
                interest-bearing obligations of the United States with 
                periods to maturity comparable to the period between 
                the beginning of the fiscal year and the repayment date 
                for the new capital investment.
    (b) New Principal Amounts.--(1) Effective October 1, 1995, an old 
capital investment shall have a new principal amount that is the sum 
of--
            (A) the present value of the old payment amounts for the 
        old capital investment, calculated using a discount rate equal 
        to the Treasury rate for the old capital investment; and
            (B) an amount equal to $100,000,000 multiplied by a 
        fraction whose numerator is the principal amount of the old 
        payment amounts for the old capital investment and whose 
        denominator is the sum of the principal amounts of the old 
        payment amounts for all old capital investments.
    (2) With the approval of the Secretary of the Treasury based solely 
on consistency with this Act, the Administrator shall determine the new 
principal amounts under paragraph (1) and the assignment of interest 
rates to the new principal amounts under subsection (c).
    (3) For the purposes of this section, ``old payment amounts'' 
means, for an old capital investment, the annual interest and principal 
that the Administrator would have paid to the United States Treasury 
from October 1, 1995, if this section were not enacted, assuming that--
            (A) the principal were repaid--
                    (i) on the repayment date the Administrator 
                assigned before October 1, 1993, to the old capital 
                investment, or
                    (ii) with respect to an old capital investment for 
                which the Administrator has not assigned a repayment 
                date before October 1, 1993, on a repayment date the 
                Administrator shall assign to the old capital 
                investment in accordance with paragraph 10(d)(1) of the 
                version of Department of Energy Order RA 6120.2 in 
                effect on October 1, 1993; and
            (B) interest were paid--
                    (i) at the interest rate the Administrator assigned 
                before October 1, 1993, to the old capital investment, 
                or
                    (ii) with respect to an old capital investment for 
                which the Administrator has not assigned an interest 
                rate before October 1, 1993, at a rate determined by 
                the Secretary of the Treasury, taking into 
                consideration prevailing market yields, during the 
                month preceding the beginning of the fiscal year in 
                which the related project, facility, or separable unit 
                or feature is placed in service, on outstanding 
                interest-bearing obligations of the United States with 
                periods to maturity comparable to the period between 
                the beginning of the fiscal year and the repayment date 
                for the old capital investment.
    (c) Interest Rate for New Principal Amounts.--As of October 1, 
1995, the unpaid balance on the new principal amount established for an 
old capital investment under subsection (b) shall bear interest 
annually at the Treasury rate for the old capital investment until the 
earlier of the date that the new principal amount is repaid or the 
repayment date for the new principal amount.
    (d) Repayment Dates.--As of October 1, 1995, the repayment date for 
the new principal amount established for an old capital investment 
under subsection (b) shall be no earlier than the repayment date for 
the old capital investment assumed in subsection (b)(3)(A).
    (e) Prepayment Limitations.--During the period October 1, 1995, 
through September 30, 2000, the total new principal amounts of old 
capital investments, as established under subsection (b), that the 
Administrator may pay before their respective repayment dates shall not 
exceed $100,000,000.
    (f) Interest Rates for New Capital Investments During 
Construction.--(1) The principal amount of a new capital investment 
includes interest in each fiscal year of construction of the related 
project, facility, or separable unit or feature at a rate equal to the 
one-year rate for the fiscal year on the sum of--
            (A) construction expenditures that were made from the date 
        construction commenced through the end of the fiscal year, and
            (B) accrued interest during construction.
    (2) The Administrator shall not be required to pay, during 
construction of the project, facility, or separable unit or feature, 
the interest calculated, accrued, and capitalized under paragraph (1).
    (3) For the purposes of this subsection, ``one-year rate'' for a 
fiscal year means a rate determined by the Secretary of the Treasury, 
taking into consideration prevailing market yields, during the month 
preceding the beginning of the fiscal year, on outstanding interest-
bearing obligations of the United States with periods to maturity of 
approximately one year.
    (g) Interest Rates for New Capital Investments.--The unpaid balance 
on the principal amount of a new capital investment bears interest at 
the Treasury rate for the new capital investment from the date the 
related project, facility, or separable unit or feature is placed in 
service until the earlier of the date the new capital investment is 
repaid or the repayment date for the new capital investment.
    (h) Credits to Administrator's Payments to the United States 
Treasury.--The Confederated Tribe of the Colville Reservation Grand 
Coulee Dam Settlement Act (Public Law 103-436) is amended by striking 
section 6 and inserting the following:

``SEC. 6. CREDITS TO ADMINISTRATOR'S PAYMENTS TO THE UNITED STATES 
              TREASURY.

    ``(a) In General.--So long as the Administrator makes annual 
payments to the tribes under the settlement agreement, the 
Administrator shall apply against amounts otherwise payable by the 
Administrator to the United States Treasury a credit that reduces the 
Administrator's payment in the amount and for each fiscal year as 
follows: $15,250,000 in fiscal year 1996; $15,860,000 in fiscal year 
1997; $16,490,000 in fiscal year 1998; $17,150,000 in fiscal year 1999; 
$17,840,000 in fiscal year 2000; and $4,100,000 in each succeeding 
fiscal year.
    ``(b) Definitions.--For the purposes of this section--
            ``(1) The term `settlement agreement' means that settlement 
        agreement between the United States of America and the 
        Confederated Tribes of the Colville Reservation signed by the 
        Tribes on April 16, 1994, and by the United States of America 
        on April 21, 1994, which settlement agreement resolves claims 
        of the Tribes in Docket 181-D of the Indian Claims Commission, 
        which docket has been transferred to the United States Court of 
        Federal Claims; and
            ``(2) The term `Tribes' means the Confederated Tribes of 
        the Colville Reservation, a Federally recognized Indian 
        Tribe.''.
    (i) Contract Provisions.--In each contract of the Administrator 
that provides for the Administrator to sell electric power, 
transmission, or related services, and that is in effect after 
September 30, 1995, the Administrator shall offer to include, or as the 
case may be, shall offer to amend to include, provisions specifying 
that after September 30, 1995--
            (1) the Administrator shall establish rates and charges on 
        the basis that--
                    (A) the principal amount of an old capital 
                investment shall be no greater than the new principal 
                amount established under subsection (b);
                    (B) the interest rate applicable to the unpaid 
                balance of the new principal amount of an old capital 
                investment shall be no greater than the interest rate 
                established under subsection (c);
                    (C) any payment of principal of an old capital 
                investment shall reduce the outstanding principal 
                balance of the old capital investment in the amount of 
                the payment at the time the payment is tendered; and
                    (D) any payment of interest on the unpaid balance 
                of the new principal amount of an old capital 
                investment shall be a credit against the appropriate 
                interest account in the amount of the payment at the 
                time the payment is tendered;
            (2) apart from charges necessary to repay the new principal 
        amount of an old capital investment as established under 
        subsection (b), and to pay the interest on the principal amount 
        under subsection (c), no amount may be charged for return to 
        the United States Treasury as repayment for or return on an old 
        capital investment, whether by way of rate, rent, lease 
        payment, assessment, user charge, or any other fee;
            (3) amounts provided under section 1304 of title 31, United 
        States Code, shall be available to pay, and shall be the sole 
        source for payment of, a judgment against or settlement by the 
        Administrator or the United States on a claim for a breach of 
        the contract provisions required by this Act; and
            (4) the contract provisions specified in this Act shall 
        not--
                    (A) preclude the Administrator from recovering, 
                through rates or other means, any tax that is generally 
                imposed on electric utilities in the United States, or
                    (B) affect the Administrator's authority under 
                applicable law, including section 7(g) of the Pacific 
                Northwest Electric Power Planning and Conservation Act 
                (16 U.S.C. 839e(g)), to--
                            (i) allocate costs and benefits, including 
                        but not limited to fish and wildlife costs, to 
                        rates or resources, or
                            (ii) design rates.
    (j) Savings Provisions.--(1) This section does not affect the 
obligation of the Administrator to repay the principal associated with 
each capital investment, and to pay interest on the principal, only 
from the ``Administrator's net proceeds,'' as defined in section 13 of 
the Federal Columbia River Transmission System Act (16 U.S.C. 838k(b)).
    (2) Except as provided in subsection (e) of this section, this 
section does not affect the authority of the Administrator to pay all 
or a portion of the principal amount associated with a capital 
investment before the repayment date for the principal amount.
    (k) DOE Study.--(1) The Administrator shall undertake a study to 
determine the effect that increases in the rates for electric power 
sales made by the Administrator may have on the customer base of the 
Bonneville Power Administration. Such study shall identify other 
sources of electric power that may be available to customers of the 
Bonneville Power Administration and shall estimate the level at which 
higher rates for power sales by the Administration may result in the 
loss of customers by the Administration.
    (2) The Administrator shall undertake a study to determine the 
total prior costs incurred by the Bonneville Power Administration for 
compliance with the provisions of the Endangered Species Act of 1973 
and the total future costs anticipated to be incurred by the 
Administration for compliance with such provisions.
    (3) The Administrator shall submit the results of the studies 
undertaken under this section to the Congress within 180 days after the 
date of the enactment of this Act.

                          PART 2--RECLAMATION

SEC. 9211. PREPAYMENT OF CERTAIN REPAYMENT CONTRACTS BETWEEN THE UNITED 
              STATES AND THE CENTRAL UTAH WATER CONSERVANCY DISTRICT.

    The second sentence of section 210 of the Central Utah Project 
Completion Act (106 Stat. 4624) is amended to read as follows: ``The 
Secretary of the Interior shall allow for prepayment of the repayment 
contract between the United States and the Central Utah Water 
Conservancy District dated December 28, 1965, and supplemented on 
November 26, 1985, providing for repayment of the municipal and 
industrial water delivery facilities for which repayment is provided 
pursuant to such contract, under such terms and conditions as the 
Secretary deems appropriate to protect the interest of the United 
States, which shall be similar to the terms and conditions contained in 
the supplemental contract that provided for the prepayment of the 
Jordan Aqueduct dated October 28, 1993. The District shall exercise its 
right to prepayment pursuant to this section by the end of fiscal year 
2002.''.

SEC. 9212. TREATMENT OF CITY OF FOLSOM AS A CENTRAL VALLEY PROJECT 
              CONTRACTOR.

    For the purposes of being considered eligible to be a transferee of 
Central Valley Project water to be used for municipal and industrial 
purposes, the city of Folsom, California, shall be treated as a Central 
Valley Project contractor as of November 1, 1990.

SEC. 9213. SLY PARK.

    (a) Short Title.--This section may be cited as the ``Sly Park Unit 
Conveyance Act''.
    (b) Definitions.--For purposes of this section:
            (1) The term ``El Dorado Irrigation District'' or 
        ``District'' means a political subdivision of the State of 
        California duly organized, existing, and acting pursuant to the 
        laws thereof with its principal place of business in the city 
        of Placerville, El Dorado County, California.
            (2) The term ``Secretary'' means the Secretary of the 
        Interior.
            (3) The term ``Sly Park Unit'' means the Sly Park Dam and 
        Reservoir, Camp Creek Diversion Dam and Tunnel and conduits and 
        canals as authorized under the American River Act of October 
        14, 1949 (63 Stat. 852), together with all other facilities 
        owned by the United States including those used to convey and 
        store water delivered from Sly Park, as well as all recreation 
        facilities associated thereto.
    (c) Sale of the Sly Park Unit.--
            (1) In general.--The Secretary shall, within one year after 
        the date of enactment of this Act, sell and convey to the El 
        Dorado Irrigation District the Sly Park Unit. Within such one-
        year period, the Secretary shall also transfer and assign the 
        water rights relating to the Sly Park Unit held in trust by the 
        Secretary for diversion and storage under California State 
        permits numbered 2631, 5645A, 10473, and 10474 to the El Dorado 
        Irrigation District.
            (2) Sale price.--The sale price shall not exceed--
                    (A) the construction costs ($30,926,230), as 
                included in the accounts of the Secretary, plus
                    (B) interest on the construction costs allocated to 
                domestic use, at the authorized rate included in 
                enactment of the Act of October 14, 1949 (63 Stat. 
                852), up to an agreed upon date, less
                    (C) all revenues to date as collected under the 
                terms of the contract between the United States and the 
                El Dorado Irrigation District, estimated at $9,146,885.
            (3) Terms of payment.--The Secretary shall provide for a 
        payment of the purchase price under paragraph (2) on terms not 
        to exceed 20 years. The interest rate to be paid by the 
        District shall be the authorized rate included in the Act of 
October 14, 1949 (63 Stat. 852). Section 213(c) of the Reclamation 
Reform Act of 1982 (43 U.S.C. 390mm(c)) shall not apply to the purchase 
of the Sly Park Unit under this section.
            (4) Conveyance.--Upon signing the agreement to carry out 
        the sale required by this section, the Secretary shall convey 
        and assign to the El Dorado Irrigation District all right, 
        title, and interest of the United States in and to the Sly Park 
        Unit.
            (5) No additional environmental impact.--The Congress 
        specifically finds that (A) the sale, conveyance and assignment 
        of the Sly Park Unit and water rights under this section 
        involves the transfer of the ownership and operation of an 
        existing ongoing water project, (B) the Sly Park Unit 
        operation, facilities and water rights have been, and after the 
        sale and transfer will continue to be, committed to maximum 
        reasonable and beneficial use for existing services, and (C) 
        the sale, conveyance and assignment of the Sly Park Unit and 
        water rights does not involve any additional growth or 
        expansion of the project or other environmental impacts. 
        Consequently, the sale, conveyance and assignment of the Sly 
        Park Unit and water rights shall not be subject to 
        environmental review pursuant to the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4332) or endangered species 
        review or consultation pursuant to section 7 of the Endangered 
        Species Act of 1973 (16 U.S.C. 1536).

SEC. 9214. HETCH HETCHY DAM.

    Section 7 of the Act of December 19, 1913 (38 Stat. 242), is 
amended--
            (1) by striking ``$30,000'' in the first sentence and 
        inserting ``$8,000,000'', and
            (2) by amending the second and third sentences to read as 
        follows: ``These funds shall be placed in a separate fund by 
        the United States and, notwithstanding any other provision of 
        law, shall not be available for obligation or expenditure until 
        appropriated by the Congress. The highest priority use of the 
        funds shall be for annual operation of Yosemite National Park, 
        with the remainder of any funds to be used to fund operations 
        of other national parks in the State of California.''.

         Subtitle C--National Parks, Forests, and Public Lands

                       PART 1--CONCESSION REFORM

SEC. 9301. SHORT TITLE.

    This part may be cited as the ``Visitor Facilities and Services 
Enhancement Act of 1995''.

SEC. 9302. PURPOSE.

    The purpose of this part is to ensure that quality visitor 
facilities and services are provided by the Federal land management 
agencies (Forest Service, United States Fish and Wildlife Service, 
National Park Service, Bureau of Land Management, Bureau of Reclamation 
and United States Army Corps of Engineers). Each Federal land 
management agency shall implement a program to encourage appropriate 
development and operation of services and facilities for the 
accommodation of visitors. The program implemented by each such agency 
shall consist of actions which--
            (1) recognize the importance of the private sector in 
        providing a quality visitor experience on Federal lands by 
        encouraging private sector investments for facilities and 
        services on Federal lands under a fair and competitive process;
            (2) establish the basis for an effective relationship 
        between the land management agencies and private businesses 
        operating on public lands and waters in efforts to serve the 
        public and to protect the resources of these areas;
            (3) measure quality and value of services provided by 
        concessioners and provide incentives for consistent excellence.
            (4) ensure a fair return to the Federal Government; and
            (5) are consistent among the various agencies to the extent 
        practicable in order to increase efficiency of the Federal 
        Government and simplify requirements for concessioners.

SEC. 9303. DEFINITIONS.

    For the purposes of this part:
            (1) The term ``adjusted gross receipts'' means gross 
        receipts less revenue derived from goods and services provided 
        on other than Federal lands or conveyed to units of Government 
        for hunting or fishing licenses or for entrance or recreation 
        fees, or from such other exclusions as the Secretary concerned 
        might apply.
            (2) The term ``agency head'' means the head of an agency or 
        his or her designated representative.
            (3) The term ``concessioner'' means a person or other 
        entity acting under a concession authorization which provides 
public services, facilities, or activities on Federal lands or waters 
pursuant to a concession services agreement or concession license.
            (4) The term ``concession license'' means a written 
        contract between the agency head and the concessioner which 
        sets forth the terms and conditions under which the 
        concessioner is authorized to provide recreation services or 
        activities on a limited basis as well as the rights and 
        obligations of the Federal Government.
            (5) The term ``concession service agreement'' means a 
        written contract between the agency head and the concessioner 
        which sets forth the terms and conditions under which the 
        concessioner is authorized to provide visitor services, 
        facilities, or activities as well as the rights and obligations 
        of the Federal Government.
            (6) The term ``gross receipts'' means revenue from goods or 
        services provided by concession services, facilities, or 
        activities on Federal lands and waters.
            (7) The term ``performance incentive'' means a credit based 
        on past performance toward the score awarded by the Secretary 
        to a concessioner's proposal submitted in response to a 
        solicitation for the reissuance of such contract.
            (8) The term ``proposal'' means the complete submission for 
        a concession service agreement offered in response to the 
        solicitation for such concession service agreement.
            (9) The term ``prospectus'' means a document or documents 
        issued by the Secretary concerned and included with a 
        solicitation which sets forth the minimum requirements for the 
        award of a concession service agreement.
            (10) The term ``Secretary concerned'' means--
                    (A) the Secretary of the Interior with respect to 
                the United States Fish and Wildlife Service, National 
                Park Service, Bureau of Land Management, and Bureau of 
                Reclamation;
                    (B) the Secretary of Agriculture with respect to 
                the Forest Service; and
                    (C) the Secretary of the Army with respect to the 
                United States Army Corps of Engineers.
            (11) The term ``solicitation'' means a request by the 
        Secretary concerned for proposals in response to a prospectus.

SEC. 9304. NATURE AND TYPES OF CONCESSION AUTHORIZATIONS.

    (a) In General.--The Secretary concerned may enter into concession 
authorizations, as follows:
            (1) Concession services agreement.--A concession service 
        agreement shall be entered into for all concessions where the 
        Secretary concerned makes a finding that the provision of 
        concession services is in the interest of the Federal 
        Government and issues either a competitive offering for 
        concession services, facilities or activities or a 
        noncompetitive offering for such services, facilities, or 
        activities based on a finding that due to special circumstances 
        it is not in the public interest of the United States to award 
        a concession service agreement on a competitive basis. Where 
        the concessioner develops or uses fixed facilities on Federal 
        lands, the Secretary concerned shall issue a lease.
            (2) Concession license.--Whenever the Secretary concerned 
        makes a finding that public enjoyment of Federal lands would be 
        enhanced through the provision of concession services and that 
        there exists no need to limit the number of concessioners 
        providing such services, he shall consider entering into a 
        concession license with a qualified concessioner. Activities 
        covered under a concession license would typically be one-time, 
        intermittent, or infrequently scheduled. The Secretary 
        concerned may not limit the number of concession licenses 
        issued for the same types of activities in a particular 
        geographic area. The Secretary concerned shall monitor such 
        concession licenses to determine whether issuance of a 
        concession service agreement would be a more appropriate 
        authorization.
            (3) Lands under multiple jurisdictions.--The Secretaries of 
        the Departments concerned shall designate an agency to be the 
        lead agency concerning concessions which conduct a single 
        operation on lands or waters under the jurisdiction of more 
        than one agency. Unless otherwise agreed to by each such 
        Secretary concerned, the lead agency shall be that agency under 
        whose jurisdiction the concessioner generates the greatest 
        amount of gross receipts. The agency so designated shall issue 
        a single authorization and collect a single fee under 
        paragraphs (1) and (2) for such operation. Such authorization 
        shall provide for use in a manner consistent with the plans and 
        policies for each agency.
    (b) Leases of Areas to States and State Third Party Agreement Not 
Covered.--This part does not apply to leases or licenses of entire 
areas to States or other political subdivisions or to any third party 
agreement issued by any such State or political subdivisions with 
respect to such entire area.

SEC. 9305. COMPETITIVE SELECTION PROCESS FOR CONCESSION SERVICE 
              AGREEMENTS.

    (a) Award to Best Proposal.--The Secretary shall enter into, and 
reissue, a concession service agreement with the person whom the 
Secretary determines in accordance with this section submits the best 
proposal through a competitive process as defined in this section.
    (b) Solicitation and Prospectus.--The Secretary concerned shall 
prepare a solicitation and prospectus which describes the concession 
service opportunity and shall publish, in appropriate locations, 
announcements of the availability of the solicitation, prospectus, and 
the concession service opportunity. The solicitation shall include (but 
need not be limited to) the following:
            (1) A description of the services and facilities to be 
        provided by the concessioner.
            (2) The level of capital investment required by the 
        concessioner (if any).
            (3) Terms and conditions of the concession service 
        agreement.
            (4) Minimum facilities and services to be provided by the 
        Secretary to the concessioner and the public.
            (5) Minimum fees to the United States.
    (c) Factors and Minimum Standards in Determining Best Proposal.--
The prospectus shall assign a weight to each factor indentified therein 
related to the importance of such factor in the selection process. 
Points shall be awarded for each such factor, based on the relative 
strength of the proposal concerning that factor. In determining the 
best proposal, the Secretary concerned shall take into consideration 
(but shall not be limited to) the following, including whether the 
proposal meets the minimum requirements (if any) of the Secretary for 
each of the following:
            (1) Responsiveness to the prospectus.
            (2) Quality of visitor services taking into account the 
        nature of equipment and facilities to be provided.
            (3) Experience and performance in providing similar 
        services. This factor shall account for not less than 20 
        percent of the maximum points available under any prospectus. 
        Where the Secretary concerned determines it to be warranted to 
        provide for a high quality visitor experience, the prospectus 
        for a concession service agreement shall provide greater weight 
        to this factor based on such aspects of the concession service 
        agreement as scope or size, complexity, nature of technical 
        skills required, and site-specific knowledge of the area. The 
        similarity of the qualifying experience outlined in the 
        proposal to the nature of the services required under the 
        concession service agreement and the length of such qualifying 
        experience shall be the basis for awarding points for this 
        factor.
            (4) Record of resource protection (as appropriate for 
        services and activities with potential to impact natural or 
        cultural resources).
            (5) Financial capability.
            (6) Fees to the United States.
    (d) Selection Process.--The process for selecting the best proposal 
shall consist of the following:
            (1) First, the Secretary concerned shall identify those 
        proposals which meet the minimum standards (if any) for the 
        factors identified under subsection (c).
            (2) Second, the Secretary concerned shall evaluate all 
        proposals identified under paragraph (1), considering all 
        factors identified under subsection (c), as well as performance 
        incentives earned under section 9306(c) and renewal penalties 
        incurred under section 9306(d).
            (3) Third, the Secretary concerned shall offer the 
        concession service agreement to the best qualified applicant as 
        determined by the evaluation under paragraph (2).
    (e) Inapplicability of NEPA to Temporary Extensions and Similar 
Reissuance of Concessions Agreements.--The temporary extension of a 
concession authorization, or reissuance of a concession authorization 
to provide concession services similar in nature and amount to 
concession services provided under the previous authorization, is 
hereby determined to be a categorical exclusion as provided for under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4331 et seq.).
    (f) Provision for Additional Related Services.--The Secretary 
concerned may modify the concession service agreement to allow 
concessioners to provide services closely related to such agreement, if 
the Secretary concerned determines that such changes would enhance the 
safety or enjoyment of visitors and would not unduly restrict the award 
of future concession service agreements.

SEC. 9306. CONCESSIONER EVALUATIONS.

    (a) In General.--The Secretary concerned shall develop a program of 
evaluations of the concessioners operating under a concession service 
agreement who are providing visitor services in areas under the 
jurisdiction of the Secretary. The evaluations shall be on an annual 
basis over the duration of the concession service agreement. In 
developing the evaluation program, the Secretary concerned shall seek 
broad public input from concessioners, State agencies, and other 
interested persons. The evaluation program shall--
            (1) include the four program areas of: quality of visitor 
        services provided; resource protection (as applicable); 
        financial performance; and compliance with concession service 
        agreement provisions and pertinent laws and regulations;
            (2) define three levels of performance--
                    (A) good, which shall be defined as a level of 
                performance which exceeds the requirements outlined in 
                the prospectus, but which is attainable;
                    (B) satisfactory, which shall be defined as meeting 
                the requirements as contained in the prospectus; and
                    (C) unsatisfactory, which shall be defined as not 
                meeting the requirements contained in the prospectus;
            (3) be based on criteria which--
                    (A) are objective, measurable, and attainable; and
                    (B) shall include as applicable general standards 
                for all concession operations, industry-specific 
                standards, and standards developed by the Secretary 
                concerned in consultation with the concessioner for 
                each concession service agreement;
            (4) be designed in such a manner that the annual evaluation 
        represents the overall performance of the concessioner without 
        undue weight to matters of limited importance; and
            (5) take into account factors beyond the control of the 
        concessioner, such as general market and other economic 
        fluctuations, as well as weather and other natural phenomena, 
        so that such factors may not be used as a justification for 
        denial of performance incentives.
    (b) Annual Evaluations.--
            (1) Requirements.--The Secretary concerned shall at least 
        semiannually review the performance of each concessioner and 
        shall assign an overall rating for each concessioner for each 
        year. The procedure for any performance evaluation shall be 
        provided to the concessioner prior to the beginning of any 
        evaluation period. Such procedure shall provide for adequate 
        notification of the concessioner prior to any on-site 
        evaluation and permit a representative of the concessioner to 
        observe the evaluation. The concessioner shall be entitled to a 
        complete explanation of any rating given. If the Secretary's 
        performance evaluation for any year results in an 
        unsatisfactory rating of the concessioner, the Secretary 
        concerned shall so notify the concessioner, in writing. Such 
        notification shall identify the nature of conditions which 
        require corrective action and shall provide the concessioner 
        with a list of corrective actions necessary to meet the 
        standards.
            (2) Suspension, revocation, and termination of 
        authorization.--The Secretary concerned may suspend, revoke, or 
        terminate a concession authorization if the concessioner fails 
        to correct the conditions identified by the Secretary within 
        the limitations established by the Secretary at the time notice 
        of the unsatisfactory rating is provided to the concessioner. 
        The Secretary may immediately suspend or revoke a concession 
        authorization where necessary to protect the public health or 
        welfare.
    (c) Performance Incentives.--
            (1) In evaluating the performance of a concessioner, the 
        incumbent concessioner is entitled to a performance incentive 
        of--
                    (A) one percent of the maximum points available 
                under such evaluations for performance in each year in 
                which the concessioner's annual performance is rated 
                good, as specified in subsection (a)(2)(A), and
                    (B) a one-time three year merit term extension upon 
                a finding that a concessioner has been rated as good in 
                each annual performance evaluation through the term of 
                the concession service agreement.
            (2) A performance incentive awarded under paragraph (1)(A) 
        may not exceed 10 percent of the maximum points available under 
        such evaluations over the life of the concession service 
        agreement.
    (d) Renewal Penalty.--In evaluating the performance of a 
concessioner, a concessioner shall be penalized one percent of the 
maximum points available under such evaluation for performance in each 
year in which the concessioner's annual performance is found to be 
unsatisfactory.

SEC. 9307. CAPITAL IMPROVEMENTS.

    (a) Private Sector Development.--It is the policy of the United 
States to encourage the private sector to develop, own, and maintain to 
the extent possible such public recreation facilities which would 
enhance public use and enjoyment of Federal lands as are contained in 
approved plans developed by the Secretary concerned. Under the terms of 
this part, concessioners may only construct or finance construction 
under terms of section 9312 such public facilities on Federal lands as 
are to be used by the concessioner under the terms of their concession 
service agreement or facilities which are necessary for the 
concessioner to administer such public facilities on Federal lands.
    (b) Investment Interest.--
            (1) In general.--A concessioner, who is required or 
        authorized under a concession service agreement pursuant to 
        this part to acquire or construct any structure, improvement, 
        or fixture pursuant to such agreement on Federal lands shall 
        have an investment interest therein, to the extent provided by 
        the agreement and this part. Such investment interest shall not 
        be extinguished by the expiration of such agreement. Such 
        investment interest may be assigned, transferred, encumbered or 
        relinquished.
            (2) Limitation.--Such investment interest shall not be 
        construed to include or imply any authority, privilege, or 
        right to operate or engage in any business or other activity, 
        and the use of any improvement in which the concessioner has an 
        investment interest shall be wholly subject to the applicable 
        provisions of the concession service agreement and of laws and 
        regulations relating to the area.
            (3) Federal property.--The agreement shall specify which 
        new improvements required under terms of the concession service 
        agreement, if any, shall become the property of the Federal 
        Government at the end of the agreement. No concession service 
        agreement shall provide for a concessioner to obtain an 
        investment interest in any building which is wholly owned by 
        the Federal Government. Title to the land on which such 
        structure, improvement, or fixture is placed shall remain in 
        the United States.
    (c) Sale of Assets.--If the existing concessioner is not selected 
as the best qualified applicant at the time of reissuance of a 
concession service agreement, the Secretary concerned shall require the 
new concessioner to buy the investment interest of the existing 
concessioner.
    (d) Closure of Concessioner Facilities.--In the event of a decision 
by the Secretary concerned, that the public interest, by reason of 
public and safety considerations or for other reasons beyond the 
control of the concessioner, requires the discontinuation or closure of 
facilities in which the concessioner has an investment interest, the 
Secretary shall compensate the concessioner in the amount equal to the 
value of the investment interest.
    (e) Determination of Value of Investment Interest.--For purposes of 
this part, the investment interest of any capital improvement at the 
end of the concession service agreement period is the actual cost of 
construction of such capital improvement adjusted from the completion 
of such construction by changes in the Consumer Price Index (selected 
in the same manner as such Index is selected under section 9311(c)(2)) 
less depreciation evidenced by the condition and prospective 
serviceability in comparison with a new unit of like kind, but not to 
exceed fair market value. Such value shall be determined by appraisal 
and included in any prospectus.

SEC. 9308. DURATION OF CONCESSION AUTHORIZATION.

    (a) Concession Service Agreement.--The standard term of a 
concession service agreement shall be ten years. The Secretary 
concerned may issue a concession service agreement for less than ten 
years if he determines (in his discretion) that the average annual 
gross receipts over the life of the concession service agreement would 
be less than $100,000. The Secretary concerned may not issue a 
concession service agreement for less than five years. The Secretary 
concerned shall issue a concession service agreement for longer than 
ten years if the Secretary determines (in his discretion) that such 
longer term is in the public interest or necessary due to the extent of 
investment and associated financing requirements and to meet the 
obligations assumed. The term for a concession service agreement may 
not exceed 30 years.
    (b) Concession License.--The term for a concession license may not 
exceed two years.
    (c) Temporary Extension.--The Secretary may agree to temporary 
extensions of concession service agreements for up to two years on a 
noncompetitive basis to avoid interruption of services to the public.

SEC. 9309. RATES AND CHARGES TO THE PUBLIC.

    In general, rates and charges to the public shall be set by the 
concessioner. For concession service agreements only, a concessioner's 
rates and charges to the public shall be subject to the approval of the 
Secretary concerned in those instances where the Secretary determines 
that sufficient competition for such facilities and services does not 
exist within or in close proximity to the area in which the 
concessioner operates. In those instances, the concession service 
agreement shall state that the reasonableness of the concessioner's 
rates and charges to the public shall be reviewed and approved by the 
Secretary concerned primarily by comparison with those rates and 
charges for facilities and services of comparable character under 
similar conditions, with due consideration for length of season, 
seasonal variations, average percentage of occupancy, accessibility, 
availability and costs of labor and materials, type of patronage, and 
other factors deemed significant by the Secretary concerned. Such 
review shall be completed within 90 days of receipt of all necessary 
information, or the requirement for the Secretary's approval shall be 
waived and such rates and charges as proposed by the concessioner 
considered to be approved for immediate use.

SEC. 9310. TRANSFERABILITY OF CONCESSION AUTHORIZATIONS.

    (a) Concession Service Agreements.--
            (1) Approval required.--A concession service agreement is 
        transferable or assignable only upon the approval of the 
        Secretary concerned, which approval may not be unreasonably 
        withheld or delayed. The Secretary may not approve any such 
        transfer or assignment if the Secretary determines that the 
        prospective concessioner is or is likely to be unable to 
        completely satisfy all of the material requirements, terms, and 
        conditions of the agreement or that the terms of the transfer 
        or assignment would preclude providing appropriate facilities 
        or services to the public at reasonable rates.
            (2) Consideration period.--If the Secretary fails to 
        approve or disapprove a transfer or assignment under paragraph 
        (1) within 90 days after the date on which the Secretary 
        receives all necessary information requested by the Secretary 
        with respect to such transfer, the transfer or assignment shall 
        be deemed approved.
            (3) No modification of terms and conditions.--The terms and 
        conditions of the concessions service agreement shall not be 
        subject to modification by reason of any transfer or assignment 
        under this section.
            (4) Performance incentive.--Upon approval of the sale or 
        transfer, the prospective concessioner shall be entitled to the 
        benefit of performance incentives earned by the previous 
        concessioner.
    (b) Concession License.--A concession license may not be 
transferred.

SEC. 9311. FEES CHARGED BY THE UNITED STATES FOR CONCESSION 
              AUTHORIZATIONS.

    (a) In General.--The Secretary concerned shall charge a fee for the 
privilege of providing concession services pursuant to this part. The 
fee for any concession service agreement may include any of the 
following:
            (1) An annual cash payment for the privilege of providing 
        concession services.
            (2) The amount required for capital improvements required 
        pursuant to section 9307(a).
            (3) Fees for rental or lease of Government-owned facilities 
        or lands occupied by the concessioner.
            (4) Expenditures for maintenance of or improvements to 
        Government-owned facilities occupied by the concessioner.
    (b) Establishment of Amount.--
            (1) Minimum acceptable fee.--The Secretary concerned shall 
        establish a minimum fee for each applicable category specified 
        in paragraphs (1) through (4) of subsection (a) which is 
        acceptable to the Secretary under this section and shall 
        include the minimum fee in the prospectus under section 9305. 
        This fee shall be based on historical data, where available, as 
        well as industry-specific and other market data available to 
        the Secretary concerned.
            (2) Final fee.--Except as provided by paragraph (3), the 
        final fee shall be the amount bid by the selected applicant 
        under section 9305.
            (3) Substantially similar services in a specific geographic 
        area.--Where the Secretary concerned simultaneously offers 
        authorizations for more than one river runner, outfitter, or 
        guide concession operation to provide substantially similar 
        services in a defined geographic area, the concession fee for 
        all such concessioners shall be specified by the Secretary 
        concerned in the prospectus. The Secretary concerned shall base 
        the fee on historical data, where available, as well as on 
        industry-specific and other market data available to the 
        Secretary concerned or may establish a charge per user day.
    (c) Adjustment of Fees.--
            (1) In general.--The amount of any fee for the term of the 
        concession service agreement shall be set at the beginning of 
        the concession authorization and may only be modified on the 
        basis of inflation, if the annual payment is not determined by 
        a percentage of adjusted gross receipts (as measured by changes 
        in the Consumer Price Index), to reflect substantial changes 
        from the conditions specified in the prospectus, or in the 
        event of an unforeseen disaster.
            (2) CPI.--For the purposes of adjustments for inflation 
        under paragraph (1), the Federal agencies shall select a 
        Consumer Price Index published by the Bureau of Labor 
        Statistics and shall use such index in a consistent manner.
    (d) Concession License Fee.--The fee for a concession license shall 
at least cover the program administrative costs and may not be changed 
over the term of the license.

SEC. 9312. DISPOSITION OF FEES.

    (a) Concession Improvement Account.--
            (1) In general.--The Secretary concerned shall, whenever 
        the concession service agreement requires or authorizes the 
        concessioner to make capital improvements or occupy Government-
        owned facilities, require the concessioner to establish a 
        concession improvement account. The concessioner shall deposit 
        into this account--
                    (A) all funds for capital improvements as specified 
                in the concession service agreement;
                    (B) all funds for maintenance of or improvements to 
                Government-owned facilities occupied by the 
                concessioner; and
                    (C) all amounts received from the Secretary 
                concerned pursuant to subsection (b).
            (2) Terms and conditions.--The account shall be maintained 
        by the concessioner in an interest bearing account in a 
        Federally insured financial institution. The concessioner shall 
        maintain the account separately from any other funds or 
        accounts and shall not commingle the monies in the account with 
        any other moneys. The Secretary concerned may establish such 
        other terms, conditions, or requirements as the Secretary 
        determines to be necessary to ensure the financial integrity of 
        the account.
            (3) Disbursements.--The concessioner shall make 
        disbursements from the account for improvements and other 
        activities, only as specified in the concession service 
        agreement and subsection (b)(2)(C).
            (4) Records.--The concessioner shall maintain proper 
        records for all disbursements made from the account. Such 
        records shall include (but not be limited to) invoices, bank 
        statements, canceled checks, and such other information as the 
        Secretary concerned determines to be necessary.
            (5) Annual financial statement.--The concessioner shall 
        annually submit to the Secretary concerned a statement 
        reflecting total activity in the account for the preceding 
        financial year. The statement shall reflect monthly deposits, 
        expenditures by project, interest earned, and such other 
        information as the Secretary concerned requires.
            (6) Transfer of remaining balance.--Upon the termination of 
        a concession authorization, or upon the transfer of a 
        concession service agreement, any remaining balance in the 
        account shall be transferred by the concessioner to the 
        successor concessioner, to be used solely as set forth in this 
        subsection. In the event there is no successor concessioner, 
        the account balance shall be deposited in the Treasury as 
        miscellaneous receipts.
    (b) Amounts Received Relating to Privilege of Providing Concession 
Services and Rental of Government-owned Facilities.--
            (1) Deposit into treasury.--The Secretary concerned shall 
        deposit into the Treasury of the United States as miscellaneous 
        receipts amounts received for a fiscal year for the privilege 
        of providing concession services and the rental of Government-
        owned facilities up to the amount specified in the table in 
        paragraph (3) for the National Park Service for that fiscal 
        year. For the other agencies covered under this part, the 
        Secretary concerned shall develop a schedule of anticipated 
        receipts to be deposited to the Treasury and submit such 
        schedule to the appropriate Congressional committees within 18 
        months of the date of enactment of this Act. Nothing in this 
        part shall be construed to modify any provision of law relating 
        to sharing of Federal receipts with any other level of 
        Government.
            (2) Deposit into concession improvement accounts.--(A) 
        Amounts received by the Secretary concerned for a fiscal year 
        for the privilege of providing concession services and the use 
        of Government-owned facilities which exceed the amount 
        specified in the table in paragraph (3) for that fiscal year 
        shall be available for deposit in the succeeding fiscal year 
        into concession improvement accounts.
            (B) Of the amounts available for deposit into concession 
        improvement accounts, the Secretary shall make available to 
        each concessioner a percentage of such excess amounts which 
        bears the same ratio as the amount paid by the concessioner to 
        the Secretary concerned for a fiscal year for the privilege of 
providing concession services and the use of Government-owned 
facilities bears to the total amount paid to the Secretary concerned by 
all concessioners for that fiscal year for such privilege on an agency-
wide basis.
            (C) Amounts made available to a concessioner under this 
        paragraph may be used only for expenditures on visitor services 
        and facilities at the area at which the funds were generated.
            (3) Deposit into concession improvement accounts.--The 
        table referred to in paragraph (2), expressed by fiscal year on 
        an agency basis, is as follows:

                         National Park Service

                Fiscal year:
                                                               Amount: 
                        1997.........................      $15,800,000 
                        1998.........................      $21,100,000 
                        1999.........................      $26,700,000 
                        2000.........................      $32,300,000 
                        2001.........................      $38,200,000 
                        2002.........................      $44,400,000.
    (c) Audit Requirement.--Beginning with fiscal year 1998, the 
Inspector General of the Department concerned shall conduct a biennial 
audit of concession fees generated pursuant to this part. The Inspector 
General shall make a determination as to whether concession fees are 
being collected and expended in accordance with this part and shall 
submit copies of each audit to the Committee on Resources of the House 
of Representatives and the Committee on Energy and Natural Resources of 
the Senate.

SEC. 9313. DISPUTE RESOLUTION.

    (a) Board of Contract Appeals.--The Board of Contract Appeals 
within each Department shall adjudicate disputes between the Federal 
Government and concessioners arising under this part, including 
disputes regarding the revocation, suspension, or termination of a 
concession authorization, transfers of concession service agreements, 
and performance evaluations of concessions. Such disputes shall be 
subject to the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.). 
The expiration of a concession authorization shall not be subject to 
appeal to the Board.
    (b) Administrative Review.--Appeals of decisions may be taken to 
the Board of Contract Appeals after one level of review of decisions 
made within an agency.
    (c) Expedited Procedure.--Appeals of decisions to suspend, revoke, 
or terminate a concession authorization shall be considered under an 
expedited procedure, as provided by the Secretary concerned by 
regulation.
    (d) Judicial Review.--
            (1) In general.--A person may seek judicial review of 
        decisions made by the Board. Such review shall be conducted by 
        the court with jurisdiction on a de novo basis.
            (2) Concession service agreements.--Judicial review of 
        decisions rendered by the Board regarding concession service 
        agreements shall be to the United States Court of Federal 
        Claims in accordance with section 1491 of title 28, United 
        States Code (commonly referred to as the ``Tucker Act'').
            (3) Concession licenses.--Judicial review of decisions 
        rendered by the Board regarding concession licenses shall be to 
        the appropriate Federal District Court.
    (d) Inapplicability of Certain Provisions.--Disputes arising under 
this part shall not be subject to the jurisdiction of the General 
Accounting Office to review bid protests under the Competition in 
Contracting Act of 1984.

SEC. 9314. RECORDKEEPING.

    (a) Maintenance and Access.--Each concessioner shall keep such 
records as the Secretary concerned may prescribe to enable the 
Secretary to determine that all terms of the concession authorization 
have been and are being faithfully performed, and the Secretary and his 
duly authorized representatives shall, for the purpose of audit and 
examination, have access at reasonable times and locations to such 
records and to other books, documents, and papers of the concessioner 
pertinent to the concession authorization and all the terms and 
conditions thereof.
    (b) Access by Comptroller General.--The Comptroller General of the 
United States or any of his duly authorized representatives shall, 
until the expiration of five calendar years after the close of the 
business year of each concessioner have access to and the right to 
examine any pertinent books, documents, papers, and records of the 
concessioner related to the concession authorization involved.

SEC. 9315. APPLICATION OF GENERAL GOVERNMENTAL ACQUISITION 
              REQUIREMENTS.

    The following laws and regulations shall not apply to concession 
service agreements and concession licenses under this part:
            (1) Title III of the Federal Property and Administrative 
        Services Act of 1949 (41 U.S.C. 251-266).
            (2) The Office of Federal Procurement Policy Act (41 U.S.C. 
        401 et seq.).
            (3) The Federal Acquisition Streamlining Act of 1994 
        (Public Law 103-355).
            (4) The Brooks Automatic Data Processing Act (40 U.S.C. 
        759).
            (5) Chapters 137 and 141 of title 10, United States Code.
            (6) The Federal Acquisition Regulation and any laws not 
        listed in paragraphs (1) through (5) providing authority to 
        promulgate regulations in the Federal Acquisition Regulation.
            (7) The Act of June 20, 1936 (20 U.S.C. 107; commonly 
        referred to as the ``Randolph-Sheppard Act'') and the Service 
        Contract Act of 1965 (41 U.S.C. 351 et seq.).

SEC. 9316. RULES OF CONSTRUCTION.

    Concession programs of an agency on Federal lands and waters 
subject to this part shall be fully consistent with the agency's 
mission and laws applicable to the agency. Nothing in this part shall 
be construed as limiting or restricting any right, title, or interest 
of the United States in any land or resources.

SEC. 9317. REGULATIONS.

    (a) In General.--Pursuant to enactment of this part, no new 
concession authorization may be issued, nor may any existing concession 
authorization remain in effect after two years after the date of the 
enactment of this Act, unless regulations fully implementing this part 
are in effect. During such two-year period, the Secretary may only 
extend an existing concession authorization for a period ending at the 
end of such two-year period. Such extensions shall be made in 
accordance with the applicable provisions of law specified in section 
9318, as such provisions were in effect on the day before the date of 
the enactment of this Act. The Secretary of the Interior, Secretary of 
Agriculture, and Secretary of the Army shall develop a single set of 
regulations which specify a uniform set of recordkeeping requirements 
for all concessioners with respect to implementation of this part.
    (b) Qualifications of Agency Personnel Assigned Concession 
Management Duties.--The Secretary, by regulation under subsection (a) 
and taking into account the provisions of this part, shall specify the 
minimum training and qualifications required for agency personnel 
assigned predominantly to concession management duties, including (but 
not limited to) competency in business management, public health and 
safety, and the delivery of quality customer services.

SEC. 9318. RELATIONSHIP TO OTHER EXISTING LAWS.

    (a) Repeals.--
            (1) The Act entitled ``An Act relating to the establishment 
        of concession policies in the areas administered by the 
        National Park Service and for other purposes'' (16 U.S.C. 20-
        20g) approved October 9, 1965, is repealed.
            (2) The last paragraph under the heading ``forest service'' 
        in the Act of March 4, 1915 (38 Stat. 1101), as amended by the 
        Act of July 28, 1956 (chap. 771; 70 Stat. 708) (16 U.S.C. 497), 
        is repealed.
            (3) Section 7 of the Act of April 24, 1950 (16 U.S.C. 580d) 
        is repealed.
    (b) Superseded Provisions.--The provisions of this part shall 
supersede the provisions of the following Acts as they pertain to 
concessions management:
            (1) The Federal Land Policy and Management Act of 1976 
        (Oct. 21, 1976).
            (2) Public Law 87-714 (16 U.S.C. 460k et seq.; commonly 
        known as the ``Refuge Recreation Act'').
            (3) The National Wildlife Refuge System Administration Act 
        of 1966 (16 U.S.C. 668dd).
    (c) Conforming Amendment.--The fourth sentence of section 3 of the 
Act of August 25, 1916 (16 U.S.C. 3; 39 Stat. 535), is amended by 
striking all through ``no natural'' and inserting in lieu thereof ``No 
natural''.
    (d) Modified Provisions.--The second sentence of section 4 of the 
Act entitled ``An Act authorizing the construction of certain public 
works on rivers and harbors for flood control, and for other purposes'' 
(16 U.S.C. 460d) is amended by inserting ``, except for commercial 
concessions purposes'' the first place it appears after ``public 
interest''.
    (e) Savings.--
            (1) In general.--The repeal of any provision, the 
        superseding of any provision, and the amendment of any 
        provision, of an Act referred to in subsections (a), (b), or 
        (c) shall not affect the validity of any authorizations entered 
        into under any such Act. The provisions of this part shall 
        apply to any such authorizations, except to the extent such 
        provisions are inconsistent with the express terms and 
        conditions of such authorizations.
            (2) Right of renewal.--The right of renewal explicitly 
        provided for by any concession contract under any such 
        provision shall be preserved for a single renewal of a contract 
        following the enactment of, or concession authorization under, 
        this part.
            (3) Value of capital improvements or possessory interest.--
        Nothing in this part shall be construed to change the value of 
        existing capital improvements or possessory interest as 
        identified in concession contracts entered into before the 
        enactment of this Act.
            (4) ANILCA.--Nothing in this part shall be construed to 
        amend, supersede or otherwise affect any provision of the 
        Alaska National Interest Lands Conservation Act (16 U.S.C. 3101 
        et seq.) relating to revenue-producing visitor services.
            (5) Ski area permits.--No provision of this part shall 
        apply to any ski area permittee operating on lands administered 
        by the Forest Service.
            (6) Procedures for considering existing concessioners in 
        reissuance of contracts.--In the case of any concession 
        contract which has expired prior to the date of the enactment 
        of this Act, or within five years after the date of the 
        enactment of this Act, the incumbent concessioner shall be 
        entitled to a one-time bonus of five percent of the maximum 
        points available in the reissuance of a previous concession 
        authorization. For any concession contract entered into prior 
        to the date of enactment of this Act, which is projected to 
        terminate five years or later after the enactment of this Act, 
        any concessioner shall be entitled to a performance incentive 
        as outlined in this part. The concessioner shall be entitled to 
        an evaluation for the purposes of section 9306 of good for each 
        year in which the Secretary concerned does not complete an 
        evaluation as provided for in this part.

                   PART 2--NATIONAL FOREST SKI AREAS

SEC. 9321. PRIVATIZATION OF FOREST SERVICE SKI AREAS.

    (a) Authorization To Sell.--
            (1) In general.--Not later than five years after the date 
        of enactment of this part, the Secretary of Agriculture shall 
        offer to sell not less than 40 ski areas to the qualifying ski 
        area operator. Any such sale shall provide for continuation of 
        public access for diverse recreational uses. The Secretary 
        shall offer such areas for sale only after consultation with 
        State and local governments. Any such sale shall be at fair 
        market value and, subject to valid existing rights, shall 
        transfer all right, title, and interest of the United States in 
        and to the lands. In any such sale, the Secretary shall 
        establish the minimum acceptable bid based on the appraised 
        fair market value of such lands.
            (2) Qualifying lands.--For the purposes of subsection (a), 
        lands are qualifying concession lands if such lands are--
                    (A) subject to a lease on the date of the enactment 
                of this Act for use as a ski area with improvements 
                with a fair market value greater than $2,000,000; and
                    (B) located either adjacent to the boundary of the 
                Federal lands or adjacent to other significant private 
                inholdings.
    (b) Appraisal.--
            (1) In general.--The Secretary shall provide for an 
        independent appraisal of the lands and interests therein to be 
        transferred pursuant to subsection (a). The appraiser shall--
                    (A) utilize nationally recognized appraisal 
                standards, including to the extent appropriate the 
                uniform appraisal standards for Federal land 
                acquisition; and
                    (B) not include the value of any improvement placed 
                on the lands by the concessioner.
            (2) Appraisal report.--The appraiser shall submit a 
        detailed report to the Secretary.
    (c) Additional Lands.--In addition to the national forest ski area, 
the Secretary may transfer by sale or exchange additional National 
Forest System lands for the purpose of adding such lands to and 
operating them as part of a ski area sold under subsection (a). The 
transfer of additional lands under this subsection shall be in 
accordance with this part and the laws generally applicable to the 
National Forest System.
    (d) Use of Proceeds by the Appropriate Secretary.--The Secretary 
may retain 50 percent of the funds generated through sales under this 
section to acquire other high priority lands identified for acquisition 
in any forest land and resource management plan. The remaining 50 
percent of such amount shall be deposited in the Treasury as 
miscellaneous receipts.

SEC. 9322. SKI AREA PERMIT FEES AND WITHDRAWAL OF SKI AREAS FROM 
              OPERATION OF MINING LAWS.

    The National Forest Ski Area Permit Act of 1986 (16 U.S.C. 497b) is 
amended by adding at the end the following new sections:

``SEC. 4. SKI AREA PERMIT FEES.

    ``(a) Ski Area Permit Fee.--
            ``(1) In general.--Except as provided by paragraph (2), 
        after the date of the enactment of this section, the fee for 
        all ski area permits on National Forest System lands shall be 
        calculated, charged, and paid only as set forth in subsection 
        (b).
            ``(2) Exception.--Paragraph (1) does not apply to any ski 
        area where the existing permit in effect on the date of 
        enactment of this section specifies a different method to 
        calculate the fee. In any such situation the terms of such 
        permit shall prevail, unless the permit holder notifies the 
        Forest Service that the permit holder agrees to adopt the 
        method of fee calculation specified in this section. The Forest 
        Service should encourage such permit holders to consider 
        adopting the new method of fee calculation in order to reduce 
        its administrative costs.
    ``(b) Method of Calculation.--
            ``(1) Determination of adjusted gross revenue subject to 
        fee.--The Secretary of Agriculture shall calculate the ski area 
        permit fee to be charged a ski area permittee by first 
        determining the permittee's adjusted gross revenue to be 
        subject to the permit fee. The permittee's adjusted gross 
        revenue is equal to the sum of the following:
                    ``(A) The permittee's gross revenues from alpine 
                lift ticket and alpine season pass sales plus revenue 
                from alpine ski school operations, with such total 
                multiplied by the permittee's slope transport feet 
                percentage on National Forest System lands.
                    ``(B) The permittee's gross revenues from nordic 
                ski use pass sales and nordic ski school operations, 
                with such total multiplied by the permittee's 
percentage of nordic trails on National Forest System lands.
                    ``(C) The permittee's gross revenues from ancillary 
                facilities physically located on National Forest System 
                lands, including all permittee or subpermittee lodging, 
                food service, rental shops, parking, and other 
                ancillary operations.
            ``(2) Determination of ski area permit fee.--The Secretary 
        shall determine the ski area permit fee to be charged a ski 
        area permittee by multiplying adjusted gross revenue determined 
        under paragraph (1) for the permittee by the following 
        percentages for each revenue bracket and adding the total for 
        each revenue bracket:
                    ``(A) 1.5 percent of all adjusted gross revenue 
                below $3,000,000.
                    ``(B) 2.5 percent for adjusted gross revenue 
                between $3,000,000 and $15,000,000.
                    ``(C) 2.75 percent for adjusted gross revenue 
                between $15,000,000 and $50,000,000.
                    ``(D) 4.0 percent for the amount of adjusted gross 
                revenue that exceeds $50,000,000.
            ``(3) Slope transport feet percentage.--In cases where ski 
        areas are only partially located on National Forest System 
        lands, the slope transport feet percentage on national forest 
        land referred to in paragraph (1) shall be calculated as 
        generally described in the Forest Service Manual in effect as 
        of January 1, 1992.
            ``(4) Annual adjustment of adjusted gross revenue.--In 
        order to insure that the ski area permit fee set forth in this 
        subsection remains fair and equitable to both the United States 
        and ski area permittees, the Secretary shall adjust, on an 
        annual basis, the adjusted gross revenue figures for each 
        revenue bracket in subparagraphs (A) through (D) of paragraph 
        (2) by the percent increase or decrease in the national 
        Consumer Price Index for the preceding calendar year.
    ``(c) Minimum Fee.--In cases where an area of National Forest 
System land is under a ski area permit but the permittee does not have 
revenue or sales qualifying for fee payment pursuant to subsection (a), 
the permittee shall pay an annual minimum fee of $2 for each acre of 
National Forest System land under permit. Rental fees imposed under 
this subsection shall be paid at the time specified in subsection (d).
    ``(d) Time for Payment.--The fee set forth in subsection (b) shall 
be due on June 1 of each year and shall be paid or prepaid by the 
permittee on a monthly, quarterly, annual, or other schedule as 
determined appropriate by the Secretary in consultation with the 
permittee. It is the intention of Congress that unless mutually agreed 
otherwise by the Secretary and the permittee, the payment or prepayment 
schedule shall conform to the permittee's schedule in effect prior to 
the enactment of this section. To simplify bookkeeping and fee 
calculation burdens on the permittee and the Forest Service, the 
Secretary shall each year provide the permittee with a standardized 
form and worksheets (including annual fee calculations brackets and 
rates) to be utilized for fee calculation and submitted with the fee 
payment. Information provided on such forms shall be compiled by the 
Secretary annually and kept in the Office of the Chief, United States 
Forest Service.
    ``(e) Definitions.--To simplify bookkeeping and administrative 
burdens on ski area permittees and the Forest Service, as used in this 
section, the terms `revenue' and `sales' mean actual income from sales. 
Such terms do not include sales of operating equipment, refunds, rent 
paid to the permittee by sublessees, sponsor contributions to special 
events or any amounts attributable to employee gratuities, discounts, 
complimentary lift tickets, or other goods or services (except for 
bartered goods) for which the permittee does not receive money.
    ``(f) Effective Date for Fees.--The ski area permit fees as 
provided under this section shall become effective on July 1, 1996, and 
cover receipts retroactive to July 1, 1995. If a ski area permittee has 
paid fees for the 12-month period ending on June 30, 1996, under the 
graduated rate fee system formula in effect prior to the date of the 
enactment of this section, such fees shall be credited toward the new 
ski area permit fee due for that period under this section.
    ``(g) Report on Fair Market Value.--No later than five years after 
the date of enactment of this section and every 10 years thereafter, 
the Secretary shall submit to the Committee on Energy and Natural 
Resources of the United States Senate and the Committees of Agriculture 
and Resources of the United States House of Representatives a report 
analyzing whether the ski area permit fee system legislated by this 
section is returning a fair market value rental to the United States 
together with any recommendations the Secretary may have for 
modifications in the system.
    ``(h) Transition Period.--Where the new fee provided for in this 
section results in an increase in permit fee greater than one percent 
of the permittee's adjusted gross revenue (as defined in subsection 
(b)(1)), the new fee shall be phased in over a three year period in a 
manner providing for increases of approximately equal increments.
    ``(i) Applicability of NEPA to Reissuance of Ski Area Permits.--The 
reissuance of a ski area permit to provide activities similar in nature 
and amount to the activities provided under the previous permit is 
hereby determined to be a categorical exclusion as provided for under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4331 et seq.).

``SEC. 5. WITHDRAWAL OF SKI AREAS FROM OPERATION OF MINING LAWS.

    ``Subject to valid existing rights, all lands located within the 
boundaries of ski area permits issued prior to, on, or after the date 
of the enactment of this section pursuant to the authority of the Act 
of March 4, 1915 (16 U.S.C. 497), the Act of June 4, 1897 (16 U.S.C. 
473 et seq.), or section 3 of this Act are hereby and henceforth 
automatically withdrawn from all forms of appropriation under the 
mining laws and from disposition under all laws pertaining to mineral 
and geothermal leasing. Such withdrawal shall continue for the full 
term of the permit and any modification, reissuance, or renewal of the 
permit. Such withdrawal shall be canceled automatically upon expiration 
or other termination of the permit unless, at the request of the 
Secretary of Agriculture, the Secretary of the Interior determines to 
continue the withdrawal. Upon cancellation of the withdrawal, the land 
shall be automatically restored to all appropriation not otherwise 
restricted under the public land laws.''.

                   PART 3--DOMESTIC LIVESTOCK GRAZING

SEC. 9331. APPLICABLE REGULATIONS.

    (a) BLM Lands.--Except as otherwise provided by this part, grazing 
of domestic livestock on lands administered by the Bureau of Land 
Management shall be in accordance with part 1780 and part 4100 of title 
43, Code of Federal Regulations, as in effect on January 1, 1995.
    (b) Forest Service Lands.--Except as otherwise provided by this 
part, grazing of domestic livestock on lands administered by the Forest 
Service shall, to the extent possible, be in accordance with 
regulations, which the Secretary of Agriculture shall promulgate, which 
are substantially similar to the regulations referred to in subsection 
(a). Regulations promulgated under this subsection may differ from the 
regulations referred to in subsection (a) to the extent necessary to 
conform to the laws governing the National Forest System (other than 
this part).
    (c) Federal Lands.--For the purposes of this part, the term 
``Federal lands'' means lands administered by the Bureau of Land 
Management and lands administered by the Forest Service.

SEC. 9332. FEES AND CHARGES.

    (a) Basic Fee.--The basic fee for each animal unit month in a 
grazing fee year to be determined by the Bureau of Land Management and 
the Forest Service shall be equal to the 3-year average of the total 
gross value of production for beef cattle, as compiled by the Economic 
Research Service of the Department of Agriculture in accordance with 
subsection (b) on the basis of economic data published by the Service 
in the Economic Indicators of the Farm Sector: Cost of Production--
Major Field Crops & Livestock and Dairy for the 3 years preceding the 
grazing fee year, multiplied by the 10 year average of the United 
States Treasury Securities 6-month bill ``new issue'' rate and divided 
by 12.
    (b) Criteria.--The Economic Research Service of the Department of 
Agriculture shall continue to compile the gross production value of 
production of beef cattle as reported in a dollar per bred cow basis in 
the ``U.S. Cow-Calf Production Cash Costs and Returns''.
    (c) Surcharge.--
            (1) In general.--A surcharge shall be added to the grazing 
        fee billings for authorized grazing of livestock owned by 
        persons other than the permittee or lessee except where--
                    (A) such use is made by livestock owned by a 
                spouse, child, or grandchild or their respective spouse 
                of the permittee and lessee; or
                    (B) the permittee or lessee is unable to make full 
                grazing use, as authorized by a grazing permit or 
                lease, due to the infirmed condition or death of the 
                permittee or lessee.
            (2) Treatment as additional fee.--The surcharge shall be 
        over and above any other fees that may be charged for using 
        public land forage.
            (3) Prior payment required.--Surcharges shall be paid prior 
        to grazing use.
            (4) Amount.--The surcharge for authorized pasturing of 
        livestock owned by persons other than the permittee or lessee 
        shall be equal to 25 percent of the difference between the 
        current year's Federal grazing fee and the prior year's private 
        grazing land lease rate per AUM for the appropriate State as 
        compiled by the National Agricultural Statistics Service.
            (5) In general.--The Bureau of Land Management and the 
        Forest Service shall make a determination under subsection (a) 
        based on the following information gathered by the National 
        Agriculture Statistics Service of the Department of Agriculture 
        with respect to the largest single grazing lease of each 
        grazing operator (in terms of dollars):
                    (A) Whether the operator charged--
                            (i) per acre;
                            (ii) per head per month;
                            (iii) per pound of gain;
                            (iv) per hundredweight of gain; or
                            (v) by another measure, and the rate 
                        charged.
                    (B)(i) The estimated average pounds gained per 
                season for the grazing lease.
                    (ii) The total dollar amount estimated to be 
                realized from the grazing lease.
                    (iii) Grazing lease acreage.
                    (iv) The State and county where the grazing lease 
                is located.
                    (C) The classes of livestock grazed.
                    (D) The term of the grazing lease.
                    (E)(i) Whether grazing lease payments are paid if 
                no grazing occurred.
                    (ii) Whether the grazing lease contains a take or 
                pay provision.
                    (F) Additional information on whether the following 
                are provided by the landlord on a 5-year basis:
                            (i) Fencing maintenance.
                            (ii) Animal management and oversight.
                            (iii) Water maintenance.
                            (iv) Salt and minerals.
                            (v) Other service (specified).
                            (vi) No services.
                            (vii) Hunting.
                            (viii) Fishing.
                            (ix) Other (specified).
                            (x) None.
            (6) Private native rangeland.--For the purpose of 
        determining rates for grazing leases of private native 
        rangeland, rates for irrigated pasture, crop aftermath, and 
        dryland winter wheat shall be excluded.

SEC. 9333. ANIMAL UNIT MONTH.

    (a) Definition of Animal Unit Month.--The term ``animal unit 
month'' means 1 month's use and occupancy of range by--
            (1) 1 cow, bull, steer, heifer, horse, burro, or mule, 7 
        sheep, or 7 goats, each of which is 6 months of age or older on 
        the date on which the animal begins grazing on Federal land;
            (2) any such animal regardless of age if the animal is 
        weaned on the date on which the animal begins grazing on 
        Federal land; and
            (3) any such animal that will become 12 months of age 
        during the period of use authorized under a grazing permit or 
        grazing lease.
    (b) Livestock Not Counted.--There shall not be counted as an animal 
unit month the use of Federal land for grazing by an animal that is 
less than 6 months of age on the date on which the animal begins 
grazing on Federal land and is the natural progeny of an animal on 
which a grazing fee is paid if the animal is removed from the Federal 
land before becoming 12 months of age.

SEC. 9334. TERM OF GRAZING PERMITS OR GRAZING LEASES.

    A grazing permit or grazing lease shall be issued for a term of 15 
years unless--
            (1) the land is pending disposal;
            (2) the land will be devoted to a public purpose that 
        precludes grazing prior to the end of 15 years; or
            (3) the Secretary determines that it would be in the best 
        interest of sound land management to specify a shorter term, if 
        the decision to specify a shorter term is supported by 
        appropriate and accepted resource analysis and evaluation.

SEC. 9335. CONFORMANCE WITH LAND USE PLAN.

    Livestock grazing activities and management actions approved by the 
Secretary of the Interior or the Secretary of Agriculture, as the case 
may be--
            (1) may include any such activities as are not clearly 
        prohibited by a land use plan; and
            (2) shall not require any consideration under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) in 
        addition to the studies supporting the land use plan.

SEC. 9336. EFFECTIVE DATE.

    This part shall apply to grazing on Federal lands on and after the 
date of the enactment of this Act.

     PART 4--REGIONAL DISPOSAL FACILITY OF SOUTHWESTERN LOW LEVEL 
                   RADIOACTIVE WASTE DISPOSAL COMPACT

SEC. 9341. CONVEYANCE OF PROPERTY.

    (a) Conveyance.--Upon the tendering of $500,000 on behalf of the 
State of California and the release of the United States by the State 
of California from any liability for claims relating to the property 
described in subsection (b), all right, title and interest of the 
United States in and to said lands and improvements thereon are 
conveyed to the Department of Health Services of the State of 
California: Provided, That the property shall revert to the United 
States if the property is not used as a low-level radioactive waste 
disposal facility.
    (b) Description.--The lands conveyed are those depicted on a map 
designated USGS 7.5 minute quadrangle, west of Flattop Mtn, CA 1984, 
entitled ``Location Map for Ward Valley Site'', located in San 
Bernardino Meridian, Township 9 North, Range 19 East.
    (c) Title.--The Secretary of the Interior shall issue evidence of 
title pursuant to this Act notwithstanding any other provision of law. 
The Southwestern Low-Level Radioactive Waste Disposal Compact's Ward 
Valley regional disposal facility and transfer of the land are in 
compliance with any applicable provisions of section 7 of Endangered 
Species Act of 1973 (16 U.S.C. 1536) and the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332).
    (d) Deposit of Funds.--Sums received pursuant to subsection (a) 
shall be deposited as miscellaneous receipts in the Treasury of the 
United States.
    (e) Expiration of Authority.--This authority expires October 1, 
2010.

SEC. 9342. CONVEYANCE OF EASEMENTS.

    Concurrent with the conveyance property described in section 
9341(b) to the Department of Health Services of the State of 
California, all necessary easements for utilities and ingress and 
egress to said lands described in section 9341(b) of this Act and the 
right to improve those easements, are also conveyed to the Department 
of Health Services of the State of California: Provided, That the 
Department of Health Services right-of-way easements revert to the 
United States if the lands referenced in section 9341 are not licensed 
and used as a low-level radioactive waste disposal facility.

                        Subtitle D--Territories

          PART 1--COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

SEC. 9401. TERMINATION OF ANNUAL DIRECT GRANT ASSISTANCE.

    (a) Termination.--Pursuant to section 704(d) of the Covenant to 
Establish a Commonwealth of the Northern Mariana Islands in Political 
Union with the United States of America (48 U.S.C. 1681 note), the 
annual payments under section 702 of the Covenant shall terminate as of 
September 30, 1995.
    (b) Repeal.--Sections 3 and 4 of the Act of March 24, 1976 (Public 
Law 94-241; 48 U.S.C. 1681 note), as amended, are repealed, effective 
October 1, 1995.
    (c) Removal of Authority To Obligate Certain Funds.--Amounts 
appropriated under title VII of the Covenant to Establish a 
Commonwealth of the Northern Mariana Islands in Political Union with 
the United States of America, and under sections 3 and 4 of Public Law 
94-241 (48 U.S.C. 1681), which are not obligated as of the date of the 
enactment of this Act may not be obligated after such date.
    (d) Conforming Amendments.--Section 5 of such Act (48 U.S.C. 1681 
note) is amended--
            (1) by striking out ``agreement identified in section 3 of 
        this Act'' and inserting in lieu thereof ``Agreement of the 
        Special Representatives on Future United States Financial 
        Assistance for the Government of the Northern Mariana Islands, 
        executed July 10, 1985, between the special representative of 
        the President of the United States and the special 
        representatives of the Governor of the Northern Mariana 
        Islands''; and
            (2) by striking out ``Committee on Interior and Insular 
        Affairs'' and inserting in lieu thereof ``Committee on 
        Resources''.

            PART 2--TERRITORIAL ADMINISTRATIVE CESSATION ACT

SEC. 9421. SHORT TITLE.

    This part may be cited as the ``Territorial Administrative 
Cessation Act''.

SEC. 9422. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) each of the four political subdivisions of the United 
        Nations Trust Territory of the Pacific Islands, known as the 
        Japanese Mandated Islands, have successfully entered into 
        distinct self-governing entities, thereby culminating in the 
        final termination of the Trusteeship and the end of the 
        trusteeship responsibilities of the United States as 
        administering authority of the Trust Territory on October 1, 
        1994;
            (2) the United States territories have developed 
        progressively increased local self-government over the past 
        five decades;
            (3) the territories predominantly deal directly with 
        Federal agencies and departments, as a State would;
            (4) the administering responsibilities of the Department of 
        the Interior with respect to the insular areas has declined 
        substantially during the past five decades; and
            (5) Federal-territorial relations can be enhanced and 
        Federal fiscal conditions improved by the elimination of 
        unnecessary Federal bureaucracy.

SEC. 9423. ELIMINATION OF OFFICE OF TERRITORIAL AND INTERNATIONAL 
              AFFAIRS.

    (a) In General.--The Office of Territorial and International 
Affairs of the Department of the Interior, established pursuant to the 
Order of the Secretary of the Interior 3046, of February 14, 1980, as 
amended, is hereby abolished.
    (b) Termination of Position of Assistant Secretary.--Section 5315 
of title 5, United States Code, is amended by striking ``Assistant 
Secretaries of the Interior (6)'' and inserting ``Assistant Secretaries 
of the Interior (5)''.
    (c) Effective Date.--Subsection (a) and the amendment made by 
subsection (b) shall take effect on the first day of the first fiscal 
year that begins after the date of the enactment of this Act.

SEC. 9424. CERTAIN ACTIVITIES NOT FUNDED.

    Amounts may not be made available for the following program 
activities for assistance to territories for fiscal years beginning 
after September 30, 1995, as identified under the appropriations 
account numbered 14-0412-0-1-808:
            (1) technical assistance, item 00.12;
            (2) maintenance assistance, item 00.14;
            (3) disaster fund, item 00.17; and
            (4) insular management controls, item 00.19.

                          Subtitle E--Minerals

                        PART 1--HARDROCK MINING

SEC. 9501. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds and declares that--
            (1) a secure and reliable supply of locatable minerals is 
        essential to the industrial base of the United States, national 
        security, and balance of trade;
            (2) many of the deposits of locatable minerals that may be 
        commercially developed are on Federal lands as that term is 
        defined in this Act, and are difficult and expensive to 
        discover, mine, extract and process;
            (3) the national need for locatable minerals will continue 
        to expand, and without a strong mining industry the demand for 
        the minerals will exceed domestic sources of supply;
            (4) mining of locatable minerals is an extremely high-risk, 
        capital-intensive endeavor, which, to attract necessary 
        investment, requires certainty and predictability in access to 
        Federal lands in establishment of mining titles, and in the 
        rights of owners of mining claims or sites to develop minerals;
            (5) the national interest is to foster and encourage 
        private enterprise in the development of a domestic minerals 
        industry to maintain and create high-paying jobs and the 
        various Federal, State, and local taxes paid by the mining 
        industry in the United States;
            (6) changes in the general mining laws of the United States 
        to provide more direct economic return to the United States and 
        greater protection of public resources are desirable, so long 
        as these changes do not act as a disincentive to development of 
        minerals, adversely affect employment in the mining industry or 
        in industries that provide goods and services required for 
        mining activities, interfere with a secure and reliable 
        domestic supply of minerals, or adversely affect the balance of 
        trade of the United States; and
            (7) mining claims, mill sites and tunnel sites located 
        under the general mining laws are property interests, and any 
        law or regulation that substantially impairs existing property 
        rights may expose the Federal Government to takings claims 
        under the fifth amendment to the United States Constitution.
    (b) Purpose.--It is the purpose of this subtitle to--
            (1) affirm and maintain the policy established in section 2 
        of the Mining and Minerals Policy Act of 1970;
            (2) promote exploration for and the development of a secure 
        and reliable domestic source of locatable minerals;
            (3) provide for increased Federal revenue from the location 
        and production of locatable minerals from Federal lands through 
        patent payments and royalties; and
            (4) recognize that unpatented mining claims, mill sites and 
        tunnel sites are property rights in the fullest sense and 
        avoid, to the greatest extent possible, claims of takings of 
        existing property rights under the general mining laws that 
        could require compensation under the fifth amendment to the 
        United States Constitution.

SEC. 9502. PATENTS UNDER THE GENERAL MINING LAW.

    (a) In General.--Any patent issued by the United States under the 
general mining laws after the date of the enactment of this Act for any 
interest in land covered by a mining claim or site under such laws 
shall be issued only--
            (1) upon payment by the owner of the mining claim or site 
        of the fair market value for the interest in the land owned by 
        the United States exclusive of, and without regard to, the 
        mineral deposits in the land or the use of such land for 
        mineral activities unless the requirements of subsection (b) 
        are met, and
            (2) subject to a reservation by the United States of the 
        royalty provided in section 9503(a), unless the requirements in 
        subsection (b) are met.
    (b) Patent Transition.--(1) Subsection (a) shall not apply to any 
mining claim or site if--
            (A) the claimant establishes that the claim or site 
        constituted a valid mining claim as of the date of the 
        enactment of this Act; and
            (B) the claimant has filed a patent application or mineral 
        survey application prior to the date of the enactment of this 
        Act, or files such an application with the Bureau of Land 
        Management before the date 2 years after the date of the 
        enactment of this Act. A patent application or mineral survey 
        application referred to in this subparagraph shall be deemed 
        timely, notwithstanding that the application may be corrected 
        or supplemented and resubmitted thereafter.
    (2) During the 2-year period in paragraph (1)(B), or while there is 
pending a mineral survey or patent application to which this subsection 
applies, an owner of the mining claim or site may continue work on a 
mining claim or site directed toward establishment and confirmation of 
entitlement to a patent, and may amend the application as necessary.
    (3) Where access to any mining claim or site has been denied or 
impeded by the action or inaction of any Federal official, agency, or 
court during all or part of the 5-year period preceding the date of 
enactment of this Act, including any mining claim or site within the 
area described in section 106 of Public Law 103-433, and the mining 
claim or site may require further exploration or development in order 
for the claimant to file a patent application or a mineral survey 
application and otherwise meet the requirements of paragraph (1), the 
claimant may, within 1 year after the date of enactment of this Act, 
submit a certified written statement to the Secretary describing the 
access denial or impediment, and shall then have a period of 10 years 
from the date of enactment of this Act or the termination of such 
access denial or impediment, whichever occurs first, to conduct such 
mineral exploration or development activities, file a patent 
application or mineral survey application, and otherwise meet the 
requirements of paragraph (1).
    (c) Payment Plan.--(1) Any owner grossing less than $500,000 
annually shall qualify for a payment plan. Upon completion of the 
patent process, the owner of the mining claim may purchase the surface 
estate under the following conditions:
            (A) Payment to be amortized over 5 years with 5 equal 
        annual payments, including principal and interest.
            (B) Interest shall be calculated per annum at a rate of 2 
        percent over the ``Treasury Current Value of Funds Rate'' on 
        the date of execution of the payment plan agreement.
    (2) The purchaser shall be notified by certified mail after 60 days 
of delinquent payments and have 90 days from receipt of notification to 
correct the delinquency. Repossession shall be by and under the laws of 
repossession, foreclosure, and replevin of the State wherein the land 
is situated.
    (d) Repeal of Patenting Moratorium; Processing of Patent 
Applications.--Sections ____ and ____ of Public Law ____ are hereby 
repealed. The Secretary of the Interior shall diligently process all 
patent applications under the general mining laws pending on the date 
of enactment and shall make determinations for all such applications 
regarding patent issuance within 2 years.

SEC. 9503. ROYALTY UNDER THE GENERAL MINING LAW.

    (a) In General.--The production and sale of locatable minerals 
(including associated minerals) from any unpatented mining claim (other 
than those from Federal lands to which subsection 9502(b) applies) or 
any mining claim patented under section 9502(a) shall be subject to a 
royalty of 3.5 percent on the net proceeds from such production mined 
and sold from such claim.
    (b) Royalty Exclusion.--(1) The royalty payable under this section 
shall be waived for any person or corporation with annual net proceeds 
from mineral production subject to subsection (a) of less than $50,000.
    (2) Where mining operations subject to this section are conducted 
in 2 or more places by 1 person or corporation, the operations shall be 
considered a single operation the aggregate net proceeds from which 
shall be subject to the $50,000 limitation set forth in this 
subsection.
    (3) No royalty shall be payable under this section with respect to 
minerals processed at a facility by the same person or entity which 
extracted the minerals if an urban development action grant has been 
made under section 119 of the Housing and Community Development Act of 
1974 with respect to any portion of such facility.
    (4) The obligation to pay royalties under this section shall accrue 
only upon the sale of locatable minerals or mineral products produced 
from a mining claim subject to such royalty, and not upon the 
stockpiling of the same for future processing.
    (c) Definitions.--For the purposes of this subtitle:
            (1) The term ``net proceeds'' means gross yield, less the 
        sum of the following deductions for costs incurred prior to 
        sale or value determination, and none other:
                    (A) The actual cost of extracting the locatable 
                mineral.
                    (B) The actual cost of transporting the locatable 
                mineral from the claim to the place or places of 
                reduction, beneficiation, refining, and sale.
                    (C) The actual cost of crushing, processing, 
                reduction, beneficiation, refining, and sale of the 
                locatable mineral.
                    (D) The actual cost of marketing and delivering the 
                locatable mineral and the conversion of the locatable 
                mineral into money.
                    (E) The actual cost of maintenance and repairs of--
                            (i) all machinery, equipment, apparatus, 
                        and facilities used in the mine;
                            (ii) all crushing, milling, leaching, 
                        refining, smelting, and reduction works, 
                        plants, and facilities; and
                            (iii) all facilities and equipment for 
                        transportation.
                    (F) The actual cost for support personnel and 
                support services at the mine site, including without 
                limitation, accounting, assaying, drafting and mapping, 
                computer services, surveying, housing, camp, and office 
                expenses, safety, and security.
                    (G) The actual cost of engineering, sampling, and 
                assaying pertaining to development and production.
                    (H) The actual cost of permitting, reclamation, 
                environmental compliance and monitoring.
                    (I) The actual cost of fire and other insurance on 
                the machinery, equipment, apparatus, works, plants, and 
                facilities mentioned in subparagraph (E).
                    (J) Depreciation of the original capitalized cost 
                of the machinery, equipment, apparatus, works, plants, 
                and facilities listed in subparagraph (E). The annual 
                depreciation charge shall consist of amortization of 
                the original cost in the manner consistent with the 
                Internal Revenue Code of 1986, as amended from time to 
                time. The probable life of the property represented by 
                the original cost must be considered in computing the 
                depreciation charge.
                    (K) All money expended for premiums for industrial 
                insurance, and the owner paid cost of hospital and 
                medical attention and accident benefits and group 
                insurance for all employees engaged in the production 
                or processing of locatable minerals.
                    (L) All money paid as contributions or payments 
                under State unemployment compensation law, all money 
                paid as contributions under the Federal Social Security 
                Act, and all money paid to State government in real 
                property taxes and severance or other taxes measured or 
                levied on production, or Federal excise tax payments 
                and payments as fees or charges for use of the Federal 
                lands from which the locatable minerals are produced.
                    (M) The actual cost of the developmental work in or 
                about the mine or upon a group of mines when operated 
                as a unit.
            (2) The term ``gross yield'' shall having the following 
        meaning:
                    (A) In the case of sales of gold and silver ore, 
                concentrates or bullion, or the sales of other 
                locatable minerals in the form of ore or concentrates, 
                the term ``gross yield'' means the actual proceeds of 
                sale of such ore, concentrates or bullion.
                    (B) In the case of sales of beneficiated products 
                from locatable minerals other than those subject to 
                subparagraph (A) (including cathode, anode or copper 
                rod or wire, or other products fabricated from the 
                locatable minerals), the term ``gross yield'' means the 
                gross income from mining derived from the first 
                commercially marketable product determined in the same 
                manner as under section 613 of the Internal Revenue 
                Code of 1986.
                    (C) If ore, concentrates, beneficiated or 
                fabricated products, or locatable minerals are used or 
                consumed and are not sold in an arms length 
                transaction, the term ``gross yield'' means the 
                reasonable fair market value of the ore, concentrates, 
                beneficiated or fabricated products at the mine or 
                wellhead determined from the first applicable of the 
                following:
                            (i) Published or other competitive selling 
                        prices of locatable minerals of like kind and 
                        grade.
                            (ii) Any proceeds of sale.
                            (iii) Value received in exchange for any 
                        thing or service.
                            (iv) The value of any locatable minerals in 
                        kind or used or consumed in a manufacturing 
                        process or in providing a service.
                Without limiting the foregoing, the profits or losses 
                incurred in connection with forward sales, futures or 
                commodity options trading, metal loans, or any other 
                price hedging or speculative activity or arrangement 
                shall not be included in gross yield.
            (3) The term ``Secretary'' means the Secretary of the 
        Interior.
    (d) Limitations and Allocations of Net Proceeds, Gross Yield, and 
Allowable Costs.--(1) The deductions listed in subsection (c)(1) are 
intended to allow a reasonable allowance for overhead. Such deductions 
shall not include any expenditures for salaries, or any portion of 
salaries, of any person not actually engaged in--
            (A) the working of the mine;
            (B) the operating of the leach pads, ponds, plants, mills, 
        smelters, or reduction works;
            (C) the operating of the facilities or equipment for 
        transportation; or
            (D) superintending the management of any of those 
        operations described in subparagraphs (A) through (C).
    (2) Ores or solutions of locatable minerals subject to the royalty 
requirements of this section may be extracted from mines comprised of 
mining claims and lands other than mining claims and ore or solutions 
of locatable minerals subject to the royalty requirements of this 
section may be commingled with ores or solutions from lands other than 
mining claims. In any such case, for purposes of determining the amount 
of royalties payable under this section--
            (A) the operator shall first sample, weigh or measure, and 
        assay the same in accordance with accepted industry standards; 
        and
            (B) gross yield, allowable costs and net proceeds for 
        royalty purposes shall be allocated in proportion to mineral 
        products recovered from the mining claims in accordance with 
        accepted industry standards.
    (e) Liability for Royalty Payments.--The owner or co-owners of a 
mining claim subject to a royalty under this section shall be liable 
for such royalty to the extent of the interest in such claim owned. As 
used in this subsection, the terms ``owner'' and ``co-owner'' mean the 
person or persons owning the right to mine locatable minerals from such 
claim and receiving the net proceeds of such sale. No person who makes 
any royalty payment attributable to the interest of the owner or co-
owners liable therefor shall become liable to the United States for 
such royalty as a result of making such payment on behalf of such owner 
or co-owners.
    (f) Time and Manner of Payment.--(1) Royalty payments for 
production from any mining claim subject to the royalty payable under 
this section shall be due to the United States at the end of the month 
following the end of the calendar quarter in which the net proceeds 
from the sale of such production are received by the owner or co-
owners. Royalty payments may be made based upon good faith estimates of 
the gross yield, net proceeds and the quantity of ore, concentrates, or 
other beneficiated or fabricated products of locatable minerals, 
subject to adjustment when the actual annual gross yield, net proceeds 
and quantity are determined by the owner of the mining claim or site or 
co-owners.
    (2) Each royalty payment or adjustment shall be accompanied by a 
statement containing each of the following:
            (A) The name and Bureau of Land Management serial number of 
        the mining claim or claims from which ores, concentrates, 
        solutions or beneficiated products of locatable minerals 
        subject to the royalty required in this section were produced 
        and sold for the period covered by such payment or adjustment.
            (B) The estimated (or actual, if determined) quantity of 
        such ore, concentrates, solutions or beneficiated or fabricated 
        products produced and sold from such mining claim or claims for 
        such period.
            (C) The estimated (or actual, if determined) gross yield 
        from the production and sale of such ore, concentrates, 
        solutions or beneficiated products for such period.
            (D) The estimated (or actual, if determined) net proceeds 
        from the production and sale of such ores, concentrates, 
        solutions or beneficiated products for such period, including 
        an itemization of the applicable deductions described in 
        subsection (c)(1).
            (E) The estimated (or actual, if determined) royalty due to 
        the United States, or adjustment due to the United States or 
        such owner or co-owners, for such period.
    (3) In lieu of receiving a refund under subsection (h), the owner 
or co-owners may elect to apply any adjustment due to such owner or co-
owners as an offset against royalties due from such owner or co-owners 
to the United States under this Act, regardless of whether such 
royalties are due for production and sale from the same mining claim or 
claims.
    (g) Recordkeeping and Reporting Requirements.--(1) An owner, 
operator, or other person directly involved in the conduct of mineral 
activities, transportation, purchase, or sale of locatable minerals, 
concentrates, or products derived therefrom, subject to the royalty 
under this section, through the point of royalty computation, shall 
establish and maintain any records, make any reports, and provide any 
information that the Secretary may reasonably require for the purposes 
of implementing this section or determining compliance with regulations 
or orders under this section. Upon the request of the Secretary when 
conducting an audit or investigation pursuant to subsection (i), the 
appropriate records, reports, or information required by this 
subsection shall be made available for inspection and duplication by 
the Secretary.
    (2) Records required by the Secretary under this section shall be 
maintained for 3 years after the records are generated unless the 
Secretary notifies the record holder that he or she has initiated an 
audit or investigation specifically identifying and involving such 
records and that such records must be maintained for a longer period. 
When an audit or investigation is under way, such records shall be 
maintained until the earlier of the date that the Secretary releases 
the record holder of the obligation to maintain such records or the 
date that the limitations period applicable to such audit or 
investigation under subsection (i) expires.
    (h) Interest Assessments.--(1) If royalty payments under this 
section are not received by the Secretary on the date that such 
payments are due, or if such payments are less than the amount due, the 
Secretary shall charge interest on such unpaid amount. Interest under 
this subsection shall be computed at the rate published by the 
Department of the Treasury as the ``Treasury Current Value of Funds 
Rate.'' In the case of an underpayment or partial payment, interest 
shall be computed and charged only on the amount of the deficiency and 
not on the total amount, and only for the number of days such payment 
is late. No other late payment or underpayment charge or penalty shall 
be charged with respect to royalties under this section.
    (2) In any case in which royalty payments are made in excess of the 
amount due, or amounts are held by the Secretary pending the outcome of 
any appeal in which the Secretary does not prevail, the Secretary shall 
promptly refund such overpayments or pay such amounts to the person or 
persons entitled thereto, together with interest thereon for the number 
of days such overpayment or amounts were held by the Secretary, with 
the addition of interest charged against the United States computed at 
the rate published by the Department of the Treasury as the ``Treasury 
Current Value of Funds Rate.''
    (i) Audits, Payment Demands and Limitations.--(1) The Secretary may 
conduct, after notice, any audit reasonably necessary and appropriate 
to verify the payments required under this section.
    (2) The Secretary shall send or issue any billing or demand letter 
for royalty due on locatable minerals produced and sold from any mining 
claim subject to royalty required by this section not later than 3 
years after the date such royalty was due and must specifically 
identify the production involved, the royalty allegedly due and the 
basis for the claim. No action, proceeding or claim for royalty due on 
locatable minerals produced and sold, or relating to such production, 
may be brought by the United States, including but not limited to any 
claim for additional royalties or claim of the right to offset the 
amount of such additional royalties against amounts owed to any person 
by the United States, unless judicial suit or administrative 
proceedings are commenced to recover specific amounts claimed to be due 
prior to the expiration of 3 years from the date such royalty is 
alleged to have been due.
    (j) Transitional Rules.--Any mining claim for which a patent is 
issued pursuant to section 9502(b) shall not be subject to the 
obligation to pay the royalty pursuant to this section. Royalty 
payments for any claim processed under section 9502(b) shall be 
suspended pending final determination of the right to patent. For any 
such claim that is determined not to qualify for the issuance of a 
patent under section 9502(b), royalties shall be payable under this 
section on production after the date of enactment of this Act, plus 
interest computed at the rate published by the Department of the 
Treasury as the ``Treasury Current Value of Funds Rate'' on production 
after such date of enactment and before the date of such determination.
    (k) Disbursement of Revenues.--The receipts from royalties 
collected under this section shall be disbursed as follows:
            (1) Two-thirds of such receipts shall be paid into the 
        Treasury of the United States and deposited as miscellaneous 
        receipts.
            (2) One-third of such receipts shall be paid by the 
        Secretary of the Treasury to the State in which the mining 
        claim from which production occurred is located.
    (l) No Implied Covenants.--The owner of a mining claim subject to 
the provisions of this title shall have no obligation, express or 
implied, to explore for, develop, produce or market locatable minerals 
as a result of the obligation to pay a royalty hereunder, and the 
timing, nature, extent and manner of exploring, developing, mining and 
marketing such locatable minerals shall be in the sole discretion of 
the claim owner.

SEC. 9504. MINERAL MATERIALS.

    (a) Determinations.--Section 3 of the Act of July 23, 1955 (30 
U.S.C. 611), is amended as follows:
            (1) Insert ``(a)'' before the first sentence.
            (2) Add the following new subsection at the end thereof:
    ``(b)(1) Subject to valid existing rights, after the date of 
enactment of this subsection, notwithstanding the reference to common 
varieties in subsection (a) and to the exception to such term relating 
to a deposit of materials with some property giving it distinct and 
special value, all deposits of mineral materials referred to in such 
subsection, including the block pumice referred to in such subsection, 
shall be subject to disposal only under the terms and conditions of the 
Materials Act of 1947.
    ``(2) For purposes of paragraph (1), the term `valid existing 
rights' means that a mining claim located for any such mineral material 
had some property giving it the distinct and special value referred to 
in subsection (a), or as the case may be, met the definition of block 
pumice referred to in such subsection, was properly located and 
maintained under the general mining laws prior to the date of the 
enactment of this subsection, and was supported by a discovery of a 
valuable mineral deposit within the meaning of the general mining laws 
as in effect immediately prior to such date of enactment and that such 
claim continues to be valid under this Act.''.
    (b) Identified Deposits.--In order to assure that the Secretary has 
the authority to provide for the development of mineral materials 
which, in order to justify the investment necessary for the development 
of the appropriate mine, quarry or other workings and related 
facilities, may require longer and more secure tenure than is provided 
by sales contracts under the Act entitled ``An Act to provide for the 
disposal of materials on the public lands of the United States'', 
approved July 31, 1947 (30 U.S.C. 602), and in order to provide 
flexibility with regard to the manner of disposition of mineral 
materials section 2 of such Act is amended by adding at the end the 
following:
    ``(b) Identified Deposits.--(1) Lands known to contain valuable 
deposits of mineral materials subject to this Act and subsequent 
amendments and not covered by any contract, permit, or lease under this 
section shall also be subject to disposition by lease under this Act by 
the Secretary of the Interior through advertisement, competitive 
bidding, or such other methods as he may by general regulations adopt, 
and in such reasonably compact areas as he shall fix.
    ``(2) All leases will be conditioned upon--
            ``(A) the payment by the lessee of such royalty as may be 
        fixed in the lease, not less than two percent of the quantity 
        or gross value of the output of mineral materials, and
            ``(B) the payment in advance of a rental of 25 cents per 
        acre for the first calendar year or fraction thereof; 50 cents 
        per acre for the second, third, fourth, and fifth years, 
        respectively; and $1 per acre per annum thereafter during the 
        continuance of the lease, such rental for that year being 
        credited against royalties accruing for that year.
    ``(3)(A) Any lease issued under this subsection shall be for a term 
of 20 years and so long thereafter as the lessee complies with the 
terms and conditions of the lease and upon the further condition that 
at the end of each 20-year period succeeding the date of the lease such 
reasonable adjustment of the terms and conditions thereof may be made 
therein as may be prescribed by the Secretary of the Interior unless 
otherwise provided by law at the expiration of such periods.
    ``(B) Leases shall be conditioned upon a minimum annual production 
or the payment of a minimum royalty in lieu thereof, except when 
production is interrupted by strikes, the elements, or casualties not 
attributable to the lessee.
    ``(C) The Secretary of the Interior may permit suspension of 
operations under any such leases when marketing conditions are such 
that the leases cannot be operated except at a loss.
    ``(D) The Secretary upon application by the lessee prior to the 
expiration of any existing lease in good standing shall amend such 
lease to provide for the same tenure and to contain the same 
conditions, including adjustment at the end of each 20-year period 
succeeding the date of said lease, as provided for in this subsection.
    ``(c) Other Lands.--(1) The Secretary of the Interior is hereby 
authorized, under such rules and regulations as he may prescribe, to 
grant to any qualified applicant a prospecting permit which shall give 
the exclusive right to prospect for mineral materials in lands 
belonging to the United States which are not subject to subsection (b), 
and are not covered by a contract, permit, or lease under this Act, 
except that a prospecting permit shall not exceed a period of 2 years 
and the area to be included in such a permit shall not exceed 2,560 
acres of land in reasonably compact form.
    ``(2) The Secretary of the Interior shall reserve and may exercise 
the authority to cancel any prospecting permit upon failure by the 
permittee to exercise due diligence in the prosecution of the 
prospecting work in accordance with the terms and conditions stated in 
the permit, and shall insert in every such permit issued under the 
provisions of this Act appropriate provisions for its cancellation by 
him.
    ``(3) Upon showing to the satisfaction of the Secretary of the 
Interior that valuable deposits of one of the mineral materials subject 
to the Materials Act of 1947 have been discovered by the permittee 
within the area covered by his permit, and that such land is valuable 
therefor, the permittee shall be entitled to a lease for any or all of 
the land embraced in the prospecting permit, at a royalty of not less 
than two percent of the quantity or gross value of the output of the 
mineral materials at the point of shipment to market, such lease to be 
taken in compact form by legal subdivisions of the public land surveys, 
or if the land be not surveyed, by survey executed at the cost of the 
permittee in accordance with regulations prescribed by the Secretary of 
the Interior.''.
    (d) Mineral Materials Disposal Clarification.--Section 4 of the Act 
of July 23, 1955 (30 U.S.C. 612), as amended as follows:
            (1) In subsection (b) insert ``and mineral material'' after 
        ``vegetative''.
            (2) In subsection (c) insert ``and mineral material'' after 
        ``vegetative''.
    (e) Conforming Amendment.--Section 1 of the Act of July 31, 1947, 
entitled ``An Act to provide for the disposal of materials on the 
public lands of the United States'' (30 U.S.C. 601 and following) is 
amended by striking ``common varieties of'' in the first sentence.
    (f) Short Titles.--
            (1) Surface resources.--The Act of July 23, 1955, is 
        amended by inserting after section 7 the following new section:
    ``Sec. 8. This Act may be cited as the `Surface Resources Act of 
1955'.''.
            (2) Mineral materials.--The Act of July 31, 1947, entitled 
        ``An Act to provide for the disposal of materials on the public 
        lands of the United States'' (30 U.S.C. 601 and following) is 
        amended by inserting after section 4 the following new section:
    ``Sec. 5. This Act may be cited as the `Materials Act of 1947'.''.
    (g) Repeals.--(1) Subject to valid existing rights, the Act of 
August 4, 1892 (27 Stat. 348, 30 U.S.C. 161), commonly known as the 
Building Stone Act, is hereby repealed.
    (2) Subject to valid existing rights, the Act of January 31, 1901 
(30 U.S.C. 162), commonly known as the Saline Placer Act, is hereby 
repealed.
    (h) Authorization for Disposal of Mineral Materials by Contract.--
Section 2(a) of the Act entitled ``An Act to provide for the disposal 
of materials on the public lands of the United States'', approved July 
31, 1947 (30 U.S.C. 602(a)), is amended--
            (1) by striking the period at the end of paragraph (3) and 
        inserting ``or, if''; and
            (2) by adding after paragraph (3) the following:
            ``(4) the material is a mineral material.''.
    (i) Sodium.--Section 24 of the Mineral Leasing Act (30 U.S.C. 181 
et seq.) is amended by inserting after ``2 per centum'' in each place 
it appears the following: ``and not greater than five and one-half per 
centum''. Any rate under section 24 of the Mineral Leasing Act (30 
U.S.C. 181) in excess of five and one-half per centum shall not be 
allowed unless the following conditions are met:
            (1) the Secretary, in consultation with the Secretary of 
        Commerce and the United States Trade Representative, finds that 
        any increase in the royalty rate for sodium will not have an 
        adverse effect on the export of domestically produced soda ash;
            (2) the Secretary reports this finding of no ``adverse 
        effect'' to Congress and recommends an additional proposed 
        royalty rate increase; and
            (3) the Congress, within 360 days, approves the Secretary's 
        recommendation.
The Secretary shall, within 90 days, offer for competitive bid all 
tracts for which there are applications pending on sodium leases.

SEC. 9505. CLAIM MAINTENANCE REQUIREMENTS.

    (a) Maintenance Fees.--
            (1) Annual maintenance fee.--After the date of enactment of 
        this Act, the owner of each unpatented mining claim or site 
        located pursuant to the general mining laws, whether located 
        before or after the enactment of this Act, shall pay to the 
        Secretary in advance on or before September 1 of each year, 
        until a patent has been issued therefor, an annual maintenance 
        fee per mining claim or site.
            (2) Initial maintenance fee.--The owner of each unpatented 
        mining claim or site located after the date of enactment of 
        this Act pursuant to the general mining laws shall pay to the 
        Secretary, at the time the copy of the notice or certificate of 
        location is filed with the Bureau of Land Management pursuant 
        to section 314(b) of the Federal Land Policy and Management Act 
        of 1976 (43 U.S.C. 1744(b)), the location fee required under 
        subsection (i) of this section, in lieu of the annual 
        maintenance fee of $100 per mining claim or site for the 
        assessment year which includes the date of location of such 
        mining claim or site.
            (3) Exemption.--The owner of any mining claim or site who 
        certifies in writing to the Secretary on or before the first 
        day of any assessment year that access to such mining claim or 
        site was denied or impeded during the prior assessment year by 
        the action or inaction of any local, State, or Federal 
        governmental officer, agency, or court, or by any Indian tribal 
        authority, shall be exempt from the annual maintenance fee 
        requirements of paragraph (1) for the assessment year following 
        the filing of the certification.
            (4) Amount of annual maintenance fee.--For each assessment 
        year the annual maintenance fee payable under paragraph (1) for 
        a claim or site referred to in paragraph (1) shall be in the 
        amount specified in Table 1.
      

                                 TABLE 1                                
------------------------------------------------------------------------
                                                  Amount of Fee Per Site
                Assessment Year                          or Claim       
------------------------------------------------------------------------
1 through 3....................................       $100 per year     
4 through 5....................................       $150 per year     
6 through 10...................................       $200 per year     
11 through 15..................................       $300 per year     
16 and thereafter..............................       $500 per year     
------------------------------------------------------------------------

For purposes of applying Table 1 in the case of claims filed before the 
enactment of this Act, the portion of the assessment year in which this 
Act is enacted shall be treated as the first assessment year.
            (5) Effect of forfeiture.--No owner or co-owner of a mining 
        claim or site which has been forfeited because the maintenance 
        fee has not been paid and no person who is a related person of 
        any such owner or co-owner may relocate a new claim on any part 
        of lands located within the forfeited claim for a period of 18 
        months after the date of forfeiture.
            (6) Deposit of fees.--The full amount of all fees paid 
        under this subsection shall be deposited in the General Fund of 
        the Treasury.
    (b) Annual Labor.--(1) Amounts expended on activities that qualify 
as annual labor under the general mining laws may be credited on a 
dollar for dollar basis towards up to 75 percent of the annual 
maintenance fee payable under this section for the following assessment 
year.
    (2) Subject to the 75 percent limit set forth in paragraph (1), the 
excess of amounts expended for annual labor performed in any one year 
over such 75 percent limit may be applied to the maintenance fee due in 
subsequent years for a period of up to three years.
    (3) In order to receive credit under this subsection for annual 
labor work or excess annual labor, the description and value of the 
work must be included in the statement required in subsection (e) and 
the statement must be timely filed.
    (4) Annual labor performed on an individual mining claim or site 
within a group of contiguous claims may be credited towards the 
aggregate amount of maintenance fees due on all of the contiguous 
claims within that group.
    (c) Work Qualifying as Annual Labor.--(1) Only work which directly 
benefits or develops a mining claim or facilitates the extraction of 
ore qualifies as annual labor. Acceptable labor and improvements 
include any of the following:
            (A) Drilling or excavating, including ore extraction.
            (B) Mining costs directly associated with the production of 
        ore.
            (C) Prospecting work which benefits the location or a 
        contiguous location.
            (D) Development work toward an actual mine, such as shafts, 
        tunnels, crosscuts and drifts, settling ponds and dams.
            (E) Bringing in water for direct mining or milling 
        purposes.
            (F) Clearing of brush, timber, debris, or overburden where 
        necessary to facilitate the extraction or processing of 
        minerals.
            (G) Construction of trails, roads, or landing strips 
        providing access to claims.
            (H) Construction costs of worker housing, mills, and 
        equipment storage buildings where reasonably necessary for the 
        development of the location.
            (I) Reasonable value of the use of equipment for 
        prospecting, mining, or development purposes on the location.
            (J) Repairs of equipment used for prospecting, sampling, or 
        production of minerals provided that such equipment has been on 
        site during the assessment year.
            (K) Cost of moving workers, materials, and equipment among 
        contiguous locations.
            (L) Watchman services of a bona fide employed watchman on 
        the property where reasonably necessary to protect mining 
        equipment of substantial value.
            (M) Activities covered under section 1 of the Act of 
        September 2, 1958 (30 U.S.C. 28-1), as amended.
            (N) Reclamation conducted pursuant to State or Federal 
        surface management regulations.
            (O) Other activities which the Secretary may determine 
        qualify as annual labor.
    (2) The following activities do not qualify as annual labor:
            (A) Work involved in maintaining the location such as 
        brushing and marking boundaries or replacing corner posts and 
        location notices.
            (B) Transportation of workers to or from the location.
            (C) Prospecting or exploration work not conducted within 
        the location or a contiguous location.
    (d) Amendments of Public Law 85-876.--The Act of September 2, 1958 
(Public Law 85-876; 30 U.S.C. 28-1), is amended as follows:
            (1) Section 1 is amended by inserting ``mineral activities, 
        environmental baseline monitoring, and'' after ``without being 
        limited to'' and before ``geological, geochemical and 
        geophysical surveys'' and by striking ``Such'' at the beginning 
        of the last sentence and inserting ``Airborne''.
            (2) Section 2(d) is amended by inserting ``environmental 
        baseline monitoring or'' after ``experience to conduct'' and 
        before ``geological, geochemical or geophysical surveys''.
            (3) Section 2 is amended by adding at the end of the 
        following new subsection at the end thereof:
    ``(e) The term `environmental baseline monitoring' means activities 
for collecting, reviewing and analyzing information concerning soil, 
vegetation, wildlife, mineral, air, water, cultural, historical, 
archaeological or other resources related to planning for or complying 
with Federal and State environmental or permitting requirements 
applicable to potential or proposed mineral activities on the 
claim(s).''.
    (e) Maintenance Fee Statement.--Each payment under subsection (a) 
of this section shall be accompanied by a statement which reasonably 
identifies the mining claim or site for which the maintenance fee is 
being paid. The statement required under this subsection shall be in 
lieu of any annual filing requirements for mining claims or sites, 
under any other Federal law, but shall not supersede any such filing 
requirement under applicable State law.
    (f) Annual Labor Report.--When the value of annual labor is 
credited towards part or all of the maintenance fee, subject to the 75-
percent limit set forth in subsection (b)(1), the following shall 
apply:
            (1) The maintenance fee statement required in subsection 
        (e) must also state the dates of performance of the labor, 
        describe the character and total value of the improvements made 
        or the labor performed, the amount of labor used as a credit 
        toward the maintenance fee for the current year, and the value 
        of excess labor performed in previous years which is to be 
        applied to the maintenance fee for the current year.
            (2) Documentation which reasonably supports the activities 
        or improvements claimed must accompany the maintenance fee 
        statement. Such documentation may include, but is not limited 
        to, copies of maps showing sample locations, drill locations, 
        or survey data; environmental baseline data; reports on 
        geology, geochemistry, or geophysics by qualified experts; 
        drill results; or engineering reports by qualified engineers.
            (3) All supporting material filed pursuant to paragraph (2) 
        shall remain confidential in accordance with section 552 of 
        title 5 of the United States Code as long as the location is 
        maintained and for a period of one year after the location is 
        abandoned, after which all data filed shall be considered 
        public information.
    (g) Effect of Compliance as Against Subsequent Locators.--(1) 
Except as provided in paragraph (2), after the date of enactment of 
this Act, compliance with the requirements of this section shall, from 
the time the location notice or certificate is posted on the land under 
applicable State law, confer upon the owner of any unpatented mining 
claim or site, whether located before or after the date of enactment of 
this Act, an exclusive right of possession, as against subsequent 
locators, of the land included in such mining claim or site under the 
general mining laws. If more than one mining claim or site owned or 
controlled by the same claim or site owner covers substantially the 
same land, by reason of the location of one or more mining claims or 
sites on such land, the amendment or relocation of any such mining 
claim or site, or otherwise, such exclusive right of possession shall 
extend to all such mining claims or sites, effective from the time the 
location notice or certificate for the initial mining claim or site was 
posted on such land under applicable State law. The order of location, 
amendment, or relocation of any such mining claims or sites on such 
land shall not affect the validity of any such mining claim or site. 
Such owner of the mining claim or site shall not be required to be in 
actual, physical occupation of such land and shall not be required to 
exclude rival locators from such land. Such exclusive right of 
possession shall be subject to applicable Federal law, including the 
Multiple Mineral Development Act of 1954 (30 U.S.C. 521-31), the 
Materials Act of 1947 (30 U.S.C. 601-604) and the Surface Resources Act 
of 1955 (30 U.S.C. 611-15) to the extent applicable, and shall neither 
enlarge nor diminish any rights of such owner of the mining claim or 
site as against the United States in such land. This paragraph shall 
supersede the common law doctrine of pedis possessio.
    (2) Conflicts over the right of exclusive possession of land 
included in any mining claim or site shall be determined in proceedings 
between owners of mining claims or sites under the provisions of 
section 910 of the Revised Statutes (30 U.S.C. 53) and other applicable 
law, including but not limited to each of the following:
            (A) Any conflict based upon circumstances existing as of 
        the date of enactment of this Act between mining claims or 
        sites located before the date of enactment of this Act, shall 
        be resolved under the law in effect on the day prior to the 
        date of enactment of this Act, including the common law 
        doctrine of pedis possessio.
            (B) Any conflict arising on or after the date of enactment 
        of this Act between mining claims or sites located before, on 
        or after the date of enactment over whether either owner of the 
        mining claim or site has complied with the requirements of this 
        section, shall be resolved under this Act.
    (h) Failure of Co-Owner To Contribute.--Upon the failure of any one 
or more of several co-owners of any mining claim or site to contribute 
such co-owner or owners' portion of any location or maintenance fee 
payable under this section, any co-owner who has paid such fee may, 
after the payment due date, serve the delinquent co-owner or owners 
with notice of such failure in writing or, if such delinquent co-owner 
or owners cannot be located after reasonable efforts, by publication in 
a general circulation newspaper published in a location nearest the 
mining claim or site at least once a week for at least 90 days. If at 
the expiration of 90 days after such notice in writing or by 
publication, any delinquent co-owner fails or refuses to contribute the 
owed portion, such co-owner or owners' interest shall become the 
property of the owner or co-owners who have paid the required fee.
    (i) Location Fee.--The owner of each unpatented mining claim or 
site located on or after the date of enactment of this Act pursuant to 
the general mining laws shall pay to the Secretary, at the time the 
notice or certificate of location is filed with the Bureau of Land 
Management pursuant to subsection 314(b) of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1744(b)), a location fee of $25.00 
per mining claim or site. The full amount of all fees paid under this 
subsection shall be deposited in the General Fund of the Treasury. 
Effective on the date of the enactment of this Act, section 10102 of 
the Omnibus Budget Reconciliation Act of 1993 (107 Stat. 406; 30 U.S.C. 
28g) is repealed.
    (j) Credit Against Maintenance Fee.--(1) Except as provided in 
paragraph (2), the annual maintenance fee payable for any unpatented 
mining claim or site for any assessment year shall be reduced by the 
amount of royalty paid by such claimholder for such mining claim or 
site, or for any contiguous mining claim or site, during the prior 
assessment year.
    (2) Royalties paid during any assessment year prior to the first 
full assessment year commencing after the enactment of this Act shall 
not reduce the amount of any maintenance fee.
    (k) Oil Shale Claims Subject to Claim Maintenance Fee Under Energy 
Policy Act of 1992.--This section shall not apply to any oil shale 
claims for which a fee is required to be paid under paragraph 
2511(e)(2) of the Energy Policy Act of 1992 (30 U.S.C. 242(e)(2)).
    (l) Failure To Comply.--The failure of the owner of the mining 
claim or site to pay any claim maintenance fee or location fee for a 
mining claim or site on or before the date such payment is due under 
this section shall constitute forfeiture of the mining claim or site 
and such mining claim or site shall be null and void, effective as of 
the day after the date such payment is due, except that if such 
maintenance fee or location fee is paid or tendered on or before the 
30th day after such payment was due under subsection of this section, 
such mining claim or site shall not be forfeited or null or void, and 
such maintenance fee or location fee shall be deemed timely paid.
    (m) Amendment of FLPMA Filing Requirements.--(1) Section 314(a) of 
the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1744(a)) 
is hereby repealed.
    (2) Section 314(c) of the Federal Land Policy and Management Act of 
1976 (43 U.S.C. 1744(c)) is amended to read as follows:
    ``(c) Failure To File as Constituting Forfeiture; Defective or 
Untimely Filing.--The failure to timely file the copy of the notice or 
certificate of location as required by subsection (b) shall constitute 
forfeiture of the mining claim and such claim shall be null and void by 
operation of law; except that it shall not be considered a failure to 
file if the notice or certificate of location is defective or not 
timely filed for record under other State or Federal laws permitting or 
requiring the filing or recording thereof, or if the copy of the notice 
or certificate is filed by or on behalf of some but not all of the 
owners of the claim.''.
    (n) Related Persons.--As used in this section, the term ``related 
persons'' includes--
            (1) the spouse and dependent children (as defined in 
        section 152 of the Internal Revenue Code of 1986), of the owner 
        of the mining claim or site; and
            (2) a person controlled by, controlling, or under common 
        control with the owner of the mining claim or site.
    (o) Repeal.--Section 10101 of the Omnibus Budget Reconciliation Act 
of 1993 (107 Stat. 406; 30 U.S.C. 28g) is repealed, effective with 
respect to assessment year commencing after the enactment of this Act.
    (p) Periodic Review of Fee Structure.--Beginning in the year 2005 
and at 10 year intervals thereafter, the Secretary shall review the 
costs incurred by the Secretary to administer mining claims for 
locatable minerals under the general mining laws and the structure and 
level of maintenance and location fees received by the Secretary with 
respect to such claims. The Secretary shall determine if the revenues 
from such fees is adequate to cover such costs, taking inflation and 
other appropriate factors into account. The Secretary shall submit the 
results of each such review to the Congress, together with such 
legislative recommendations as the Secretary deems appropriate.

                 PART 2--FEDERAL OIL AND GAS ROYALTIES

SEC. 9511. SHORT TITLE.

    This part may be cited as the ``Federal Oil and Gas Royalty 
Simplification and Fairness Act of 1995''.

SEC. 9512. DEFINITIONS.

    (a) In General.--Section 3 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1701 et seq.) is amended--
            (1) by amending paragraph (7) to read as follows:
            ``(7) `lessee' means any person to whom the United States, 
        an Indian tribe, or an Indian allottee issues a lease or any 
        person to whom operating rights have been assigned;''; and
            (2) by striking ``and'' at the end of paragraph (15), by 
        striking the period at the end of paragraph (16) and inserting 
        a semicolon, and by adding at the end the following:
            ``(17) `adjustment' means an amendment to a previously 
        filed report on an obligation, and any additional payment or 
        credit, if any, applicable thereto, to rectify an underpayment 
        or overpayment on a lease;
            ``(18) `administrative proceeding' means any agency process 
        in which a demand, decision or order issued by the Secretary is 
        subject to appeal or has been appealed;
            ``(19) `assessment' means any fee or charge levied or 
        imposed by the Secretary or the United States other than--
                    ``(A) the principal amount of any royalty, minimum 
                royalty, rental, bonus, net profit share or proceed of 
                sale;
                    ``(B) any interest; or
                    ``(C) any civil or criminal penalty;
            ``(20) `commence' means--
                    ``(A) with respect to a judicial proceeding, the 
                service of a complaint, petition, counterclaim, 
                crossclaim, or other pleading seeking affirmative 
                relief or seeking credit or recoupment; or
                    ``(B) with respect to a demand, the receipt by the 
                Secretary or a lessee of the demand;
            ``(21) `credit' means the application of an overpayment (in 
        whole or in part) against an obligation which has become due to 
        discharge, cancel or reduce the obligation;
            ``(22) `demand' means--
                    ``(A) an order to pay issued by the Secretary; or
                    ``(B) a separate written request by a lessee which 
                asserts an obligation due the lessee,
        but does not mean any royalty or production report, or any 
        information contained therein, required by the Secretary;
            ``(23) `obligation' means--
                    ``(A) any duty of the Secretary or the United 
                States--
                            ``(i) to take oil or gas royalty in kind; 
                        or
                            ``(ii) to pay, refund, offset, or credit 
                        monies including but not limited to--
                                    ``(I) the principal amount of any 
                                royalty, minimum royalty, rental, 
                                bonus, net profit share or proceed of 
                                sale; or
                                    ``(II) any interest;
                    ``(B) any duty of a lessee--
                            ``(i) to deliver oil or gas royalty in 
                        kind; or
                            ``(ii) to pay, offset or credit monies 
                        including but not limited to--
                                    ``(I) the principal amount of any 
                                royalty, minimum royalty, rental, 
                                bonus, net profit share or proceed of 
                                sale;
                                    ``(II) any interest;
                                    ``(III) any penalty; or
                                    ``(IV) any assessment,
        which arises from or relates to any lease administered by the 
        Secretary for, or any mineral leasing law related to, the 
        exploration, production and development of oil or gas on 
        Federal lands or the Outer Continental Shelf;
            ``(24) `order to pay' means a written order issued by the 
        Secretary or the United States which--
                    ``(A) asserts a definite and quantified obligation; 
                and
                    ``(B) specifically identifies the obligation by 
                lease, production month and amount of such obligation 
                ordered to be paid, as well as the reason or reasons 
                such obligation is claimed to be due,
        but such term does not include any other communication or 
        action by or on behalf of the Secretary or the United States;
            ``(25) `overpayment' means any payment by a lessee in 
        excess of an amount legally required to be paid on an 
        obligation and includes the portion of any estimated payment 
        for a production month that is in excess of the royalties due 
        for that month;
            ``(26) `payment' means satisfaction, in whole or in part, 
        of an obligation;
            ``(27) `penalty' means a statutorily authorized civil fine 
        levied or imposed by the Secretary or the United States for a 
        violation of this Act, any mineral leasing law, or a term or 
        provision of a lease administered by the Secretary;
            ``(28) `refund' means the return of an overpayment by the 
        Secretary or the United States by the drawing of funds from the 
        United States Treasury;
            ``(29) `State concerned' means, with respect to a lease, a 
        State which receives a portion of royalties under this Act from 
        such lease; and
            ``(30) `underpayment' means any payment or nonpayment by a 
        lessee that is less than the amount legally required to be paid 
        on an obligation.''.
    (b) Lessee Liability.--Section 102(a) of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1712(a)) is amended to read 
as follows:
    ``(a) A lessee who is required to make any royalty or other payment 
under a lease or under the mineral leasing laws, shall make such 
payments in the time and manner as may be specified by the Secretary. A 
lessee may designate a person to act on the lessee's behalf and shall 
notify the Secretary in writing of such designation. The person to whom 
the United States issues a lease or the person by whom operating rights 
are currently owned, but not both, shall remain primarily liable for 
its obligations.''.

SEC. 9513. LIMITATION PERIODS.

    (a) In General.--The Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) is amended by adding after section 114 
the following new section:

``SEC. 115. LIMITATION PERIODS AND AGENCY ACTIONS.

    ``(a) In General.--A judicial proceeding or demand which arises 
from, or relates to an obligation, shall be commenced within six years 
from the date on which the obligation becomes due and if not so 
commenced shall be barred, except as otherwise provided by this 
section.
    ``(b) Obligation Becomes Due.--
            ``(1) In general.--For purposes of this Act, an obligation 
        becomes due when the right to enforce the obligation is fixed.
            ``(2) Royalty obligations.--The right to enforce the 
        royalty obligation for a production month for a lease is fixed 
        for purposes of this Act on the last day of the calendar month 
        following the month in which oil or gas is produced.
            ``(3) Royalty payment.--The right to collect a royalty 
        payment for an obligation for a production month for a lease is 
        fixed for purposes of this Act on the last day of the second 
        calendar month following the month in which gas is produced, to 
        be phased in by the Secretary in a manner which does not have a 
        negative impact on the Federal budget.
    ``(c) Tolling of Limitation Period.--The running of the limitation 
period under subsection (a) shall not be suspended, tolled, extended, 
or enlarged for any obligation for any reason by any action, including 
an action by the Secretary or the United States, other than the 
following:
            ``(1) Tolling agreement.--A written agreement executed 
        during the limitation period between the Secretary and a lessee 
        which tolls the limitation period for the amount of time during 
        which the agreement is in effect.
            ``(2) Subpoena.--The issuance of a subpoena in accordance 
        with the provisions of section 107(c) shall toll the limitation 
        period with respect to the obligation which is the subject of a 
        subpoena only for the period beginning on the date the lessee 
        receives the subpoena and ending on the date on which (A) the 
        lessee has produced such subpoenaed records for the subject 
        obligation, (B) the Secretary receives written notice that the 
        subpoenaed records for the subject obligation are not in 
        existence or are not in the lessee's possession or control, or 
        (C) a court has determined in a final decision that such 
        records are not required to be produced, whichever occurs 
        first.
            ``(3) Fraud or concealment.--Any fraud or concealment by a 
        lessee in an attempt to defeat or evade an obligation in which 
        case the limitation period shall be tolled for the period of 
        such fraud or such concealment.
            ``(4) Tolling request.--A written tolling request from a 
        lessee based upon the lessee's representation that the lessee's 
        entitlement to an overpayment has not been finally determined. 
        The limitation period shall be tolled pursuant to this 
        paragraph from the date the Secretary receives the tolling 
        request until the earlier of the end of the requested period or 
        12 months after the date the Secretary receives the tolling 
        request, but is subject to successive 12-month renewals by the 
        lessee made prior to the expiration of the then applicable 12-
        month period. The tolling request shall be sufficient if it 
        identifies--
                    ``(A) the person who made the potential 
                overpayment;
                    ``(B) the leases and production months involved in 
                the potential overpayment; and
                    ``(C) the reasons the lessee believes that it may 
                later be entitled to a refund of the overpayment.
            ``(5) Order to perform a restructured accounting.--The 
        issuance of a notice under section 107(d)(4) that the lessee 
        has not adequately performed a restructured accounting shall 
        toll the limitation period with respect to the obligation which 
        is the subject of the notice only for the period beginning on 
        the date the lessee receives the notice and ending on the date 
        on which (A) the Secretary receives written notice the 
        accounting or other requirement has been performed, or (B) a 
        court has determined in a final decision that the lessee is not 
        required to perform the accounting, whichever occurs first.
    ``(d) Termination of Limitations Period.--The limitations period 
shall be terminated in the event--
            ``(1) the Secretary has notified the lessee in writing that 
        a time period is closed to further audit; or
            ``(2) the Secretary and a lessee have so agreed in writing.
    ``(e) Final Agency Action.--
            ``(1) 3-year period.--The Secretary shall issue a final 
        decision in any administrative proceeding, including any 
        administrative proceedings pending on the date of enactment of 
        the Federal Oil and Gas Royalty Simplification and Fairness Act 
        of 1995, within three years from the date such proceeding was 
        initiated or three years from the date of such enactment, 
        whichever is later. The three-year period may be extended by 
        any period of time agreed upon in writing by the Secretary and 
        the lessee.
            ``(2) Effect of failure to issue decision.--
                    ``(A) In general.--If no such decision has been 
                issued by the Secretary within the three-year period 
                referred to in paragraph (1)--
                            ``(i) the Secretary shall be deemed to have 
                        issued and granted a decision in favor of the 
lessee or lessees as to any nonmonetary obligation and any monetary 
obligation the principal amount of which is less than $2,500; and
                            ``(ii) the Secretary shall be deemed to 
                        have issued a final decision in favor of the 
                        Secretary, which decision shall be deemed to 
                        affirm those issues for which the agency 
                        rendered a decision prior to the end of such 
                        period, as to any monetary obligation the 
                        principal amount of which is $2,500 or more, 
                        and the lessee shall have a right to a de novo 
                        judicial review of such deemed final decision.
                    ``(B) No precedential effect on other 
                proceedings.--Deemed decisions under subparagraph (A) 
                shall have no precedential effect in any judicial or 
                administrative proceeding or for any other purpose.
    ``(f) Administrative Settlement.--During the pendency of any 
administrative proceeding, the parties shall hold at least one 
settlement consultation for the purpose of discussing disputed matters 
between the parties. For purposes of settlement, the Secretary may take 
such action as is appropriate to compromise and settle a disputed 
obligation, including interest and allowing offsetting of obligations 
among leases. The Secretary and the State concerned shall seek to 
resolve disputes with a lessee in as expeditious a manner as possible, 
through settlement negotiations and other alternative dispute 
resolution processes methods. If any dispute involving an obligation 
due is not resolved by the end of the six-year period beginning on the 
date the obligation became due, the amount of interest otherwise 
payable with respect to the obligation shall accrue after such six-year 
period at the rate--
            ``(1) for purposes of section 111(h), reduced each year 
        thereafter by two additional percentage points from the rate in 
        effect under this subsection for the previous year (but not 
        less than zero); and
            ``(2) for purposes of section 111(a), reduced each year 
        thereafter by one additional percentage point from the rate in 
        effect under this subsection for the previous year (but not 
        less than zero).
    ``(g) Limitation on Certain Actions.--When an action on or 
enforcement of an obligation under the mineral leasing laws is barred 
under this section--
            ``(1) no other or further action regarding that obligation, 
        including (but not limited to) the issuance of any order, 
        request, demand or other communication seeking any document, 
        accounting, determination, calculation, recalculation, payment, 
        principal, interest, assessment, or penalty or the initiation, 
        pursuit or completion of an audit with respect to that 
        obligation may be taken; and
            ``(2) no other equitable or legal remedy, whether under 
        statute or common law, with respect to an action on or an 
        enforcement of said obligation may be pursued.
    ``(h) Judicial Review.--In the event a demand subject to this 
section is timely commenced, a judicial proceeding challenging the 
final agency action with respect to such demand shall be deemed timely 
so long as such judicial proceeding is commenced within 180 days from 
receipt of notice by the lessee of the final agency action.
    ``(i) Implementation of Final Decision.--In the event a judicial 
proceeding or demand subject to this section is timely commenced and 
thereafter the limitation period in this section lapses during the 
pendency of such proceeding, any party to such proceeding shall not be 
barred from taking such action as is required or necessary to implement 
a final unappealable judicial or administrative decision, including any 
action required or necessary to implement such decision by the recovery 
or recoupment of an underpayment or overpayment by means of refund or 
credit.
    ``(j) Stay of Payment Obligation Pending Review.--Any party ordered 
by the Secretary or the United States to pay any obligation (other than 
an assessment) shall be entitled to a stay of such payment without bond 
or other surety instrument pending an administrative or judicial 
proceeding if the party periodically demonstrates to the satisfaction 
of the Secretary that such party is financially solvent or otherwise 
able to pay the obligation. In the event the party is not able to so 
demonstrate, the Secretary may require a bond or other surety 
instrument satisfactory to cover the obligation. Any party ordered by 
the Secretary to pay an assessment shall be entitled to a stay without 
bond or other surety instrument.
    ``(k) Inapplicability of the Other Statutes of Limitation.--The 
limitations set forth in sections 2401, 2415, 2416, and 2462 of title 
28, United States Code, section 42 of the Mineral Leasing Act (30 
U.S.C. 226-2) and section 3716 of title 31, United States Code, shall 
not apply to any obligation to which this Act applies.''.
    (b) Subpoena.--Section 107 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1717) is amended by adding at the end 
the following:
    ``(c) Rules Regarding Issuance of Subpoena Relating to Reporting 
and Payment of an Obligation Due.--
            ``(1) In general.--A subpoena which requires a lessee to 
        produce records necessary to determine the proper reporting and 
        payment of an obligation due the Secretary may be issued under 
        this section only by an Assistant Secretary of the Interior and 
        an acting Assistant Secretary of the Interior who is a schedule 
        C employee (as defined by section 213.3301 of title 5, Code of 
        Federal Regulations) and may not be delegated.
            ``(2) Prior written request required.--A subpoena described 
        in paragraph (1) may only be issued against a lessee during the 
        limitation period provided in section 115 and only after the 
        Secretary has in writing requested the records from the lessee 
        related to the obligation which is the subject of the subpoena 
        and has determined that--
                    ``(A) the lessee has failed to respond within a 
                reasonable period of time to the Secretary's written 
                request for such records necessary for an audit, 
                investigation or other inquiry made in accordance with 
                the Secretary's responsibilities under this Act;
                    ``(B) the lessee has in writing denied the 
                Secretary's written request to produce such records in 
                the lessee's possession or control necessary for an 
                audit, investigation or other inquiry made in 
                accordance with the Secretary's responsibilities under 
                this Act; or
                    ``(C) the lessee has unreasonably delayed in 
                producing records necessary for an audit, investigation 
                or other inquiry made in accordance with the 
                Secretary's responsibilities under this Act after the 
                Secretary's written request.
            ``(3) Reasonable period for compliance with written 
        request.--In seeking records, the Secretary shall afford the 
        lessee a reasonable period of time after a written request by 
        the Secretary in which to provide such records prior to the 
        issuance of any subpoena.''.
    (c) Restructured Accounting.--Section 107 of the Federal Oil and 
Gas Royalty Management Act of 1982 (30 U.S.C. 1717), as amended by 
subsection (b) of this section, is amended by adding at the end the 
following:
    ``(d) Restructured Accounting.--
            ``(1) In general.--The Secretary shall issue an order to 
        perform a restructured accounting when the Secretary determines 
        during an in-depth audit of a lessee that the lessee should 
        recalculate royalty due on an obligation based upon the 
        Secretary's finding that the lessee has made identified 
        underpayments or overpayments which are demonstrated by the 
        Secretary to be based upon repeated, systemic reporting errors 
        for a significant number of leases or a single lease for a 
        significant number of reporting months with the same type of 
        error which constitutes a pattern of violations and which are 
        likely to result in either significant underpayments or 
        overpayments.
            ``(2) Delegation.--The power of the Secretary to issue an 
        order to perform a restructured accounting may not be delegated 
        below the most senior career professional position having 
        responsibility for the royalty management program, which 
        position is currently designated as the `Associate Director for 
        Royalty Management'. An order to perform a restructured 
        accounting shall--
                    ``(A) be issued within a reasonable period of time 
                from when the audit identifies the systemic, reporting 
                errors;
                    ``(B) specify the reasons and factual bases for 
                such order; and
                    ``(C) be specifically identified as an `order to 
                perform a restructured accounting'.
            ``(3) Order to perform.--An order to perform a restructured 
        accounting shall not include any other communication or action 
        by or on behalf of the Secretary or the United States.
            ``(4) Notice.--If a lessee fails to adequately perform a 
        restructured accounting pursuant to this subsection, a notice 
        shall be issued to the lessee that the restructured accounting 
        has not been adequately performed. Such notice may be issued 
        under this section only by an Assistant Secretary of the 
        Interior or an acting Assistant Secretary of the Interior who 
        is a schedule C employee (as defined by section 213.3301 of 
        title 5, Code of Federal Regulations) and may not be 
        delegated.''.
    (d) State Suits.--Section 204 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1751) is amended by adding at the end 
the following:
    ``(d) With respect to an obligation, a State bringing an action 
under this section shall enjoy no greater rights than the Secretary 
enjoys under this Act.''.
    (e) Clerical Amendment.--The table of contents in section 1 of such 
Act (30 U.S.C. 1701) is amended by adding after the item relating to 
section 114 the following new item:

``Sec. 115. Limitation periods and agency actions.''.

SEC. 9514. ADJUSTMENT AND REFUNDS.

    (a) In General.--The Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) is amended by adding after section 111 
the following new section:

``SEC. 111A. ADJUSTMENTS AND REFUNDS.

    ``(a) Adjustments.--
            ``(1) If, during the adjustment period, a lessee determines 
        that an adjustment or refund request is necessary to correct an 
        underpayment or overpayment of an obligation, the lessee shall 
        make such adjustment or request a refund within a reasonable 
        period of time and only during the adjustment period. The 
        filing of a royalty report which reflects the underpayment or 
        overpayment of an obligation shall constitute prior written 
        notice to the Secretary of an adjustment.
            ``(2)(A) For any adjustment, the lessee shall calculate and 
        report the interest due attributable to such adjustment at the 
        same time the lessee adjusts the principal amount of the 
        subject obligation, except as provided by subparagraph (B).
            ``(B) In the case of a lessee on whom the Secretary 
        determines that subparagraph (A) would impose a hardship, the 
        Secretary shall calculate the interest due and notify the 
        lessee within a reasonable time of the amount of interest due, 
        unless such lessee elects to calculate and report interest in 
        accordance with subparagraph (A).
            ``(3) An adjustment or a request for a refund for an 
        obligation may be made after the adjustment period only upon 
        written notice to and approval by the Secretary during an audit 
        of the period which includes the production month for which the 
        adjustment is being made. If an overpayment is identified 
        during an audit, then the Secretary shall allow a credit or 
        refund in the amount of the overpayment.
            ``(4) For purposes of this section, the adjustment period 
        for any obligation shall be the five-year period following the 
        date on which an obligation became due. The adjustment period 
        shall be suspended, tolled, extended, enlarged, or terminated 
        by the same actions as the limitation period in section 115.
    ``(b) Refunds.--
            ``(1) In general.--A request for refund is sufficient if 
        it--
                    ``(A) is made in writing to the Secretary and, for 
                purposes of section 115, is specifically identified as 
                a demand;
                    ``(B) identifies the person entitled to such 
                refund;
                    ``(C) provides the Secretary information that 
                reasonably enables the Secretary to identify the 
                overpayment for which such refund is sought; and
                    ``(D) provides the reasons why the payment was an 
                overpayment.
            ``(2) Payment by secretary of the treasury.--The Secretary 
        shall certify the amount of the refund to be paid under 
        paragraph (1) to the Secretary of the Treasury who shall make 
        such refund. Such refund shall be paid from amounts received as 
        current receipts from sales, bonuses, royalties (including 
        interest charges collected under this section) and rentals of 
        the public lands and the Outer Continental Shelf under the 
        provisions of the Mineral Leasing Act and the Outer Continental 
        Shelf Lands Act, which are not payable to a State or the 
        Reclamation Fund. The portion of any such refund attributable 
        to any amounts previously disbursed to a State, the Reclamation 
        Fund, or any recipient prescribed by law shall be deducted from 
        the next disbursements to that recipient made under the 
        applicable law. Such amounts deducted from subsequent 
        disbursements shall be credited to miscellaneous receipts in 
        the Treasury.
            ``(3) Payment period.--A refund under this subsection shall 
        be paid or denied (with an explanation of the reasons for the 
        denial) within 120 days of the date on which the request for 
        refund is received by the Secretary. Such refund shall be 
        subject to later audit by the Secretary and subject to the 
        provisions of this Act.
            ``(4) Prohibition against reduction of refunds or 
        credits.--In no event shall the Secretary directly or 
        indirectly claim any amount or amounts against, or reduce any 
        refund or credit (or interest accrued thereon) by the amount of 
        any obligation the enforcement of which is barred by section 
        115.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act (30 U.S.C. 1701) is amended by adding after the item relating to 
section 111 the following new item:

``Sec. 111A. Adjustments and refunds.''.

SEC. 9515. REQUIRED RECORDKEEPING.

    Section 103 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1713(b)) is amended by adding at the end the following:
    ``(c) Records required by the Secretary for the purpose of 
determining compliance with any applicable mineral leasing law, lease 
provision, regulation or order with respect to oil and gas leases from 
Federal lands or the Outer Continental Shelf shall be maintained for 
the same period of time during which a judicial proceeding or demand 
may be commenced under section 115(a). If a judicial proceeding or 
demand is timely commenced, the record holder shall maintain such 
records until the final nonappealable decision in such judicial 
proceeding is made, or with respect to that demand is rendered, unless 
the Secretary authorizes in writing an earlier release of the 
requirement to maintain such records. Notwithstanding anything herein 
to the contrary, under no circumstance shall a record holder be 
required to maintain or produce any record relating to an obligation 
for any time period which is barred by the applicable limitation in 
section 115.''.

SEC. 9516. ROYALTY INTEREST, PENALTIES, AND PAYMENTS.

    (a) Period.--Section 111(f) of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1721(f)) is amended to read as 
follows:
    ``(f) Upon a determination that it will further the effective and 
efficient performance of his duties and responsibilities, the Secretary 
may waive or forego such interest in whole or in part. Interest shall 
be charged under this section only for the number of days a payment is 
late.''.
    (b) Lessee Interest.--Section 111 of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1721) is amended by adding 
after subsection (g) the following:
    ``(h) Interest shall be allowed and the Secretary shall pay or 
credit such interest on any overpayment, with such interest to accrue 
from the date such overpayment was made, at the rate obtained by 
applying the provisions of subparagraphs (A) and (B) of section 
6621(a)(1) of the Internal Revenue Code of 1986. Interest which has 
accrued on any overpayment may be applied to reduce an underpayment. 
This subsection applies to overpayments made later than six months 
after the date of enactment of this subsection or September 1, 1996, 
whichever is later. Such interest shall be paid from amounts received 
as current receipts from sales, bonuses, royalties (including interest 
charges collected under this section) and rentals of the public lands 
and the Outer Continental Shelf under the provisions of the Mineral 
Leasing Act, and the Outer Continental Shelf Lands Act, which are not 
payable to a State or the Reclamation Fund. The portion of any such 
interest payment attributable to any amounts previously disbursed to a 
State, the Reclamation Fund, or any other recipient designated by law 
shall be deducted from the next disbursements to that recipient made 
under the applicable law. Such amounts deducted from subsequent 
disbursements shall be credited to miscellaneous receipts in the 
Treasury.''.
    (c) Limitation on Interest.--Section 111 of such Act, as amended by 
subsection (b) of this Act, is further amended by adding at the end the 
following:
    ``(i) Upon a determination by the Secretary that an excessive 
overpayment (based upon all obligations of a lessee for a given 
reporting month) was made for the sole purpose of receiving interest, 
interest shall not be paid on the excessive amount of such overpayment. 
For purposes of this Act, an `excessive overpayment' shall be the 
amount that any overpayment a lessee pays for a given reporting month 
(excluding payments for demands for obligations as a result of judicial 
or administrative proceedings for settlement agreements and for other 
similar payments) for the aggregate of all of its Federal leases 
exceeds 25 percent of the total royalties paid that month for those 
leases.''.
    (d) Estimated Payment.--Section 111 of such Act, as amended by 
subsections (b) and (c) of this Act, is further amended by adding at 
the end the following:
    ``(j) A lessee may make a payment for the approximate amount of 
royalties (hereinafter in this subsection `estimated payment') that 
would otherwise be due to the Secretary for such lease to avoid 
underpayment or nonpayment interest charges. When an estimated payment 
is made, actual royalties become due at the end of the month following 
the period covered by the estimated payment. If the lessee makes a 
payment for such actual royalties, the lessee may apply the estimated 
payment to future royalties. Any estimated payment may be adjusted, 
recouped, or reinstated at any time by the lessee.''.
    (e) Volume Allocation of Oil and Gas Production.--Section 111 of 
such Act (30 U.S.C. 1721), as amended by subsections (b) through (d) of 
this Act, is amended by adding at the end the following:
    ``(k)(1) Except as otherwise provided by this subsection--
            ``(A) a lessee of a lease in a unit or communitization 
        agreement which contains only Federal leases with the same 
        royalty rate and funds distribution must report and pay 
        royalties on oil and gas production for each production month 
        based on the actual volume of production sold by or on behalf 
        of that lessee;
            ``(B) a lessee of a lease in any other unit or 
        communitization agreement must report and pay royalties on oil 
        and gas production for each production month based on the 
        volume of oil and gas produced from such agreement and 
        allocated to the lease in accordance with the terms of the 
        agreement; and
            ``(C) a lessee of a lease that is not contained in a unit 
        or communitization agreement must report and pay royalties on 
        oil and gas production for each production month based on the 
        actual volume of production sold by or on behalf of that 
        lessee.
    ``(2) This subsection applies only to requirements for reporting 
and paying royalties. Nothing in this subsection is intended to alter a 
lessee's liability for royalties on oil or gas production based on the 
share of production allocated to the lease in accordance with the terms 
of the lease, a unit or communitization agreement, or any other 
agreement.
    ``(3) For any unit or communitization agreement, if all lessees 
contractually agree to an alternative method of royalty reporting and 
payment, the lessees may submit such alternative method to the 
Secretary for approval and make payments in accordance with such 
approved alternative method so long as such alternative method does not 
reduce the amount of the royalty obligation.
    ``(4) The Secretary shall grant an exception from the reporting and 
payment requirements for marginal properties by allowing for any 
calendar year or portion thereof royalties to be paid each month based 
on the volume of production sold. Interest shall not accrue on the 
difference for the entire calendar year or portion thereof between the 
amount of oil and gas actually sold and the share of production 
allocated to the lease until the beginning of the month following 
calendar year or portion thereof. Any additional royalties due or 
overpaid royalties and associated interest shall be paid, refunded, or 
credited within six months after the end of each calendar year in which 
royalties are paid based on volumes of production sold. For the purpose 
of this subsection, the term `marginal property' means a lease that 
produces on average the combined equivalent of less than 15 barrels of 
oil per day or 90 thousand cubic feet of gas per day, or a combination 
thereof, determined by dividing the average daily production of 
domestic crude oil and domestic natural gas from producing wells on 
such lease by the number of such wells, unless the Secretary, together 
with the State concerned, determines that a different production is 
more appropriate.
    ``(5) Not later than two years after the date of the enactment of 
this subsection, the Secretary shall issue any appropriate demand for 
all outstanding royalty payment disputes regarding who is required to 
report and pay royalties on production from units and communitization 
agreements outstanding on the date of the enactment of this subsection, 
and collect royalty amounts owed on such production.''.
    (f) Production Allocation.--Section 111 of such Act (30 U.S.C. 
1721), as amended by subsections (b) through (e) of this Act, is 
amended by adding at the end the following:
    ``(l) The Secretary shall issue all determinations of allocations 
of production for units and communitization agreements within 120 days 
of a request for determination. If the Secretary fails to issue a 
determination within such 120-day period, the Secretary shall waive 
interest due on obligations subject to the determination until the end 
of the month following the month in which the determination is made.''.

SEC. 9517. LIMITATION ON ASSESSMENTS.

    Section 111 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1721), as amended by section 9516, is further amended 
by adding at the end the following:
    ``(m)(1) After the date of enactment of this subsection, the 
Secretary shall not impose any assessment for any late payment or 
underpayment. After the date of enactment of this subsection, the 
Secretary may impose an assessment only for erroneous reports submitted 
by lessees subject to the limitations of paragraph (2). Nothing in this 
section shall prohibit the Secretary from imposing penalties or 
interest under other sections of this Act for late payments or 
underpayments.
    ``(2) No assessment for erroneous reports shall be imposed for 18 
months following the date of enactment of this subsection, or until the 
Secretary issues a final rule which provides for imposition of an 
assessment only on a lessee who chronically submits erroneous reports 
and which establishes what constitutes chronic errors for a lessee, 
whichever is later. However, if the Secretary determines during that 
18-month period that the reporting error rate for all reporters for all 
Federal leases has increased by one-third for three consecutive report 
months for either production reporting or royalty reporting over the 12 
months preceding the date of enactment of this subsection, the 
Secretary may impose an assessment for erroneous reports only for the 
increased category of report under regulations in effect on the date of 
enactment of this subsection.''.

SEC. 9518. ALTERNATIVES FOR MARGINAL PROPERTIES.

    (a) In General.--The Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.), as amended by section 9513 of this Act, 
is further amended by adding at the end the following:

``SEC. 116. ALTERNATIVES FOR MARGINAL PROPERTIES.

    ``(a) Selling the Revenue Stream.--
            ``(1) In general.--Notwithstanding the provisions of any 
        lease to the contrary, upon request of the lessee or a State 
        under section 205(g), the Secretary shall authorize a lessee 
        for a marginal property and for a lease, the administration of 
        which is not cost-effective for the Secretary to administer, to 
        make a prepayment in lieu of royalty payments under the lease 
        for the remainder of the lease term. For the purposes of this 
        section, the term `marginal property' has the same meaning 
        given such term in section 111(k)(4), unless the Secretary, 
        together with each State in which such marginal production 
        occurs, determines that a different definition of marginal 
        property better achieves the purpose of this section.
            ``(2) Marginal properties.--For marginal properties, 
        prepayments under paragraph (1) shall begin--
                    ``(A) in the case of those properties producing on 
                average $500 or less per month in total royalties to 
                the United States, two years after the date of the 
                enactment of this section;
                    ``(B) in the case of those properties producing on 
                average more than $500 but $1,000 or less per month in 
                total royalties to the United States, three years after 
                the date of the enactment of this section;
                    ``(C) in the case of those properties producing on 
                average more than $1,000 but $1,500 or less per month 
                in total royalties to the United States, four years 
                after the date of the enactment of this section; and
                    ``(D) in the case of those properties not described 
                in subparagraphs (A) through (C), five years after the 
                date of the enactment of this section.
            ``(3) Administration not cost-effective.--For a lease, the 
        administration of which is not cost-effective for the Secretary 
        to administer, prepayments under paragraph (1) shall begin on 
        the date of the enactment of this section.
            ``(4) Satisfaction of royalty obligation.--A lessee who 
        makes a prepayment under this section shall have satisfied in 
        full its obligation to pay royalty on production from the lease 
        or a portion of a lease and shall not be required to submit any 
        royalty reports to the Secretary. The prepayment shall be 
        shared by the Secretary with any State or other recipient to 
        the same extent as any royalty payment for such lease.
            ``(5) Valuation.--The prepayment authorized under this 
        section shall only occur if the Secretary, the State concerned, 
        and the lessee determine that such prepayment is based on the 
        present value of the projected remaining royalties from the 
        production from the lease, based on appropriate nominal 
        discount rate for a comparable term. Prior to accepting such 
        prepayment, the Secretary and State concerned shall agree that 
        such prepayment is in the best interest of the United States 
        and the State concerned.
    ``(b) Alternative Accounting and Auditing Requirements.--
            ``(1) In general.--Within one year after the date of the 
        enactment of this section, for the marginal properties 
        referenced in subsection (a)(1), the Secretary shall provide 
        accounting, reporting, and auditing relief that will encourage 
        lessees to continue to produce and develop such properties: 
        Provided, That such relief will only be available to lessees in 
        a State that concurs. Prior to granting such relief, the 
        Secretary and the State concerned shall agree that the type of 
        marginal wells and relief provided under this paragraph is in 
the best interest of the United States and the State concerned.
            ``(2) Payment date.--For leases subject to this section, 
        the Secretary may allow royalties to be paid later than the 
        time specified in the lease.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act (30 U.S.C. 1701) is amended by adding after the item relating to 
section 115 the following new item:

``Sec. 116. Alternatives for marginal properties.''.

SEC. 9519. ROYALTY IN KIND.

    (a) In General.--
            (1) OCS.--Section 27(a)(1) of the Outer Continental Shelf 
        Lands Act (43 U.S.C. 1353(a)(1)) is amended by adding at the 
        end the following:
``Any royalty or net profit share of oil or gas accruing to the United 
States under any such lease, at the Secretary's option, may be taken in 
kind at or near the lease (unless the lease expressly provides for 
delivery at a different location) upon prior written notice given 
reasonably in advance by the Secretary to the lessee. Once the United 
States has commenced taking royalty in kind, it shall continue to do so 
until a reasonable time after the Secretary has provided written notice 
reasonably in advance to the lessee that it will resume taking royalty 
in value. Delivery of royalty in kind by the lessee shall satisfy in 
full the lessee's royalty obligation. Once the oil or gas is delivered, 
the lessee shall not be subject to the reporting and recordkeeping 
requirements under section 103 for its share of oil and gas production 
other than records necessary to verify the quantity of oil or gas 
delivered.''.
            (2) Onshore.--Section 36 of the Mineral Leasing Act (30 
        U.S.C. 192) is amended by adding at the end the following 
        undesignated paragraph:
    ``Notwithstanding the provisions of the previous paragraph, any 
royalty or net profit share of oil or gas accruing to the United States 
under any lease issued or maintained by the Secretary for the 
exploration, production and development of oil and gas on Federal 
lands, at the Secretary's option, may be taken in kind at or near the 
lease (unless the lease expressly provides for delivery at a different 
location) after prior written notice given reasonably in advance by the 
Secretary to the lessee. Once the United States has commenced taking 
royalty in kind, it shall continue to do so until a reasonable time 
after the Secretary has provided written notice reasonably in advance 
to the lessee that it will resume taking royalty in value. Delivery of 
royalty in kind by the lessee shall satisfy in full the lessee's 
royalty obligation. Once the oil or gas is delivered, the lessee shall 
not be subject to the reporting and recordkeeping requirements under 
section 103 for its share of oil and gas production other than records 
necessary to verify the quantity of oil or gas delivered.''.
    (b) Sale.--Sections 27(b)(1) and (c)(1) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1353(c)(1)) are each amended by striking 
``competitive bidding for not more than its regulated price, or, if no 
regulated price applies, not less than its fair market value'' and 
inserting ``competitive bidding or private sale''.

SEC. 9520. ROYALTY SIMPLIFICATION AND COST-EFFECTIVE AUDIT AND 
              COLLECTION REQUIREMENTS.

    (a) In General.--Section 101 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1711) is amended by adding at the end 
the following:
    ``(d)(1) For the purpose of reducing costs and increasing net 
royalties to the United States and the States, the Secretary, in 
consultation with States concerned, shall, within one year after the 
date of the enactment of this subsection, streamline and simplify 
current royalty management requirements and practices, including 
royalty reporting, instructions, audits and collections. This 
streamlining and simplification shall specifically include--
            ``(A) elimination of all unnecessary royalty and production 
        reports;
            ``(B) modification and simplification of remaining reports 
        and associated instructions to eliminate redundant or 
        unnecessary reports and information that are provided or can be 
        obtained from other required reports, forms, computer databases 
        or government agencies;
            ``(C) elimination or modifications of accounting, 
        reporting, audit and collection requirements that are not cost-
        effective, particularly those associated with de minimis 
        monetary amounts;
            ``(D) implementation of specific recommendations and 
        comments contained in Secretarial sponsored teams, rulemakings, 
        and studies or those participated in by the Secretary to the 
        extent these recommendations simplify and streamline royalty 
        management requirements without adversely affecting the 
        Secretary's ability to meet obligations under this Act or other 
        mineral leasing statutes;
            ``(E) recommendations and comments submitted by interested 
        parties to the extent these recommendations and comments 
        simplify and streamline royalty management requirements without 
        adversely affecting the Secretary's ability to meet obligations 
        under this Act or other mineral leasing statutes.
    ``(2) The Secretary shall submit to the Congress a progress report 
on the implementation of this section within six months from date of 
enactment of this Act, and a final report within 12 months from date of 
enactment of this Act. These reports shall include--
            ``(A) a description of the extent to which the Secretary 
        has implemented the requirements in paragraph (1), including a 
        list of specific initiatives implemented;
            ``(B) a list and description of additional initiatives 
        identified by the Secretary to simplify and streamline royalty 
        management requirements and practices; and
            ``(C) cost savings of implemented initiatives including 
        impact on net-receipts sharing for States.
    ``(3) If the Secretary and the State concerned determines that the 
cost of accounting and auditing for and collecting of any obligation 
due for any oil and gas production exceeds the amount of the obligation 
to be collected, the Secretary shall waive such obligation.
    ``(4) The Secretary and the State concerned shall not perform 
accounting, reporting, or audit activities if the Secretary and the 
State concerned determines that the cost of conducting the activity 
exceeds the expected amount to be collected by the activity.
    ``(5) The Secretary and the State concerned shall develop a 
reporting and audit strategy which eliminates multiple or redundant 
reporting of information.''.
    (b) Paperwork Reduction.--Section 107 of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1717), as amended by section 
9513(b) and (c), is amended by adding at the end the following:
    ``(e) Paperwork Reduction.--Administrative actions and 
investigations (including, but not limited to, accounting collection 
and audits) under this Act involving obligations shall be subject to 
section 3518(c)(1)(B) of title 44, United States Code.''.

SEC. 9521. REPEALS.

    (a) FOGRMA.--Section 307 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1755), is repealed. Section 1 of such 
Act (relating to the table of contents) is amended by striking out the 
item relating to section 307.
    (b) OCSLA.--Effective on the date of the enactment of this Act, 
section 10 of the Outer Continental Shelf Lands Act (43 U.S.C. 1339) is 
repealed.

SEC. 9522. DELEGATION TO STATES.

    (a) General Authority.--Section 205(a) of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1735(a)) is amended to read 
as follows:
    ``(a) Upon written request of any State, the Secretary is 
authorized to delegate, in accordance with the provisions of this 
section, all or part of the authorities and responsibilities of the 
Secretary under this Act to conduct inspections, such production and 
royalty accounting duties and responsibilities as the Secretary 
determines are legally delegable, all audit coverage, and 
investigations to any State with respect to all Federal lands within 
the State.''.
    (b) Standardized Reporting.--Section 205(b) of such Act (30 U.S.C. 
1735(b)) is amended--
            (1) by striking ``and'' at the end of paragraph (2);
            (2) by striking the comma at the end of paragraph (3) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (3) the following:
            ``(4) the State agrees to adopt Federal standardized 
        reporting for Federal royalty accounting and collection 
        purposes,''.
    (c) Cost Effective Collection of De Minimis Royalty Amounts.--
Section 205 of such Act (30 U.S.C. 1735) is amended by adding at the 
end the following:
    ``(g) Upon written request of any State, the Secretary is 
authorized to delegate for any year the responsibility to collect 
royalties from all Federal leases within the State if the average 
amount per year of mineral revenues received by the State on all such 
leases under all Federal mineral leasing laws for the previous five 
years is less than $100,000. The State may also request that the 
Secretary sell the revenue stream from all or part of the Federal 
leases within the State in accordance with section 116 of the Federal 
Oil and Gas Royalty Management Act of 1982, as added by section 9518 of 
the Federal Oil and Gas Royalty Simplification and Fairness Act of 
1995.''.

SEC. 9523. PERFORMANCE STANDARD.

    Section 109 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1719) is amended in subsections (c) and (d), by 
striking ``knowingly or willfully'' and inserting ``by willful 
misconduct or gross negligence'' each place it appears.

SEC. 9524. INDIAN LANDS.

    The amendments made by this part shall not apply with respect to 
Indian lands, and the provisions of the Federal Oil and Gas Royalty 
Management Act of 1982 as in effect on the day before the date of 
enactment of this Act shall continue to apply after such date with 
respect to Indian lands.

SEC. 9525. PRIVATE LANDS.

    This part shall not apply to any privately owned minerals.

SEC. 9526. EFFECTIVE DATE.

    Except as provided by section 115(e), section 111(h), section 
111(k)(5), and section 116 of the Federal Oil and Gas Royalty 
Management Act of 1982 (as added by this part), this part, and the 
amendments made by this part, shall apply with respect to the 
production of oil and gas after the first day of the month following 
the date of the enactment of this Act.

                  Subtitle F--Indian Gaming and Health

                         PART 1--INDIAN GAMING

SEC. 9601. INDIAN GAMING.

    (a) Commission Funding.--Section 18(a) of the Indian Gaming 
Regulatory Act (25 U.S.C. 2717(a)) is amended by striking out 
``$1,500,000'' each place it appears and inserting in lieu thereof 
``$2,500,000''.
    (b) Authorization of Appropriations.--Section 19(a) of the Indian 
Gaming Regulatory Act (25 U.S.C. 2718(a)) is amended by striking out 
all after ``(a)'' and inserting in lieu thereof the following: 
``Notwithstanding the provisions of section 18, no funds may be 
authorized to be appropriated for the operation of the Commission.''.

                    PART 2--INDIAN HEALTH: MEDICAID

SEC. 9611. HEALTH CARE FACILITIES.

    (a) Treatment of Payments.--Section 402 of the Indian Health Care 
Improvement Act (25 U.S.C. 1642) is amended--
            (1) in the first sentence of subsection (a), by inserting 
        ``, Indian Tribe, tribal organization, or urban Indian 
        organization'' after ``Service'' each place it appears; and
            (2) in the second sentence of subsection (a), by inserting 
        ``, Indian Tribe, tribal organization, or urban Indian 
        organization'' after ``facilities of the Service''.
    (b) Eligibility for Reimbursement.--Section 1911 of the Social 
Security Act (42 U.S.C. 1396j) is amended in subsection (a), by 
inserting ``, Indian Tribe, tribal organization, or urban Indian 
organization'' after ``Indian Health Service''.

SEC. 9612. PROVIDER REIMBURSEMENT.

    Section 402 of the Indian Health Care Improvement Act (25 U.S.C. 
1642) is amended by adding the following new subsections:
    ``(c) Notwithstanding any other provision of law, a health program 
of the Indian Health Service, an Indian tribe, tribal organization, or 
urban Indian organization, that is eligible for reimbursement for 
medical assistance under title XIX of the Social Security Act shall be 
eligible to participate in, and receive reimbursement for medical 
assistance provided to individuals served under any State plan 
authorized under any law which succeeds such title XIX on the same 
basis as any other health care provider in the State in which the 
health program of the Indian Health Service, an Indian tribe, tribal 
organization, or urban Indian organization is operated.
    ``(d) Nothing in this section, or any other law, shall prevent an 
Indian eligible for services through an Indian health program from 
participating in any State plan authorized under any law which succeeds 
such title XIX.
    ``(e) Nothing in this section, or any other law, shall authorize a 
State to deny or limit payments to any provider for medical assistance 
for items or services to Indians.
    ``(f) Any State that authorizes a health plan under any law which 
succeeds such title XIX or applies for a waiver under section 1115 of 
title XIX of the Social Security Act shall consult with the Indian 
tribes located within the State in the development of the health plan's 
standards.''.

SEC. 9613. STUDY.

    The Secretary of Health and Human Services shall conduct a 
comprehensive study of the number of Indians eligible to receive 
services under title XIX of the Social Security Act, the number of 
Indians actually receiving such services, and the effect upon Indians 
of eliminating the entitlement status of title XIX and transferring 
funding under that title to the States, and shall provide 
recommendations for the improvement of such services to eligible 
Indians. The Secretary shall submit the report to Congress no later 
than June 1, 1996.

                    PART 3--INDIAN HEALTH: MEDICARE

SEC. 9621. HEALTH CARE FACILITIES.

    (a) Tribal Facilities.--Section 401(a) of the Indian Health Care 
Improvement Act (25 U.S.C 1641(a)) is amended by striking ``a hospital 
or skilled nursing facility of the Service (whether operated by the 
Service or by an Indian tribe or tribal organization pursuant to a 
contract under the Indian Self-Determination Act)'' and inserting 
``facility of the Service, Indian tribe, tribal organization, or urban 
Indian organization''.
    (b) Eligibility for Reimbursement.--Section 1880(a) of the Social 
Security Act (42 U.S.C. 1395qq) is amended--
            (1) by striking ``hospital or skilled nursing'';
            (2) by inserting ``, Indian Tribe, tribal organization, or 
        urban Indian organization'' after ``Indian Health Service''; 
        and
            (3) by striking ``generally to hospitals or skilled nursing 
        facilities (as the case may be)''.

SEC. 9622. PROVIDER REIMBURSEMENT.

    Section 401 of the Indian Health Care Improvement Act (25 U.S.C. 
1641) is amended by adding the following new subsection:
    ``(c) Notwithstanding any other provision of law, a health program 
of the Indian Health Service, an Indian tribe, tribal organization, or 
urban Indian organization, that is eligible for reimbursement for 
medical assistance under title XVIII of the Social Security Act shall 
be eligible to participate in, and receive reimbursement for medical 
assistance provided to individuals served under any plan offered under 
the Medicare Plus plan on the same basis as any other health care 
provider in the State in which the health program of the Indian Health 
Service, an Indian tribe, tribal organization, or urban Indian 
organization is operated.''.

                        Subtitle G--Consultation

SEC. 9701. CONSULTATION.

    Section 7(d) of the Endangered Species Act of 1973 (16 U.S.C. 
1536(d)) is amended to read as follows:
    ``(d) Limitation on Commitment of Resources.--After initiation of 
consultation required under subsection (a)(2) of this section, the 
Federal agency and the permit or license applicant shall not make any 
irreversible or irretrievable commitment of resources with respect to 
the agency action which has the effect of foreclosing the formulation 
or implementation of any reasonable and prudent alternative measures 
which would not violate subsection (a)(2) of this section. This 
limitation on the commitment of resources is only applicable to 
consultations regarding site-specific projects and activities, and 
shall not apply to any consultation regarding an agency's periodic or 
long-term planning activities, mission or policy statements, 
programmatic documents, or general policies, regulations, or 
activities, whether or not such consultation has previously been 
initiated pursuant to a court order, and regardless of the date on 
which consultation was ordered or initiated.''.

                          Subtitle H--Mapping

SEC. 9801. SHORT TITLE.

    This subtitle may be cited as the ``Department of the Interior 
Surveying and Mapping Efficiency and Economic Opportunity Act of 
1995''.

SEC. 9802. SURVEYING AND MAPPING CONTRACTING PROGRAM.

    In order to provide private firms, including small and small 
disadvantaged businesses, ample opportunities to provide quality 
services to the Department of the Interior (hereinafter referred to as 
the ``Department''), the Secretary of the Interior (hereinafter 
referred to as the ``Secretary'') shall conduct a surveying and mapping 
contracting program.

SEC. 9803. INVENTORY OF ACTIVITIES.

    (a) Publication of Inventory.--Not later than 90 days after the 
date of enactment of this Act, the Secretary, in consultation with the 
Administrator of the Office of Federal Procurement Policy, the 
Administrator of the Small Business Administration and the trade 
association of private surveying and mapping firms, shall publish an 
inventory of surveying and mapping activities in the Department of the 
Interior for the last fiscal year completed prior to the date of 
enactment of this Act.
    (b) Items Included.--The inventory shall include each of the 
following:
            (1) The total dollar value of surveying and mapping 
        activities in each agency of the Department.
            (2) The total dollar value of surveying and mapping 
        activities in each agency of the Department performed by 
        contract with private sector firms.
            (3) The total dollar value of surveying and mapping 
        activities in each agency of the Department performed by 
        personnel of the Department.
            (4) The total dollar value of surveying and mapping 
        activities in each agency of the Department performed for any 
        other department or agency of the Federal Government.
            (5) The total dollar value of surveying and mapping 
        activities in each agency of the Department performed for any 
        State or political subdivision thereof, or for any foreign 
        government.
            (6) The total number of personnel involved in surveying and 
        mapping activities in each agency of the Department.

SEC. 9804. PLAN TO INCREASE USE OF CONTRACTS.

    (a) Establishment.--Based on the inventory conducted pursuant to 
section 9803 of this Act, not later than 180 days after the date of 
enactment of this Act, the Secretary, in consultation with the 
Administrator of the Office of Federal Procurement Policy, the 
Administrator of the Small Business Administration and the trade 
association of private surveying and mapping firms, shall develop and 
implement a plan to increase the use of contracts with private firms 
for surveying and mapping services.
    (b) Items Included in Plan.--The plan established pursuant to 
subsection (a) of this section shall include, but not be limited to 
each of the following:
            (1) A reduction of surveying and mapping activities by 
        personnel in the Department that duplicate capabilities 
        available by contract from the private sector.
            (2) A reduction of acquisition and maintenance of surveying 
        and mapping equipment that duplicate capabilities and capital 
        investment already made by the private sector.
            (3) The elimination of unfair Government competition in 
        activities in which the Department uses its personnel to 
        perform surveying and mapping for which it shares the cost 
        with, is reimbursed for, or makes a grant to any other agency 
        of the Federal Government, a State or political subdivision 
        thereof, or a foreign government, for such activities, when 
        such activities can be obtained by contract from the private 
        sector.
            (4) The use of contracts to perform surveying and mapping 
        requirements of the Department created through attrition.
            (5) The enhancement of the leadership role of the 
        Department of the Interior in--
                    (A) the preparation of standards and 
                specifications;
                    (B) research in surveying and mapping 
                instrumentation and procedures, and the prompt transfer 
                of technology to the private sector;
                    (C) providing technical guidance, coordination, 
                cost sharing, cooperative efforts and administration in 
                the use of Federal funds for surveying and mapping 
                activities, and the development of geographic 
                information systems, that are performed by the private 
                sector by the contract to Federal, State, and local 
                government agencies;
                    (D) establishing a schedule with quantifiable goals 
                for increasing the use of contracts with private sector 
                for current and future surveying and mapping 
                activities; and
                    (E) using Department personnel to perform only 
                those surveying and mapping activities that are 
                inherently governmental in nature, necessary to keep 
                current the skills of such personnel for evaluating 
                contractor performance and administering contracts, and 
                to perform basic research.

SEC. 9805. REPORTS.

    The Secretary shall transmit to the Committee on Resources of the 
House of Representatives and the Committee on Energy and Natural 
Resources of the Senate a report on implementation of the program not 
later than January 15 of each year.

SEC. 9806. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``surveying and mapping'' means collecting, 
        storing, retrieving, or disseminating graphical or digital data 
        depicting natural or man-made physical features, phenomena and 
        boundaries of the earth and any information related thereto, 
        including but not limited to data shown on or in relation to 
        surveys, maps, and charts.
            (2) The ``contract'' means an instrument to retain private 
        firms with licensed, certified, or otherwise qualified 
        professionals in such fields as surveying, photogrammetry, 
        cartography, and geodesy, which shall be awarded in accordance 
        with the selection procedures in title IX of the Federal 
        Property and Administrative Services Act of 1949 (40 U.S.C. 541 
        and following).

                Subtitle I--National Park System Reform

SEC. 9901. SHORT TITLE.

    This subtitle may be cited as the ``National Park System Reform Act 
of 1995''.

SEC. 9902. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``Secretary'' means the Secretary of the 
        Interior.
            (2) The term ``Plan'' means the National Park System Plan 
        developed under section 101.
            (3) The term ``Commission'' means the National Park System 
        Review Commission established pursuant to section 103.
            (4) The term ``Congressional resources committees'' means 
        the Committee on Resources of the House of Representatives and 
        the Committee on Energy and Natural Resources of the Senate.

                   PART 1--NATIONAL PARK SYSTEM PLAN

SEC. 9911. PREPARATION OF NATIONAL PARK SYSTEM PLAN.

    (a) Preparation of Plan.--The Secretary of the Interior, acting 
through the Director of the National Park Service, shall prepare a 
National Park System Plan to guide the direction of the National Park 
System into the next century. The Plan shall include each of the 
following:
            (1) Identification of goals and objectives for use in 
        defining the mission and role of the National Park Service and 
        the National Park System in preserving our Nation's heritage, 
        relative to other efforts at the Federal, State, local, and 
        private levels. This statement shall include a refinement for 
        the definition of ``nationally significant'' for purposes of 
        inclusion in the National Park System.
            (2) Criteria to be used in determining which themes and 
        types of resources are appropriate for representation in the 
        National Park System, as well as criteria for judging 
        individual sites, areas, and themes that are appropriate for 
        inclusion as units of the National Park System.
            (3) Identification of what constitutes adequate 
        representation of a particular resource type or theme in the 
        National Park System.
            (4) Identification of which aspects of the Nation's 
        heritage are adequately represented in the existing National 
        Park System.
            (5) Identification of appropriate aspects of the Nation's 
        heritage not currently or adequately represented in the 
        National Park System.
            (6) Priorities of the themes and types of resources which 
        should be added to the National Park System in order to provide 
        more complete representation of our Nation's heritage.
            (7) A thorough analysis of the role of the National Park 
        System and the National Park Service with respect to (but not 
        limited to) conservation of natural areas and ecosystems; 
        preservation of industrial America; preservation of intangible 
        cultural heritage such as arts, music, and folklife; 
        presidential sites; open space protection; and provision of 
        outdoor recreation opportunities.
            (8) A comprehensive financial management plan for the 
        National Park System which identifies all funding available to 
        the agency, how funds will be allocated to support various 
        programs, and the level of service to be provided.
    (b) Public Participation and Consultation.--During the preparation 
of the Plan under subsection (a), the Secretary shall ensure broad 
public participation in a manner which, at a minimum, consists of the 
following two elements:
            (1) Solicitation of the views of the American public with 
        regard to the future of the National Park System. Opportunities 
        for public participation shall be made available throughout the 
        planning process and shall include specific regional public 
        meetings.
            (2) Consultation with other Federal land management 
        agencies, State and local officials, resource management, 
        recreation and scholarly organizations, and other interested 
        parties as the Secretary deems advisable.
    (c) Transmittal of Report.--Prior to the end of the second complete 
fiscal year commencing after the date of enactment of this Act, the 
Secretary shall transmit the Plan developed under this section to the 
Congressional resources committees.
    (d) Congressional Approval.--Unless Congress enacts a joint 
resolution rejecting all or modifying part of the Plan within 180 
calendar days after the date of its transmittal to Congress, the Plan 
shall be deemed approved.
    (e) Identification of Units of the National Park System.--The 
Secretary shall submit to the Congressional resources committees an 
official list of areas or units of the National Park System within 180 
days after the date of the enactment of this Act. The Secretary shall 
establish a set of criteria for the purpose of developing such list and 
shall transmit those criteria to the Congressional resources 
committees.
    (f) Authority To Establish Units of the National Park System.--
After the enactment of this Act, units or areas of the National Park 
System may only be established pursuant to an Act of Congress or by 
Presidential action in accordance with the Act entitled ``An Act for 
the preservation of American antiquities'' (16 U.S.C. 431 et seq.).

SEC. 9912. MANAGEMENT REVIEW OF NATIONAL PARK SYSTEM.

    (a) Selection Criteria.--(1) The Secretary shall, not later than 45 
days after transmittal of the Plan under section 9911(c), publish in 
the Federal Register and transmit to the Congressional resources 
committees the criteria proposed to be used by the Department of the 
Interior in reviewing existing units of the National Park System under 
this section. The Secretary shall provide an opportunity for public 
comment on the proposed criteria for a period of at least 30 days.
    (2)(A) The Secretary shall, within 60 days of the transmittal of 
proposed criteria under paragraph (1), publish in the Federal Register 
and transmit to the Congressional resources committees the final 
criteria to be used in carrying out this section. Except as provided in 
subparagraph (B), such criteria shall be the final criteria to be used 
unless disapproved by a joint resolution of Congress enacted not more 
than 30 legislative days after receipt of the final criteria. For the 
purpose of the preceding sentence, the term ``legislative day'' means a 
day on which both Houses of Congress are in session.
    (B) The Secretary may amend such criteria, but such amendments may 
not become effective until they have been published in the Federal 
Register, opened to public comment for at least 30 days, and 
transmitted to the Congressional resources committees in final form.
    (b) Review.--(1)(A) Using the Plan deemed to be approved pursuant 
to section 9911(d) and the criteria developed pursuant to subsection 
(a), the Secretary shall review the existing National Park System to 
determine whether any existing units or significant portions of such 
units do not conform to the Plan. For any such areas, the Secretary 
shall determine whether there are more appropriate alternatives for 
managing all or a portion of such units, including through partnerships 
or direct management by States, local governments, other agencies and 
the private sector.
    (B) The Secretary shall develop a report which contains a list of 
any unit of the National Park System where National Park Service 
management should be terminated and a list of any portion of units 
where National Park Service management should be modified as a result 
of nonconformance with the Plan. No area or portion of an area which 
Congress has designated as a national park may be included in the 
report.
    (2) Should any such unit or portion of such unit not be recommended 
for continued National Park Service management, the Secretary shall 
make recommendations regarding management by an entity or entities 
other than the National Park Service.
    (3) For any such unit or portion of such unit determined to have 
national significance, prior to including such unit or portion of such 
unit on a list under paragraph (1), the Secretary shall identify 
feasible alternatives to National Park Service management which will 
protect the resources of and assure continued public access to the 
unit.
    (c) Consultation.--In developing the report referred to in 
subsection (b), the Secretary shall consult with other Federal land 
management agencies, State and local officials, resource management, 
recreation and scholarly organizations, and other interested parties as 
the Secretary deems advisable.
    (d) Transmittal.--Not later than 18 months after the Plan has been 
deemed approved, the Secretary shall transmit the report developed 
under this section simultaneously to the Congressional resources 
committees and the Commission. The report shall contain the 
recommendations of the Secretary for termination of National Park 
Service management for any unit of the National Park System that is 
determined not to conform with the Plan, a list of portions of units 
where National Park Service management should be modified, and the 
recommendations for alternative management by an entity or entities 
other than the National Park Service for such unit.

SEC. 9913. NATIONAL PARK SYSTEM REVIEW COMMISSION.

    (a) Establishment of Commission; Duties.--(1) Following completion 
of the Plan as specified in section 9911, a National Park System Review 
Commission shall be established.
    (2) The Commission shall either review the report developed under 
section 9912 or, if the Secretary fails to develop and transmit such 
report, develop the report itself. In conducting its review (or 
developing the report, if necessary), the Commission shall be subject 
to the provisions of sections 9912(b) and (c) in the same manner as 
such provisions apply to the Secretary. If the Secretary develops and 
transmits the report, the review of the Commission shall be limited to 
the manner in which the criteria have been applied to the existing 
National Park System. In addition the Commission shall seek broad 
public input and ensure the opportunity for input from persons who 
would be directly affected by recommendations regarding National Park 
System units identified in its report.
    (3) Within 2 years after the date of its establishment, the 
Commission shall prepare and transmit to the Congressional resources 
committees a report of its work under paragraph (2) in which the 
Commission recommends a list of National Park System units where 
National Park Service management should be terminated and a list of 
portions of units where National Park Service management should be 
modified.
    (b) Membership and Appointment.--The Commission shall consist of 11 
members, each of whom shall have substantial familiarity with, and 
understanding of, the National Park System and related fields. In 
addition, the Commission members shall have expertise in natural 
sciences, history, archaeology, and outdoor recreation. Five members of 
the Commission, one of whom shall be the Director of the National Park 
Service, shall be appointed by the Secretary. Two members shall be 
appointed by the Speaker of the United States House of Representatives 
in consultation with the chairman of the Committee on Resources, and 
one member shall be appointed by the Minority Leader of the House of 
Representatives in consultation with the ranking minority member of the 
Committee on Resources. Two members shall be appointed by the President 
pro tempore of the United States Senate, in consultation with the 
chairman of the Committee on Energy and Natural Resources and one 
member shall be appointed by the Minority Leader of the Senate in 
consultation with the ranking minority member of the Committee on 
Energy and Natural Resources. Each member shall be appointed within 
three months after the completion of the Plan as specified in section 
101.
    (c) Chair.--The Commission shall elect a chair from among its 
members.
    (d) Vacancies.--Vacancies occurring on the Commission shall not 
affect the authority of the remaining members of the Commission to 
carry out the functions of the Commission. Any vacancy in the 
Commission shall be promptly filled in the same manner in which the 
original appointment was made.
    (e) Quorum.--A simple majority of Commission members shall 
constitute a quorum.
    (f) Meetings.--The Commission shall meet at least quarterly or upon 
the call of the chair or a majority of the members of the Commission.
    (g) Compensation.--Members of the Commission shall serve without 
compensation as such. Members of the Commission, when engaged in 
official Commission business, shall be entitled to travel expenses, 
including per diem in lieu of subsistence, in the same manner as 
persons employed intermittently in government service under section 
5703 of title 5, United States Code.
    (h) Termination.--The Commission established pursuant to this 
section shall terminate 90 days after the transmittal of the report to 
Congress as provided in subsection (a).
    (i) Limitation on National Park Service Staff.--The Commission may 
hire staff to carry out its assigned responsibilities. Not more than 
one-half of the professional staff of the Commission shall be made up 
of current employees of the National Park Service.
    (j) Staff of Other Agencies.--Upon the request of the Commission, 
the head of any Federal agency may detail, on a reimbursable basis, any 
of the personnel of such agency to the Commission to assist the 
Commission.
    (k) Experts and Consultants.--Subject to such rules as may be 
adopted by the Commission, the Commission may procure temporary and 
intermittent services to the same extent as authorized by section 
3109(b) of title 5, United States Code, but at rates determined by the 
Commission to be advisable.
    (l) Powers of the Commission.--(1) The Commission shall for the 
purpose of carrying out this title hold such public hearings, sit and 
act at such times and places, take such testimony, and receive such 
evidence as the Commission deems advisable.
    (2) The Commission may make such bylaws, rules, and regulations, 
consistent with this part, as it considers necessary to carry out its 
functions under this part.
    (3) When so authorized by the Commission, any member or agent of 
the Commission may take any action which the Commission is authorized 
to take by this section.
    (4) The Commission may use the United States mails in the same 
manner and upon the same conditions as other departments and agencies 
of the United States.
    (5) The Secretary shall provide to the Commission any information 
available to the Secretary and requested by the Commission regarding 
the Plan and any other information requested by the Commission which is 
relevant to the duties of the Commission and available to the 
Secretary.

SEC. 9914. SUBSEQUENT ACT OF CONGRESS REQUIRED TO MODIFY OR TERMINATE A 
              PARK.

    Nothing in this part shall be construed as modifying or terminating 
any unit of the National Park System without a subsequent Act of 
Congress. This limitation shall not limit any existing authority of the 
Secretary.

SEC. 9915. AUTHORIZATION OF APPROPRIATIONS.

    There are hereby authorized to be appropriated $2,000,000 to carry 
out the purposes of this part.

SEC. 9916. COMMENDATION AND PROTECTION OF NATIONAL PARK RANGERS.

    (a) Finding.--The Congress recognizes the dedication, expertise and 
courage of the men and women who serve as rangers and other employees 
of the National Park Service and finds their service to the protection 
of our park resources and the safety of the hundreds of millions of 
Americans who visit our national parks each year to be indispensable.
    (b) Protection of National Park Service Employees.--As soon as 
possible as part of the report developed under section 9911, the 
Secretary shall report on the procedures that have been instituted to 
report to the United States Attorney or other appropriate law 
enforcement official any intimidation, threats, or acts of violence 
against employees of the National Park Service related to their duties.

                     PART 2--NEW AREA ESTABLISHMENT

SEC. 9921. STUDY OF NEW PARK SYSTEM AREAS.

    Section 8 of the Act of August 18, 1970, entitled ``An Act to 
improve the Administration of the National Park System by the Secretary 
of the Interior, and to clarify the authorities applicable to the 
system, and for other purposes'' (16 U.S.C. 1a-1 and following) is 
amended as follows:
            (1) By inserting ``General Authority.--'' after ``(a)''.
            (2) By striking the second through the sixth sentences of 
        subsection (a).
            (3) By redesignating the last two sentences of subsection 
        (a) as subsection (f) and inserting in the first of such 
        sentences before the words ``For the purposes of carrying'' the 
        following: ``(f) Authorization of Appropriations.--''.
            (4) By striking subsection (b).
            (5) By inserting the following after subsection (a):
    ``(b) Studies of Areas for Potential Addition.--(1) At the 
beginning of each calendar year, along with the annual budget 
submission, the Secretary shall submit to the Committee on Resources of 
the House of Representatives and to the Committee on Energy and Natural 
Resources of the United States Senate a list of areas recommended for 
study for potential inclusion in the National Park System.
    ``(2) In developing the list to be submitted under this subsection, 
the Secretary shall give consideration to those areas that have the 
greatest potential to meet the established criteria of national 
significance, suitability, and feasibility. The Secretary shall give 
special consideration to themes, sites, and resources not already 
adequately represented in the National Park System as identified in the 
National Park System Plan to be developed under section 101 of the 
National Park System Reform Act of 1995.
    ``(3) No study of the potential of an area for inclusion in the 
National Park System may be initiated after the date of enactment of 
this subsection, except as provided by specific authorization of an Act 
of Congress.
    ``(4) Nothing in this Act shall limit the authority of the National 
Park Service to conduct preliminary resource assessments, gather data 
on potential study areas, provide technical and planning assistance, 
prepare or process nominations for administrative designations, update 
previous studies, or complete reconnaissance surveys of individual 
areas requiring a total expenditure of less than $25,000.
    ``(5) Nothing in this section shall be construed to apply to or to 
affect or alter the study of any river segment for potential addition 
to the national wild and scenic rivers system or to apply to or to 
affect or alter the study of any trail for potential addition to the 
national trails system.
    ``(c) Report.--(1) The Secretary shall complete the study for each 
area for potential inclusion in the National Park System within 3 
complete fiscal years following the date of enactment of specific 
legislation providing for the study of such area. Each study under this 
section shall be prepared with appropriate opportunity for public 
involvement, including at least one public meeting in the vicinity of 
the area under study, and after reasonable efforts to notify 
potentially affected landowners and State and local governments.
    ``(2) In conducting the study, the Secretary shall consider whether 
the area under study--
            ``(A) possesses nationally significant natural or cultural 
        resources, or outstanding recreational opportunities, and that 
        the area represents one of the most important examples of a 
        particular resource type in the country; and
            ``(B) is a suitable and feasible addition to the system.
    ``(3) Each study--
            ``(A) shall consider the following factors with regard to 
        the area being studied--
                    ``(i) the rarity and integrity of the resources;
                    ``(ii) the threats to those resources;
                    ``(iii) whether similar resources are already 
                protected in the National Park System or in other 
                public or private ownership;
                    ``(iv) the public use potential;
                    ``(v) the interpretive and educational potential;
                    ``(vi) costs associated with acquisition, 
                development and operation;
                    ``(vii) the socioeconomic impacts of any 
                designation;
                    ``(viii) the level of local and general public 
                support, and
                    ``(ix) whether the area is of appropriate 
                configuration to ensure long-term resource protection 
                and visitor use;
            ``(B) shall consider whether direct National Park Service 
        management or alternative protection by other public agencies 
        or the private sector is appropriate for the area;
            ``(C) shall identify what alternative or combination of 
        alternatives would in the professional judgment of the Director 
        of the National Park Service be most effective and efficient in 
        protecting significant resources and providing for public 
        enjoyment; and
            ``(D) may include any other information which the Secretary 
        deems to be relevant.
    ``(4) Each study shall be completed in compliance with the National 
Environmental Policy Act of 1969.
    ``(5) The letter transmitting each completed study to Congress 
shall contain a recommendation regarding the Secretary's preferred 
management option for the area.
    ``(d) New Area Study Office.--The Secretary shall establish a 
single office to be assigned to prepare all new area studies and to 
implement other functions of this section.
    ``(e) List of Areas.--At the beginning of each calendar year, along 
with the annual budget submission, the Secretary shall submit to the 
Committee on Resources of the House of Representatives and to the 
Committee on Energy and Natural Resources of the United States Senate a 
list of areas which have been previously studied which contain 
primarily historical resources, and a list of areas which have been 
previously studied which contain primarily natural resources, in 
numerical order of priority for addition to the National Park System. 
In developing the lists, the Secretary should consider threats to 
resource values, cost escalation factors, and other factors listed in 
subsection (c) of this section. The Secretary should only include on 
the lists areas for which the supporting data is current and 
accurate.''.

        TITLE X--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      Subtitle A--Water Resources

SEC. 10001. COMMERCIAL CONCESSIONS AT CORPS OF ENGINEERS PROJECTS.

    Notwithstanding part 1 of subtitle C of title IX of this Act, the 
Secretary of the Army shall not modify any concession service 
agreement, concession license, or similar instrument (or any policy or 
procedure relating to such agreement, license, or agreement) except to 
the extent that such modification is permitted under laws in effect on 
the day before the date of the enactment of this Act.

SEC. 10002. PROHIBITION ON SALE OF CORPS OF ENGINEERS PROJECTS.

    (a) Prohibition.--Notwithstanding part 1 of subtitle B of title IX 
of this Act, the sale of any project or project feature operated by the 
Corps of Engineers (including any dam, lock, reservoir, related 
transmission and generation structures, equipment, facilities, and real 
property) is prohibited.
    (b) Cooperation With Purchasers of Electric Power.--
            (1) In general.--Subject to paragraph (2), the Secretary of 
        the Army shall cooperate, to the maximum extent practicable, 
        with a non-Federal purchaser of electric power generated at any 
        project under the jurisdiction of the Secretary to facilitate 
        the purchaser's access to, operation of, and maintenance, 
        repair, rehabilitation, and replacement of hydroelectric power 
        facilities at the project.
            (2) Continued effectiveness of project purposes.--In 
        carrying out paragraph (1), the Secretary shall take such 
        actions as may be necessary to ensure that each project 
        referred to in paragraph (1) continues to operate in accordance 
        with the authorized purpose or purposes of the project.

SEC. 10003. FEMA RADIOLOGICAL EMERGENCY PREPAREDNESS FEES.

    (a) In General.--The Director of the Federal Emergency Management 
Agency may assess and collect fees applicable to persons subject to 
radiological emergency preparedness regulations issued by the Director.
    (b) Requirements.--The assessment and collection of fees by the 
Director under subsection (a) shall be fair and equitable and shall 
reflect the full amount of costs to the Agency of providing 
radiological emergency planning, preparedness, response, and associated 
services. Such fees shall be assessed by the Director in a manner which 
reflects the use of resources of the Agency for classes of regulated 
persons and the administrative costs of collecting such fees.
    (c) Amount of Fees.--The aggregate amount of fees assessed under 
subsection (a) in a fiscal year shall approximate, but not be less 
than, 100 percent of the amounts anticipated by the Director to be 
obligated for the radiological emergency preparedness program of the 
Agency for such fiscal year.
    (d) Deposit of Fees in Treasury.--Fees received pursuant to 
subsection (a) shall be deposited in the general fund of the Treasury 
as offsetting receipts.
    (e) Expiration of Authority.--The authority of the Director to 
assess and collect fees under subsection (a) shall expire on September 
30, 2002.

                   Subtitle B--Ocean Shipping Reform

SEC. 10201. SHORT TITLE.

    This subtitle may be cited as the ``Ocean Shipping Reform Act of 
1995''.

                    CHAPTER 1--OCEAN SHIPPING REFORM

SEC. 10211. PURPOSES.

    Section 2 of the Shipping Act of 1984 (46 U.S.C. App. 1701) is 
amended--
            (1) by striking ``and'' at the end of paragraph (2);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(4) to permit carriers and shippers to develop 
        transportation arrangements to meet their specific needs.''.

SEC. 10212. DEFINITIONS.

    Section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702) is 
amended--
            (1) effective January 1, 1997--
                    (A) by striking paragraph (9); and
                    (B) by redesignating paragraphs (10) through (19) 
                as paragraphs (9) through (18), respectively; and
            (2) effective June 1, 1997--
                    (A) by striking paragraph (4);
                    (B) in paragraph (7) by striking ``a common 
                tariff;'' and inserting ``a common schedule of 
                transportation rates, charges, classifications, rules, 
                and practices;'';
                    (C) by striking paragraph (10) (as redesignated by 
                paragraph (1) of this section);
                    (D) by striking paragraph (13) (as redesignated by 
                paragraph (1) of this section);
                    (E) by striking paragraph (16) (as redesignated by 
                paragraph (1) of this section);
                    (F) by striking paragraph (18) (as redesignated by 
                paragraph (1) of this section) and inserting the 
                following:
            ``(18) `ocean freight forwarder' means a person that--
                    ``(A)(i) in the United States, dispatches shipments 
                from the United States via a common carrier and books 
                or otherwise arranges space for those shipments on 
                behalf of shippers; or
                    ``(ii) processes the documentation or performs 
                related activities incident to those shipments; or
                    ``(B) acts as a common carrier that does not 
                operate the vessels by which the ocean transportation 
                is provided, and is a shipper in its relationship with 
                an ocean common carrier.'';
                    (G) by striking paragraph (21);
                    (H) in paragraph (23)--
                            (i) by striking ``or'' the second place it 
                        appears and inserting a comma; and
                            (ii) by striking the period and inserting 
                        ``, a shippers' association, or an ocean 
                        freight forwarder that accepts responsibility 
                        for payment of the ocean freight.'';
                    (I) by striking paragraph (24) and inserting the 
                following:
            ``(24) `shippers' association' means a group of shippers 
        that consolidates or distributes freight, on a nonprofit basis 
        for the members of the group in order to secure carload, 
        truckload, or other volume rates or ocean transportation 
        contracts.''; and
                    (J) by inserting after paragraph (18) (as 
                redesignated by paragraph (1) of this section) the 
                following:
            ``(19) `ocean transportation contract' means a contract in 
        writing separate from the bill of lading or receipt between 1 
        or more common carriers or a conference and 1 or more shippers 
        to provide specified services under specified rates and 
        conditions.''.

SEC. 10213. AGREEMENTS WITHIN THE SCOPE OF THE ACT.

    Effective June 1, 1997, section 4(a) of the Shipping Act of 1984 
(46 U.S.C. App. 1703(a)) is amended--
            (1) in paragraph (5) by striking ``non-vessel-operating 
        common carriers'' and inserting ``ocean freight forwarders''; 
        and
            (2) by striking paragraph (7) and inserting the following:
            ``(7) discuss any matter related to ocean transportation 
        contracts, and enter ocean transportation contracts and 
        agreements related to those contracts.''.

SEC. 10214. AGREEMENTS.

    Section 5 of the Shipping Act of 1984 (46 U.S.C. App. 1704) is 
amended--
            (1) effective January 1, 1997--
                    (A) in subsection (b)(4) by striking ``at the 
                request of any member, require an independent neutral 
                body to police fully'' and inserting ``state the 
                provisions, if any, for the policing of'';
                    (B) in subsection (b)(7) by striking ``and'' at the 
                end;
                    (C) in subsection (b)(8) by striking the period and 
                inserting ``; and''; and
                    (D) by adding at the end of subsection (b) the 
                following:
            ``(9) provide that a member of the conference may enter 
        individual and independent negotiations and may conclude 
        individual and independent service contracts under section 8 of 
        this Act.'';
            (2) effective June 1, 1997--
                    (A) by striking subsection (b)(8) and inserting the 
                following:
            ``(8) provide that any member of the conference may take 
        independent action on any rate or service item agreed upon by 
        the conference for transportation provided under section 8(a) 
        of this Act upon not more than 3 business days' notice to the 
        conference, and that the conference will provide the new rate 
        or service item for use by that member, effective no later than 
        3 business days after receipt of that notice, and by any other 
        member that notifies the conference that it elects to adopt the 
        independent rate or service item on or after its effective 
        date, in lieu of the existing conference provision for that 
        rate or service item;'';
                    (B) in subsection (b)(9) by striking ``service'' 
                and inserting ``ocean transportation'' and by striking 
                the period at the end and inserting ``; and'';
                    (C) by adding at the end of subsection (b) the 
                following:
            ``(10) prohibit the conference from--
                    ``(A) prohibiting or restricting the members of the 
                conference from engaging in individual negotiations for 
                ocean transportation contracts under section 8(b) with 
                1 or more shippers; and
                    ``(B) issuing mandatory rules or requirements 
                affecting ocean transportation contracts that may be 
                entered by 1 or more members of the conference, except 
                that a conference may require that a member of the 
                conference disclose the existence of an existing 
                individual ocean transportation contract or 
                negotiations on an ocean transportation contract, when 
                the conference enters negotiations on an ocean 
                transportation contract with the same shipper.''; and
                    (D) in subsection (e) by striking ``carrier that 
                are required to be set forth in a tariff,'' and 
                inserting ``carrier,''.

SEC. 10215. EXEMPTION FROM ANTITRUST LAWS.

    Section 7 of the Shipping Act of 1984 (46 U.S.C. App. 1706) is 
amended--
            (1) by striking subsection (a)(6) and inserting the 
        following:
            ``(6) subject to section 20(e)(2) of this Act, any 
        agreement, modification, or cancellation, in effect before the 
        effective date of this Act and any tariff, rate, fare, charge, 
        classification, rule, or regulation explanatory thereof 
        implementing that agreement, modification, or cancellation.''; 
        and
            (2) in subsection (c)(1) by striking ``agency'' and 
        inserting ``agency, department,''.

SEC. 10216. COMMON AND CONTRACT CARRIAGE.

    (a) In General.--Effective June 1, 1997--
            (1) section 502 of the High Seas Driftnet Fisheries 
        Enforcement Act (46 U.S.C. App. 1707a) is repealed; and
            (2) section 8 of the Shipping Act of 1984 (46 U.S.C. App. 
        1707) is amended to read as follows:

``SEC. 8. COMMON AND CONTRACT CARRIAGE.

    ``(a) Common Carriage.--
            ``(1) A common carrier and a conference shall make 
        available a schedule of transportation rates which shall 
        include the rates, terms, and conditions for transportation 
        services not governed by an ocean transportation contract, and 
        shall provide the schedule of transportation rates, in writing, 
        upon the request of any person. A common carrier and a 
        conference may assess a reasonable charge for complying with a 
        request for a rate, term, and condition, except that the charge 
        may not exceed the cost of providing the information requested.
            ``(2) A dispute between a common carrier or conference and 
        a person as to the applicability of the rates, terms, and 
        conditions for ocean transportation services shall be decided 
        in an appropriate State or Federal court of competent 
        jurisdiction, unless the parties otherwise agree.
            ``(3) A claim concerning a rate for ocean transportation 
        services which involves false billing, false classification, 
        false weighing, false report of weight, or false measurement 
        shall be decided in an appropriate State or Federal court of 
        competent jurisdiction, unless the parties otherwise agree.
    ``(b) Contract Carriage.--
            ``(1) 1 or more common carriers or a conference may enter 
        into an ocean transportation contract with 1 or more shippers. 
        A common carrier may enter into ocean transportation contracts 
        without limitations concerning the number of ocean 
        transportation contracts or the amount of cargo or space 
        involved. The status of a common carrier as an ocean common 
        carrier is not affected by the number or terms of ocean 
        transportation contracts entered.
            ``(2) A party to an ocean transportation contract entered 
        under this section shall have no duty in connection with 
        services provided under the contract other than the duties 
        specified by the terms of the contract.
            ``(3)(A) An ocean transportation contract or the 
        transportation provided under that contract may not be 
        challenged in any court on the grounds that the contract 
        violates a provision of this Act.
            ``(B) The exclusive remedy for an alleged breach of an 
        ocean transportation contract is an action in an appropriate 
        State or Federal court of competent jurisdiction, unless the 
        parties otherwise agree.
            ``(4) The requirements and prohibitions concerning 
        contracting by conferences contained in sections 5(b)(9) and 
        (10) of this Act shall also apply to any agreement among one or 
        more ocean common carriers that is filed under section 5(a) of 
        this Act.''.
    (b) Confidentiality of Contracts.--Effective January 1, 1998, 
section 8(b) of the Shipping Act of 1984 (46 U.S.C. App. 1707(b)), as 
amended by subsection (a) of this section, is amended by adding at the 
end the following:
            ``(5) A contract entered under this section may be made on 
        a confidential basis, upon agreement of the parties. An ocean 
        common carrier that is a member of a conference agreement may 
        not be prohibited or restricted from agreeing with 1 or more 
        shippers that the parties to the contract will not disclose the 
        rates, services, terms, or conditions of that contract to any 
        other member of the agreement, to the conference, to any other 
        carrier, shipper, conference, or to any other third party.''.

SEC. 10217. PROHIBITED ACTS.

    Section 10 of the Shipping Act of 1984 (46 U.S.C. App. 1709) is 
amended--
            (1) effective January 1, 1997, in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) except for service contracts, subject a person, 
        place, port, or shipper to unreasonable discrimination;''; and
                    (B) by striking paragraphs (2), (3), (4), and (8);
            (2) effective June 1, 1997, by striking subsection (b) and 
        inserting the following:
    ``(b) Common Carriers.--No common carrier, either alone or in 
conjunction with any other person, directly or indirectly, may--
            ``(1) except for ocean transportation contracts, subject a 
        person, place, port, or shipper to unreasonable discrimination;
            ``(2) retaliate against any shipper by refusing, or 
        threatening to refuse, cargo space accommodations when 
        available, or resort to other unfair or unjustly discriminatory 
        methods because the shipper has patronized another carrier or 
        has filed a complaint, or for any other reason;
            ``(3) employ any fighting ship;
            ``(4) subject any particular person, locality, class, or 
        type of shipper or description of traffic to an unreasonable 
        refusal to deal;
            ``(5) refuse to negotiate with a shippers' association;
            ``(6) knowingly and willfully accept cargo from or 
        transport cargo for the account of an ocean freight forwarder 
        that does not have a bond, insurance, or other surety as 
        required by section 19;
            ``(7) knowingly and willfully enter into an ocean 
        transportation contract with an ocean freight forwarder or in 
        which an ocean freight forwarder is listed as an affiliate that 
        does not have a bond, insurance, or other surety as required by 
        section 19; or
            ``(8)(A) knowingly disclose, offer, solicit, or receive any 
        information concerning the nature, kind, quantity, destination, 
        consignee, or routing of any property tendered or delivered to 
        a common carrier without the consent of the shipper or 
        consignee if that information--
                    ``(i) may be used to the detriment or prejudice of 
                the shipper or consignee;
                    ``(ii) may improperly disclose its business 
                transaction to a competitor; or
                    ``(iii) may be used to the detriment or prejudice 
                of any common carrier;
        except that nothing in this paragraph shall be construed to 
        prevent providing the information, in response to legal 
        process, to the United States, or to an independent neutral 
        body operating within the scope of its authority to fulfill the 
        policing obligations of the parties to an agreement effective 
        under this Act. Nor shall it be prohibited for any ocean common 
        carrier that is a party to a conference agreement approved 
        under this Act, or any receiver, trustee, lessee, agent, or 
        employee of that carrier, or any other person authorized by 
        that carrier to receive information, to give information to the 
        conference or any person, firm, corporation, or agency 
        designated by the conference or to prevent the conference or 
        its designee from soliciting or receiving information for the 
        purpose of determining whether a shipper or consignee has 
        breached an agreement with a conference or for the purpose of 
        determining whether a member of the conference has breached the 
        conference agreement or for the purpose of compiling statistics 
        of cargo movement, but the use of that information for any 
        other purpose prohibited by this Act or any other Act is 
        prohibited; and
            ``(B) after December 31, 1997, the rates, services, terms, 
        and conditions of an ocean transportation contract may not be 
        disclosed under this paragraph if the contract has been made on 
        a confidential basis under section 8(b) of this Act.
The exclusive remedy for a disclosure under this paragraph shall be an 
action for breach of contract as provided in section 8(b)(3) of this 
Act.'';
            (3) effective June 1, 1997--
                    (A) by striking subsection (c)(1) and inserting the 
                following:
                    ``(1) boycott, take any concerted action resulting 
                in an unreasonable refusal to deal, or implement a 
                policy or practice that results in an unreasonable 
                refusal to deal;'';
                    (B) in subsection (c)(5) by inserting ``as defined 
                in section 3(14)(A) of this Act'' after ``freight 
                forwarder''; and
                    (C) in subsection (c)(6) by striking ``a service 
                contract.'' and inserting ``an ocean transportation 
                contract.''; and
            (4) effective June 1, 1997, in subsection (d)(3) by 
        striking ``subsection (b) (11), (12), and (16)'' and inserting 
        ``paragraphs (1), (4), and (8) of subsection (b)''.

SEC. 10218. REPARATIONS.

    Effective June 1, 1997, section 11(g) of the Shipping Act of 1984 
(46 U.S.C. App. 1710(g)) is amended--
            (1) by inserting ``or counter-complainant'' after 
        ``complainant'' the second place it appears;
            (2) by striking ``10(b) (5) or (7)'' and inserting ``10(b) 
        (2) or (3)''; and
            (3) by striking the last sentence.

SEC. 10219. FOREIGN LAWS AND PRACTICES.

    Effective on June 1, 1997, section 10002 of the Foreign Shipping 
Practices Act of 1988 (46 U.S.C. App. 1710a) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ```non-vessel-operating common 
                carrier',''; and
                    (B) by inserting ```ocean freight forwarder','' 
                after ```ocean common carrier','';
            (2) in subsection (a)(4) by striking ``non-vessel-operating 
        common carrier operations,'';
            (3) in subsection (e)(1) by striking subparagraphs (B), 
        (C), and (D) and inserting the following:
            ``(B) suspension, in whole or in part, of the right of an 
        ocean common carrier to operate under any agreement filed with 
        the Secretary, including agreements authorizing preferential 
        treatment at terminals, preferential terminal leases, space 
        chartering, or pooling of cargo or revenues with other ocean 
        common carriers; and
            ``(C) a fee, not to exceed $1,000,000 per voyage.''; and
            (4) in subsection (h) by striking ``section 13(b)(5) of the 
        Shipping Act of 1984 (46 U.S.C. App. 1712(b)(5))'' and 
        inserting ``section 13(b)(2) of the Shipping Act of 1984 (46 
        U.S.C. App. 1712(b)(2))''.

SEC. 10220. PENALTIES.

    Effective June 1, 1997, section 13 of the Shipping Act of 1984 (46 
U.S.C. App. 1712) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraphs (1) and (3) and 
                redesignating paragraphs (2), (4), (5), and (6) as 
                paragraphs (1), (2), (3), and (4), respectively;
                    (B) by striking paragraph (1), as so redesignated, 
                and inserting the following:
            ``(1) If the Secretary finds, after notice and an 
        opportunity for a hearing, that a common carrier has failed to 
        supply information ordered to be produced or compelled by 
        subpoena under section 12 of this Act, the Secretary may 
        request that the Secretary of the Treasury refuse or revoke any 
        clearance required for a vessel operated by that common 
        carrier. Upon request by the Secretary, the Secretary of the 
        Treasury shall, with respect to the vessel concerned, refuse or 
        revoke any clearance required by section 4197 of the Revised 
        Statutes of the United States (46 U.S.C. App. 91).''; and
                    (C) in paragraph (3), as so redesignated, by 
                striking ``finds appropriate,'' and all that follows 
                through the period at the end and inserting ``finds 
                appropriate including the imposition of the penalties 
                authorized under paragraph (2).''; and
            (2) in subsection (f)(1) by striking ``section 10 (a)(1), 
        (b)(1), or (b)(4)'' and inserting ``section 10(a)(1)''.

SEC. 10221. REPORTS.

    (a) In General.--Effective January 1, 1997, section 15 of the 
Shipping Act of 1984 (46 U.S.C. App. 1714) is amended--
            (1) in the section heading by striking ``and 
        certificates'';
            (2) by striking ``(a) Reports.--''; and
            (3) by striking subsection (b).
    (b) Clerical Amendment.--The table of contents contained in the 
first section of such Act (46 U.S.C. App. 1701) is amended by striking 
the item relating to section 15 and inserting the following:

``Sec. 15. Reports.''.

SEC. 10222. REGULATIONS.

    Section 17 of the Shipping Act of 1984 (46 U.S.C. App. 1716) is 
amended--
            (1) by striking ``(a)''; and
            (2) by striking subsection (b).

SEC. 10223. REPEAL.

    (a) Repeal.--Section 18 of the Shipping Act of 1984 (46 U.S.C. App. 
1717) is repealed.
    (b) Clerical Amendment.--The table of contents contained in the 
first section of such Act (46 U.S.C. App. 1701) is amended by striking 
the item relating to section 18.

SEC. 10224. OCEAN FREIGHT FORWARDERS.

    Effective June 1, 1997, section 19 of the Shipping Act of 1984 (46 
U.S.C. App. 1718) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) License.--No person in the United States may act as an ocean 
freight forwarder unless that person holds a license issued by the 
Commission. The Commission shall issue a forwarder's license to any 
person that the Commission determines to be qualified by experience and 
character to render forwarding services.'';
            (2) by redesignating subsections (b), (c), and (d) as 
        subsections (c), (d), and (e), respectively;
            (3) by inserting after subsection (a) the following:
    ``(b) Financial Responsibility.--
            ``(1) No person may act as an ocean freight forwarder 
        unless that person furnishes a bond, proof of insurance, or 
        other surety in a form and amount determined by the Commission 
        to insure financial responsibility that is issued by a surety 
        company found acceptable by the Secretary of the Treasury.
            ``(2) A bond, insurance, or other surety obtained pursuant 
        to this section shall be available to pay any judgment for 
        damages against an ocean freight forwarder arising from its 
        transportation-related activities under this Act or order for 
        reparation issued pursuant to section 11 or 14 of this Act.
            ``(3) An ocean freight forwarder not domiciled in the 
        United States shall designate a resident agent in the United 
        States for receipt of service of judicial and administrative 
        process, including subpoenas.'';
            (4) in subsection (c), as redesignated by paragraph (2) of 
        this section, by striking ``a bond in accordance with 
        subsection (a)(2)'' and inserting ``a bond, proof of insurance, 
        or other surety in accordance with subsection (b)(1)''; and
            (5) in subsection (e), as redesignated by paragraph (2) of 
        this section--
                    (A) by striking paragraph (3) and redesignating 
                paragraph (4) as paragraph (3); and
                    (B) by adding at the end the following:
            ``(4) No conference or group of 2 or more ocean common 
        carriers in the foreign commerce of the United States that is 
        authorized to agree upon the level of compensation paid to an 
        ocean freight forwarder, as defined in section 3(18)(A) of this 
        Act, may--
                    ``(A) deny to any member of the conference or group 
                the right, upon notice of not more than 3 business 
                days, to take independent action on any level of 
                compensation paid to an ocean freight forwarder; or
                    ``(B) agree to limit the payment of compensation to 
                an ocean freight forwarder, as defined in section 
                3(18)(A) of this Act, to less than 1.25 percent of the 
                aggregate of all rates and charges which are applicable 
                under a common schedule of transportation rates 
                provided under section 8(a) of this Act, and which are 
                assessed against the cargo on which the forwarding 
                services are provided.''.

SEC. 10225. EFFECTS ON CERTAIN AGREEMENTS AND CONTRACTS.

    Section 20(e) of the Shipping Act of 1984 (46 U.S.C. App. 1719) is 
amended to read as follows:
    ``(e) Savings Provisions.--
            ``(1) Each service contract entered into by a shipper and 
        an ocean common carrier or conference before the date of the 
        enactment of the Ocean Shipping Reform Act of 1995 may remain 
        in full force and effect according to its terms.
            ``(2) This Act and the amendments made by this Act shall 
        not affect any suit--
                    ``(A) filed before the date of the enactment of the 
                Ocean Shipping Reform Act of 1995;
                    ``(B) with respect to claims arising out of conduct 
                engaged in before the date of the enactment of the 
                Ocean Shipping Reform Act of 1995, filed within 1 year 
                after the date of the enactment of the Ocean Shipping 
                Reform Act of 1995;
                    ``(C) with respect to claims arising out of conduct 
                engaged in after the date of the enactment of the Ocean 
                Shipping Reform Act of 1995 but before January 1, 1997, 
                pertaining to a violation of section 10(b) (1), (2), 
                (3), (4), or (8), as in effect before January 1, 1997, 
                filed by June 1, 1997;
                    ``(D) with respect to claims pertaining to the 
                failure of a common carrier or conference to file its 
                tariffs or service contracts in accordance with this 
                Act in the period beginning January 1, 1997, and ending 
                June 1, 1997, filed by December 31, 1997; or
                    ``(E) with respect to claims arising out of conduct 
                engaged in on or after the date of the enactment of the 
                Ocean Shipping Reform Act of 1995 but before June 1, 
                1997, filed by December 31, 1997.''.

SEC. 10226. REPEAL.

    (a) Repeal.--Effective June 1, 1997, section 23 of the Shipping Act 
of 1984 (46 U.S.C. App. 1721) is repealed.
    (b) Clerical Amendment.--Effective June 1, 1997, the table of 
contents contained in the first section of such Act (46 U.S.C. App. 
1701) is amended by striking the item relating to section 23.

SEC. 10227. MARINE TERMINAL OPERATOR SCHEDULES.

    (a) In General.--Effective June 1, 1997, the Shipping Act of 1984 
(46 U.S.C. App. 1701 et seq.) is amended by adding at the end the 
following:

``SEC. 24. MARINE TERMINAL OPERATOR SCHEDULES.

    ``A marine terminal operator shall make available to the public a 
schedule of rates, regulations, and practices, including limitations of 
liability, pertaining to receiving, delivering, handling, or storing 
property at its marine terminal. The schedule shall be enforceable as 
an implied contract, without proof of actual knowledge of its 
provisions, for any activity by the marine terminal operator that is 
taken to--
            ``(1) efficiently transfer property between transportation 
        modes;
            ``(2) protect property from damage or loss;
            ``(3) comply with any governmental requirement; or
            ``(4) store property in excess of the terms of any other 
        contract or agreement, if any, entered into by the marine 
        terminal operator.''.
    (b) Clerical Amendment.--The table of contents contained in the 
first section of such Act (46 U.S.C. App. 1701) is amended by adding at 
the end the following:

``Sec. 24. Marine terminal operator schedules.''.

               CHAPTER 2--CONTROLLED CARRIERS AMENDMENTS

SEC. 10231. CONTROLLED CARRIERS.

    Effective June 1, 1997, section 9 of the Shipping Act of 1984 (46 
U.S.C. App. 1708) is amended--
            (1)(A) in the first sentence of subsection (a)--
                    (i) by striking ``in its tariffs or service 
                contracts filed with the Commission''; and
                    (ii) by striking ``in those tariffs or service 
                contracts''; and
            (B) in the last sentence of subsection (a) by striking 
        ``filed by a controlled carrier'';
            (2) in paragraphs (1) and (2) of subsection (b) by striking 
        ``filed'' and inserting ``published'';
            (3) in subsection (c) by striking the first sentence;
            (4) by striking subsection (d) and inserting the following:
    ``(d) Within 120 days of the receipt of information requested by 
the Secretary under this section, the Secretary shall determine whether 
the rates, charges, classifications, rules, or regulations of a 
controlled carrier may be unjust and unreasonable. If so, the Secretary 
shall issue an order to the controlled carrier to show cause why those 
rates, charges, classifications, rules, or regulations should not be 
approved. Pending a determination, the Secretary may suspend the rates, 
charges, classifications, rules, or regulations at any time. No period 
of suspension may be greater than 180 days. Whenever the Secretary has 
suspended any rates, charges, classifications, rules, or regulations 
under this subsection, the affected carrier may publish and, after 
notification to the Secretary, assess new rates, charges, 
classifications, rules, or regulations--except that the Secretary may 
reject the new rates, charges, classifications, rules, or regulations 
if the Secretary determines that they are unreasonable.'';
            (5) in subsection (f) by striking ``This'' and inserting 
        ``Subject to subsection (g), this''; and
            (6) by adding at the end the following:
    ``(g) The rate standards, information submissions, remedies, 
reviews, and penalties in this section shall also apply to ocean common 
carriers that are not controlled, but who have been determined by the 
Secretary to be structurally or financially affiliated with 
nontransportation entities or organizations (government or private) in 
such a way as to affect their pricing or marketplace behavior in an 
unfair, predatory, or anticompetitive way that disadvantages an ocean 
common carrier or carriers. The Secretary may make such determinations 
upon request of any person or upon the Secretary's own motion, after 
conducting an investigation and a public hearing.
    ``(h) The Secretary shall issue regulations by June 1, 1997, that 
prescribe the procedures and requirements that would govern how price 
and other information is to be submitted by controlled carriers and 
carriers subject to determinations made under subsection (g) when such 
information would be needed to determine whether prices charged by 
these carriers are unfair, predatory, or anticompetitive.
    ``(i) In any instance where information provided to the Secretary 
under this section does not result in an affirmative finding or 
enforcement action by the Secretary that information may not be made 
public and shall be exempt from disclosure under section 552 of title 
5, United States Code, except as may be relevant to an administrative 
or judicial action or proceeding. This section does not prevent 
disclosure to either body of Congress or to a duly authorized committee 
or subcommittee of Congress.''.

SEC. 10232. NEGOTIATING STRATEGY TO REDUCE GOVERNMENT OWNERSHIP AND 
              CONTROL OF COMMON CARRIERS.

    Not later than January 1, 1997, the Secretary of Transportation 
shall develop, submit to Congress, and begin implementing a negotiation 
strategy to persuade foreign governments to divest themselves of 
ownership and control of ocean common carriers (as that term is defined 
in section 3(18) of the Shipping Act of 1984 (46 U.S.C. App. 1702).

SEC. 10233. ANNUAL REPORT BY THE SECRETARY.

    Not later than September 30, 1998, and annually thereafter, the 
Secretary shall report to Congress on the actions taken under the 
Foreign Shipping Practices Act (46 U.S.C. App. 1708), section 9 of the 
Shipping Act of 1984 (46 U.S.C. App. 1708), and section 10232 of this 
Act and the effect on United States maritime employment of laws, rules, 
regulations, policies, or practices of foreign governments, or any 
practices of foreign carriers or other persons providing maritime or 
maritime-related services in a foreign country that result in the 
existence of conditions that adversely affect the operations of United 
States carriers in United States oceanborne trade.

       CHAPTER 3--ELIMINATION OF THE FEDERAL MARITIME COMMISSION

SEC. 10241. PLAN FOR AGENCY TERMINATION.

    (a) In General.--No later than 30 days after the date of the 
enactment of this Act, the Director of the Office of Management and 
Budget, in consultation with the Secretary of Transportation, shall 
submit to Congress a plan to eliminate the Federal Maritime Commission 
no later than October 1, 1997. The plan shall include a timetable for 
the transfer of remaining functions of the Federal Maritime Commission 
to the Secretary of Transportation beginning as soon as feasible in 
fiscal year 1996. The plan shall also address matters related to 
personnel and other resources necessary for the Secretary of 
Transportation to perform the remaining functions of the Federal 
Maritime Commission.
    (b) Implementation.--The Director of the Office of Management and 
Budget shall implement the plan to eliminate the Federal Maritime 
Commission submitted to Congress under subsection (a) beginning as soon 
as feasible in fiscal year 1996.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this subtitle 
and the amendments made by this subtitle.

             Subtitle C--Midewin National Tallgrass Prairie

                     CHAPTER 1--GENERAL PROVISIONS

SEC. 10301. SHORT TITLE.

    This subtitle may be cited as the ``Illinois Land Conservation Act 
of 1995''.

SEC. 10302. DEFINITIONS.

    For purposes of this subtitle, the following definitions apply:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the United States Environmental Protection 
        Agency.
            (2) Agricultural purposes.--The term ``agricultural 
        purposes'' means the use of land for row crops, pasture, hay, 
        and grazing.
            (3) Arsenal.--The term ``Arsenal'' means the Joliet Army 
        Ammunition Plant located in the State of Illinois.
            (4) CERCLA.--The term ``CERCLA'' means the Comprehensive 
        Environmental Response, Compensation, and Liability Act of 1980 
        (42 U.S.C. 9601 et seq.).
            (5) Defense environmental restoration program.--The term 
        ``Defense Environmental Restoration Program'' means the program 
        of environmental restoration for defense installations 
        established by the Secretary of Defense under section 2701 of 
        title 10, United States Code.
            (6) Environmental law.--The term ``environmental law'' 
        means all applicable Federal, State, and local laws, 
        regulations, and requirements related to protection of human 
        health, natural and cultural resources, or the environment, 
        including CERCLA, the Solid Waste Disposal Act (42 U.S.C. 6901 
        et seq.), the Federal Water Pollution Control Act (33 U.S.C. 
        1251 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the 
        Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 
        136 et seq.), the Toxic Substances Control Act (15 U.S.C. 2601 
        et seq.), and the Safe Drinking Water Act (42 U.S.C. 300f et 
        seq.).
            (7) Hazardous waste.--The term ``hazardous substance'' has 
        the meaning given such term by section 101(14) of CERCLA (42 
        U.S.C. 9601(14)).
            (8) MNP.--The term ``MNP'' means the Midewin National 
        Tallgrass Prairie established pursuant to section 10314 and 
        managed as a part of the National Forest System.
            (9) National cemetery.--The term ``national cemetery'' 
        means a cemetery established and operated as part of the 
        National Cemetery System of the Department of Veterans Affairs 
        and subject to the provisions of chapter 24 of title 38, United 
        States Code.
            (10) Person.--The term ``person'' has the meaning given 
        such term by section 101(21) of CERCLA (42 U.S.C. 9601(21)).
            (11) Pollutant or contaminant.--The term ``pollutant or 
        contaminant'' has the meaning given such term by section 
        101(33) of CERCLA (42 U.S.C. 9601(33)).
            (12) Release.--The term ``release'' has the meaning given 
        such term by section 101(22) of CERCLA (42 U.S.C. 9601(22)).
            (13) Response action.--The term ``response action'' has the 
        meaning given the term ``response'' by section 101(25) of 
        CERCLA (42 U.S.C. 9601(25)).

   CHAPTER 2--CONVERSION OF JOLIET ARMY AMMUNITION PLANT TO MIDEWIN 
                       NATIONAL TALLGRASS PRAIRIE

SEC. 10311. PRINCIPLES OF TRANSFER.

    (a) Land Use Plan.--The Congress ratifies in principle the 
proposals generally identified by the land use plan which was developed 
by the Joliet Arsenal Citizen Planning Commission and unanimously 
approved on May 30, 1995.
    (b) Transfer Without Reimbursement.--The area constituting the 
Midewin National Tallgrass Prairie shall be transferred, without 
reimbursement, to the Secretary of Agriculture.
    (c) Management of MNP.--Management by the Secretary of Agriculture 
of those portions of the Arsenal transferred to the Secretary under 
this subtitle shall be in accordance with sections 10314 and 10315 
regarding the Midewin National Tallgrass Prairie.
    (d) Security Measures.--The Secretary of the Army and the Secretary 
of Agriculture shall each provide and maintain physical and other 
security measures on such portion of the Arsenal as is under the 
administrative jurisdiction of such Secretary. Such security measures 
(which may include fences and natural barriers) shall include measures 
to prevent members of the public from gaining unauthorized access to 
such portions of the Arsenal as are under the administrative 
jurisdiction of such Secretary and that may endanger health or safety.
    (e) Cooperative Agreements.--The Secretary of the Army, the 
Secretary of Agriculture, and the Administrator are individually and 
collectively authorized to enter into cooperative agreements and 
memoranda of understanding among each other and with other affected 
Federal agencies, State and local governments, private organizations, 
and corporations to carry out the purposes for which the Midewin 
National Tallgrass Prairie is established.
    (f) Interim Activities of the Secretary of Agriculture.--Prior to 
transfer and subject to such reasonable terms and conditions as the 
Secretary of the Army may prescribe, the Secretary of Agriculture may 
enter upon the Arsenal property for purposes related to planning, 
resource inventory, fish and wildlife habitat manipulation (which may 
include prescribed burning), and other such activities consistent with 
the purposes for which the Midewin National Tallgrass Prairie is 
established.

SEC. 10312. TRANSFER OF MANAGEMENT RESPONSIBILITIES AND JURISDICTION 
              OVER ARSENAL.

    (a) Initial Transfer of Jurisdiction.--Within 6 months after the 
date of the enactment of this Act, the Secretary of the Army shall 
effect the transfer of those portions of the Arsenal property 
identified for transfer to the Secretary of Agriculture pursuant to 
subsection (d). The Secretary of the Army shall transfer to the 
Secretary of Agriculture only those portions of the Arsenal for which 
the Secretary of the Army and the Administrator concur that no further 
action is required under any environmental law and which therefore have 
been eliminated from the areas to be further studied pursuant to the 
Defense Environmental Restoration Program for the Arsenal. Within 4 
months after the date of the enactment of this Act, the Secretary of 
the Army and the Administrator shall provide to the Secretary of 
Agriculture all existing documentation supporting such finding and all 
existing information relating to the environmental conditions of the 
portions of the Arsenal to be transferred to the Secretary of 
Agriculture pursuant to this subsection.
    (b) Additional Transfers.--The Secretary of the Army shall transfer 
to the Secretary of Agriculture in accordance with section 10316(c) any 
portion of the property generally identified in subsection (d) and not 
transferred under subsection (a) after the Secretary of the Army and 
the Administrator concur that no further action is required at that 
portion of property under any environmental law and that such portion 
is therefore eliminated from the areas to be further studied pursuant 
to the Defense Environmental Restoration Program for the Arsenal. At 
least 2 months before any transfer under this subsection, the Secretary 
of the Army and the Administrator shall provide to the Secretary of 
Agriculture all existing documentation supporting such finding and all 
existing information relating to the environmental conditions of the 
portion of the Arsenal to be transferred. Transfer of jurisdiction 
pursuant to this subsection may be accomplished on a parcel-by-parcel 
basis.
    (c) Effect on Continued Responsibilities and Liability of Secretary 
of the Army.--Subsections (a) and (b), and their requirements, shall 
not in any way affect the responsibilities and liabilities of the 
Secretary of the Army specified in section 10313.
    (d) Identification of Portions for Transfer for MNP.--The lands to 
be transferred to the Secretary of Agriculture under subsections (a) 
and (b) shall be identified on a map or maps which shall be agreed to 
by the Secretary of the Army and the Secretary of Agriculture. 
Generally, the land to be transferred to the Secretary of Agriculture 
shall be all the real property and improvements comprising the Arsenal, 
except for lands and facilities described in subsection (e) or 
designated for transfer or disposal under section 10316 or chapter 3.
    (e) Property Used for Environmental Cleanup.--
            (1) Retention.--The Secretary of the Army shall retain 
        jurisdiction, authority, and control over real property at the 
        Arsenal to be used for--
                    (A) water treatment;
                    (B) the treatment, storage, or disposal of any 
                hazardous substance, pollutant or contaminant, 
                hazardous material, or petroleum products or their 
                derivatives;
                    (C) other purposes related to any response action 
                at the Arsenal; and
                    (D) other actions required at the Arsenal under any 
                environmental law to remediate contamination or 
                conditions of noncompliance with any environmental law.
            (2) Conditions.--The Secretary of the Army shall consult 
        with the Secretary of Agriculture regarding the identification 
        and management of the real property retained under this 
        subsection and ensure that activities carried out on that 
        property are consistent, to the extent practicable, with the 
        purposes for which the Midewin National Tallgrass Prairie is 
        established, as specified in section 10314(c), and with the 
        other provisions of sections 10314 and 10315.
            (3) Priority of response actions.--In the case of any 
        conflict between management of the property by the Secretary of 
        Agriculture and any response action, or any other action 
        required under any other environmental law, including actions 
        to remediate petroleum products of their derivatives, the 
        response action or other action shall take priority.
    (f) Surveys.--All costs of necessary surveys for the transfer of 
jurisdiction of Arsenal property from the Secretary of the Army to the 
Secretary of Agriculture shall be borne by the Secretary of 
Agriculture.

SEC. 10313. CONTINUATION OF RESPONSIBILITY AND LIABILITY OF SECRETARY 
              OF THE ARMY FOR ENVIRONMENTAL CLEANUP.

    (a) Responsibility.--The liabilities and responsibilities of the 
Secretary of the Army under any environmental law shall not transfer 
under any circumstances to the Secretary of Agriculture as a result of 
the property transfers made under section 10312 or section 10316, or as 
a result of interim activities of the Secretary of Agriculture on 
Arsenal property under section 10311(f). With respect to the real 
property at the Arsenal, the Secretary of the Army shall remain liable 
for and continue to carry out--
            (1) all response actions required under CERCLA at or 
        related to the property;
            (2) all remediation actions required under any other 
        environmental law at or related to the property; and
            (3) all actions required under any other environmental law 
        to remediate petroleum products or their derivatives (including 
        motor oil and aviation fuel) at or related to the property.
    (b) Liability.--
            (1) In general.--Nothing in this Act shall be construed to 
        effect, modify, amend, repeal, alter, limit, or otherwise 
        change, directly or indirectly, the responsibilities or 
        liabilities under any environmental law of any person 
        (including the Secretary of Agriculture), except as provided in 
        paragraph (3) with respect to the Secretary of Agriculture.
            (2) Liability of secretary of the army.--The Secretary of 
        the Army shall retain any obligation or other liability at the 
        Arsenal that the Secretary may have under CERCLA and other 
        environmental laws. Following transfer of any portions of the 
        Arsenal pursuant to this Act, the Secretary of the Army shall 
        be accorded all easements and access to such property as may be 
        reasonably required to carry out such obligation or satisfy 
        such liability.
            (3) Special rules for secretary of agriculture.--The 
        Secretary of Agriculture shall not be responsible or liable 
        under any environmental law for matters which are in any way 
        related directly or indirectly to activities of the Secretary 
        of the Army, or any party acting under the authority of the 
        Secretary in connection with the Defense Environmental 
        Restoration Program, at the Arsenal and which are for any of 
        the following:
                    (A) Costs of response actions required under CERCLA 
                at or related to the Arsenal.
                    (B) Costs, penalties, or fines related to 
                noncompliance with any environmental law at or related 
                to the Arsenal or related to the presence, release, or 
                threat of release of any hazardous substance, 
                pollutant, contaminant, hazardous waste or hazardous 
                material of any kind at or related to the Arsenal, 
                including contamination resulting from migration of 
                hazardous substances, pollutants, contaminants, 
                hazardous materials, or petroleum products or their 
                derivatives disposed during activities of the 
                Department of the Army.
                    (C) Costs of actions necessary to remedy such 
                noncompliance or other problem specified in 
                subparagraph (B).
    (c) Payment of Response Action Costs.--Any Federal department or 
agency that had or has operations at the Arsenal resulting in the 
release or threatened release of hazardous substances, pollutants, or 
contaminants shall pay the cost of related response actions, or related 
actions under other environmental laws, including actions to remediate 
petroleum products or their derivatives.
    (d) Consultation.--The Secretary of Agriculture shall consult with 
the Secretary of the Army with respect to the Secretary of 
Agriculture's management of real property included in the Midewin 
National Tallgrass Prairie subject to any response action or other 
action at the Arsenal being carried out by or under the authority of 
the Secretary of the Army under any environmental law. The Secretary of 
Agriculture shall consult with the Secretary of the Army prior to 
undertaking any activities on the Midewin National Tallgrass Prairie 
that may disturb the property to ensure that such activities will not 
exacerbate contamination problems or interfere with performance by the 
Secretary of the Army of response actions at the property. In carrying 
out response actions at the Arsenal, the Secretary of the Army shall 
consult with the Secretary of Agriculture to ensure that such actions 
are carried out in a manner consistent with the purposes for which the 
Midewin National Tallgrass Prairie is established, as specified in 
section 10314(c), and the other provisions of sections 10314 and 10315.

SEC. 10314. ESTABLISHMENT AND ADMINISTRATION OF MIDEWIN NATIONAL 
              TALLGRASS PRAIRIE.

    (a) Establishment.--On the effective date of the initial transfer 
of jurisdiction of portions of the Arsenal to the Secretary of 
Agriculture under section 10312(a), the Secretary of Agriculture shall 
establish the Midewin National Tallgrass Prairie. The MNP shall--
            (1) be administered by the Secretary of Agriculture; and
            (2) consist of the real property so transferred and such 
        other portions of the Arsenal subsequently transferred under 
        section 10312(b) or 10316.
    (b) Administration.--
            (1) In general.--The Secretary of Agriculture shall manage 
        the Midewin National Tallgrass Prairie as a part of the 
        National Forest System in accordance with this Act and the 
        laws, rules, and regulations pertaining to the National Forest 
        System, except that the Bankhead-Jones Farm Tenant Act of 1937 
        (7 U.S.C. 1010-1012) shall not apply to the MNP.
            (2) Initial management activities.--In order to expedite 
        the administration and public use of the Midewin National 
        Tallgrass Prairie, the Secretary of Agriculture may conduct 
        management activities at the MNP to effectuate the purposes for 
        which the MNP is established, as specified in subsection (c), 
        in advance of the development of a land and resource management 
        plan for the MNP.
            (3) Land and resource management plan.--In developing a 
        land and resource management plan for the Midewin National 
        Tallgrass Prairie, the Secretary of Agriculture shall consult 
        with the Illinois Department of Conservation and local 
        governments adjacent to the MNP and provide an opportunity for 
        public comment. Any parcel transferred to the Secretary of 
        Agriculture under this Act after the development of a land and 
        resource management plan for the MNP may be managed in 
        accordance with such plan without need for an amendment to the 
        plan.
    (c) Purposes of the Midewin National Tallgrass Prairie.--The 
Midewin National Tallgrass Prairie is established to be managed for 
National Forest System purposes, including the following:
            (1) To manage the land and water resources of the MNP in a 
        manner that will conserve and enhance the native populations 
        and habitats of fish, wildlife, and plants.
            (2) To provide opportunities for scientific, environmental, 
        and land use education and research.
            (3) To allow the continuation of agricultural uses of lands 
        within the MNP consistent with section 10315(b).
            (4) To provide a variety of recreation opportunities that 
        are not inconsistent with the preceding purposes.
    (d) Other Land Acquisition for MNP.--
            (1) Land acquisition funds.--Notwithstanding section 7 of 
        the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 
        460l-9), monies appropriated from the Land and Water 
        Conservation Fund established under section 2 of such Act (16 
        U.S.C. 460l-5) shall be available for acquisition of lands and 
        interests in land for inclusion in the Midewin National 
        Tallgrass Prairie.
            (2) Acquisition of private lands.--Acquisition of private 
        lands for inclusion in the Midewin National Tallgrass Prairie 
        shall be on a willing seller basis only.
    (e) Cooperation With States, Local Governments and Other 
Entities.--In the management of the Midewin National Tallgrass Prairie, 
the Secretary of Agriculture is authorized and encouraged to cooperate 
with appropriate Federal, State, and local governmental agencies, 
private organizations and corporations. Such cooperation may include 
cooperative agreements as well as the exercise of the existing 
authorities of the Secretary under the Cooperative Forestry Assistance 
Act of 1978 and the Forest and Rangeland Renewable Resources Research 
Act of 1978. The objects of such cooperation may include public 
education, land and resource protection and cooperative management 
among government, corporate, and private landowners in a manner which 
furthers the purposes for which the Midewin National Tallgrass Prairie 
is established.

SEC. 10315. SPECIAL MANAGEMENT REQUIREMENTS FOR MIDEWIN NATIONAL 
              TALLGRASS PRAIRIE.

    (a) Prohibition Against the Construction of New Through Roads.--No 
new construction of any highway, public road, or any part of the 
interstate system, whether Federal, State, or local, shall be permitted 
through or across any portion of the Midewin National Tallgrass 
Prairie. Nothing herein shall preclude construction and maintenance of 
roads for use within the MNP or the granting of authorizations for 
utility rights-of-way under applicable Federal law or preclude such 
access as is necessary. Nothing herein shall preclude necessary access 
by the Secretary of the Army for purposes of restoration and cleanup as 
provided in this subtitle.
    (b) Agricultural Leases and Special Use Authorizations.--Within the 
Midewin National Tallgrass Prairie, use of the lands for agricultural 
purposes shall be permitted subject to the following terms and 
conditions:
            (1) If, at the time of transfer of jurisdiction under 
        section 10312, there exists any lease issued by the Department 
        of the Army, Department of Defense, or any other agency 
        thereof, for agricultural purposes upon the parcel transferred, 
        the Secretary of Agriculture, upon transfer of jurisdiction, 
        shall convert the lease to a special use authorization, the 
        terms of which shall be identical in substance to the lease 
        that existed prior to the transfer, including the expiration 
        date and any payments owed the United States.
            (2) The Secretary of Agriculture may issue special use 
        authorizations to persons for use of the Midewin National 
        Tallgrass Prairie for agricultural purposes. Special use 
        authorizations issued pursuant to this paragraph shall include 
        terms and conditions as the Secretary of Agriculture may deem 
        appropriate.
            (3) No agricultural special use authorization shall be 
        issued for agricultural purposes which has a term extending 
        beyond the date 20 years from the date of the enactment of this 
        Act, except that nothing in this Act shall preclude the 
        Secretary of Agriculture from issuing agricultural special use 
        authorizations or grazing permits which are effective after 20 
        years from the date of the enactment of this Act for purposes 
        primarily related to erosion control, provision for food and 
        habitat for fish and wildlife, or other resource management 
activities consistent with the purposes of the Midewin National 
Tallgrass Prairie.
    (c) Treatment of Rental Fees.--Monies received pursuant to 
subsection (b) shall be subject to distribution to the State of 
Illinois and affected counties pursuant to the Acts of May 23, 1908, 
and March 1, 1911 (16 U.S.C. 500). All such monies not distributed 
pursuant to such Acts shall be deposited into the Treasury and shall 
constitute a special fund, which shall be available to the Secretary of 
Agriculture, in such amounts as are provided in advance in 
appropriation Acts, to cover the cost to the United States of such 
prairie-improvement work as the Secretary may direct. Any portion of 
any deposit made to the fund which the Secretary determines to be in 
excess of the cost of doing such work shall be transferred, upon such 
determination, to miscellaneous receipts, Forest Service Fund, as a 
National Forest receipt of the fiscal year in which such transfer is 
made.
    (d) User Fees.--The Secretary of Agriculture is authorized to 
charge reasonable fees for the admission, occupancy, and use of the 
Midewin National Tallgrass Prairie and may prescribe a fee schedule 
providing for reduced, or a waiver of, fees for persons or groups 
engaged in authorized activities including those providing volunteer 
services, research, or education. The Secretary shall permit admission, 
occupancy, and use at no additional charge for persons possessing a 
valid Golden Eagle Passport or Golden Age Passport.
    (e) Salvage of Improvements.--The Secretary of Agriculture may sell 
for salvage value any facilities and improvements which have been 
transferred to the Secretary pursuant to this subtitle.
    (f) Treatment of User Fees and Salvage Receipts.--Monies collected 
pursuant to subsections (d) and (e) shall be covered into the Treasury 
and constitute a special fund to be known as the Midewin National 
Tallgrass Prairie Restoration Fund. Deposits in the Midewin National 
Tallgrass Prairie Restoration Fund shall be available to the Secretary 
of Agriculture, in such amounts as are provided in advance in 
appropriation Acts, for restoration and administration of the Midewin 
National Tallgrass Prairie, including construction of a visitor and 
education center, restoration of ecosystems, construction of 
recreational facilities (such as trails), construction of 
administrative offices, and operation and maintenance of the MNP.

SEC. 10316. SPECIAL DISPOSAL RULES FOR CERTAIN ARSENAL PARCELS INTENDED 
              FOR MNP.

    (a) Description of Parcels.--Except as provided in subsection (b), 
the following areas are designated for transfer or disposal pursuant to 
subsection (c):
            (1) Manufacturing Area--Study Area 1--Southern Ash Pile, 
        Study Area 2--Explosive Burning Ground, Study Area 3--Flashing 
        Grounds, Study Area 4--Lead Azide Area, Study Area 10--Toluene 
        Tank Farms, Study Area 11--Landfill, Study Area 12--Sellite 
        Manufacturing Area, Study Area 14--Former Pond Area, Study Area 
        15--Sewage Treatment Plant.
            (2) Load Assemble Packing Area--Group 61: Study Area L1, 
        Explosive Burning Ground: Study Area L2, Demolition Area: Study 
        Area L3, Landfill Area: Study Area L4, Salvage Yard: Study Area 
        L5, Group 1: Study Area L7, Group 2: Study Area L8, Group 3: 
        Study Area L9, Group 3A: Study Area L10, Group 4: Study Area 
        L14, Group 5: Study Area L15, Group 8: Study Area L18, Group 9: 
        Study Area L19, Group 27: Study Area L23, Group 62: Study Area 
        L25, PVC Area: Study Area L33, including all associated 
        inventoried buildings and structures as identified in the 
        Joliet Army Ammunition Plant Plantwide Building and Structures 
        Report and the contaminate study sites for both the 
        Manufacturing and Load Assembly and Packing sides of the Joliet 
        Arsenal as delineated in the Dames and Moore Final Report, 
        Proposed Future Land Use Map, dated May 30, 1995.
    (b) Exception.--The parcels described in subsection (a) shall not 
include the property at the Arsenal designated for disposal under 
chapter 3.
    (c) Initial Offer to Secretary of Agriculture.--Within 6 months 
after the construction and installation of any remedial design approved 
by the Administrator and required for any lands described in subsection 
(a), the Administrator shall provide to the Secretary of Agriculture 
all existing information regarding the implementation of such remedy, 
including information regarding its effectiveness. Within 3 months 
after the Administrator provides such information to the Secretary of 
Agriculture, the Secretary of the Army shall offer the Secretary of 
Agriculture the option of accepting a transfer of the areas described 
in subsection (a), without reimbursement, to be added to the Midewin 
National Tallgrass Prairie and subject to the terms and conditions, 
including the limitations on liability, contained in this subtitle. In 
the event the Secretary of Agriculture declines such offer, the 
property may be disposed of as the Secretary of the Army would 
ordinarily dispose of such property under applicable provisions of law. 
Any sale or other transfer of property conducted pursuant to this 
subsection may be accomplished on a parcel-by-parcel basis.

    CHAPTER 3--OTHER REAL PROPERTY DISPOSALS INVOLVING JOLIET ARMY 
                            AMMUNITION PLANT

SEC. 10321. DISPOSAL OF CERTAIN REAL PROPERTY AT ARSENAL FOR A NATIONAL 
              CEMETERY.

    (a) Transfer Required.--Subject to section 10331, the Secretary of 
the Army shall transfer, without reimbursement, to the Secretary of 
Veterans Affairs the parcel of real property at the Arsenal described 
in subsection (b) for use as a national cemetery.
    (b) Description of Property.--The real property to be transferred 
under subsection (a) is a parcel of real property at the Arsenal 
consisting of approximately 982 acres, the approximate legal 
description of which includes part of sections 30 and 31 Jackson 
Township, T34N R10E, and part of sections 25 and 36 Channahon Township, 
T34N R9E, Will County, Illinois, as depicted in the Arsenal Land Use 
Concept.
    (c) Security Measures.--The Secretary of Veterans Affairs shall 
provide and maintain physical and other security measures on the real 
property transferred under subsection (a). Such security measures 
(which may include fences and natural barriers) shall include measures 
to prevent members of the public from gaining unauthorized access to 
the portion of the Arsenal that is under the administrative 
jurisdiction of the Secretary of Veterans Affairs and that may endanger 
health or safety.
    (d) Surveys.--All costs of necessary surveys for the transfer of 
jurisdiction of Arsenal properties from the Secretary of the Army to 
the Secretary of Veterans Affairs shall be borne solely by the 
Secretary of Veterans Affairs.

SEC. 10322. DISPOSAL OF CERTAIN REAL PROPERTY AT ARSENAL FOR A COUNTY 
              LANDFILL.

    (a) Transfer Required.--Subject to section 10331, the Secretary of 
the Army shall transfer, without compensation, to Will County, 
Illinois, all right, title, and interest of the United States in and to 
the parcel of real property at the Arsenal described in subsection (b), 
which shall be operated as a landfill by the County.
    (b) Description of Property.--The real property to be transferred 
under subsection (a) is a parcel of real property at the Arsenal 
consisting of approximately 455 acres, the approximate legal 
description of which includes part of sections 8 and 17, Florence 
Township, T33N R10E, Will County, Illinois, as depicted in the Arsenal 
Land Use Concept.
    (c) Condition on Conveyance.--The conveyance shall be subject to 
the condition that the Army (or its agents or assigns) may use the 
landfill established on the real property transferred under subsection 
(a) for the disposal of construction debris, refuse, and other 
nonhazardous materials from the restoration and cleanup of the Arsenal 
property as provided for in this Act. Such use shall be at no cost to 
the Federal Government.
    (d) Reversionary Interest.--During the 5-year period beginning on 
the date the Secretary of the Army makes the conveyance under 
subsection (a), if the Secretary of the Army determines that the 
conveyed real property is not being operated as a landfill or that Will 
County, Illinois, is in violation of the condition specified in 
subsection (c), then, at the option of the United States, all right, 
title, and interest in and to the property, including improvements 
thereon, shall be subject to reversion to the United States. In the 
event the United States exercises its option to cause the property to 
revert, the United States shall have the right of immediate entry onto 
the property. Any determination of the Secretary of the Army under this 
subsection shall be made on the record after an opportunity for a 
hearing.
    (e) Surveys.--All costs of necessary surveys for the transfer of 
real property under this section shall be borne by Will County, 
Illinois.
    (f) Additional Terms and Conditions.--The Secretary of the Army may 
require such additional terms and conditions in connection with the 
conveyance under this section as the Secretary of the Army considers 
appropriate to protect the interests of the United States.

SEC. 10323. DISPOSAL OF CERTAIN REAL PROPERTY AT ARSENAL FOR ECONOMIC 
              DEVELOPMENT.

    (a) Transfer Required.--Subject to section 10331, the Secretary of 
the Army shall transfer to the State of Illinois, all right, title, and 
interest of the United States in and to the parcel of real property at 
the Arsenal described in subsection (b), which shall be used for 
economic redevelopment to replace all or a part of the economic 
activity lost at the Arsenal.
    (b) Description of Property.--The real property to be transferred 
under subsection (a) is a parcel of real property at the Arsenal 
consisting of--
            (1) approximately 1,900 acres, the approximate legal 
        description of which includes part of section 30, Jackson 
        Township, Township 34 North, Range 10 East, and sections or 
        parts of sections 24, 25, 26, 35, and 36, Township 34 North, 
        Range 9 East, in Channahon Township, an area of 9.77 acres 
        around the Des Plaines River Pump Station located in the 
        southeast quarter of section 15, Township 34 North, Range 9 
        East of the Third Principal Meridian, in Channahon Township, 
        and an area of 511 feet by 596 feet around the Kankakee River 
        Pump Station in the Northwest Quarter of section 5, Township 33 
        North, Range 9 East, east of the Third Principal Meridian in 
        Wilmington Township, containing 6.99 acres, located along the 
        easterly side of the Kankakee Cut-Off in Will County, Illinois, 
        as depicted in the Arsenal Re-Use Concept, and the connecting 
        piping to the northern industrial site, as described by the 
        United States Army Report of Availability, dated 13 December 
        1993; and
            (2) approximately 1,100 acres, the approximate legal 
        description of which includes part of sections 16, 17, 18 
        Florence Township, Township 33 North, Range 10 East, Will 
        County, Illinois, as depicted in the Arsenal Land Use Concept.
    (c) Consideration.--The transfer under subsection (a) shall be made 
without consideration. However, the transfer shall be subject to the 
condition that, if the State of Illinois reconveys all or any part of 
the transferred property to a non-Federal entity, the State shall pay 
to the United States an amount equal to the fair market value of the 
reconveyed property. The Secretary of the Army shall determine the fair 
market value of any property reconveyed by the State as of the time of 
the reconveyance, excluding the value of improvements made to the 
property by the State. The Secretary may treat a lease of the property 
as a reconveyance if the Secretary determines that the lease was used 
in an effort to avoid operation of this subsection. Amounts received 
under this subsection shall be deposited in the general fund of the 
Treasury for purposes of deficit reduction.
    (d) Other Conditions of Conveyance.--
            (1) Redevelopment authority.--The transfer under subsection 
        (a) shall be subject to the further condition that the Governor 
        of the State of Illinois establish a redevelopment authority to 
        be responsible for overseeing the economic redevelopment of the 
        transferred land.
            (2) Time for establishment.--To satisfy the condition 
        specified in paragraph (1), the redevelopment authority shall 
        be established within 1 year after the date of the enactment of 
        this Act.
    (e) Reversionary Interest.--During the 20-year period beginning on 
the date the Secretary of the Army makes the transfer under subsection 
(a), if the Secretary determines that a condition specified in 
subsection (c) or (d) is not being satisfied or that the transferred 
land is not being used for economic development purposes, then, at the 
option of the United States, all right, title, and interest in and to 
the property, including improvements thereon, shall be subject to 
reversion to the United States. In the event the United States 
exercises its option to cause the property to revert, the United States 
shall have the right of immediate entry onto the property. Any 
determination of the Secretary under this subsection shall be made on 
the record after an opportunity for a hearing.
    (f) Surveys.--All costs of necessary surveys for the transfer of 
real property under this section shall be borne by the State of 
Illinois.
    (g) Additional Terms and Conditions.--The Secretary of the Army may 
require such additional terms and conditions in connection with the 
transfer under this section as the Secretary considers appropriate to 
protect the interests of the United States.

                  CHAPTER 4--MISCELLANEOUS PROVISIONS

SEC. 10331. DEGREE OF ENVIRONMENTAL CLEANUP.

    (a) In General.--Nothing in this Act shall be construed to restrict 
or lessen the degree of cleanup at the Arsenal required to be carried 
out under provisions of any environmental law.
    (b) Response Action.--The establishment of the Midewin National 
Tallgrass Prairie under chapter 2 and the additional real property 
transfers and disposals required under chapter 3 shall not restrict or 
lessen in any way any response action or degree of cleanup under CERCLA 
or other environmental law, or any response action required under any 
environmental law to remediate petroleum products or their derivatives 
(including motor oil and aviation fuel), required to be carried out 
under the authority of the Secretary of the Army at the Arsenal and 
surrounding areas, except to the extent otherwise allowable under such 
laws.
    (c) Environmental Quality of Property.--Any contract for sale, 
deed, or other transfer of real property under chapter 3 shall be 
carried out in compliance with all applicable provisions of section 
120(h) of CERCLA and other environmental laws.

                  Subtitle D--Miscellaneous Provisions

SEC. 10401. EXTENSION OF HIGHER VESSEL TONNAGE DUTIES.

    (a) Extension of Duties.--Section 36 of the Act of August 5, 1909 
(36 Stat. 111; 46 App. U.S.C. 121), is amended by striking ``for fiscal 
years 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998,'' each place it 
appears and inserting ``for fiscal years through fiscal year 2002,''.
    (b) Conforming Amendment.--The Act entitled ``An Act concerning 
tonnage duties on vessels entering otherwise than by sea'', approved 
March 8, 1910 (36 Stat. 234; 46 App. U.S.C. 132), is amended by 
striking ``for fiscal years 1991, 1992, 1993, 1994, 1995, 1996, 1997, 
and 1998,'' and inserting ``for fiscal years through fiscal year 
2002,''.

SEC. 10402. SALE OF GOVERNORS ISLAND, NEW YORK.

    (a) In General.--Notwithstanding any other provision of law, the 
Administrator of General Services shall dispose of by sale at fair 
market value all rights, title, and interests of the United States in 
and to the land of, and improvements to, Governors Island, New York.
    (b) Right of First Refusal.--Before a sale is made under subsection 
(a) to any other parties, the State of New York and the city of New 
York shall be given the right of first refusal to purchase all or part 
of Governors Island. Such right may be exercised by either the State of 
New York or the city of New York or by both parties acting jointly.
    (c) Proceeds.--Proceeds from the disposal of Governors Island under 
subsection (a) shall be deposited in the general fund of the Treasury 
and credited as miscellaneous receipts.

SEC. 10403. SALE OF AIR RIGHTS.

    (a) In General.--Notwithstanding any other provision of law, the 
Administrator of General Services shall sell, at fair market value and 
in a manner to be determined by the Administrator, the air rights 
adjacent to Washington Union Station described in subsection (b), 
including air rights conveyed to the Administrator under subsection 
(d). The Administrator shall complete the sale by such date as is 
necessary to ensure that the proceeds from the sale will be deposited 
in accordance with subsection (c).
    (b) Description.--The air rights referred to in subsection (a) 
total approximately 16.5 acres and are depicted on the plat map of the 
District of Columbia as follows:
            (1) Part of lot 172, square 720.
            (2) Part of lots 172 and 823, square 720.
            (3) Part of lot 811, square 717.
    (c) Proceeds.--Before September 30, 1996, proceeds from the sale of 
air rights under subsection (a) shall be deposited in the general fund 
of the Treasury and credited as miscellaneous receipts.
    (d) Conveyance of Amtrak Air Rights.--
            (1) General rule.--As a condition of future Federal 
        financial assistance, Amtrak shall convey to the Administrator 
        of General Services on or before December 31, 1995, at no 
        charge, all of the air rights of Amtrak described in subsection 
        (b).
            (2) Failure to comply.--If Amtrak does not meet the 
        condition established by paragraph (1), Amtrak shall be 
        prohibited from obligating Federal funds after March 1, 1996.

SEC. 10404. COLLECTION OF PARKING FEES.

    (a) In General.--The Administrator of General Services shall issue 
regulations requiring each Executive agency to collect fees for the use 
of all parking facilities provided for the agency at Federal expense.
    (b) Specific Requirements.--The regulations--
            (1) shall include provisions under which any such user fee 
        shall be computed based on the fair market value of the use of 
        the parking facility involved; and
            (2) shall take effect on or before the 90th day after the 
        date of enactment of this Act.
    (c) Fees To Be Deposited in the Treasury.--All user fees collected 
under this section shall be deposited in the Treasury of the United 
States as miscellaneous receipts.
    (d) Prohibition on Use of Federal Funds.--No Federal funds may be 
used to pay any user fee collected under this section.
    (e) Executive Agency Defined.--In this section, the term 
``Executive agency'' has the meaning given such term by section 105 of 
title 5, United States Code.

    Subtitle E--Economic Development Administration and Appalachian 
                          Regional Commission

SEC. 10501. SHORT TITLE; EFFECTIVE DATE.

    (a) Short Title.--This subtitle may be cited as the ``Economic 
Development Partnership Act of 1995''.
    (b) Effective Date.--Except as otherwise expressly provided, this 
subtitle and the amendments made by this subtitle shall take effect 6 
months after the date of the enactment of this Act.

CHAPTER 1--TRANSFER OF FUNCTIONS OF ECONOMIC DEVELOPMENT ADMINISTRATION

SEC. 10511. REAUTHORIZATION OF PUBLIC WORKS AND ECONOMIC DEVELOPMENT 
              ACT OF 1965.

    The Public Works and Economic Development Act of 1965 (40 U.S.C. 
3131 et seq.) is amended by striking all after the first section and 
inserting the following:

``SEC. 2. FINDINGS AND DECLARATION.

    ``(a) Findings.--Congress finds that--
            ``(1) the maintenance of the national economy at a high 
        level is vital to the best interests of the United States, but 
        that some of our regions, counties, and communities are 
        suffering substantial and persistent unemployment and 
        underemployment that cause hardship to many individuals and 
        their families, and waste invaluable human resources;
            ``(2) to overcome this problem the Federal Government, in 
        cooperation with the States, should help areas and regions of 
        substantial and persistent unemployment and underemployment to 
        take effective steps in planning and financing their public 
        works and economic development;
            ``(3) Federal financial assistance, including grants for 
        public works and development facilities to communities, 
        industries, enterprises, and individuals in areas needing 
        development should enable such areas to help themselves achieve 
        lasting improvement and enhance the domestic prosperity by the 
        establishment of stable and diversified local economies and 
        improved local conditions, if such assistance is preceded by 
        and consistent with sound, long-range economic planning; and
            ``(4) under the provisions of this Act, new employment 
        opportunities should be created by developing and expanding new 
        and existing public works and other facilities and resources 
        rather than by merely transferring jobs from one area of the 
        United States to another.
    ``(b) Declaration.--Congress declares that, in furtherance of 
maintaining the national economy at a high level--
            ``(1) the assistance authorized by this Act should be made 
        available to both rural and urban areas;
            ``(2) such assistance should be made available for planning 
        for economic development prior to the actual occurrences of 
        economic distress in order to avoid such condition; and
            ``(3) such assistance should be used for long-term economic 
        rehabilitation in areas where long-term economic deterioration 
        has occurred or is taking place.

               ``TITLE I--ECONOMIC DEVELOPMENT COMMISSION

``SEC. 101. ESTABLISHMENT OF ECONOMIC DEVELOPMENT COMMISSION.

    ``(a) Establishment.--There is established an Economic Development 
Commission which shall be an independent establishment in the executive 
branch.
    ``(b) Appointment of Federal Cochairman.--The Commission shall 
headed by a Federal Cochairman of the Economic Development Commission 
(hereinafter in this Act referred to as the `Federal Cochairman') who 
shall be appointed by the President by and with the advice and consent 
of the Senate.
    ``(c) Duties.--It shall be the duty of the Federal Cochairman to 
carry out duties vested in the Federal Cochairman under this Act.

``SEC. 102. ESTABLISHMENT OF REGIONAL COMMISSIONS.

    ``(a) Establishment.--The Federal Cochairman shall establish for 
each region established by section 106 an Economic Development Regional 
Commission (hereinafter in this Act referred to as a `Regional 
Commission').
    ``(b) Membership.--
            ``(1) In general.--Each Regional Commission shall be 
        composed of 1 Federal member and 1 State member from each 
        participating State in the region represented by the Regional 
        Commission.
            ``(2) Federal cochairman.--The Federal member of each 
        Regional Commission shall be the Federal Cochairman.
            ``(3) State members.--Each State member of a Regional 
        Commission shall be the chief executive officer of the State. 
        The State members of a Regional Commission shall elect a 
        Cochairman from among such State members for a term of not less 
        than 1 year.
            ``(4) Alternates.--
                    ``(A) State alternates.--Each State member of a 
                Regional Commission may have a single alternate 
                appointed by the chief executive officer of the State 
                from among members of the chief executive officer's 
                cabinet or the chief executive officer's personal 
                staff.
                    ``(B) Federal alternate.--The President, by and 
                with the advice and consent of the Senate, shall 
                appoint an alternate for the Federal Cochairman.
                    ``(C) Duties.--An alternate shall vote in the event 
                of the absence, death, disability, removal, or 
                resignation of the State or Federal representative for 
                which he or she is an alternate. A State alternate 
                shall not be counted toward the establishment of a 
                quorum of the Commission in any instance in which a 
                quorum of the State members is required to be present.
    ``(c) Decisionmaking.--
            ``(1) Voting.--Decisions by a Regional Commission shall 
        require an affirmative vote of the Federal Cochairman (or the 
        Federal Cochairman's alternate) and of the majority of the 
        State members.
            ``(2) Quorum.--No decision of a Regional Commission 
        involving Commission policy, developing investment strategies, 
        or allocating funds among States may be made without the 
        Federal Cochairman (or the Federal Cochairman's alternate) and 
        a quorum of the State members present. For purposes of this 
        Act, the Federal Cochairman (or the Federal Cochairman's 
        alternate) and a majority of the State members shall constitute 
        a quorum.
    ``(d) Pay.--
            ``(1) Federal cochairman.--The Federal Cochairman shall be 
        compensated by the Federal Government at the rate prescribed 
        for level III of the Executive Schedule under section 5314 of 
        title 5, United States Code.
            ``(2) Federal cochairman's alternate.--The Federal 
        Cochairman's alternate shall be compensated by the Federal 
        Government at the rate prescribed for level V of the Executive 
        Schedule under section 5316 of title 5, United States Code, and 
        when not serving as an alternate for the Federal Cochairman 
        shall perform such functions and duties as are delegated by the 
        Federal Cochairman.
            ``(3) State members and their alternates.--Each State 
        member and the State member's alternate shall be compensated by 
        the State which they represent at the rate established by law 
        of such State.

``SEC. 103. COOPERATION OF FEDERAL AGENCIES.

    ``Each Federal department and agency, in accordance with applicable 
laws and within the limits of available funds, shall cooperate with 
each Regional Commission in order to assist the Regional Commission in 
carrying out the functions of the Regional Commission.

``SEC. 104. ADMINISTRATIVE EXPENSES.

    ``(a) Payment by States.--Fifty percent of the administrative 
expenses of a Regional Commission (other than the expenses of the 
Federal Cochairman) shall be paid by the States in the region 
represented by the Regional Commission and the remaining 50 percent of 
such expenses shall be paid by the Federal Government. The expenses of 
the Federal Cochairman, the Federal Cochairman's alternate, and the 
Federal Cochairman's staff shall be paid solely by the Federal 
Government.
    ``(b) Determination of State Share.--The share of the 
administrative expenses to be paid by each State shall be determined by 
the Regional Commission. The Federal Cochairman shall not participate 
or vote in such determination.
    ``(c) Delinquent Payments.--No assistance authorized by this Act 
shall be furnished to any State or to any political subdivision or 
resident of a State, nor shall the State member of a Regional 
Commission participate or vote in any determination by the Regional 
Commission, while such State is delinquent in the payment of such 
State's share of the administrative expenses of the Regional 
Commission.

``SEC. 105. ADMINISTRATIVE POWERS.

    ``To carry out its duties under this Act, consistent with 
regulations issued by the Federal Cochairman, a Regional Commission may 
take any of the following actions:
            ``(1) Adopt, amend, and repeal bylaws and rules governing 
        the conduct of the Regional Commission's business and the 
        performance of its functions.
            ``(2) Appoint and fix the pay of an executive director and 
        such other personnel as may be necessary to enable the Regional 
        Commission to carry out its functions; except that the 
        compensation for any individual so appointed shall not exceed 
        the rate of basic pay for level V of the Executive Schedule and 
        no member, officer, or employee of the Regional Commission, 
        other than the Federal Cochairman, the Federal Cochairman's 
        alternate, employees of the Federal Cochairman, and any Federal 
        employees detailed under paragraph (3), shall be deemed a 
        Federal employee for any purpose.
            ``(3) Request the head of a Federal department or agency to 
        detail to temporary duty with the Regional Commission such 
        personnel within the administrative jurisdiction of such head 
        as the Regional Commission may need for carrying out its 
        functions, and each such detail shall be without loss of 
        seniority, pay, or other employee status.
            ``(4) Arrange for the services of personnel from any State 
        or local government or any subdivision or agency thereof, or 
        any intergovernmental agency.
            ``(5) Make arrangements, including contracts, with any 
        participating State government for inclusion in a suitable 
        retirement and employee benefits system of such of its 
        personnel as may not be eligible for, or continue in, another 
        governmental retirement or employee benefit system, or 
        otherwise provide for such coverage of its personnel. The 
        Director of the Office of Personnel Management is authorized to 
        contract with a Regional Commission for continued coverage of 
        any Regional Commission employee who, on a date in the 6-month 
        period ending on the date of Regional Commission employment, 
        was a Federal employee, in the retirement program and other 
        employee benefit programs of the Federal Government.
            ``(6) Accept, use, and dispose of gifts or donations of 
        services or property, real, personal, or mixed, tangible or 
        intangible.
            ``(7) Subject to the requirements of the Federal Property 
        and Administrative Services Act of 1949, enter into and perform 
        such contracts, leases, cooperative agreements, or other 
        transactions as may be necessary in carrying out the Regional 
        Commission's functions and on such terms as the Regional 
        Commission may deem appropriate, with any department, agency, 
        or instrumentality of the United States, or with any person, 
        firm, association, or corporation.
            ``(8) Take such other actions and incur such other expenses 
        as may be necessary and appropriate.

``SEC. 106. ESTABLISHMENT OF REGIONS.

    ``(a) In General.--For the purposes of this Act, there are 
established 8 regions of the United States as follows:
            ``(1) Region i.--Region I shall be composed of the States 
        of Alabama, Florida, Georgia, Kentucky, Mississippi, North 
        Carolina, South Carolina, and Tennessee.
            ``(2) Region ii.--Region II shall be composed of the States 
        of Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
            ``(3) Region iii.--Region III shall be composed of the 
        States of Illinois, Indiana, Michigan, Minnesota, Ohio, and 
        Wisconsin.
            ``(4) Region iv.--Region IV shall be composed of the States 
        of Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North 
        Dakota, South Dakota, Utah, and Wyoming.
            ``(5) Region v.--Region V shall be composed of the State of 
        California.
            ``(6) Region vi.--Region VI shall be composed of the States 
        of Alaska, Arizona, Hawaii, Idaho, Nevada, Oregon, and 
        Washington and American Samoa, Guam, the Marshall Islands, 
        Micronesia, and the Northern Mariana Islands.
            ``(7) Region vii.--Region VII shall be composed of the 
        States of Delaware, Maryland, New Jersey, New York, 
        Pennsylvania, Virginia, and West Virginia and the District of 
        Columbia.
            ``(8) Region viii.--Region VIII shall be composed of the 
        States of Connecticut, Maine, Massachusetts, New Hampshire, 
        Rhode Island, and Vermont and Puerto Rico and the Virgin 
        Islands.
    ``(b) Participation Not Required.--No State shall be required to 
participate in any program under this Act.

     ``TITLE II--GRANTS FOR PUBLIC WORKS AND DEVELOPMENT FACILITIES

``SEC. 201. DIRECT AND SUPPLEMENTARY GRANTS.

    ``(a) In General.--Upon the application of any eligible recipient, 
a Regional Commission may--
            ``(1) make direct grants for the acquisition or development 
        of land and improvements for public works, public service, or 
        development facility usage, and the acquisition, design and 
        engineering, construction, rehabilitation, alteration, 
        expansion, or improvement of such facilities, including related 
        machinery and equipment, within an area described in section 
        502(a), if the Regional Commission finds that--
                    ``(A) the project for which financial assistance is 
                sought will directly or indirectly--
                            ``(i) tend to improve the opportunities, in 
                        the area where such project is or will be 
                        located, for the successful establishment or 
                        expansion of industrial or commercial plants or 
                        facilities;
                            ``(ii) otherwise assist in the creation of 
                        additional long-term employment opportunities 
                        for such area; or
                            ``(iii) primarily benefit the long-term 
                        unemployed and members of low-income families;
                    ``(B) the project for which a grant is requested 
                will fulfill a pressing need of the area, or part 
                thereof, in which it is, or will be, located;
                    ``(C) the area for which a project is to be 
                undertaken has an approved investment strategy as 
                provided by section 503 and such project is consistent 
                with such strategy; and
                    ``(D) in the case of an area described in section 
                502(a)(4), the project to be undertaken will provide 
                immediate useful work to unemployed and underemployed 
                persons in that area; and
            ``(2) make supplementary grants in order to enable the 
        States and other entities within areas described in section 
        502(a) to take maximum advantage of designated Federal grant-
        in-aid programs (as defined in subsection (c)(4)), direct 
        grants-in-aid authorized under this section, and Federal grant-
        in-aid programs authorized by the Watershed Protection and 
        Flood Prevention Act (68 Stat. 666), and the 11 watersheds 
        authorized by the Flood Control Act of December 22, 1944 (58 
        Stat. 887), for which they are eligible but for which, because 
        of their economic situation, they cannot supply the required 
        matching share.
    ``(b) Cost Sharing.--Subject to subsection (c), the amount of any 
direct grant under this subsection for any project shall not exceed 50 
percent of the cost of such project.
    ``(c) Requirements Applicable to Supplementary Grants.--
            ``(1) Amount of supplementary grants.--
                    ``(A) In general.--Except as provided by 
                subparagraph (B), the amount of any supplementary grant 
                under this section for any project shall not exceed the 
                applicable percentage established by regulations 
                promulgated by the Federal Cochairman, but in no event 
                shall the non-Federal share of the aggregate cost of 
                any such project (including assumptions of debt) be 
                less than 20 percent of such cost.
                    ``(B) Exceptions.--Notwithstanding subparagraph 
                (A)--
                            ``(i) in the case of a grant to an Indian 
                        tribe, a Regional Commission may reduce the 
                        non-Federal share below the percentage 
                        specified in subparagraph (A) or may waive the 
                        non-Federal share;
                            ``(ii) in the case of any State or a 
                        political subdivision of the State which the 
                        Regional Commission determines has exhausted 
                        its effective taxing and borrowing capacity, 
                        the Regional Commission shall reduce the non-
                        Federal share below the percentage specified in 
                        subparagraph (A) or shall waive the non-Federal 
                        share in the case of such a grant for a project 
                        in an area described in section 502(a)(4); and
                            ``(iii) in case of any community 
                        development corporation which the Regional 
                        Commission determines has exhausted its 
                        effective borrowing capacity, the Regional 
                        Commission may reduce the non-Federal share 
                        below the percentage specified in subparagraph 
                        (A) or waive the non-Federal share in the case 
                        of such a grant for a project in an area 
                        described in section 502(a)(4).
            ``(2) Form of supplementary grants.--Supplementary grants 
        shall be made by a Regional Commission, in accordance with such 
        regulations as the Federal Cochairman may prescribe, by 
        increasing the amounts of direct grants authorized under this 
        section or by the payment of funds appropriated under this Act 
        to the heads of the departments, agencies, and 
        instrumentalities of the Federal Government responsible for the 
        administration of the applicable Federal programs.
            ``(3) Federal share limitations specified in other laws.--
        Notwithstanding any requirement as to the amount or sources of 
        non-Federal funds that may otherwise be applicable to the 
        Federal program involved, funds provided under this subsection 
        shall be used for the sole purpose of increasing the Federal 
        contribution to specific projects in areas described in section 
        502(a) under such programs above the fixed maximum portion of 
        the cost of such project otherwise authorized by the applicable 
        law.
            ``(4) Designated federal grant-in-aid programs defined.--In 
        this subsection, the term `designated Federal grant-in-aid 
        programs' means such existing or future Federal grant-in-aid 
        programs assisting in the construction or equipping of 
        facilities as the Federal Cochairman may, in furtherance of the 
        purposes of this Act, designate as eligible for allocation of 
        funds under this section.
            ``(5) Consideration of relative need in determining 
        amount.--In determining the amount of any supplementary grant 
        available to any project under this section, a Regional 
        Commission shall take into consideration the relative needs of 
        the area and the nature of the projects to be assisted.
    ``(d) Regulations.--The Federal Cochairman shall prescribe rules, 
regulations, and procedures to carry out this section which will assure 
that adequate consideration is given to the relative needs of eligible 
areas. In prescribing such rules, regulations, and procedures the 
Federal Cochairman shall consider among other relevant factors--
            ``(1) the severity of the rates of unemployment in the 
        eligible areas and the duration of such unemployment; and
            ``(2) the income levels of families and the extent of 
        underemployment in eligible areas.
    ``(e) Review and Comment Upon Projects by Local Governmental 
Authorities.--The Federal Cochairman shall prescribe regulations which 
will assure that appropriate local governmental authorities have been 
given a reasonable opportunity to review and comment upon proposed 
projects under this section.

``SEC. 202. CONSTRUCTION COST INCREASES.

    ``In any case where a grant (including a supplemental grant) has 
been made by a Regional Commission under this title for a project and 
after such grant has been made but before completion of the project, 
the cost of such project based upon the designs and specifications 
which were the basis of the grant has been increased because of 
increases in costs, the amount of such grant may be increased by an 
amount equal to the percentage increase, as determined by the Regional 
Commission, in such costs, but in no event shall the percentage of the 
Federal share of such project exceed that originally provided for in 
such grant.

``SEC. 203. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER PROJECTED COST.

    ``In any case where a grant (including a supplemental grant) has 
been made by a Regional Commission under this title for a project, and 
after such grant has been made but before completion of the project, 
the cost of such project based upon the designs and specifications 
which were the basis of the grant has decreased because of decreases in 
costs, such underrun funds may be used to improve the project either 
directly or indirectly as determined by the Regional Commission.

``SEC. 204. CHANGED PROJECT CIRCUMSTANCES.

    ``In any case where a grant (including a supplemental grant) has 
been made by a Regional Commission under this title for a project, and 
after such grant has been made but before completion of the project, 
the purpose or scope of such project based upon the designs and 
specifications which were the basis of the grant has changed, the 
Regional Commission may approve the use of grant funds on such changed 
project if the Regional Commission determines that such changed project 
meets the requirements of this title and that such changes are 
necessary to enhance economic development in the area.

  ``TITLE III--SPECIAL ECONOMIC DEVELOPMENT AND ADJUSTMENT ASSISTANCE

``SEC. 301. STATEMENT OF PURPOSE.

    ``The purpose of this title to provide special economic development 
and adjustment assistance programs to help State and local areas meet 
special needs arising from actual or threatened severe unemployment 
arising from economic dislocation, including unemployment arising from 
actions of the Federal Government and from compliance with 
environmental requirements which remove economic activities from a 
locality, and economic adjustment problems resulting from severe 
changes in economic conditions (including long-term economic 
deterioration), and to encourage cooperative intergovernmental action 
to prevent or solve economic adjustment problems. Nothing in this title 
is intended to replace the efforts of the economic adjustment program 
of the Department of Defense.

``SEC. 302. GRANTS BY REGIONAL COMMISSIONS.

    ``(a) In General.--A Regional Commission is authorized to make 
grants directly to any eligible recipient in an area which the Regional 
Commission determines, in accordance with criteria to be established by 
the Federal Cochairman by regulation--
            ``(1) has experienced, or may reasonably be foreseen to be 
        about to experience, a special need to meet an expected rise in 
        unemployment, or other economic adjustment problems (including 
        those caused by any action or decision of the Federal 
        Government); or
            ``(2) has demonstrated long-term economic deterioration.
    ``(b) Purposes.--Amounts from grants under subsection (a) shall be 
used by an eligible recipient to carry out or develop an investment 
strategy which--
            ``(1) meets the requirements of section 503; and
            ``(2) is approved by the Regional Commission.
    ``(c) Types of Assistance.--In carrying out an investment strategy 
using amounts from grants under subsection (a), an eligible recipient 
may provide assistance for any of the following:
            ``(1) Public facilities.
            ``(2) Public services.
            ``(3) Business development.
            ``(4) Planning.
            ``(5) Research and technical assistance.
            ``(6) Administrative expenses.
            ``(7) Training.
            ``(8) Relocation of individuals and businesses.
            ``(9) Other assistance which demonstrably furthers the 
        economic adjustment objectives of this title.
    ``(d) Direct Expenditure or Redistribution by Recipient.--Amounts 
from grants under subsection (a) may be used in direct expenditures by 
the eligible recipient or through redistribution by the eligible 
recipient to public and private entities in grants, loans, loan 
guarantees, payments to reduce interest on loan guarantees, or other 
appropriate assistance, but no grant shall be made by an eligible 
recipient to a private profit-making entity.
    ``(e) Coordination.--A Regional Commission to the extent 
practicable shall coordinate the activities relating to the 
requirements for investment strategies and making grants and loans 
under this title with other Federal programs, States, economic 
development districts, and other appropriate planning and development 
organizations.
    ``(f) Base Closings and Realignments.--
            ``(1) Location of projects.--In any case in which a 
        Regional Commission determines a need for assistance under 
        subsection (a) due to the closure or realignment of a military 
        installation, the Regional Commission may make such assistance 
        available for projects to be carried out on the military 
        installation and for projects to be carried out in communities 
        adversely affected by the closure or realignment.
            ``(2) Interest in property.--Notwithstanding any other 
        provision of law, a Regional Commission may provide to an 
        eligible recipient any assistance available under this Act for 
        a project to be carried out on a military installation that is 
        closed or scheduled for closure or realignment without 
        requiring that the eligible recipient have title to the 
        property or a leasehold interest in the property for any 
        specified term.

``SEC. 303. ANNUAL REPORTS BY RECIPIENT.

    ``Each eligible recipient which receives assistance under this 
title from a Regional Commission shall annually during the period such 
assistance continue to make a full and complete report to the Regional 
Commission, in such manner as the Regional Commission shall prescribe, 
and such report shall contain an evaluation of the effectiveness of the 
economic assistance provided under this title in meeting the need it 
was designed to alleviate and the purposes of this title.

``SEC. 304. SALE OF FINANCIAL INSTRUMENTS IN REVOLVING LOAN FUNDS.

    ``Any loan, loan guarantee, equity, or other financial instrument 
in the portfolio of a revolving loan fund, including any financial 
instrument made available using amounts from a grant made before the 
effective date of the Economic Development Partnership Act of 1995, may 
be sold, encumbered, or pledged at the discretion of the grantee of the 
Fund, to a third party provided that the net proceeds of the 
transaction--
            ``(1) shall be deposited into the Fund and may only be used 
        for activities which are consistent with the purposes of this 
        title; and
            ``(2) shall be subject to the financial management, 
        accounting, reporting, and auditing standards which were 
        originally applicable to the grant.

``SEC. 305. TREATMENT OF REVOLVING LOAN FUNDS.

    ``(a) In General.--Amounts from grants made under this title which 
are used by an eligible recipient to establish a revolving loan fund 
shall not be treated, except as provided by subsection (b), as amounts 
derived from Federal funds for the purposes of any Federal law after 
such amounts are loaned from the fund to a borrower and repaid to the 
fund.
    ``(b) Exceptions.--Amounts described in subsection (a) which are 
loaned from a revolving loan fund to a borrower and repaid to the 
fund--
            ``(1) may only be used for activities which are consistent 
        with the purposes of this title; and
            ``(2) shall be subject to the financial management, 
        accounting, reporting, and auditing standards which were 
        originally applicable to the grant.
    ``(c) Regulations.--Not later than 30 days after the effective date 
of the Economic Development Partnership Act of 1995, the Federal 
Cochairman shall issue regulations to carry out subsection (a).
    ``(d) Public Review and Comment.--Before issuing any final 
guidelines or administrative manuals governing the operation of 
revolving loan funds established using amounts from grants under this 
title, the Federal Cochairman shall provide reasonable opportunity for 
public review of and comment on such guidelines and administrative 
manuals.
    ``(e) Applicability to Past Grants.--The requirements of this 
section applicable to amounts from grants made under this title shall 
also apply to amounts from grants made, before the effective date of 
the Economic Development Partnership Act of 1995, under title I of this 
Act, as in effect on the day before such effective date.

      ``TITLE IV--TECHNICAL ASSISTANCE, RESEARCH, AND INFORMATION

``SEC. 401. TECHNICAL ASSISTANCE.

    ``(a) In General.--In carrying out its duties under this Act, a 
Regional Commission may provide technical assistance which would be 
useful in alleviating or preventing conditions of excessive 
unemployment or underemployment to areas which the Regional Commission 
finds have substantial need for such assistance. Such assistance shall 
include project planning and feasibility studies, management and 
operational assistance, establishment of business outreach centers, and 
studies evaluating the needs of, and development potentialities for, 
economic growth of such areas.
    ``(b) Procedures and Terms.--
            ``(1) Manner of providing assistance.--Assistance may be 
        provided by a Regional Commission through--
                    ``(A) members of the Regional Commission's staff;
                    ``(B) the payment of funds authorized for this 
                section to departments or agencies of the Federal 
                Government;
                    ``(C) the employment of private individuals, 
                partnerships, firms, corporations, or suitable 
                institutions under contracts entered into for such 
                purposes; or
                    ``(D) grants-in-aid to appropriate public or 
                private nonprofit State, area, district, or local 
                organizations.
            ``(2) Repayment terms.--A Regional Commission, in its 
        discretion, may require the repayment of assistance provided 
        under this subsection and prescribe the terms and conditions of 
        such repayment.
    ``(c) Grants Covering Administrative Expenses.--
            ``(1) In general.--A Regional Commission may make grants to 
        defray not to exceed 75 percent of the administrative expenses 
        of organizations which the Regional Commission determines to be 
        qualified to receive grants-in-aid under subsections (a) and 
        (b); except that in the case of a grant under this subsection 
        to an Indian tribe, the Regional Commission is authorized to 
        defray up to 100 percent of such expenses.
            ``(2) Determination of non-federal share.--In determining 
        the amount of the non-Federal share of such costs or expenses, 
        a Regional Commission shall give due consideration to all 
        contributions both in cash and in kind, fairly evaluated, 
        including contributions of space, equipment, and services.
            ``(3) Use of grants with planning grants.--Where 
        practicable, grants-in-aid authorized under this subsection 
        shall be used in conjunction with other available planning 
        grants to assure adequate and effective planning and economical 
        use of funds.
    ``(d) Availability of Technical Information; Federal Procurement.--
A Regional Commission shall aid areas described in section 502(a) and 
other areas by furnishing to interested individuals, communities, 
industries, and enterprises within such areas any assistance, technical 
information, market research, or other forms of assistance, 
information, or advice which would be useful in alleviating or 
preventing conditions of excessive unemployment or underemployment 
within such areas. The Regional Commission may furnish the procurement 
divisions of the various departments, agencies, and other 
instrumentalities of the Federal Government with a list containing the 
names and addresses of business firms which are located in areas 
described in section 502(a) and which are desirous of obtaining 
Government contracts for the furnishing of supplies or services, and 
designating the supplies and services such firms are engaged in 
providing.

``SEC. 402. ECONOMIC DEVELOPMENT PLANNING.

    ``(a) Direct Grants.--
            ``(1) In general.--A Regional Commission may, upon 
        application of any State, or city, or other political 
        subdivision of a State, or sub-State planning and development 
        organization (including an area described in section 502(a) or 
        an economic development district), make direct grants to such 
        State, city, or other political subdivision, or organization to 
        pay up to 80 percent of the cost for economic development 
        planning.
            ``(2) Planning projects specifically included.--The 
        planning for cities, other political subdivisions, and sub-
        State planning and development organizations (including areas 
        described in section 502(a) and economic development districts) 
        assisted under this section shall include systematic efforts to 
        reduce unemployment and increase incomes.
            ``(3) Planning process.--The planning shall be a continuous 
        process involving public officials and private citizens in 
        analyzing local economies, defining development goals, 
        determining project opportunities, and formulating and 
        implementing a development program.
            ``(4) Coordination of assistance under section 401(c).--The 
        assistance available under this section may be provided in 
        addition to assistance available under section 401(c) but shall 
        not supplant such assistance.
    ``(b) Compliance With Review Procedure.--The planning assistance 
authorized under this title shall be used in conjunction with any other 
available Federal planning assistance to assure adequate and effective 
planning and economical use of funds.

            ``TITLE V--ELIGIBILITY AND INVESTMENT STRATEGIES

                         ``PART A--ELIGIBILITY

``SEC. 501. ELIGIBLE RECIPIENT DEFINED.

    ``In this Act, the term `eligible recipient' means an area 
described in section 502(a), an economic development district 
designated under section 510, an Indian tribe, a State, a city or other 
political subdivision of a State, or a consortium of such political 
subdivisions, or a public or private nonprofit organization or 
association acting in cooperation with officials of such political 
subdivisions.

``SEC. 502. AREA ELIGIBILITY.

    ``(a) Certification.--In order to be eligible for assistance under 
title II, an applicant seeking assistance to undertake a project in an 
area shall certify, as part of an application for such assistance, that 
the area on the date of submission of such application meets 1 or more 
of the following criteria:
            ``(1) The area has a per capita income of 80 percent or 
        less of the national average.
            ``(2) The area has an unemployment rate 1 percent above the 
        national average percentage for the most recent 24-month period 
        for which statistics are available.
            ``(3) The area has experienced or is about to experience a 
        sudden economic dislocation resulting in job loss that is 
        significant both in terms of the number of jobs eliminated and 
        the effect upon the employment rate of the area.
            ``(4) The area is a community or neighborhood (defined 
        without regard to political or other subdivisions or 
        boundaries) which the Federal Cochairman determines has one or 
        more of the following conditions:
                    ``(A) A large concentration of low-income persons.
                    ``(B) Rural areas having substantial out-migration.
                    ``(C) Substantial unemployment.
    ``(b) Documentation.--A certification made under subsection (a) 
shall be supported by Federal data, when available, and in other cases 
by data available through the State government. Such documentation 
shall be accepted by a Regional Commission unless it is determined to 
be inaccurate. The most recent statistics available shall be used.
    ``(c) Special Rule.--An area which a Regional Commission determines 
has 1 or more of the conditions described in subsection (a)(4)--
            ``(1) shall not be subject to the requirements of 
        subparagraphs (A) and (C) of section 201(a)(1); and
            ``(2) shall not be eligible to meet the requirements of 
        section 510(a)(1)(B).
    ``(d) Prior Designations.--Any designation of a redevelopment area 
made before the effective date of the Economic Development Partnership 
Act of 1995 shall not be effective after such effective date.

``SEC. 503. INVESTMENT STRATEGY.

    ``A Regional Commission may provide assistance under titles II and 
III to an applicant for a project only if the applicant submits to the 
Regional Commission, as part of an application for such assistance, and 
the Regional Commission approves an investment strategy which--
            ``(1) identifies the economic development problems to be 
        addressed using such assistance;
            ``(2) identifies past, present, and projected future 
        economic development investments in the area receiving such 
        assistance and public and private participants and sources of 
        funding for such investments;
            ``(3) sets forth a strategy for addressing the economic 
        problems identified pursuant to paragraph (1) and describes how 
        the strategy will solve such problems;
            ``(4) provides a description of the project necessary to 
        implement the strategy, estimates of costs, and timetables; and
            ``(5) provides a summary of public and private resources 
        expected to be available for the project.

``SEC. 504. APPROVAL OF PROJECTS.

    ``Only applications for grants or other assistance under this Act 
for specific projects shall be approved which are certified by the 
State member of the Regional Commission representing such applicant and 
determined by the Federal Cochairman--
            ``(1) to be included in a State investment strategy 
        approved by the Regional Commission;
            ``(2) to have adequate assurance that the project will be 
        properly administered, operated, and maintained; and
            ``(3) to otherwise meet the requirements for assistance 
        under this Act.

                ``PART B--ECONOMIC DEVELOPMENT DISTRICTS

``SEC. 510. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS AND ECONOMIC 
              DEVELOPMENT CENTERS.

    ``(a) In General.--In order that economic development projects of 
broader geographic significance may be planned and carried out, a 
Regional Commission may--
            ``(1) designate appropriate `economic development 
        districts' within the United States with the concurrence of the 
        States in which such districts will be wholly or partially 
        located, if--
                    ``(A) the proposed district is of sufficient size 
                or population, and contains sufficient resources, to 
                foster economic development on a scale involving more 
                than a single area described in section 502(a);
                    ``(B) the proposed district contains at least 1 
                area described in section 502(a);
                    ``(C) the proposed district contains 1 or more 
                areas described in section 502(a) or economic 
                development centers identified in an approved district 
                investment strategy as having sufficient size and 
                potential to foster the economic growth activities 
                necessary to alleviate the distress of the areas 
                described in section 502(a) within the district; and
                    ``(D) the proposed district has a district 
                investment strategy which includes adequate land use 
                and transportation planning and contains a specific 
                program for district cooperation, self-help, and public 
                investment and is approved by the State or States 
                affected and by the Regional Commission;
            ``(2) designate as `economic development centers', in 
        accordance with such regulations as the Federal Cochairman 
        shall prescribe, such areas as the Regional Commission may deem 
        appropriate, if--
                    ``(A) the proposed center has been identified and 
                included in an approved district investment strategy 
                and recommended by the State or States affected for 
                such special designation;
                    ``(B) the proposed center is geographically and 
                economically so related to the district that its 
                economic growth may reasonably be expected to 
                contribute significantly to the alleviation of distress 
                in the areas described in section 502(a) of the 
                district; and
                    ``(C) the proposed center does not have a 
                population in excess of 250,000 according to the most 
                recent Federal census.
            ``(3) provide financial assistance in accordance with the 
        criteria of this Act, except as may be herein otherwise 
        provided, for projects in economic development centers 
        designated under subsection (a)(2), if--
                    ``(A) the project will further the objectives of 
                the investment strategy of the district in which it is 
                to be located:
                    ``(B) the project will enhance the economic growth 
                potential of the district or result in additional long-
                term employment opportunities commensurate with the 
                amount of Federal financial assistance requested; and
                    ``(C) the amount of Federal financial assistance 
                requested is reasonably related to the size, 
                population, and economic needs of the district;
            ``(4) subject to the 20 percent non-Federal share required 
        for any project by section 201(c), increase the amount of grant 
        assistance authorized by section 201 for projects within areas 
        described in section 502(a), by an amount not to exceed 10 
        percent of the aggregate cost of any such project, in 
        accordance with such regulations as the Federal Cochairman 
        shall prescribe if--
                    ``(A) the area described in section 502(a) is 
                situated within a designated economic development 
                district and is actively participating in the economic 
                development activities of the district; and
                    ``(B) the project is consistent with an approved 
                investment strategy.
    ``(b) Authorities.--In designating economic development districts 
and approving district investment strategies under subsection (a), a 
Regional Commission may, under regulations prescribed by the Federal 
Cochairman--
            ``(1) invite the several States to draw up proposed 
        district boundaries and to identify potential economic 
        development centers;
            ``(2) cooperate with the several States--
                    ``(A) in sponsoring and assisting district economic 
                planning and development groups; and
                    ``(B) in assisting such district groups to 
                formulate district investment strategies; and
            ``(3) encourage participation by appropriate local 
        governmental authorities in such economic development 
        districts.
    ``(c) Termination or Modification of Designations.--The Federal 
Cochairman shall by regulation prescribe standards for the termination 
or modification of economic development districts and economic 
development centers designated under the authority of this section.
    ``(d) Definitions.--In this Act, the following definitions apply:
            ``(1) Economic development district.--The term `economic 
        development district' refers to any area within the United 
        States composed of cooperating areas described in section 
        502(a) and, where appropriate, designated economic development 
        centers and neighboring counties or communities, which has been 
        designated by a Regional Commission as an economic development 
        district. Such term includes any economic development district 
        designated under section 403 of this Act, as in effect on the 
        day before the effective date of the Economic Development 
        Partnership Act of 1995.
            ``(2) Economic development center.--The term `economic 
        development center' refers to any area within the United States 
        which has been identified as an economic development center in 
        an approved investment strategy and which has been designated 
        by a Regional Commission as eligible for financial assistance 
        under this Act in accordance with the provisions of this 
        section.
            ``(3) Local government.--The term `local government' means 
        any city, county, town, parish, village, or other general-
        purpose political subdivision of a State.
    ``(e) Parts of Economic Development Districts Not Within Areas 
Described in Section 502(a).-- A Regional Commission is authorized to 
provide the financial assistance which is available to an area 
described in section 502(a) under this Act to those parts of an 
economic development district which are not within an area described in 
section 502(a), when such assistance will be of a substantial direct 
benefit to an area described in section 502(a) within such district. 
Such financial assistance shall be provided in the same manner and to 
the same extent as is provided in this Act for an area described in 
section 502(a); except that nothing in this subsection shall be 
construed to permit such parts to receive the increase in the amount of 
grant assistance authorized subsection (a)(4).

                       ``TITLE VI--ADMINISTRATION

``SEC. 601. FUNCTIONS OF ECONOMIC DEVELOPMENT COMMISSION.

    ``In administering the Economic Development Commission, the Federal 
Cochairman shall ensure that the Commission--
            ``(1) serves as a central information clearinghouse on 
        matters relating to economic development, economic adjustment, 
        disaster recovery, and defense conversion programs and 
        activities of the Federal and State governments, including 
        political subdivisions of the States; and
            ``(2) helps potential and actual applicants for economic 
        development, economic adjustment, disaster recovery, and 
        defense conversion assistance under Federal, State, and local 
        laws in locating and applying for such assistance, including 
        financial and technical assistance.

``SEC. 602. CONSULTATION WITH OTHER PERSONS AND AGENCIES.

    ``(a) Consultation on Problems Relating to Employment.--The Federal 
Cochairman is authorized from time to time to call together and confer 
with any persons, including representatives of labor, management, 
agriculture, and government, who can assist in meeting the problems of 
area and regional unemployment or underemployment.
    ``(b) Consultation on Administration of Act.--The Federal 
Cochairman may make provisions for such consultation with interested 
departments and agencies as the Federal Cochairman may deem appropriate 
in the performance of the functions vested in the Federal Cochairman by 
this Act.

``SEC. 603. ADMINISTRATION, OPERATION, AND MAINTENANCE.

    ``No Federal assistance shall be approved under this Act unless the 
Federal Cochairman is satisfied that the project for which Federal 
assistance is granted will be properly and efficiently administered, 
operated, and maintained.

``SEC. 604. TREATMENT OF ECONOMIC DEVELOPMENT ADMINISTRATION EMPLOYEES.

    ``In considering applications for employment at the Economic 
Development Commission or in a Regional Commission, preference shall be 
given to individuals who are employees of the Economic Development 
Administration on the effective date of the Economic Development 
Partnership Act of 1995.

                       ``TITLE VII--MISCELLANEOUS

``SEC. 701. POWERS OF FEDERAL COCHAIRMAN.

    ``(a) In General.--In performing the Federal Cochairman's duties 
under this Act, the Federal Cochairman is authorized to--
            ``(1) adopt, alter, and use a seal, which shall be 
        judicially noticed;
            ``(2) subject to the civil-service and classification laws, 
        select, employ, appoint, and fix the compensation of such 
        personnel as may be necessary to carry out the provisions of 
        this Act;
            ``(3) hold such hearings, sit and act at such times and 
        places, and take such testimony, as the Federal Cochairman may 
        deem advisable;
            ``(4) request directly from any executive department, 
        bureau, agency, board, commission, office, independent 
        establishment, or instrumentality information, suggestions, 
        estimates, and statistics needed to carry out the purposes of 
        this Act; and each department, bureau, agency, board, 
        commission, office, establishment, or instrumentality is 
        authorized to furnish such information, suggestions, estimates, 
        and statistics directly to the Federal Cochairman;
            ``(5) under regulations prescribed by the Federal 
        Cochairman, assign or sell at public or private sale, or 
        otherwise dispose of for cash or credit, in the Federal 
        Cochairman's discretion and upon such terms and conditions and 
        for such consideration as the Federal Cochairman determines to 
        be reasonable, any evidence of debt, contract, claim, personal 
        property, or security assigned to or held by the Federal 
        Cochairman in connection with assistance extended under this 
        Act, and collect or compromise all obligations assigned to or 
        held by the Federal Cochairman in connection with such 
        assistance until such time as such obligations may be referred 
        to the Attorney General for suit or collection;
            ``(6) deal with, complete, renovate, improve, modernize, 
        insure, rent, or sell for cash or credit, upon such terms and 
        conditions and for such consideration as the Federal Cochairman 
        determines to be reasonable, any real or personal property 
        conveyed to, or otherwise acquired by the Federal Cochairman in 
        connection with assistance extended under this Act;
            ``(7) pursue to final collection, by way of compromise or 
        other administrative action, prior to reference to the Attorney 
        General, all claims against third parties assigned to the 
        Federal Cochairman in connection with assistance extended this 
        Act;
            ``(8) acquire, in any lawful manner and in accordance with 
        the requirements of the Federal Property and Administrative 
        Services Act of 1949, any property (real, personal, or mixed, 
        tangible or intangible), whenever necessary or appropriate to 
        the conduct of the activities authorized under this Act;
            ``(9) in addition to any powers, functions, privileges, and 
        immunities otherwise vested in the Federal Cochairman, take any 
        action, including the procurement of the services of attorneys 
        by contract, determined by the Federal Cochairman to be 
        necessary or desirable in making, purchasing, servicing, 
        compromising, modifying, liquidating, or otherwise 
        administratively dealing with assets held in connection with 
        financial assistance extended under this Act;
            ``(10) employ experts and consultants or organizations as 
        authorized by section 3109 of title 5, United States Code, 
        compensate individuals so employed at rates not in excess of 
        $100 per diem, including travel time, and allow them, while 
        away from their homes or regular places of business, travel 
        expenses (including per diem in lieu of subsistence) as 
        authorized by section 5703 of title 5, United States Code, for 
        persons in the Government service employed intermittently, 
        while so employed, except that contracts for such employment 
        may be renewed annually;
            ``(11) sue and be sued in any court of record of a State 
        having general jurisdiction or in any United States district 
        court, and jurisdiction is conferred upon such district court 
        to determine such controversies without regard to the amount in 
        controversy; but no attachment, injunction, garnishment, or 
        other similar process, mesne or final, shall be issued against 
        the Federal Cochairman or the Federal Cochairman's property;
            ``(12) make discretionary grants, pursuant to authorities 
        otherwise available to a Regional Commission under this Act and 
        without regard to the requirements of section 504, to implement 
        significant regional initiatives, to take advantage of special 
        development opportunities, or to respond to emergency economic 
        distress in the region from the funds withheld from 
        distribution to the Regional Commissions; except that the 
aggregate amount of such discretionary grants in any fiscal year may 
not exceed 10 percent of the amounts appropriated under title VIII for 
such fiscal year; and
            ``(13) establish such rules, regulations, and procedures as 
        the Federal Cochairman considers appropriate in carrying out 
        the provisions of this Act.
    ``(b) Deficiency Judgments.--The authority under subsection (a)(7) 
to pursue claims shall include the authority to obtain deficiency 
judgments or otherwise in the case of mortgages assigned to the Federal 
Cochairman.
    ``(c) Inapplicability of Certain Other Requirements.--Section 3709 
of the Revised Statutes of the United States shall not apply to any 
contract of hazard insurance or to any purchase or contract for 
services or supplies on account of property obtained by the Federal 
Cochairman as a result of assistance extended under this Act if the 
premium for the insurance or the amount of the insurance does not 
exceed $1,000.
    ``(d) Powers of Conveyance and Execution.--The power to convey and 
to execute, in the name of the Federal Cochairman, deeds of conveyance, 
deeds of release, assignments and satisfactions of mortgages, and any 
other written instrument relating to real or personal property or any 
interest therein acquired by the Federal Cochairman pursuant to the 
provisions of this Act may be exercised by the Federal Cochairman, or 
by any officer or agent appointed by the Federal Cochairman for such 
purpose, without the execution of any express delegation of power or 
power of attorney.

``SEC. 702. ALLOCATION OF FUNDS.

    The Federal Cochairman shall establish a formula for the equitable 
allocation among the Regional Commissions of amounts appropriated to 
carry out this Act.

``SEC. 703. PERFORMANCE MEASURES.

    ``The Federal Cochairman shall establish performance measures for 
grants and other assistance provided under this Act. Such performance 
measures shall be used to evaluate project proposals and conduct 
evaluations of projects receiving such assistance.

``SEC. 704. MAINTENANCE OF STANDARDS.

    ``The Federal Cochairman shall continue to implement and enforce 
the provisions of section 712 of this Act, as in effect on the day 
before the effective date of the Economic Development Partnership Act 
of 1995.

``SEC. 705. TRANSFER OF FUNCTIONS.

    ``The functions, powers, duties, and authorities and the assets, 
funds, contracts, loans, liabilities, commitments, authorizations, 
allocations, and records which are vested in or authorized to be 
transferred to the Secretary of the Treasury under section 29(b) of the 
Area Redevelopment Act, and all functions, powers, duties, and 
authorities under section 29(c) of such Act are hereby vested in the 
Federal Cochairman.

``SEC. 706. DEFINITION OF STATE.

    ``In this Act, the terms `State', `States', and `United States' 
include the several States and each of the other political entities 
included in a region established by section 106.

``SEC. 707. ANNUAL REPORT TO CONGRESS.

    ``The Federal Cochairman shall transmit a comprehensive and 
detailed annual report to Congress of the Federal Cochairman's and each 
Regional Commission's operations under this Act for each fiscal year 
beginning with the fiscal year ending September 30, 1996. Such report 
shall be printed and shall be transmitted to Congress not later than 
April 1 of the year following the fiscal year with respect to which 
such report is made.

``SEC. 708. USE OF OTHER FACILITIES.

    ``(a) Delegation of Functions to Other Federal Departments and 
Agencies.--The Federal Cochairman may delegate to the heads of other 
departments and agencies of the Federal Government any of the Federal 
Cochairman's functions, powers, and duties under this Act as the 
Federal Cochairman may deem appropriate, and to authorize the 
redelegation of such functions, powers, and duties by the heads of such 
departments and agencies.
    ``(b) Department and Agency Execution of Delegated Authority.--
Departments and agencies of the Federal Government shall exercise their 
powers, duties, and functions in such manner as will assist in carrying 
out the objectives of this Act.
    ``(c) Transfer Between Departments.--Funds authorized to be 
appropriated under this Act may be transferred between departments and 
agencies of the Government, if such funds are used for the purposes for 
which they are specifically authorized and appropriated.
    ``(d) Funds Transferred From Other Departments and Agencies.--In 
order to carry out the objectives of this Act, the Federal Cochairman 
may accept transfers of funds from other departments and agencies of 
the Federal Government if the funds are used for the purposes for which 
(and in accordance with the terms under which) the funds are 
specifically authorized and appropriated. Such transferred funds shall 
remain available until expended, and may be transferred to and merged 
with the appropriations under the heading `salaries and expenses' by 
the Federal Cochairman to the extent necessary to administer the 
program.

``SEC. 709. PENALTIES.

    ``(a) False Statements; Security Overvaluation.--Whoever makes any 
statement knowing it to be false, or whoever willfully overvalues any 
security, for the purpose of obtaining for such person or for any 
applicant any financial assistance under this Act or any extension of 
such assistance by renewal, deferment or action, or otherwise, or the 
acceptance, release, or substitution of security for such assistance, 
or for the purpose of influencing in any way the action of the Federal 
Cochairman or a Regional Commission or for the purpose of obtaining 
money, property, or anything of value, under this Act, shall be fined 
under title 18, United States Code, imprisoned for not more than 5 
years, or both.
    ``(b) Embezzlement and Fraud-Related Crimes.--Whoever, being 
connected in any capacity with the Federal Cochairman or a Regional 
Commission, in the administration of this Act--
            ``(1) embezzles, abstracts, purloins, or willfully 
        misapplies any moneys, funds, securities, or other things of 
        value, whether belonging to such person or pledged or otherwise 
        entrusted to such person;
            ``(2) with intent to defraud the Federal Cochairman or a 
        Regional Commission or any other body politic or corporate, or 
        any individual, or to deceive any officer, auditor, or 
        examiner, makes any false entry in any book, report, or 
        statement of or to the Federal Cochairman or a Regional 
        Commission, or without being duly authorized draws any orders 
        or issues, puts forth, or assigns any note, debenture, bond, or 
        other obligation, or draft, bill of exchange, mortgage, 
        judgment, or decree thereof;
            ``(3) with intent to defraud participates or shares in or 
        receives directly or indirectly any money, profit, property, or 
        benefit through any transaction, loan, grant, commission, 
        contract, or any other act of the Federal Cochairman or a 
        Regional Commission; or
            ``(4) gives any unauthorized information concerning any 
        future action of plan of the Federal Cochairman or a Regional 
        Commission which might affect the value of securities, or 
        having such knowledge invests or speculates, directly or 
        indirectly, in the securities or property of any company or 
        corporation receiving loans, grants, or other assistance from 
        the Federal Cochairman or a Regional Commission,
shall be fined under title 18, United States Code, imprisoned for not 
more than 5 years, or both.

``SEC. 710. EMPLOYMENT OF EXPEDITERS AND ADMINISTRATIVE EMPLOYEES.

    ``No financial assistance shall be extended by a Regional 
Commission under this Act to any business enterprise unless the owners, 
partners, or officers of such business enterprise--
            ``(1) certify to the Regional Commission the names of any 
        attorneys, agents, and other persons engaged by or on behalf of 
        such business enterprise for the purpose of expediting 
        applications made to the Regional Commission for assistance of 
        any sort, under this Act, and the fees paid or to be paid to 
        any such person; and
            ``(2) execute an agreement binding such business 
        enterprise, for a period of 2 years after such assistance is 
        rendered by the Regional Commission to such business 
        enterprise, to refrain from employing, tendering any office or 
        employment to, or retaining for professional services, any 
        person who, on the date such assistance or any part thereof was 
        rendered, or within the 1-year period ending on such date, 
        shall have served as an officer, attorney, agent, or employee, 
        occupying a position or engaging in activities which the 
        Regional Commission determines involves discretion with respect 
        to the granting of assistance under this Act.

``SEC. 711. PERSONAL FINANCIAL INTERESTS.

    ``(a) In General.--Except as permitted by subsection (b), no State 
member or alternate and no officer or employee of a Regional Commission 
shall participate personally and substantially as member, alternate, 
officer, or employee, through decision, approval, disapproval, 
recommendation, the rendering of advice, investigation, or otherwise, 
in any proceeding, application, request for a ruling or other 
determination, contract, claim, controversy, or other particular matter 
in which, to the individual's knowledge, the individual, the 
individual's spouse, minor child, partner, organization (other than a 
State or political subdivision thereof) in which the individual is 
serving as officer, director, trustee, partner, or employee, or any 
person or organization with whom the individual is serving as officer, 
director, trustee, partner, or employee, or any person or organization 
with whom the individual is negotiating or has any arrangement 
concerning prospective employment, has a financial interest. Any 
individual who shall violate the provisions of this subsection shall be 
fined under title 18, United States Code, imprisoned for not more than 
2 years, or both.
    ``(b) Exception.--Subsection (a) shall not apply if the State 
member, alternate, officer, or employee first advises the Regional 
Commission of the nature and circumstances of the proceeding, 
application, request for a ruling or other determination, contract, 
claim, controversy, or other particular matter and makes full 
disclosure of the financial interest and receives in advance a written 
determination made by the Regional Commission that the interest is not 
so substantial as to be deemed likely to affect the integrity of the 
services which the Regional Commission may expect from such State 
member, alternate, officer, or employee.
    ``(c) Salaries.--No State member or alternate of a Regional 
Commission shall receive any salary, or any contribution to or 
supplementation of salary for the individual's services on the Regional 
Commission from any source other than the State of the individual. No 
individual detailed to serve the Regional Commission under authority of 
section 105 shall receive any salary or any contribution to or 
supplementation of salary for the individual's services on the Regional 
Commission from any source other than the State, local, or 
intergovernmental department or agency from which he was detailed or 
from the Regional Commission. Any individual who shall violate the 
provisions of this subsection shall be fined under title 18, United 
States Code, imprisoned for not more than 1 year, or both.
    ``(d) Nonapplicability to Federal Officials.--Notwithstanding any 
other provision of this section, the Federal Cochairman (or the Federal 
Cochairman's alternate) and any Federal officers or employees detailed 
to duty with a Regional Commission pursuant to section 105 shall not be 
subject to such provisions but shall remain subject to sections 202 
through 209 of title 18, United States Code.
    ``(e) Authority To Rescind Certain Agreements.--A Regional 
Commission may, in the Regional Commission's discretion, declare void 
and rescind any agreement to extend financial assistance under this Act 
entered into by the Regional Commission in relation to which the 
Regional Commission finds that there has been a violation of subsection 
(a) or (c) of this section or any of the provisions of sections 202 
through 209 of title 18, United States Code.

``SEC. 712. MAINTENANCE OF RECORDS OF APPROVED APPLICATIONS FOR 
              FINANCIAL ASSISTANCE; PUBLIC INSPECTION.

    ``(a) Maintenance of Record Required.--The Federal Cochairman shall 
maintain as a permanent part of the records of the Economic Development 
Commission a list of applications approved for financial assistance 
under this Act, which shall be kept available for public inspection 
during the regular business hours of the Economic Development 
Commission.
    ``(b) Posting to List.--The following information shall be posted 
in such list as soon as each application is approved:
            ``(1) The name of the applicant and, in the case of 
        corporate applications, the names of the officers and directors 
        thereof.
            ``(2) The amount and duration of the financial assistance 
        for which application is made.
            ``(3) The purposes for which the proceeds of the financial 
        assistance are to be used.

``SEC. 713. RECORDS AND AUDIT.

    ``(a) Recordkeeping and Disclosure Requirements.--Each recipient of 
assistance under this Act shall keep such records as the Federal 
Cochairman shall prescribe, including records which fully disclose the 
amount and the disposition by such recipient of the proceeds of such 
assistance, the total cost of the project or undertaking in connection 
with which such assistance is given or used, and the amount and nature 
of that portion of the cost of the project or undertaking supplied by 
other sources, and such other records as will facilitate an effective 
audit.
    ``(b) Access to Books for Examination and Audit.--The Federal 
Cochairman and the Comptroller General of the United States, or any of 
their duly authorized representatives, shall have access for the 
purpose of audit and examination to any books, documents, papers, and 
records of the recipient that are pertinent to assistance received 
under this Act.

``SEC. 714. PROHIBITION AGAINST A STATUTORY CONSTRUCTION WHICH MIGHT 
              CAUSE DIMINUTION IN OTHER FEDERAL ASSISTANCE.

    ``All financial and technical assistance authorized under this Act 
shall be in addition to any Federal assistance previously authorized, 
and no provision of this Act shall be construed as authorizing or 
permitting any reduction or diminution in the proportional amount of 
Federal assistance to which any State or other entity eligible under 
this Act would otherwise be entitled under the provisions of any other 
Act.

``SEC. 715. ACCEPTANCE OF APPLICANTS' CERTIFICATIONS.

    ``A Regional Commission may accept, when deemed appropriate, the 
applicants' certifications to meet the requirements of this Act.

                         ``TITLE VIII--FUNDING

``SEC. 801. AUTHORIZATION OF APPROPRIATIONS

    ``There is authorized to be appropriated to carry out this Act 
$340,000,000 per fiscal year for each of fiscal years 1996, 1997, 1998, 
1999, and 2000. Such sums shall remain available until expended.

``SEC. 802. DEFENSE CONVERSION ACTIVITIES.

    ``In addition to the appropriations authorized by section 801, 
there are authorized to be appropriated to carry out this Act such sums 
as may be necessary to provide assistance for defense conversion 
activities. Such funding may include pilot projects for privatization 
and economic development activities for closed or realigned military 
installations. Such sums shall remain available until expended.''.

SEC. 10512. CONFORMING AMENDMENTS.

    Title 5, United States Code, is amended--
            (1) in section 5314 by adding at the end the following:
            ``Federal Cochairman of the Economic Development 
        Commission.''; and
            (2) in section 5316--
                    (A) by striking the following:
            ``Administrator for Economic Development.''; and
                    (B) by adding at the end the following:
            ``Alternate for the Federal Cochairman of the Economic 
        Development Commission.''.

SEC. 10513. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, loans, contracts, agreements, 
certificates, licenses, and privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, the Secretary of Commerce, 
        any officer or employee of any office transferred by this 
        chapter, or any other Government official, or by a court of 
        competent jurisdiction, in the performance of any function that 
        is transferred by this chapter; and
            (2) that are in effect on the effective date of such 
        transfer (or become effective after such date pursuant to their 
        terms as in effect on such effective date),
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked in accordance with law by 
the President, any other authorized official, a court of competent 
jurisdiction, or operation of law.
    (b) Proceedings.--This chapter shall not affect any proceedings or 
any application for any benefits, service, license, permit, 
certificate, or financial assistance pending on the date of the 
enactment of this Act before an office transferred by this chapter, but 
such proceedings and applications shall be continued. Orders shall be 
issued in such proceedings, appeals shall be taken therefrom, and 
payments shall be made pursuant to such orders, as if this chapter had 
not been enacted, and orders issued in any such proceeding shall 
continue in effect until modified, terminated, superseded, or revoked 
by a duly authorized official, by a court of competent jurisdiction, or 
by operation of law. Nothing in this subsection shall be considered to 
prohibit the discontinuance or modification of any such proceeding 
under the same terms and conditions and to the same extent that such 
proceeding could have been discontinued or modified if this chapter had 
not been enacted.
    (c) Suits.--This chapter shall not affect suits commenced before 
the date of the enactment of this Act, and in all such suits, 
proceeding shall be had, appeals taken, and judgments rendered in the 
same manner and with the same effect as if this chapter had not been 
enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Department of Commerce or the Secretary of 
Commerce, or by or against any individual in the official capacity of 
such individual as an officer or employee of an office transferred by 
this chapter, shall abate by reason of the enactment of this chapter.
    (e) Continuance of Suits.--If any officer of the Department of 
Commerce in the official capacity of such officer is party to a suit 
with respect to a function of the officer, and under this chapter such 
function is transferred to any other officer or office, then such suit 
shall be continued with the other officer or the head of such other 
office, as applicable, substituted or added as a party.

SEC. 10514. REFERENCES.

    Any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to an office from which a function is transferred by this 
chapter--
            (1) to the Secretary of Commerce or an officer of the 
        Department of Commerce, is deemed to refer to the head of the 
        department or office to which such function is transferred; or
            (2) to the Department of Commerce or an agency in the 
        Department of Commerce is deemed to refer to the department or 
        office to which such function is transferred.

              CHAPTER 2--APPALACHIAN REGIONAL DEVELOPMENT

SEC. 10521. FINDINGS AND PURPOSES.

    Section 2 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 2) is amended by adding at the end the following:
    ``(c) 1995 Findings and Purposes.--The Congress further finds and 
declares that, while substantial progress has been made in fulfilling 
many of the objectives of this Act, rapidly changing national and 
global economies over the past decade have created new problems and 
challenges for rural areas throughout the Nation and especially for the 
Appalachian region. It is, therefore, also the purpose of this Act to 
assist the region in providing the infrastructure necessary for 
economic and human resource development, in developing its industry, in 
building entrepreneurial communities, in generating a diversified 
regional economy, and in making its industrial and commercial resources 
more competitive in national and world markets. It is further the 
purpose of this Act to provide a framework for coordinating Federal, 
State, and local initiatives to respond to the economic competitive 
challenge through improving the skills of the region's workforce, 
adapting and applying new technologies for the region's businesses, and 
improving the access of the region's businesses to the technical and 
financial resources necessary to their development. Finally, it is the 
purpose of this Act to address the needs of severely and persistently 
distressed and underdeveloped areas of the region so as to provide a 
fairer opportunity for the people of the region to share the quality of 
life generally enjoyed by citizens across this Nation.''.

SEC. 10522. MEETINGS.

    (a) Annual Meeting Requirement.--Section 101(a) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App. 101(a)) is amended by 
adding at the end the following: ``The Commission shall conduct at 
least one meeting each year with the Federal Cochairman and at least a 
majority of the State members present.''.
    (b) Additional Meetings by Electronic Means.--Section 101 of such 
Act (40 U.S.C. App. 101) is amended--
            (1) in subsection (a), as amended by subsection (a) of this 
        section, by adding at the end the following: ``The Commission 
        may conduct such additional meetings by electronic means as the 
        Commission considers advisable, including meetings to decide 
        matters requiring an affirmative vote.''; and
            (2) in subsection (c) by striking ``to be present'' at the 
        end of the fourth sentence.
    (c) Decisions Requiring a Quorum.--Section 101(b) of such Act (40 
U.S.C. App. 101(b)) is amended by striking the third sentence and 
inserting the following: ``No decision involving Commission policy, 
approval of State, regional, or subregional development plans or 
implementing investment programs, any modification or revision of the 
Appalachian Regional Commission Code, any allocation of funds among the 
State, or any designation of a distressed county or an economically 
competitive county may be made without a quorum of State members.''.

SEC. 10523. AUTHORIZATIONS FOR ADMINISTRATIVE EXPENSES.

    Section 105(b) of the Appalachian Regional Development Act of 1965 
(40 U.S.C. App. 105(b)) is amended to read as follows:
    ``(b) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated 
        to carry out this section $3,645,000 per fiscal year for each 
        of fiscal years 1996 through 2000. Such sums shall remain 
        available until expended.
            ``(2) Expenses of federal cochairman.--Of the amounts 
        appropriated pursuant to paragraph (1), not to exceed 
        $1,245,000 per fiscal year for each of fiscal years 1996 
        through 2000 shall be available for expenses of the Federal 
        Cochairman, the Federal Cochairman's alternate, and the Federal 
        Cochairman's staff.''.

SEC. 10524. ADMINISTRATIVE POWERS OF COMMISSION.

    (a) Authority To Lease.--Section 106(7) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 106(7)) is amended--
            (1) by inserting ``subject to the requirements of the 
        Federal Property and Administrative Services Act of 1949,'' 
        after ``(7)'';
            (2) by striking ``notwithstanding any other provision of 
        law,''; and
            (3) by striking ``1982'' and inserting ``2000''.
    (b) Authority To Maintain Temporary Office.--Section 106(8) of such 
Act (40 U.S.C. App. 106(8)) is amended by inserting ``subject to the 
requirements of the Federal Property and Administrative Services Act of 
1949,'' after ``(8)''.

SEC. 10525. HIGHWAY SYSTEM.

    (a) Authorization of Appropriations.--Section 201(g) of the 
Appalachian Regional Development Act of 1965 (40 U.S.C. App. 201(g)) is 
amended to read as follows:
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $90,000,000 per fiscal year for 
each of fiscal years 1996 through 2000. Such sums shall remain 
available until expended.''.
    (b) Cost Sharing.--
            (1) In general.--Section 201(h)(1) of such Act (40 U.S.C. 
        App. 201(h)(1)) is amended by striking ``70 per centum'' and 
        inserting ``80 percent''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply to projects approved after March 31, 1979.

SEC. 10526. COST SHARING OF DEMONSTRATION HEALTH PROJECTS.

    (a) Operation Costs.--Section 202(c) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 202(c)) is amended in the first 
sentence by striking ``100 per centum of the costs thereof'' and all 
that follows through the period at the end of the second sentence and 
inserting ``50 percent of the costs thereof (or 80 percent of such 
costs in the case of a project to be carried out in a county for which 
a distressed county designation is in effect under section 226).''.
    (b) Cost Sharing.--Section 202 of such Act (40 U.S.C. App. 202) is 
amended by adding at the end the following:
    ``(f) Maximum Commission Contribution After September 30, 1995.--
After September 30, 1995, not more than 50 percent of any project cost 
eligible for financial assistance under this section may be provided 
from funds appropriated to carry out this Act; except that such maximum 
Commission contribution may be increased to 80 percent, or to the 
percentage of the maximum Federal contribution authorized by this 
section, whichever is less, for a project to be carried out in a county 
for which a distressed county designation is in effect under section 
226.''.

SEC. 10527. REPEAL OF LAND STABILIZATION, CONSERVATION, AND EROSION 
              CONTROL PROGRAM.

    Section 203 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 203) is repealed.

SEC. 10528. REPEAL OF TIMBER DEVELOPMENT PROGRAM.

    Section 204 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 204) is repealed.

SEC. 10529. REPEAL OF MINING AREA RESTORATION PROGRAM.

    Section 205 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 205) is repealed.

SEC. 10530. REPEAL OF WATER RESOURCE SURVEY.

    Section 206 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 206) is repealed.

SEC. 10531. COST SHARING OF HOUSING PROJECTS.

    (a) Loans.--Section 207(b) of the Appalachian Regional Development 
Act of 1965 (40 U.S.C. App. 207(b)) is amended by striking ``80 per 
centum'' and inserting ``50 percent (or 80 percent in the case of a 
project to be carried out in a county for which a distressed county 
designation is in effect under section 226)''.
    (b) Grants.--Section 207(c)(1) of such Act (40 U.S.C. 207(c)(1)) is 
amended by striking ``80 per centum'' and inserting ``50 percent (or 80 
percent in the case of a project to be carried out in a county for 
which a distressed county designation is in effect under section 
226)''.

SEC. 10532. REPEAL OF AIRPORT SAFETY IMPROVEMENTS PROGRAM.

    Section 208 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 208) is repealed.

SEC. 10533. COST SHARING OF VOCATIONAL EDUCATION AND EDUCATION 
              DEMONSTRATION PROJECTS.

    (a) Operation Costs.--Section 211(b)(3) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 211(b)(3)) is amended in the 
first sentence by striking ``100 per centum of the costs thereof'' and 
all that follows through the period at the end of the second sentence 
and inserting ``50 percent of the costs thereof (or 80 percent of such 
costs in the case of a project to be carried out in a county for which 
a distressed county designation is in effect under section 226).''
    (b) Cost Sharing.--Section 211 of such Act (40 U.S.C. App. 211) is 
amended by adding at the end the following:
    ``(c) Maximum Commission Contribution After September 30, 1995.--
After September 30, 1995, not more than 50 percent of any project cost 
eligible for financial assistance under this section may be provided 
from funds appropriated to carry out this Act; except that such maximum 
Commission contribution may be increased to 80 percent, or to the 
percentage of the maximum Federal contribution authorized by this 
section, whichever is less, for a project to be carried out in a county 
for which a distressed county designation is in effect under section 
226.''.

SEC. 10534. SEWAGE TREATMENT WORKS PROGRAM.

    Section 212 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 212) is repealed.

SEC. 10535. REPEAL OF AMENDMENTS TO HOUSING ACT OF 1954.

    Section 213 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 213) is repealed.

SEC. 10536. SUPPLEMENTS TO FEDERAL GRANT-IN-AID PROGRAMS.

    (a) Availability of Amounts.--The first sentence of section 214(a) 
of the Appalachian Regional Development Act of 1965 (40 U.S.C. App. 
214(a)) is amended by striking ``the President is authorized to provide 
funds to the Federal Cochairman to be used'' and inserting ``the 
Federal Cochairman may use amounts made available to carry out this 
section''.
    (b) Cost Sharing.--Section 214(b) of such Act (40 U.S.C. App. 
214(b)) is amended--
            (1) by striking ``(b)'' and inserting ``(b)(1)''; and
            (2) by adding at the end the following:
    ``(2) After September 30, 1995, not more than 50 percent of any 
project cost eligible for financial assistance under this section may 
be provided from funds appropriated to carry out this Act; except that 
such maximum Commission contribution may be increased to 80 percent for 
a project to be carried out in a county for which a distressed county 
designation is in effect under section 226.''.
    (c) Federal Grant-in-Aid Programs Defined.--The first sentence of 
section 214(c) of such Act (40 U.S.C. App. 214(c)) is amended by 
striking ``on or before December 31, 1980,''.
    (d) Limitation on Covered Road Projects.--The second sentence of 
section 214(c) of such Act is amended by inserting ``authorized by 
title 23, United States Code'' after ``road construction''.

SEC. 10537. PROGRAM DEVELOPMENT CRITERIA.

    (a) Considerations.--Section 224(a) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 224(a)) is amended by inserting 
before the semicolon at the end of paragraph (1) the following: ``or in 
a severely and persistently distressed and underdeveloped county or 
area''.
    (b) Outcome Measurements.--Section 224(a) of such Act is further 
amended--
            (1) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (2) by adding at the end the following:
            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures may 
        be justified.''.
    (c) Removal of Limitations.--Section 224(b) of such Act (40 U.S.C. 
App. 224(b)) is amended to read as follows:
    ``(b) Limitation.--No financial assistance made available under 
this Act may be used to assist establishments relocating from one area 
to another.''.

SEC. 10538. DISTRESSED AND ECONOMICALLY COMPETITIVE COUNTIES.

    Part C of title II of the Appalachian Regional Development Act of 
1965 (40 U.S.C. App. 221-225) is amended by adding at the end the 
following:

``SEC. 226. DISTRESSED AND ECONOMICALLY COMPETITIVE COUNTIES.

    ``(a) Designations.--Not later than 90 days after the effective 
date of the Economic Development Partnership Act of 1995, and annually 
thereafter, the Commission, in accordance with such criteria as the 
Commission may establish, shall--
            ``(1) designate as `distressed counties' those counties in 
        the region that are the most severely and persistently 
        distressed and underdeveloped; and
            ``(2) designate as `economically competitive counties' 
        those counties in the region which have attained substantial 
        economic parity with the rest of the Nation.
    ``(b) Period of Effectiveness.--In making annual designations under 
subsection (a), the Commission may discontinue an existing designation 
at the discretion of the Commission; except that any designation of a 
distressed county shall remain in effect for the 3-year period 
beginning on the date of the designation.
    ``(c) Funding Prohibition for Projects Located in Economically 
Competitive Counties.--
            ``(1) In general.--Except as provided by paragraph (2), no 
        funds may be provided under this Act for a project located in a 
        county for which an economically competitive county designation 
        is in effect under this section.
            ``(2) Exceptions.--The prohibition established by paragraph 
        (1) shall not apply to--
                    ``(A) projects on the Appalachian development 
                highway system authorized by section 201;
                    ``(B) local development district administrative 
                projects authorized by section 302(a)(1); or
                    ``(C) discretionary grants authorized by section 
                302(a).''.

SEC. 10539. GRANTS FOR ADMINISTRATIVE EXPENSES AND COMMISSION PROJECTS.

    (a) Availability of Amounts.--Section 302(a) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App. 302(a)) is amended--
            (1) by striking ``The President'' and inserting ``The 
        Commission''; and
            (2) in paragraphs (1), (2), and (3) by striking ``to the 
        Commission'' each place it appears.
    (b) Cost Sharing.--Section 302(a) of such Act is further amended--
            (1) in paragraph (1) by striking ``75 per centum'' and 
        inserting ``50 percent''; and
            (2) by adding at the end the following: ``After September 
        30, 1995, not more than 50 percent of the cost of any activity 
        eligible for financial assistance under this section may be 
        provided from funds appropriated to carry out this Act (or 80 
        percent of such costs in the case of a project to be carried 
        out in a county for which a distressed county designation is in 
        effect under section 226); except that discretionary grants by 
        the Commission to implement significant regional initiatives, 
        to take advantage of special development opportunities, or to 
        respond to emergency economic distress in the region may be 
        made without regard to such percentage limitations. The 
        aggregate amount of discretionary grants referred to in the 
        preceding sentence in any fiscal year shall not exceed 10 
        percent of the amounts appropriated under section 401 for such 
        fiscal year.''.
    (c) Repeals.--Section 302 of such Act (40 U.S.C. App. 302) is 
amended--
            (1) by striking paragraphs (3) and (4) of subsection (b);
            (2) by striking subsection (d); and
            (3) by striking subsection (e).

SEC. 10540. AUTHORIZATION OF APPROPRIATIONS FOR GENERAL PROGRAM.

    Section 401 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 401) is amended to read as follows:

``SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

    ``In addition to the appropriations authorized by section 105 for 
administrative expenses and by section 201(g) for the Appalachian 
development highway system and local access roads, there is authorized 
to be appropriated to the Commission to carry out this Act $88,355,000 
per fiscal year for each of fiscal years 1996 through 2000. Such sums 
shall remain available until expended.''.

SEC. 10541. EXTENSION OF TERMINATION DATE.

    Section 405 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App. 405) is amended by striking ``1982'' and inserting 
``2000''.

                TITLE XI--COMMITTEE ON VETERANS' AFFAIRS

SEC. 11001. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Veterans 
Reconciliation Act of 1995''.
    (b) Table of Contents.--The contents of this title are as follows:

                TITLE XI--COMMITTEE ON VETERANS' AFFAIRS

Sec. 11001. Short title; table of contents.
             Subtitle A--Extension of Temporary Authorities

Sec. 11011. Authority to require that certain veterans agree to make 
                            copayments in exchange for receiving 
                            health-care benefits.
Sec. 11012. Medical care cost recovery authority.
Sec. 11013. Income verification authority.
Sec. 11014. Limitation on pension for certain recipients of medicaid-
                            covered nursing home care.
Sec. 11015. Home loan fees.
Sec. 11016. Procedures applicable to liquidation sales on defaulted 
                            home loans guaranteed by the Department of 
                            Veterans Affairs.
                       Subtitle B--Other Matters

Sec. 11021. Revision to prescription drug copayment.
Sec. 11022. Rounding down of cost-of-living adjustments in compensation 
                            and DIC rates.
Sec. 11023. Revised standard for liability for injuries resulting from 
                            Department of Veterans Affairs treatment.
Sec. 11024. Enhanced loan asset sale authority.
Sec. 11025. Withholding of payments and benefits.
               Subtitle C--Health Care Eligibility Reform

Sec. 11031. Hospital care and medical services.
Sec. 11032. Extension of authority to priority health care for Persian 
                            Gulf veterans.
Sec. 11033. Prosthetics.
Sec. 11034. Management of health care.
Sec. 11035. Improved efficiency in health care resource management.
Sec. 11036. Sharing agreements for specialized medical resources.
Sec. 11037. Personnel furnishing shared resources.

             Subtitle A--Extension of Temporary Authorities

SEC. 11011. AUTHORITY TO REQUIRE THAT CERTAIN VETERANS AGREE TO MAKE 
              COPAYMENTS IN EXCHANGE FOR RECEIVING HEALTH-CARE 
              BENEFITS.

    (a) Hospital and Medical Care.--Section 8013(e) of the Omnibus 
Budget Reconciliation Act of 1990 (38 U.S.C. 1710 note) is amended by 
striking out ``September 30, 1998'' and inserting in lieu thereof 
``September 30, 2002''.
    (b) Outpatient Medications.--Section 1722A(c) of title 38, United 
States Code, is amended by striking out ``September 30, 1998'' and 
inserting in lieu thereof ``September 30, 2002''.

SEC. 11012. MEDICAL CARE COST RECOVERY AUTHORITY.

    Section 1729(a)(2)(E) of title 38, United States Code, is amended 
by striking out ``before October 1, 1998,'' and inserting ``before 
October 1, 2002,''.

SEC. 11013. INCOME VERIFICATION AUTHORITY.

    (a) Title 38.--Section 5317(g) of title 38, United States Code, is 
amended by striking out ``September 30, 1998'' and inserting in lieu 
thereof ``September 30, 2002''.
    (b) Internal Revenue Code of 1986.--Section 6103(l)(7)(D) of the 
Internal Revenue Code of 1986 is amended by striking out ``Clause 
(viii) shall not apply after September 30, 1998'' and inserting in lieu 
thereof ``Clause (viii) shall not apply after September 30, 2002''.

SEC. 11014. LIMITATION ON PENSION FOR CERTAIN RECIPIENTS OF MEDICAID-
              COVERED NURSING HOME CARE.

    Section 5503(f)(7) of title 38, United States Code, is amended by 
striking out ``September 30, 1998'' and inserting in lieu thereof 
``September 30, 2002''.

SEC. 11015. HOME LOAN FEES.

    Section 3729(a) of title 38, United States Code, is amended--
            (1) in paragraph (4), by striking out ``October 1, 1998'' 
        and inserting in lieu thereof ``October 1, 2002''; and
            (2) in paragraph (5)(C), by striking out ``October 1, 
        1998'' and inserting in lieu thereof ``October 1, 2002''.

SEC. 11016. PROCEDURES APPLICABLE TO LIQUIDATION SALES ON DEFAULTED 
              HOME LOANS GUARANTEED BY THE DEPARTMENT OF VETERANS 
              AFFAIRS.

    Section 3732(c)(11) of title 38, United States Code, is amended by 
striking out ``October 1, 1998'' and inserting ``October 1, 2002''.

                       Subtitle B--Other Matters

SEC. 11021. REVISION TO PRESCRIPTION DRUG COPAYMENT.

    (a) Increase in Amount of Copayment.--Section 1722A(a) of title 38, 
United States Code, is amended--
            (1) in paragraph (1), by striking out ``$2'' and inserting 
        in lieu thereof ``$3'';
            (2) by striking out paragraph (2); and
            (3) by redesignating paragraph (3) as paragraph (2).
    (b) Recovery of Indebtedness.--(1) Section 5302 of such title is 
amended by adding at the end the following new subsection:
    ``(f) The Secretary may not waive under this section the recovery 
of any payment or the collection of any indebtedness owed under section 
1722A of this title.''.
    (2) The amendment made by paragraph (1) shall apply with respect to 
amounts that become due to the United States under section 1722A of 
title 38, United States Code, on or after the date of the enactment of 
this Act.

SEC. 11022. ROUNDING DOWN OF COST-OF-LIVING ADJUSTMENTS IN COMPENSATION 
              AND DIC RATES.

    (a) Fiscal Year 1996 COLA.--(1) Effective as of December 1, 1995, 
the Secretary of Veterans Affairs shall recompute any increase in an 
adjustment that is otherwise provided by law to be effective during 
fiscal year 1996 in the rates of disability compensation and dependency 
and indemnity compensation paid by the Secretary as such rates were in 
effect on November 30, 1995. The recomputation shall provide for the 
same percentage increase as provided under such law, but with amounts 
so recomputed (if not a whole dollar amount) rounded down to the next 
lower whole dollar amount (rather than to the nearest whole dollar 
amount) and with each old-law DIC rate increased by the amount by which 
the new-law DIC rate is increased (rather than by a uniform 
percentage).
    (2) For purposes of paragraph (1):
            (A) The term ``old-law DIC rate'' means a dollar amount in 
        effect under section 1311(a)(3) of title 38, United States 
        Code.
            (B) The term ``new-law DIC rate'' means the dollar amount 
        in effect under section 1311(a)(1) of title 38, United States 
        Code.
    (b) Out-Year Compensation COLAs.--(1) Chapter 11 of title 38, 
United States Code, is amended by inserting after section 1102 the 
following new section:
``Sec. 1103. Cost-of-living adjustments
    ``(a) In the computation of cost-of-living adjustments for fiscal 
years 1997 through 2002 in the rates of, and dollar limitations 
applicable to, compensation payable under this chapter, such 
adjustments shall be made by a uniform percentage that is no more than 
the percentage equal to the social security increase for that fiscal 
year, with all increased monthly rates and limitations (other than 
increased rates or limitations equal to a whole dollar amount) rounded 
down to the next lower whole dollar amount.
    ``(b) For purposes of this section, the term `social security 
increase' means the percentage by which benefit amounts payable under 
title II of the Social Security Act (42 U.S.C. 401 et seq.) are 
increased for any fiscal year as a result of a determination under 
section 215(i) of such Act (42 U.S.C. 415(i)).''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 1102 the 
following new item:

``1103. Cost-of-living adjustments.''.
    (c) Out-Year DIC COLAs.--(1) Chapter 13 of title 38, United States 
Code, is amended by inserting after section 1302 the following new 
section:
``Sec. 1303. Cost-of-living adjustments
    ``(a) In the computation of cost-of-living adjustments for fiscal 
years 1997 through 2002 in the rates of dependency and indemnity 
compensation payable under this chapter, such adjustments (except as 
provided in subsection (b)) shall be made by a uniform percentage that 
is no more than the percentage equal to the social security increase 
for that fiscal year, with all increased monthly rates (other than 
increased rates equal to a whole dollar amount) rounded down to the 
next lower whole dollar amount.
    ``(b)(1) Cost-of-living adjustments for each of fiscal years 1997 
through 2002 in old-law DIC rates shall be in a whole dollar amount 
that is no greater than the amount by which the new-law DIC rate is 
increased for that fiscal year as determined under subsection (a).
    ``(2) For purposes of paragraph (1):
            ``(A) The term `old-law DIC rates' means the dollar amounts 
        in effect under section 1311(a)(3) of this title.
            ``(B) The term `new-law DIC rate' means the dollar amount 
        in effect under section 1311(a)(1) of this title.
    ``(c) For purposes of this section, the term `social security 
increase' means the percentage by which benefit amounts payable under 
title II of the Social Security Act (42 U.S.C. 401 et seq.) are 
increased for any fiscal year as a result of a determination under 
section 215(i) of such Act (42 U.S.C. 415(i)).''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 1302 the 
following new item:

``1303. Cost-of-living adjustments.''.

SEC. 11023. REVISED STANDARD FOR LIABILITY FOR INJURIES RESULTING FROM 
              DEPARTMENT OF VETERANS AFFAIRS TREATMENT.

    (a) Revised Standard.--Section 1151 of title 38, United States 
Code, is amended--
            (1) by designating the second sentence as subsection (c);
            (2) by striking out the first sentence and inserting in 
        lieu thereof the following:
    ``(a) Compensation under this chapter and dependency and indemnity 
compensation under chapter 13 of this title shall be awarded for a 
qualifying additional disability of a veteran or the qualifying death 
of a veteran in the same manner as if such disability or death were 
service-connected.
    ``(b)(1) For purposes of this section, a disability or death is a 
qualifying additional disability or a qualifying death only if the 
disability or death--
            ``(A) was caused by Department health care and was a 
        proximate result of--
                    ``(i) negligence on the part of the Department in 
                furnishing the Department health care; or
                    ``(ii) an event not reasonably foreseeable; or
            ``(B) was incurred as a proximate result of the provision 
        of training and rehabilitation services by the Secretary 
        (including by a service-provider used by the Secretary for such 
        purpose under section 3115 of this title) as part of an 
        approved rehabilitation program under chapter 31 of this title.
    ``(2) For purposes of this section, the term `Department health 
care' means hospital care, medical or surgical treatment, or an 
examination that is furnished under any law administered by the 
Secretary to a veteran by a Department employee or in a Department 
facility (as defined in section 1701(3)(A) of this title).
    ``(3) A disability or death of a veteran which is the result of the 
veteran's willful misconduct is not a qualifying disability or death 
for purposes of this section.''; and
            (3) by adding at the end the following:
    ``(d) Effective with respect to injuries, aggravations of injuries, 
and deaths occurring after September 30, 2002, a disability or death is 
a qualifying additional disability or a qualifying death for purposes 
of this section (notwithstanding the provisions of subsection (b)(1)) 
if the disability or death--
            ``(1) was the result of Department health care; or
            ``(2) was the result of the pursuit of a course of 
        vocational rehabilitation under chapter 31 of this title.''.
    (b) Conforming Amendments.--Subsection (c) of such section, as 
designated by subsection (a)(1), is amended--
            (1) by striking out ``, aggravation,'' both places it 
        appears; and
            (2) by striking out ``sentence'' and inserting in lieu 
        thereof ``subsection''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any administrative or judicial determination of eligibility 
for benefits under section 1151 of title 38, United States Code, based 
on a claim that is received by the Secretary on or after October 1, 
1995, including any such determination based on an original application 
or an application seeking to reopen, revise, reconsider, or otherwise 
readjudicate any claim for benefits under section 1151 of that title or 
any predecessor provision of law.

SEC. 11024. ENHANCED LOAN ASSET SALE AUTHORITY.

    Section 3720(h)(2) of title 38, United States Code, is amended by 
striking out ``December 31, 1995'' and inserting in lieu thereof 
``September 30, 1996''.

SEC. 11025. WITHHOLDING OF PAYMENTS AND BENEFITS.

    (a) Notice Required in Lieu of Consent or Court Order.--Section 
3726 of title 38, United States Code, is amended by striking out 
``unless'' and all that follows and inserting in lieu thereof the 
following: ``unless the Secretary provides such veteran or surviving 
spouse with notice by certified mail with return receipt requested of 
the authority of the Secretary to waive the payment of indebtedness 
under section 5302(b) of this title. If the Secretary does not waive 
the entire amount of the liability, the Secretary shall then determine 
whether the veteran or surviving spouse should be released from 
liability under section 3713(b) of this title. If the Secretary 
determines that the veteran or surviving spouse should not be released 
from liability, the Secretary shall notify the veteran or surviving 
spouse of that determination and provide a notice of the procedure for 
appealing that determination, unless the Secretary has previously made 
such determination and notified the veteran or surviving spouse of the 
procedure for appealing the determination.''.
    (b) Conforming Amendment.--Section 5302(b) of such title is amended 
by inserting ``with return receipt requested'' after ``certified 
mail''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any indebtedness to the United States arising 
pursuant to chapter 37 of title 38, United States Code, before, on, or 
after the date of the enactment of this Act.

               Subtitle C--Health Care Eligibility Reform

SEC. 11031. HOSPITAL CARE AND MEDICAL SERVICES.

    (a) Eligibility for Care.--Section 1710(a) of title 38, United 
States Code, is amended by striking out paragraphs (1) and (2) and 
inserting the following:
    ``(a)(1) The Secretary shall, to the extent and in the amount 
provided in advance in appropriations Acts for these purposes, provide 
hospital care and medical services, and may provide nursing home care, 
which the Secretary determines is needed to any veteran--
            ``(A) with a compensable service-connected disability;
            ``(B) whose discharge or release from active military, 
        naval, or air service was for a compensable disability that was 
        incurred or aggravated in the line of duty;
            ``(C) who is in receipt of, or who, but for a suspension 
        pursuant to section 1151 of this title (or both a suspension 
        and the receipt of retired pay), would be entitled to 
        disability compensation, but only to the extent that such 
        veteran's continuing eligibility for such care is provided for 
        in the judgment or settlement provided for in such section;
            ``(D) who is a former prisoner of war;
            ``(E) of the Mexican border period or of World War I;
            ``(F) who was exposed to a toxic substance, radiation, or 
        environmental hazard, as provided in subsection (e); and
            ``(G) who is unable to defray the expenses of necessary 
        care as determined under section 1722(a) of this title.
    ``(2) In the case of a veteran who is not described in paragraph 
(1), the Secretary may, to the extent resources and facilities are 
available and subject to the provisions of subsection (f), furnish 
hospital care, medical services, and nursing home care which the 
Secretary determines is needed.''.
    (b) Conforming Amendments.--(1) Section 1710(e) of such title is 
amended--
            (A) in paragraph (1), by striking out ``hospital care and 
        nursing home care'' in subparagraphs (A), (B), and (C) and 
        inserting in lieu thereof ``hospital care, medical services, 
        and nursing home care'';
            (B) in paragraph (2), by inserting ``and medical services'' 
        after ``Hospital and nursing home care''; and
            (C) by striking out ``subsection (a)(1)(G) of this 
        section'' each place it appears and inserting in lieu thereof 
        ``subsection (a)(1)(F)''.
    (2) Chapter 17 of such title is amended--
            (A) by redesignating subsection (g) of section 1710 as 
        subsection (h); and
            (B) by transferring subsection (f) of section 1712 of such 
        title to section 1710 so as to appear after subsection (f), 
        redesignating such subsection as subsection (g), and amending 
        such subsection by striking out ``section 1710(a)(2) of this 
        title'' in paragraph (1) and inserting in lieu thereof 
        ``subsection (a)(2) of this section''.
    (3) Section 1712 of such title is amended--
            (A) by striking out subsections (a) and (i); and
            (B) by redesignating subsections (b), (c), (d), (h) and 
        (j), as subsections (a), (b), (c), (d), and (e), respectively.

SEC. 11032. EXTENSION OF AUTHORITY TO PRIORITY HEALTH CARE FOR PERSIAN 
              GULF VETERANS.

    Section 1710(e)(3) of title 38, United States Code, is amended by 
striking out ``December 31, 1995'' and inserting in lieu thereof 
``December 31, 1998''.

SEC. 11033. PROSTHETICS.

    (a) Eligibility for Prosthetics.--Section 1701(6)(A)(i) of title 
38, United States Code, is amended--
            (1) by striking out ``(in the case of a person otherwise 
        receiving care or services under this chapter)'' and ``(except 
        under the conditions described in section 1712(a)(5)(A) of this 
        title),'';
            (2) by inserting ``(in the case of a person otherwise 
        receiving care or services under this chapter)'' before 
        ``wheelchairs,''; and
            (3) by inserting ``except that the Secretary may not 
        furnish sensori-neural aids other than in accordance with 
        guidelines which the Secretary shall prescribe,'' after 
        ``reasonable and necessary,''.
    (b) Regulations.--Not later than 30 days after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall 
prescribe the guidelines required by the amendments made by subsection 
(a) and shall furnish a copy of those guidelines to the Committees on 
Veterans' Affairs of the Senate and House of Representatives.

SEC. 11034. MANAGEMENT OF HEALTH CARE.

    (a) In General.--(1) Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1704 the following new sections:
``Sec. 1705. Management of health care: patient enrollment system
    ``(a) In managing the provision of hospital care and medical 
services under section 1710(a)(1) of this title, the Secretary, in 
accordance with regulations the Secretary shall prescribe, shall 
establish and operate a system of annual patient enrollment. The 
Secretary shall manage the enrollment of veterans in accordance with 
the following priorities, in the order listed:
            ``(1) Veterans with service-connected disabilities rated 30 
        percent or greater.
            ``(2) Veterans who are former prisoners of war and veterans 
        with service connected disabilities rated 10 percent or 20 
        percent.
            ``(3) Veterans who are in receipt of increased pension 
        based on a need of regular aid and attendance or by reason of 
        being permanently housebound and other veterans who are 
        catastrophically disabled.
            ``(4) Veterans not covered by paragraphs (1) through (3) 
        who are unable to defray the expenses of necessary care as 
        determined under section 1722(a) of this title.
            ``(5) All other veterans eligible for hospital care, 
        medical services, and nursing home care under section 
        1710(a)(1) of this title.
    ``(b) In the design of an enrollment system under subsection (a), 
the Secretary--
            ``(1) shall ensure that the system will be managed in a 
        manner to ensure that the provision of care to enrollees is 
        timely and acceptable in quality;
            ``(2) may establish additional priorities within each 
        priority group specified in subsection (a), as the Secretary 
        determines necessary; and
            ``(3) may provide for exceptions to the specified 
        priorities where dictated by compelling medical reasons.
``Sec. 1706. Management of health care: other requirements
    ``(a) In managing the provision of hospital care and medical 
services under section 1710(a) of this title, the Secretary shall, to 
the extent feasible, design, establish and manage health care programs 
in such a manner as to promote cost-effective delivery of health care 
services in the most clinically appropriate setting.
    ``(b) In managing the provision of hospital care and medical 
services under section 1710(a) of this title, the Secretary--
            ``(1) may contract for hospital care and medical services 
        when Department facilities are not capable of furnishing such 
        care and services economically, and
            ``(2) shall make such rules and regulations regarding 
        acquisition procedures or policies as the Secretary considers 
        appropriate to provide such needed care and services.
    ``(c) In managing the provision of hospital care and medical 
services under section 1710(a) of this title, the Secretary shall 
ensure that the Department maintains its capacity to provide for the 
specialized treatment and rehabilitative needs of disabled veterans 
described in section 1710(a) of this title (including veterans with 
spinal cord dysfunction, blindness, amputations, and mental illness) 
within distinct programs or facilities of the Department that are 
dedicated to the specialized needs of those veterans in a manner that 
(1) affords those veterans reasonable access to care and services for 
those specialized needs, and (2) ensures that overall capacity of the 
Department to provide such services is not reduced below the capacity 
of the Department, nationwide, to provide those services, as of the 
date of the enactment of this section.
    ``(d) In managing the provision of hospital care and medical 
services under section 1710(a) of this title, the Secretary shall 
ensure that any veteran with a service-connected disability is provided 
all benefits under this chapter for which that veteran was eligible 
before the date of the enactment of this section.''.
    (2) The table of sections at the beginning of chapter 17 of such 
title is amended by inserting after the item relating to section 1704 
the following new items:

``1705. Management of health care: patient enrollment system.
``1706. Management of health care: other requirements.''.
    (b) Conforming Amendments to Section 1703.--(1) Section 1703 of 
such title is amended--
            (A) by striking out subsections (a) and (b); and
            (B) in subsection (c) by--
                    (i) striking out ``(c)'', and
                    (ii) striking out ``this section, sections'' and 
                inserting in lieu thereof ``sections 1710,''.
    (2)(A) The heading of such section is amended to read as follows:
``Sec. 1703. Annual report on furnishing of care and services by 
              contract''.
    (B) The item relating to such section in the table of sections at 
the beginning of chapter 17 of such title is amended to read as 
follows:

``1703. Annual report on furnishing of care and services by 
                            contract.''.

SEC. 11035. IMPROVED EFFICIENCY IN HEALTH CARE RESOURCE MANAGEMENT.

    (a) Repeal of Sunset Provision.--Section 204 of the Veterans Health 
Care Act of 1992 (Public Law 102-585; 106 Stat. 4950) is repealed.
    (b) Cost Recovery.--Title II of such Act is further amended by 
adding at the end the following new section:

``SEC. 207. AUTHORITY TO BILL HEALTH-PLAN CONTRACTS.

    ``(a) Right To Recover.--In the case of a primary beneficiary (as 
described in section 201(2)(B)) who has coverage under a health-plan 
contract, as defined in section 1729(i)(1)(A) of title 38, United 
States Code, and who is furnished care or services by a Department 
medical facility pursuant to this title, the United States shall have 
the right to recover or collect charges for such care or services from 
such health-plan contract to the extent that the beneficiary (or the 
provider of the care or services) would be eligible to receive payment 
for such care or services from such health-plan contract if the care or 
services had not been furnished by a department or agency of the United 
States. Any funds received from such health-plan contract shall be 
credited to funds that have been allotted to the facility that 
furnished the care or services.
    ``(b) Enforcement.--The right of the United States to recover under 
such a beneficiary's health-plan contract shall be enforceable in the 
same manner as that provided by subsections (a)(3), (b), (c)(1), (d), 
(f), (h), and (i) of section 1729 of title 38, United States Code.''.

SEC. 11036. SHARING AGREEMENTS FOR SPECIALIZED MEDICAL RESOURCES.

    (a) Repeal of Section 8151.--(1) Subchapter IV of chapter 81 of 
title 38, United States Code, is amended--
            (A) by striking out section 8151; and
            (B) by redesignating sections 8152, 8153, 8154, 8155, 8156, 
        8157, and 8158 as sections 8151, 8152, 8153, 8154, 8155, 8156, 
        and 8157, respectively.
    (2) The table of sections at the beginning of chapter 81 is 
amended--
            (A) by striking out the item relating to section 8151; and
            (B) by revising the items relating to sections 8152, 8153, 
        8154, 8155, 8156, 8157, and 8158 to reflect the redesignations 
        by paragraph (1)(B).
    (b) Revised Authority for Sharing Agreements.--Section 8152 of such 
title, as redesignated by subsection (a)(1)(B), is amended--
            (1) in subsection (a)(1)(A)--
                    (A) by striking out ``specialized medical 
                resources'' and inserting in lieu thereof ``health-care 
                resources''; and
                    (B) by striking out ``other'' and all that follows 
                through ``medical schools'' and inserting in lieu 
                thereof ``any medical school, health-care provider, 
                health-care plan, insurer, or other entity or 
                individual'';
            (2) in subsection (a)(2) by striking out ``only'' and all 
        that follows through ``are not'' and inserting in lieu thereof 
        ``if such resources are not, or would not be,'';
            (3) in subsection (b), by striking out ``reciprocal 
        reimbursement'' in the first sentence and all that follows 
        through the period at the end of that sentence and inserting in 
        lieu thereof ``payment to the Department in accordance with 
        procedures that provide appropriate flexibility to negotiate 
        payment which is in the best interest of the Government.'';
            (4) in subsection (d), by striking out ``preclude such 
        payment, in accordance with--'' and all that follows through 
        ``to such facility therefor'' and inserting in lieu thereof 
        ``preclude such payment to such facility for such care or 
        services'';
            (5) by redesignating subsection (e) as subsection (f); and
            (6) by inserting after subsection (d) the following new 
        subsection (e):
    ``(e) The Secretary may make an arrangement that authorizes the 
furnishing of services by the Secretary under this section to 
individuals who are not veterans only if the Secretary determines--
            ``(1) that such an arrangement will not result in the 
        denial of, or a delay in providing access to, care to any 
        veteran at that facility; and
            ``(2) that such an arrangement--
                    ``(A) is necessary to maintain an acceptable level 
                and quality of service to veterans at that facility; or
                    ``(B) will result in the improvement of services to 
                eligible veterans at that facility.''.
    (c) Cross-Reference Amendments.--(1) Section 8110(c)(3)(A) of such 
title is amended by striking out ``8153'' and inserting in lieu thereof 
``8152''.
    (2) Subsection (b) of section 8154 of such title (as redesignated 
by subsection (a)(1)(B)) is amended by striking out ``section 8154'' 
and inserting in lieu thereof ``section 8153''.
    (3) Section 8156 of such title (as redesignated by subsection 
(a)(1)(B)) is amended--
            (A) in subsection (a), by striking out ``section 8153(a)'' 
        and inserting in lieu thereof ``section 8152(a)''; and
            (B) in subsection (b)(3), by striking out ``section 8153'' 
        and inserting in lieu thereof ``section 8152''.
    (4) Subsection (a) of section 8157 of such title (as redesignated 
by subsection (a)(1)(B)) is amended--
            (A) in the matter preceding paragraph (1), by striking out 
        ``section 8157'' and ``section 8153(a)'' and inserting in lieu 
        thereof ``section 8156'' and ``section 8152(a)'', respectively; 
        and
            (B) in paragraph (1), by striking out ``section 
        8157(b)(4)'' and inserting in lieu thereof ``section 
        8156(b)(4)''.

SEC. 11037. PERSONNEL FURNISHING SHARED RESOURCES.

    Section 712(b)(2) of title 38, United States Code, is amended--
            (1) by striking out ``the sum of--'' and inserting in lieu 
        thereof ``the sum of the following:'';
            (2) by capitalizing the first letter of the first word of 
        each of subparagraphs (A) and (B);
            (3) by striking out ``; and'' at the end of subparagraph 
        (A) and inserting in lieu thereof a period; and
            (4) by adding at the end the following:
                    ``(C) The number of such positions in the 
                Department during that fiscal year held by persons 
                involved in providing health-care resources under 
                section 8111 or 8152 of this title.''.

             TITLE XII--COMMITTEE ON WAYS AND MEANS--TRADE

  Subtitle A--Technical Corrections and Miscellaneous Trade Provisions

SEC. 12001. PAYMENT OF DUTIES AND FEES.

    (a) Interest Accrual.--Section 505(c) of the Tariff Act of 1930 (19 
U.S.C. 1505(c)) is amended in the second sentence by inserting after 
``duties, fees, and interest'' the following: ``or, in a case in which 
a claim is made under section 520(d), from the date on which such claim 
is made,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to claims made pursuant to section 520(d) of the Tariff Act of 
1930 on or after April 25, 1995.

SEC. 12002. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Examination of Books and Witnesses.--Section 509(a)(2) of the 
Tariff Act of 1930 (19 U.S.C. 1509(a)(2)) is amended by striking 
``(c)(1)(A)'' and inserting ``(d)(1)(A)''.
    (b) Requirement for Certificate for Importation of Alcoholic 
Liquors in Small Vessels.--Section 7 of the Act of August 5, 1935 (19 
U.S.C. 1707; 49 Stat. 520), is repealed.
    (c) Manifests.--Section 431(c)(1) of the Tariff Act of 1930 (19 
U.S.C. 1431(c)(1)) is amended in the matter preceding subparagraph (A) 
by striking ``such manifest'' and inserting ``a vessel manifest''.
    (d) Documentation for Entry of Merchandise.--Section 484(a)(1) of 
the Tariff Act of 1930 (19 U.S.C. 1484(a)(1)) is amended in the matter 
preceding subparagraph (A) by striking ``553, and 336(j)'' and 
inserting ``and 553''.
    (e) Penalties for Certain Violations.--Section 592 of the Tariff 
Act of 1930 (19 U.S.C. 1592) is amended--
            (1) in subsection (a)(1), by striking ``lawful duty'' and 
        inserting ``lawful duty, tax, or fee''; and
            (2) in subsections (b)(1)(A)(vi), (c)(2)(A)(ii), 
        (c)(3)(A)(ii), (c)(4)(A)(i), and (c)(4)(B) by striking ``lawful 
        duties'' each place it appears and inserting ``lawful duties, 
        taxes, and fees''.
    (f) Deprivation of Lawful Duties, Taxes, or Fees.--Section 592(d) 
of the Tariff Act of 1930 (19 U.S.C. 1592(d)) is amended by striking 
``or fees be restored'' and inserting ``and fees be restored''.
    (g) Reconciliation Treated as Entry for Recordkeeping.--
            (1) Section 401(s) of the Tariff Act of 1930 (19 U.S.C. 
        1401(s)) is amended by inserting ``recordkeeping,'' after 
        ``reliquidation,''.
            (2) Section 508(c)(1) of such Act (19 U.S.C. 1508(c)(1)) is 
        amended by inserting ``, filing of a reconciliation,'' after 
        ``entry''.
    (h) Extension of Liquidation.--Section 504(d) of the Tariff Act of 
1930 (19 U.S.C. 1504(d)) is amended by inserting ``, unless liquidation 
is extended under subsection (b),'' after ``shall liquidate the 
entry''.
    (i) Exemption From Duty for Personal and Household Goods 
Accompanying Returning Residents.--Section 321(a)(2)(B) of the Tariff 
Act of 1930 (19 U.S.C. 1321(a)(2)(B)) is amended by inserting ``, 
9804.00.65,'' after ``9804.00.30''.
    (j) Debt Collection.--Section 631(a) of the Tariff Act of 1930 (19 
U.S.C. 1631(a)) is amended--
            (1) by inserting after ``law,'' the following: ``including 
        section 3302 of title 31, United States Code, and subchapters I 
        and II of chapter 37 of such title,''; and
            (2) by inserting ``and the expenses associated with 
        recovering such indebtedness,'' after ``Government,''.
    (k) Examination of Books and Witnesses.--Section 509(b) of the 
Tariff Act of 1930 (19 U.S.C. 1509(b)) is amended in paragraphs (3) and 
(4) by striking ``appropriate regional commissioner'' and inserting 
``officer designated pursuant to regulations''.
    (l) Review of Protests.--Section 515(d) of the Tariff Act of 1930 
(19 U.S.C. 1515(d)) is amended by striking ``district director'' and 
inserting ``port director''.
    (m) Effective Date.--The amendments made by this section apply as 
of December 8, 1993.

SEC. 12003. CLARIFICATION REGARDING THE APPLICATION OF CUSTOMS USER 
              FEES.

    (a) In General.--Subparagraph (D) of section 13031(b)(8) of the 
Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
58c(b)(8)(D)) is amended--
            (1) in clause (iv)--
                    (A) by striking ``subparagraph 9802.00.80 of such 
                Schedules'' and inserting ``heading 9802.00.80 of such 
                Schedule''; and
                    (B) by striking ``and'' at the end of clause (iv);
            (2) by striking the period at the end of clause (v) and 
        inserting ``; and''; and
            (3) by inserting after clause (v) the following new clause:
            ``(vi) in the case of merchandise entered from a foreign 
        trade zone (other than merchandise to which clause (v) 
        applies), be applied only to the value of the privileged or 
        nonprivileged foreign status merchandise under section 3 of the 
        Act of June 18, 1934 (commonly known as the Foreign Trade Zones 
        Act, 19 U.S.C. 81c).''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
to--
            (1) any entry made from a foreign trade zone on or after 
        the 15th day after the date of the enactment of this Act; and
            (2) any entry made from a foreign trade zone after November 
        30, 1986, and before such 15th day if liquidation of the entry 
        was not final before such 15th day.
    (c) Application of Fees to Certain Agricultural Products.--The 
amendment made by section 111(b)(2)(D)(iv) of the Customs and Trade Act 
of 1990 shall apply to--
            (1) any entry made from a foreign trade zone on or after 
        the 15th day after the date of the enactment of this Act; and
            (2) any entry made from a foreign trade zone after November 
        30, 1986, and before such 15th day if the liquidation of the 
        entry was not final before such 15th day.

SEC. 12004. TECHNICAL AMENDMENT TO THE CUSTOMS AND TRADE ACT OF 1990.

    Subsection (b) of section 484H of the Customs and Trade Act of 1990 
(19 U.S.C. 1553 note) is amended by striking ``, or withdrawn from 
warehouse for consumption,'' and inserting ``for transportation in 
bond''.

SEC. 12005. TECHNICAL AMENDMENTS REGARDING CERTAIN BENEFICIARY 
              COUNTRIES.

    (a) Caribbean Basin Economic Recovery Act.--Section 213(h)(1) of 
the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(h)(1)) is 
amended by adding at the end thereof the following flush sentence:
``The duty reductions provided for under this paragraph shall not apply 
to textile and apparel articles which are subject to textile 
agreements.''.
    (b) Andean Trade Preference Act.--Section 204(c)(1) of the Andean 
Trade Preference Act (19 U.S.C. 3203(c)(1)) is amended by adding at the 
end thereof the following flush sentence:
``The duty reductions provided for under this paragraph shall not apply 
to textile and apparel articles which are subject to textile 
agreements.''
    (c) Effective Date.--The amendments made by this section apply with 
respect to--
            (1) articles entered, or withdrawn from warehouse for 
        consumption, on or after the 15th day after the date of the 
        enactment of this Act, and
            (2) articles entered after December 31, 1991, and before 
        such 15th day, if the liquidation of the entry of such articles 
        was not final before such 15th day.

SEC. 12006. CLARIFICATION OF FEES FOR CERTAIN CUSTOMS SERVICES.

    (a) In General.--Section 13031(b)(9)(A) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)(A)) is amended--
            (1) by striking ``centralized hub facility or'' in clause 
        (i); and
            (2) in clause (ii)--
                    (A) by striking ``facility--'' and inserting 
                ``facility or centralized hub facility--'',
                    (B) by striking ``customs inspectional'' in 
                subclause (I), and
                    (C) by striking ``at the facility'' in subclause 
                (I) and inserting ``for the facility''.
    (b) Definitions.--Section 13031(b)(9)(B)(i) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)(B)(i)) 
is amended--
            (1) by striking ``, as in effect on July 30, 1990'', and
            (2) by adding at the end thereof the following new 
        sentence: ``Nothing in this paragraph shall be construed as 
        prohibiting the Secretary of the Treasury from processing 
        merchandise that is informally entered or released at any 
        centralized hub facility or express consignment carrier 
        facility during the normal operating hours of the Customs 
        Service, subject to reimbursement and payment under 
        subparagraph (A).''.
    (c) Citation.--Section 13031(b)(9)(B)(ii) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)(B)(ii)) 
is amended by striking ``section 236 of the Tariff and Trade Act of 
1984'' and inserting ``section 236 of the Trade and Tariff Act of 
1984''.

SEC. 12007. SPECIAL RULE FOR EXTENDING TIME FOR FILING DRAWBACK CLAIMS.

    Section 313(r) of the Tariff Act of 1930 (19 U.S.C. 1313(r)) is 
amended by adding at the end the following:
            ``(3)(A)(i) Subject to clause (ii), the Customs Service 
        may, notwithstanding the limitation set forth in paragraph (1), 
        extend the time for filing a drawback claim for a period not to 
        exceed 18 months, if--
                    ``(I) the claimant establishes to the satisfaction 
                of the Customs Service that the claimant was unable to 
                file the drawback claim because of an event declared by 
                the President to be a major disaster on or after 
                January 1, 1994; and
                    ``(II) the claimant files a request for such 
                extension with the Customs Service within one year from 
                the last day of the 3-year period referred to in 
                paragraph (1).
            ``(ii) In the case of a major disaster occurring on or 
        after January 1, 1994, and before the date of the enactment of 
        this paragraph--
                    ``(I) the Customs Service may extend the time for 
                filing the drawback claim for a period not to exceed 1 
                year; and
                    ``(II) the request under clause (i)(II) must be 
                filed not later than 1 year from the date of the 
                enactment of this paragraph.
            ``(B) If an extension is granted with respect to a request 
        filed under this paragraph, the periods of time for retaining 
        records set forth in subsection (t) of this section and section 
        508(c)(3) shall be extended for an additional 18 months or, in 
        a case to which subparagraph (A)(ii) applies, for a period not 
        to exceed 1 year from the date the claim is filed.
            ``(C) For purposes of this paragraph, the term `major 
        disaster' has the meaning given that term in section 102(2) of 
        the Robert T. Stafford Disaster Relief and Emergency Assistance 
        Act (42 U.S.C. 5122(2)).''.

SEC. 12008. TREATMENT OF CERTAIN ENTRIES.

    (a) Liquidation or Reliquidation of Entries.--Notwithstanding 
sections 514 and 520 of the Tariff Act of 1930 (19 U.S.C. 1514 and 
1520), and any other provision of law, the United States Customs 
Service shall liquidate or reliquidate those entry numbers made at New 
York, New York, which are listed in subsection (c), in accordance with 
the final results of the administrative review, covering the period 
from May 1, 1984, through March 31, 1985, undertaken by the 
International Trade Administration of the Department of Commerce for 
such entries (case number A-580-008).
    (b) Payment of Amounts Owed.--Any amounts owed by the United States 
pursuant to the liquidation or reliquidation of an entry under 
subsection (a) shall be paid by the Customs Service within 90 days 
after such liquidation or reliquidation.
    (c) Entry List.--The entries referred to in subsection (a) are the 
following:

                                                                        
                    Entry Number                 Date of Entry          
                                                                        
              84-4426808.............  August 29, 1984                  
              84-4427823.............  September 4, 1984                
              84-4077985.............  July 25, 1984                    
              84-4080859.............  August 3, 1984                   
              84-4080817.............  August 3, 1984                   
              84-4077723.............  August 1, 1984                   
              84-4075194.............  July 10, 1984                    
              84-4076481.............  July 17, 1984                    
              84-4080930.............  August 9, 1984.                  
                                                                        

SEC. 12009. TEMPORARY DUTY SUSPENSION FOR PERSONAL EFFECTS OF 
              PARTICIPANTS IN CERTAIN WORLD ATHLETIC EVENTS.

    (a) In General.--Subchapter II of chapter 99 of the Harmonized 
Tariff Schedule of the United States is amended by inserting in 
numerical sequence the following new heading:

      

                                                                                                                
                                                                                                                
                                                                                                                
``   9902.98.05     Any of the                                                                                  
                     following                                                                                  
                     articles not                                                                               
                     intended for                                                                               
                     sale or                                                                                    
                     distribution to                                                                            
                     the public:                                                                                
                     personal                                                                                   
                     effects of                                                                                 
                     aliens who are                                                                             
                     participants                                                                               
                     in, officials                                                                              
                     of, or                                                                                     
                     accredited                                                                                 
                     members of                                                                                 
                     delegations to,                                                                            
                     the 1998                                                                                   
                     Goodwill Games,                                                                            
                     and of persons                                                                             
                     who are                                                                                    
                     immediate                                                                                  
                     family members                                                                             
                     of or servants                                                                             
                     to any of the                                                                              
                     foregoing                                                                                  
                     persons;                                                                                   
                     equipment and                                                                              
                     materials                                                                                  
                     imported in                                                                                
                     connection with                                                                            
                     the foregoing                                                                              
                     event by or on                                                                             
                     behalf of the                                                                              
                     foregoing                                                                                  
                     persons or the                                                                             
                     organizing                                                                                 
                     committee of                                                                               
                     such event;                                                                                
                     articles to be                                                                             
                     used in                                                                                    
                     exhibitions                                                                                
                     depicting the                                                                              
                     culture of a                                                                               
                     country                                                                                    
                     participating                                                                              
                     in such event;                                                                             
                     and, if                                                                                    
                     consistent with                                                                            
                     the foregoing,                                                                             
                     such other                                                                                 
                     articles as the                                                                            
                     Secretary of                                                                               
                     the Treasury                                                                               
                     may allow......  Free              No change         Free              On or before        
                                                                                            2/1/99              
                                                                                                              ''

    (b) Taxes and Fees Not To Apply.--The articles described in heading 
9902.98.05 of the Harmonized Tariff Schedule of the United States (as 
added by subsection (a)) shall be free of taxes and fees which may be 
otherwise applicable.
    (c) Effective Date.--The amendment made by this section applies to 
articles entered, or withdrawn from warehouse for consumption, on or 
after the 15th day after the date of the enactment of this Act.

SEC. 12010. MISCELLANEOUS TECHNICAL CORRECTIONS.

    (a) Drawback and Refunds.--Section 313(s)(2)(B) of the Tariff Act 
of 1930 (19 U.S.C. 1313(s)(2)(B)) is amended by striking ``successor'' 
the first place it appears and inserting ``predecessor''.
    (b) Trade Act of 1974.--Section 301(c)(4) of the Trade Act of 1974 
(19 U.S.C. 2411(c)(4)) is amended by striking ``(1)(C)(iii)'' and 
inserting ``(1)(D)(iii)''.

SEC. 12011. URUGUAY ROUND AGREEMENTS ACT.

    Section 405(b) of the Uruguay Round Agreements Act (19 U.S.C. 
3602(b)) is amended--
            (1) in paragraph (1) by striking ``1(a)'' and inserting 
        ``1(b)''; and
            (2) in paragraph (2) by striking ``1(b)'' and inserting 
        ``1(a)''.

SEC. 12012. FILING OF CERTIFICATIONS FOR CIVIL AIRCRAFT PARTS.

    General Note 6 of the Harmonized Tariff Schedule of the United 
States is amended--
            (1) by inserting ``or electronic'' after ``shall file a 
        written''; and
            (2) by striking ``with the appropriate customs officer'' 
        and inserting ``with the United States Customs Service''.

SEC. 12013. EXEMPTION REGARDING CERTAIN VESSEL REPAIRS.

    (a) Temporary Exemption Extended.--Section 484E(b)(2)(B) of the 
Customs and Trade Act of 1990 (19 U.S.C. 1466 note) is amended by 
striking ``December 31, 1992'' and inserting ``December 31, 1994''.
    (b) Effective Date.--The amendment made by this section applies to 
any entry made after December 31, 1992, and before January 1, 1995.

SEC. 12014. FEES FOR CERTAIN CUSTOMS SERVICES.

    (a) In General.--Section 13031(a)(5) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(5)) is amended--
            (1) in subparagraph (A), by inserting ``a place'' after 
        ``aircraft from''; and
            (2) in subparagraph (B), by striking ``subsection 
        (b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)''.
    (b) Limitation on Fees.--Section 13031(b)(1) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(1)) is 
amended to read as follows:
    ``(b) Limitations on Fees.--(1)(A) No fee may be charged under 
subsection (a) of this section for customs services provided in 
connection with--
            ``(i) the arrival of any passenger whose journey--
                    ``(I) originated in--
                            ``(aa) Canada,
                            ``(bb) Mexico,
                            ``(cc) a territory or possession of the 
                        United States, or
                            ``(dd) any adjacent island (within the 
                        meaning of section 101(b)(5) of the Immigration 
                        and Nationality Act (8 U.S.C. 1101(b)(5))), or
                    ``(II) originated in the United States and was 
                limited to--
                            ``(aa) Canada,
                            ``(bb) Mexico,
                            ``(cc) territories and possessions of the 
                        United States, and
                            ``(dd) such adjacent islands;
            ``(ii) the arrival of any railroad car the journey of which 
        originates and terminates in the same country, but only if no 
        passengers board or disembark from the train and no cargo is 
        loaded or unloaded from such car while the car is within any 
        country other than the country in which such car originates and 
        terminates;
            ``(iii) the arrival of any ferry; or
            ``(iv) the arrival of any passenger on board a commercial 
        vessel traveling only between ports which are within the 
        customs territory of the United States.
    ``(B) The exemption provided for in subparagraph (A) shall not 
apply in the case of the arrival of any passenger on board a commercial 
vessel whose journey originates and terminates at the same place in the 
United States if there are no intervening stops.
    ``(C) The exemption provided for in subparagraph (A)(i) shall not 
apply to fiscal years 1994, 1995, 1996, and 1997.''.
    (c) Fee Assessed Only Once.--Section 13031(b)(4) of the 
Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
58c(b)(4)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (2) by striking ``No fee'' and inserting ``(A) No fee''; 
        and
            (3) by adding at the end the following new subparagraph:
    ``(B) In the case of a commercial vessel making a single voyage 
involving 2 or more United States ports with respect to which the 
passengers would otherwise be charged a fee pursuant to subsection 
(a)(5), such fee shall be charged only 1 time for each passenger.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 521 of the 
North American Free Trade Agreement Implementation Act.

SEC. 12015. TECHNICAL CORRECTION TO CERTAIN CHEMICAL DESCRIPTION.

    (a) Amendment to Subheading 2933.90.02.--The article description 
for subheading 2933.90.02 of the Harmonized Tariff Schedule of the 
United States is amended by striking ``(Quizalofop ethyl)''.
    (b) Effective Date.--
            (1) General rule.--The amendment made by this section 
        applies to articles entered, or withdrawn from warehouse for 
        consumption, on or after the 15th day after the date of the 
        enactment of this Act.
            (2) Retroactive provision.--Notwithstanding section 514 of 
        the Tariff Act of 1930 or any other provision of law, upon 
        proper request (which includes sufficient information to 
        identify and locate the entry) filed with the Customs Service 
        on or before the date that is 180 days after the date of the 
        enactment of this Act, any entry, or withdrawal from warehouse 
        for consumption, of an article that occurred--
                    (A) after December 31, 1994, and before the date 
                that is 15 days after the date of the enactment of this 
                Act, and
                    (B) with respect to which there would have been no 
                duty or a lesser duty if the amendment made by 
                subsection (a) applied to such entry or withdrawal,
        shall be liquidated or reliquidated as though such amendment 
        applied to such entry or withdrawal.

SEC. 12016. MARKING OF IMPORTED ARTICLES AND CONTAINERS.

  (a) In General.--Section 304 of the Tariff Act of 1930 (19 
U.S.C.1304) is amended--
            (1) by redesignating subsections (f), (g), (h), and (i) as 
        subsections (i), (j), (k), and (l), respectively, and
            (2) by inserting after subsection (e) the following new 
        subsections:
    ``(f) Marking of Metal Forgings.--The marking requirements of 
subsections (a) and (b) shall not apply to--
            ``(1) metal forgings that--
                    ``(A) are imported for processing into finished 
                hand tools in the United States, and
                    ``(B) have not been improved in condition beyond 
                rough burring, trimming, grinding, turning, hammering, 
                chiseling, or filing; and
            ``(2) hand tools made from metal forgings described in 
        paragraph (1).
    ``(g) Marking of Certain Coffee and Tea Products.--The marking 
requirements of subsections (a) and (b) shall not apply to articles 
described in subheading 0901.21, 0901.22, 0902.10, 0902.20, 0902.30, 
0902.40, 2101.10, or 2101.20 of the Harmonized Tariff Schedule of the 
United States, as in effect on January 1, 1995.
    ``(h) Marking of Spices.--The marking requirements of subsections 
(a) and (b) shall not apply to articles provided for under subheadings 
0904.11, 0904.12, 0904.20, 0905.00, 0906.10, 0906.20, 0907.00, 0908.10, 
0908.20, 0908.30, 0909.10, 0909.20, 0909.30, 0909.40, 0909.50, 0910.10, 
0910.20, 0910.30, 0910.40, 0910.50, 0910.91, 0910.99, 1106.20, 1207.40, 
1207.50, 1207.91, 1404.90, and 3302.10, and items classifiable in 
categories 0712.90.60, 0712.90.8080, 1209.91.2000, 1211.90.2000, 
1211.90.8040, 1211.90.8050, 1211.90.8090, 2006.00.3000, 2918.13.2000, 
3203.00.8000, 3301.90.1010, 3301.90.1020, and 3301.90.1050 of the 
Harmonized Tariff Schedule of the United States, as in effect on 
January 1, 1995.''.
    (b) Effective Date.--The amendments made by this section apply to 
goods entered, or withdrawn from warehouse for consumption, on or after 
the date of the enactment of this Act.

SEC. 12017. RELIQUIDATING ENTRY OF WARP KNITTING MACHINES.

    Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 
1514) or any other provision of law, upon proper request filed with the 
Customs Service before the 180th day after the date of the enactment of 
this Act, the Secretary of the Treasury shall--
            (1) liquidate or reliquidate as duty free Entry No. 100-
        3022436-3, made on July 12, 1989, at the port of Charleston, 
        South Carolina; and
            (2) refund any duties and interest paid with respect to 
        such entry.

SEC. 12018. IDENTIFICATION OF TRADE EXPANSION PRIORITIES.

    Section 310(a)(1) of the Trade Act of 1974 (19 U.S.C. 2420(a)(1)) 
is amended by striking ``calendar year 1995'' and inserting ``each of 
calendar years 1995 through 2000''.

             Subtitle B--Generalized System of Preferences

SEC. 12101. SHORT TITLE.

    This subtitle may be cited as the ``GSP Renewal Act of 1995''.

SEC. 12102. GENERALIZED SYSTEM OF PREFERENCES.

    (a) In General.--Title V of the Trade Act of 1974 is amended to 
read as follows:

              ``TITLE V--GENERALIZED SYSTEM OF PREFERENCES

``SEC. 501. AUTHORITY TO EXTEND PREFERENCES.

    ``The President may provide duty-free treatment for any eligible 
article from any beneficiary developing country in accordance with the 
provisions of this title. In taking any such action, the President 
shall have due regard for--
            ``(1) the effect such action will have on furthering the 
        economic development of developing countries through the 
        expansion of their exports;
            ``(2) the extent to which other major developed countries 
        are undertaking a comparable effort to assist developing 
        countries by granting generalized preferences with respect to 
        imports of products of such countries;
            ``(3) the anticipated impact of such action on United 
        States producers of like or directly competitive products; and
            ``(4) the extent of the beneficiary developing country's 
        competitiveness with respect to eligible articles.

``SEC. 502. DESIGNATION OF BENEFICIARY DEVELOPING COUNTRIES.

    ``(a) Authority To Designate Countries.--
            ``(1) Beneficiary developing countries.--The President is 
        authorized to designate countries as beneficiary developing 
        countries for purposes of this title.
            ``(2) Least-developed beneficiary developing countries.--
        The President is authorized to designate any beneficiary 
        developing country as a least-developed beneficiary developing 
        country for purposes of this title, based on the considerations 
        in section 501 and subsection (c) of this section.
    ``(b) Countries Ineligible for Country Designation.--
            ``(1) Specific countries.--The following countries may not 
        be designated as beneficiary developing countries for purposes 
        of this title:
                    ``(A) Australia.
                    ``(B) Canada.
                    ``(C) European Union member states.
                    ``(D) Iceland.
                    ``(E) Japan.
                    ``(F) Monaco.
                    ``(G) New Zealand.
                    ``(H) Norway.
                    ``(I) Switzerland.
            ``(2) Other bases for ineligibility.--The President shall 
        not designate any country a beneficiary developing country 
        under this title if any of the following applies:
                    ``(A) Such country is a Communist country, unless--
                            ``(i) the products of such country receive 
                        nondiscriminatory treatment,
                            ``(ii) such country is a WTO Member (as 
                        such term is defined in section 2 of the 
                        Uruguay Round Agreements Act,) and a member of 
                        the International Monetary Fund, and
                            ``(iii) such country is not dominated or 
                        controlled by international communism.
                    ``(B) Such country is a party to an arrangement of 
                countries and participates in any action pursuant to 
                such arrangement, the effect of which is--
                            ``(i) to withhold supplies of vital 
                        commodity resources from international trade or 
                        to raise the price of such commodities to an 
                        unreasonable level, and
                            ``(ii) to cause serious disruption of the 
                        world economy.
                    ``(C) Such country affords preferential treatment 
                to the products of a developed country, other than the 
                United States, which has, or is likely to have, a 
                significant adverse effect on United States commerce.
                    ``(D)(i) Such country--
                            ``(I) has nationalized, expropriated, or 
                        otherwise seized ownership or control of 
                        property, including patents, trademarks, or 
                        copyrights, owned by a United States citizen or 
                        by a corporation, partnership, or association 
                        which is 50 percent or more beneficially owned 
                        by United States citizens,
                            ``(II) has taken steps to repudiate or 
                        nullify an existing contract or agreement with 
                        a United States citizen or a corporation, 
                        partnership, or association which is 50 percent 
                        or more beneficially owned by United States 
                        citizens, the effect of which is to 
                        nationalize, expropriate, or otherwise seize 
                        ownership or control of property, including 
                        patents, trademarks, or copyrights, so owned, 
                        or
                            ``(III) has imposed or enforced taxes or 
                        other exactions, restrictive maintenance or 
operational conditions, or other measures with respect to property, 
including patents, trademarks, or copyrights, so owned, the effect of 
which is to nationalize, expropriate, or otherwise seize ownership or 
control of such property,
                unless clause (ii) applies.
                    ``(ii) This clause applies if the President 
                determines that--
                            ``(I) prompt, adequate, and effective 
                        compensation has been or is being made to the 
                        citizen, corporation, partnership, or 
                        association referred to in clause (i),
                            ``(II) good faith negotiations to provide 
                        prompt, adequate, and effective compensation 
                        under the applicable provisions of 
                        international law are in progress, or the 
                        country described in clause (i) is otherwise 
                        taking steps to discharge its obligations under 
                        international law with respect to such citizen, 
                        corporation, partnership, or association, or
                            ``(III) a dispute involving such citizen, 
                        corporation, partnership, or association over 
                        compensation for such a seizure has been 
                        submitted to arbitration under the provisions 
                        of the Convention for the Settlement of 
                        Investment Disputes, or in another mutually 
                        agreed upon forum,
                and the President promptly furnishes a copy of such 
                determination to the Senate and House of 
                Representatives.
                    ``(E) Such country fails to act in good faith in 
                recognizing as binding or in enforcing arbitral awards 
                in favor of United States citizens or a corporation, 
                partnership, or association which is 50 percent or more 
                beneficially owned by United States citizens, which 
                have been made by arbitrators appointed for each case 
                or by permanent arbitral bodies to which the parties 
                involved have submitted their dispute.
                    ``(F) Such country aids or abets, by granting 
                sanctuary from prosecution to, any individual or group 
                which has committed an act of international terrorism.
                    ``(G) Such country has not taken or is not taking 
                steps to afford internationally recognized worker 
                rights to workers in the country (including any 
                designated zone in that country).
        Subparagraphs (D), (E), (F), and (G) shall not prevent the 
        designation of any country as a beneficiary developing country 
        under this title if the President determines that such 
        designation will be in the national economic interest of the 
        United States and reports such determination to the Congress 
        with the reasons therefor.
    ``(c) Factors Affecting Country Designation.--In determining 
whether to designate any country as a beneficiary developing country 
under this title, the President shall take into account--
            ``(1) an expression by such country of its desire to be so 
        designated;
            ``(2) the level of economic development of such country, 
        including its per capita gross national product, the living 
        standards of its inhabitants, and any other economic factors 
        which the President deems appropriate;
            ``(3) the extent to which other major developed countries 
        are extending generalized preferential tariff treatment to such 
        country;
            ``(4) the extent to which such country has assured the 
        United States that it will provide equitable and reasonable 
        access to the markets and basic commodity resources of such 
        country and the extent to which such country has assured the 
        United States that it will refrain from engaging in 
        unreasonable export practices;
            ``(5) whether such country is providing adequate and 
        effective protection of intellectual property rights;
            ``(6) the extent to which such country has taken action 
        to--
                    ``(A) reduce trade distorting investment practices 
                and policies (including export performance 
                requirements); and
                    ``(B) reduce or eliminate barriers to trade in 
                services;
            ``(7) whether or not such country has taken or is taking 
        steps to afford to workers in that country (including any 
        designated zone in that country) internationally recognized 
        worker rights; and
            ``(8) the extent to which such country fails to cooperate 
        with the United States in preventing the proliferation of 
        nuclear weapons, nuclear weapons components, and nuclear 
        weapons delivery systems, or in preventing illegal drug 
        trafficking.
A country may be found to not provide adequate and effective protection 
of intellectual property rights under paragraph (5) and section 
503(d)(2)(B), notwithstanding the fact that it may be in compliance 
with the specific obligations of the Agreement on Trade-Related Aspects 
of Intellectual Property Rights referred to in section 101(d)(15) of 
the Uruguay Round Agreements Act.
    ``(d) Withdrawal, Suspension, or Limitation of Country 
Designation.--
            ``(1) In general.--The President may withdraw, suspend, or 
        limit the application of the duty-free treatment accorded under 
        this title with respect to any country. Except in exceptional 
        circumstances, the President, before taking any action under 
        this subsection, shall provide a period for the submission of 
        public comments on the matter under consideration, and in 
        taking any action under this subsection, the President shall 
        consider the factors set forth in section 501 and subsection 
        (c) of this section, and comments received from the public.
            ``(2) Changed circumstances.--The President shall, after 
        complying with the requirements of subsection (f)(2), withdraw 
        or suspend the designation of any country as a beneficiary 
        developing country if, after such designation, the President 
        determines that as the result of changed circumstances such 
        country would be barred from designation as a beneficiary 
        developing country under subsection (b)(2). Such country shall 
        cease to be a beneficiary developing country on the day on 
        which the President issues an Executive order or Presidential 
        proclamation revoking the designation of such country under 
        this title.
    ``(e) Mandatory Graduation of Beneficiary Developing Countries.--If 
the President determines that a beneficiary developing country has 
become a `high income' country, as defined by the official statistics 
of the International Bank for Reconstruction and Development, then the 
President shall terminate the designation of such country as a 
beneficiary developing country for purposes of this title, effective on 
January 1 of the second year following the year in which such 
determination is made.
    ``(f) Congressional Notification.--
            ``(1) Notification of designation.--
                    ``(A) In general.--Before the President designates 
                any country as a beneficiary developing country under 
                this title, the President shall notify the Congress of 
                the President's intention to make such designation, 
together with the considerations entering into such decision.
                    ``(B) Designation as least-developed beneficiary 
                developing country.--At least 60 days before the 
                President designates any country as a least-developed 
                beneficiary developing country, the President shall 
                notify the Congress of the President's intention to 
                make such designation.
            ``(2) Notification of termination.--If the President has 
        designated any country as a beneficiary developing country 
        under this title, the President shall not terminate such 
        designation unless, at least 60 days before such termination, 
        the President has notified the Congress and has notified such 
        country of the President's intention to terminate such 
        designation, together with the considerations entering into 
        such decision.

``SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.

    ``(a) Eligible Articles.--
            ``(1) Designation.--
                    ``(A) In general.--Except as provided in subsection 
                (b), the President is authorized to designate articles 
                as eligible articles for all beneficiary developing 
                countries for purposes of this title by Executive order 
                or Presidential proclamation after receiving the advice 
                of the International Trade Commission in accordance 
                with subsection (e).
                    ``(B) Least-developed beneficiary developing 
                countries.--Except as provided in subsection (b), the 
                President is authorized to designate additional 
                articles as eligible articles only for countries 
                designated as least-developed beneficiary developing 
                countries under section 502(a)(2) if, after receiving 
                the advice of the International Trade Commission in 
                accordance with subsection (e) of this section, the 
                President determines that such articles are not import-
                sensitive in the context of imports from least-
                developed beneficiary developing countries.
                    ``(C) Three-year rule.--If, after receiving the 
                advice of the International Trade Commission under 
                subsection (e), an article has been formally considered 
                for designation as an eligible article under this title 
                and denied such designation, such article may not be 
                reconsidered for such designation for a period of three 
                years after such denial.
            ``(2) Rule of origin.--
                    ``(A) General rule.--The duty-free treatment 
                provided under this title shall apply to any eligible 
                article which is the growth, product, or manufacture of 
                a beneficiary developing country if--
                            ``(i) that article is imported directly 
                        from a beneficiary developing country into the 
                        customs territory of the United States; and
                            ``(ii) the sum of--
                                    ``(I) the cost or value of the 
                                materials produced in the beneficiary 
                                developing country or any two or more 
                                countries which are members of the same 
                                association of countries which is 
                                treated as one country under section 
                                506(2), plus
                                    ``(II) the direct costs of 
                                processing operations performed in such 
                                beneficiary developing country or such 
                                member countries,
                        is not less than 35 percent of the appraised 
                        value of such article at the time it is 
                        entered.
                    ``(B) Exclusions.--An article shall not be treated 
                as the growth, product, or manufacture of a beneficiary 
                developing country by virtue of having merely 
                undergone--
                            ``(i) simple combining or packaging 
                        operations, or
                            ``(ii) mere dilution with water or mere 
                        dilution with another substance that does not 
                        materially alter the characteristics of the 
                        article.
            ``(3) Regulations.--The Secretary of the Treasury, after 
        consulting with the United States Trade Representative, shall 
        prescribe such regulations as may be necessary to carry out 
        paragraph (2), including, but not limited to, regulations 
        providing that, in order to be eligible for duty-free treatment 
        under this title, an article--
                    ``(A) must be wholly the growth, product, or 
                manufacture of a beneficiary developing country, or
                    ``(B) must be a new or different article of 
                commerce which has been grown, produced, or 
                manufactured in the beneficiary developing country.
    ``(b) Articles That May Not Be Designated As Eligible Articles.--
            ``(1) Import sensitive articles.--The President may not 
        designate any article as an eligible article under subsection 
        (a) if such article is within one of the following categories 
        of import-sensitive articles:
                    ``(A) Textile and apparel articles which were not 
                eligible articles for purposes of this title on January 
                1, 1994, as this title was in effect on such date.
                    ``(B) Import-sensitive electronic articles.
                    ``(C) Import-sensitive steel articles.
                    ``(D) Footwear, handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel which were not 
                eligible articles for purposes of this title on January 
                1, 1995, as this title was in effect on such date.
                    ``(E) Import-sensitive semimanufactured and 
                manufactured glass products.
                    ``(F) Any other articles which the President 
                determines to be import-sensitive in the context of the 
                Generalized System of Preferences.
            ``(2) Articles against which other actions taken.--An 
        article shall not be an eligible article for purposes of this 
        title for any period during which such article is the subject 
        of any action proclaimed pursuant to section 203 of this Act 
        (19 U.S.C. 2253) or section 232 or 351 of the Trade Expansion 
        Act of 1962 (19 U.S.C. 1862, 1981).
            ``(3) Agricultural products.--No quantity of an 
        agricultural product subject to a tariff-rate quota that 
        exceeds the in-quota quantity shall be eligible for duty-free 
        treatment under this title.
    ``(c) Withdrawal, Suspension, or Limitation of Duty-Free Treatment; 
Competitive Need Limitation.--
            ``(1) In general.--The President may withdraw, suspend, or 
        limit the application of the duty-free treatment accorded under 
        this title with respect to any article, except that no rate of 
        duty may be established with respect to any article pursuant to 
        this subsection other than the rate which would apply but for 
        this title. In taking any action under this subsection, the 
        President shall consider the factors set forth in sections 501 
        and 502(c).
            ``(2) Competitive need limitation.--
                    ``(A) Basis for withdrawal of duty-free 
                treatment.--Except as provided in this paragraph and 
                subject to subsection (d), whenever the President 
                determines that a beneficiary developing country has 
                exported (directly or indirectly) to the United States 
                during any calendar year beginning after December 31, 
                1995--
                            ``(i) a quantity of an eligible article 
                        having an appraised value in excess of 
                        $75,000,000, except that, in applying this 
                        clause, the amount of $75,000,000 shall be 
                        increased by $5,000,000 on January 1 of each 
                        calendar year after calendar year 1995, or
                            ``(ii) a quantity of an eligible article 
                        equal to or exceeding 50 percent of the 
                        appraised value of the total imports of that 
                        article into the United States during the 
                        calendar year,
                then the President shall, not later than July 1 of the 
                next calendar year, terminate the duty-free treatment 
                for that article from that beneficiary developing 
                country.
                    ``(B) Country defined.--For purposes of this 
                paragraph, the term `country' does not include an 
                association of countries which is treated as one 
                country under section 506(2), but does include a 
                country which is a member of any such association.
                    ``(C) Redesignations.--A country which is no longer 
                treated as a beneficiary developing country with 
                respect to an eligible article by reason of 
                subparagraph (A) may be redesignated a beneficiary 
                developing country with respect to such article, 
                subject to the considerations set forth in sections 501 
                and 502, if imports of such article from such country 
                did not exceed the limitations in subparagraph (A) 
                during the preceding calendar year.
                    ``(D) Least-developed beneficiary developing 
                countries.--Subparagraph (A) shall not apply to any 
                least-developed beneficiary developing country.
                    ``(E) Articles not produced in the united states 
                excluded.--Subparagraph (A)(ii) shall not apply with 
                respect to any eligible article if a like or directly 
                competitive article was not produced in the United 
States on January 1, 1995.
                    ``(F) De minimis waivers.--The President may 
                disregard subparagraph (A)(ii) with respect to any 
                eligible article from any beneficiary developing 
                country if the appraised value of the total imports of 
                such article into the United States during calendar 
                year 1995 or any calendar year thereafter does not 
                exceed $13,000,000, except that, in applying this 
                subparagraph, the amount of $13,000,000 shall be 
                increased by $500,000 on January 1 of each calendar 
                year after calendar year 1995.
    ``(d) Waiver of Competitive Need Limitation.--
            ``(1) In general.--The President may waive the application 
        of subsection (c)(2) with respect to any eligible article of 
        any beneficiary developing country if, before July 1 of the 
        calendar year beginning after the calendar year for which a 
        determination described in subsection (c)(2)(A) was made with 
        respect to such eligible article, the President--
                    ``(A) receives the advice of the International 
                Trade Commission under section 332 of the Tariff Act of 
                1930 on whether any industry in the United States is 
                likely to be adversely affected by such waiver,
                    ``(B) determines, based on the considerations 
                described in sections 501 and 502(c) and the advice 
                described in subparagraph (A), that such waiver is in 
                the national economic interest of the United States, 
                and
                    ``(C) publishes the determination described in 
                subparagraph (B) in the Federal Register.
            ``(2) Considerations by the president.--In making any 
        determination under paragraph (1), the President shall give 
        great weight to--
                    ``(A) the extent to which the beneficiary 
                developing country has assured the United States that 
                such country will provide equitable and reasonable 
                access to the markets and basic commodity resources of 
                such country, and
                    ``(B) the extent to which such country provides 
                adequate and effective protection of intellectual 
                property rights.
            ``(3) Effective period of waiver.--Any waiver granted under 
        this subsection shall remain in effect until the President 
        determines that such waiver is no longer warranted due to 
        changed circumstances.
    ``(e) International Trade Commission Advice.--Before designating 
articles as eligible articles under section 503(a)(1), the President 
shall publish and furnish the International Trade Commission with lists 
of articles which may be considered for designation as eligible 
articles for purposes of this title. The provisions of sections 131, 
132, 133, and 134 shall be complied with as though action under section 
501 and this section were action under section 123 to carry out a trade 
agreement entered into under section 123.
    ``(f) Special Rule Concerning Puerto Rico.--No action under this 
title may affect any tariff duty imposed by the Legislature of Puerto 
Rico pursuant to section 319 of the Tariff Act of 1930 on coffee 
imported into Puerto Rico.

``SEC. 504. REVIEW AND REPORTS TO CONGRESS.

    ``(a) Report on Operation of Title.--On or before July 31, 1997, 
the President shall submit to the Congress a full and complete report 
regarding the operation of this title.
    ``(b) Annual Reports on Worker Rights.--The President shall submit 
an annual report to the Congress on the status of internationally 
recognized worker rights within each beneficiary developing country.

``SEC. 505. DATE OF TERMINATION.

    ``No duty-free treatment provided under this title shall remain in 
effect after December 31, 1997.

``SEC. 506. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Beneficiary developing country.--The term 
        `beneficiary developing country' means any country with respect 
        to which there is in effect an Executive order or Presidential 
        proclamation by the President designating such country as a 
        beneficiary developing country for purposes of this title.
            ``(2) Country.--The term `country' means any foreign 
        country or territory, including any overseas dependent 
        territory or possession of a foreign country, or the Trust 
        Territory of the Pacific Islands. In the case of an association 
        of countries which is a free trade area or customs union, or 
        which is contributing to comprehensive regional economic 
        integration among its members through appropriate means, 
        including, but not limited to, the reduction of duties, the 
        President may by Executive order or Presidential proclamation 
        provide that all members of such association other than members 
        which are barred from designation under section 502(b) shall be 
        treated as one country for purposes of this title.
            ``(3) Entered.--The term `entered' means entered, or 
        withdrawn from warehouse for consumption, in the customs 
        territory of the United States.
            ``(4) Internationally recognized worker rights.--The term 
        `internationally recognized worker rights' includes--
                    ``(A) the right of association;
                    ``(B) the right to organize and bargain 
                collectively;
                    ``(C) a prohibition on the use of any form of 
                forced or compulsory labor;
                    ``(D) a minimum age for the employment of children; 
                and
                    ``(E) acceptable conditions of work with respect to 
                minimum wages, hours of work, and occupational safety 
                and health.
            ``(5) Least-developed beneficiary developing country.--The 
        term `least-developed beneficiary developing country' means a 
        beneficiary developing country that is designated as a least-
        developed beneficiary developing country under section 
        502(a)(2).''.
    (b) Table of Contents.--The items relating to title V in the table 
of contents of the Trade Act of 1974 are amended to read as follows:

              ``TITLE V--GENERALIZED SYSTEM OF PREFERENCES

``Sec. 501. Authority to extend preferences.
``Sec. 502. Designation of beneficiary developing countries.
``Sec. 503. Designation of eligible articles.
``Sec. 504. Review and reports to Congress.
``Sec. 505. Date of termination.
``Sec. 506. Definitions.''.

SEC. 12103. RETROACTIVE APPLICATION FOR CERTAIN LIQUIDATIONS AND 
              RELIQUIDATIONS.

    (a) In General.--Notwithstanding section 514 of the Tariff Act of 
1930 or any other provision of law and subject to subsection (b), the 
entry--
            (1) of any article to which duty-free treatment under title 
        V of the Trade Act of 1974 would have applied if the entry had 
        been made on July 31, 1995, and
            (2) that was made after July 31, 1995, and before the date 
        of the enactment of this Act,
shall be liquidated or reliquidated as free of duty, and the Secretary 
of the Treasury shall refund any duty paid with respect to such entry. 
As used in this subsection, the term ``entry'' includes a withdrawal 
from warehouse for consumption.
    (b) Requests.--Liquidation or reliquidation may be made under 
subsection (a) with respect to an entry only if a request therefor is 
filed with the Customs Service, within 180 days after the date of the 
enactment of this Act, that contains sufficient information to enable 
the Customs Service--
            (1) to locate the entry; or
            (2) to reconstruct the entry if it cannot be located.
            (c) Treatment of Certain Entries of Buffalo Leather.--
        Notwithstanding section 514 of the Tariff Act of 1930 or any 
        other provision of law, buffalo leather, provided for under 
        subheading 4104.39.20 of the Harmonized Tariff Schedule of the 
        United States, that is a product of Thailand and entered into 
        the United States under entry numbers M42-1113868-8 and M42-
        1113939-7, shall be liquidated or reliquidated, as appropriate, 
        as if entered on June 30, 1995.

SEC. 12104. CONFORMING AMENDMENTS.

    (a) Trade Laws.--
            (1) Section 1211(b) of the Omnibus Trade and 
        Competitiveness Act of 1988 (19 U.S.C. 3011(b)) is amended--
                    (A) in paragraph (1), by striking ``(19 U.S.C. 
                2463(a), 2464(c)(3))'' and inserting ``(as in effect on 
                the day before the date of the enactment of the GSP 
                Renewal Act of 1995)''; and
                    (B) in paragraph (2), by striking ``(19 U.S.C. 
                2464(c)(1))'' and inserting the following: ``(as in 
                effect on the day before the date of the enactment of 
                the GSP Renewal Act of 1995)''.
            (2) Section 203(c)(7) of the Andean Trade Preference Act 
        (19 U.S.C. 3202(c)(7)) is amended by striking ``502(a)(4)'' and 
        inserting ``506(4)''.
            (3) Section 212(b)(7) of the Caribbean Basin Economic 
        Recovery Act (19 U.S.C. 2702(b)(7)) is amended by striking 
        ``502(a)(4)'' and inserting ``506(4)''.
            (4) General note 3(a)(iv)(C) of the Harmonized Tariff 
        Schedule of the United States is amended by striking ``sections 
        503(b) and 504(c)'' and inserting ``subsections (a), (c), and 
        (d) of section 503''.
    (b) Other Laws.--
            (1) Section 871(f)(2)(B) of the Internal Revenue Code of 
        1986 is amended by striking ``within the meaning of section 
        502'' and inserting ``under title V''.
            (2) Section 2202(8) of the Export Enhancement Act of 1988 
        (15 U.S.C. 4711(8)) is amended by striking ``502(a)(4)'' and 
        inserting ``506(4)''.
            (3) Section 231A(a) of the Foreign Assistance Act of 1961 
        (22 U.S.C. 2191a(a)) is amended--
                    (A) in paragraph (1) by striking ``502(a)(4) of the 
                Trade Act of 1974 (19 U.S.C. 2462(a)(4))'' and 
                inserting ``506(4) of the Trade Act of 1974'';
                    (B) in paragraph (2) by striking ``505(c) of the 
                Trade Act of 1974 (19 U.S.C. 2465(c))'' and inserting 
                ``504(b) of the Trade Act of 1974''; and
                    (C) in paragraph (4) by striking ``502(a)(4)'' and 
                inserting ``506(4)''.

                Subtitle C--Trade Adjustment Assistance

SEC. 12201. MODIFICATION OF TRADE ADJUSTMENT ASSISTANCE.

    (a) Requirement of Training.--(1) Section 231(c) of the Trade Act 
of 1974 (19 U.S.C. 2291) is amended--
            (A) in paragraph (1)(A) and (B) by striking ``it is not 
        feasible or appropriate to approve a training program'' and 
        inserting ``a training program is not available''; and
            (B) in paragraph (2)(A) and (B) by striking ``it is 
        feasible or appropriate to approve a training program'' and 
        inserting ``a training program is available''.
    (2) Section 233(b) of such Act (19 U.S.C. 2293(b)) is repealed.
    (3) Paragraph (3) of section 250(d) of the Trade Act of 1974 (19 
U.S.C. 2331(d)) is amended--
            (A) by striking ``it is not feasible or appropriate to 
        approve a training program'' in subparagraph (A) and inserting 
        ``a training program is not available'', and
            (B) by striking ``notwithstanding the provisions of section 
        233(b),'' in subparagraph (B).
    (b) Termination of Relocation Allowances.--(1) Section 238 of the 
Trade Act of 1974 (19 U.S.C. 2298), and the item relating to that 
section in the table of contents for that Act, are repealed.
    (2) Section 250(d) of the Trade Act of 1974 (19 U.S.C. 2331(d)) is 
amended by striking paragraph (5).
    (c) Termination of Program.--Section 285(c) of the Trade Act of 
1974 (19 U.S.C. 2271 preceding note) is amended--
            (1) in paragraph (1), by striking ``1998'' and inserting 
        ``2000''; and
            (2) by amending paragraph (2) to read as follows:
    ``(2) No assistance, vouchers, allowances, or other payments may be 
provided under subchapter D of chapter 2 after September 30, 1998.''.
    (d) Extension of Authorization.--(1) Section 245(a) of the Trade 
Act of 1974 (19 U.S.C. 2317(a)) is amended by striking ``and 1998'' and 
inserting ``1998, 1999, and 2000''.
    (2) Section 256(b) of the Trade Act of 1974 (19 U.S.C. 2346(a)) is 
amended by striking ``and 1998'' and inserting ``1998, 1999, and 
2000''.
    (e) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Subsections (a) and (b).--The amendments made by 
        subsections (a) and (b) shall take effect on October 1, 1996.

    TITLE XIII--COMMITTEE ON WAYS AND MEANS--REVENUE RECONCILIATION

SEC. 13001. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This title may be cited as the ``Revenue 
Reconciliation Act of 1995''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this title is as 
follows:

    TITLE XIII--COMMITTEE ON WAYS AND MEANS--REVENUE RECONCILIATION

Sec. 13001. Short title; amendment of 1986 Code.
           Subtitle A--Extension of Expiring Provisions, Etc.

              Part I--Extensions Through December 31, 1997

Sec. 13101. Work opportunity tax credit.
Sec. 13102. Employer-provided educational assistance programs.
Sec. 13103. Research credit.
Sec. 13104. Contributions of stock to private foundations.
Sec. 13105. Credit for clinical testing expenses.
 Part II--Permanent Extension of FUTA Exemption for Alien Agricultural 
                                Workers

Sec. 13106. FUTA exemption for alien agricultural workers.
                   Part III--Commercial Aviation Fuel

Sec. 13111. Delay of scheduled increase in tax on fuel used in 
                            commercial aviation.
    Part IV--Extension of Airport and Airway Trust Fund Excise Taxes

Sec. 13116. Extension of Airport and Airway Trust Fund excise taxes.
                  Subtitle B--Medical Savings Accounts

Sec. 13201. Medical savings accounts.
          Subtitle C--Pickle-Johnson Taxpayer Bill of Rights 2

                       Part I--Taxpayer Advocate

Sec. 13301. Establishment of position of taxpayer advocate within 
                            Internal Revenue Service.
Sec. 13302. Expansion of authority to issue taxpayer assistance orders.
       Part II--Modifications to Installment Agreement Provisions

Sec. 13306. Notification of reasons for termination of installment 
                            agreements.
Sec. 13307. Administrative review of termination of installment 
                            agreement.
             Part III--Abatement of Interest and Penalties

Sec. 13311. Expansion of authority to abate interest.
Sec. 13312. Review of IRS failure to abate interest.
Sec. 13313. Extension of interest-free period for payment of tax after 
                            notice and demand.
                         Part IV--Joint Returns

Sec. 13316. Studies of joint return-related issues.
Sec. 13317. Joint return may be made after separate returns without 
                            full payment of tax.
Sec. 13318. Disclosure of collection activities.
                     Part V--Collection Activities

Sec. 13321. Modifications to lien and levy provisions.
Sec. 13322. Offers-in-compromise.
                      Part VI--Information Returns

Sec. 13326. Civil damages for fraudulent filing of information returns.
Sec. 13327. Requirement to conduct reasonable investigations of 
                            information returns.
              Part VII--Awarding of Costs and Certain Fees

Sec. 13331. United States must establish that its position in 
                            proceeding was substantially justified.
Sec. 13332. Increased limit on attorney fees.
Sec. 13333. Failure to agree to extension not taken into account.
Sec. 13334. Award of litigation costs permitted in declaratory judgment 
                            proceedings.
Sec. 13335. Effective date.
 Part VIII--Modification to Recovery of Civil Damages for Unauthorized 
                           Collection Actions

Sec. 13336. Increase in limit on recovery of civil damages for 
                            unauthorized collection actions.
Sec. 13337. Court discretion to reduce award for litigation costs for 
                            failure to exhaust administrative remedies.
 Part IX--Modifications to Penalty for Failure to Collect and Pay Over 
                                  Tax

Sec. 13341. Preliminary notice requirement.
Sec. 13342. Disclosure of certain information where more than 1 person 
                            liable for penalty for failure to collect 
                            and pay over tax.
Sec. 13343. Right of contribution where more than 1 person liable for 
                            penalty for failure to collect and pay over 
                            tax.
Sec. 13344. Volunteer board members of tax-exempt organizations exempt 
                            from penalty for failure to collect and pay 
                            over tax.
          Part X--Modifications of Rules Relating to Summonses

Sec. 13346. Enrolled agents included as third-party recordkeepers.
Sec. 13347. Safeguards relating to designated summonses.
Sec. 13348. Annual report to Congress concerning designated summonses.
  Part XI--Relief From Retroactive Application of Treasury Department 
                              Regulations

Sec. 13351. Relief from retroactive application of Treasury Department 
                            regulations.
                   Part XII--Miscellaneous Provisions

Sec. 13356. Report on pilot program for appeal of enforcement actions.
Sec. 13357. Phone number of person providing payee Statements required 
                            to be shown on such Statement.
Sec. 13358. Required notice of certain payments.
Sec. 13359. Unauthorized enticement of information disclosure.
Sec. 13360. Annual reminders to taxpayers with outstanding delinquent 
                            accounts.
Sec. 13361. 5-year extension of authority for undercover operations.
Sec. 13362. Disclosure of form 8300 information on cash transactions.
Sec. 13363. Disclosure of returns and return information to designee of 
                            taxpayer.
Sec. 13364. Study of netting of interest on overpayments and 
                            liabilities.
Sec. 13365. Credit for expenses of certain TCMP audits.
Sec. 13366. Expenses of detection of underpayments and fraud, etc.
              Subtitle D--Additional Technical Corrections

Sec. 13401. Reporting of real estate transactions.
Sec. 13402. Clarification of denial of deduction for stock redemption 
                            expenses.
Sec. 13403. Clarification of depreciation class for certain energy 
                            property.
Sec. 13404. Clerical amendment to section 404.
Sec. 13405. Treatment of certain veterans' reemployment rights.
                  Subtitle E--Tax Information Sharing

Sec. 13501. Disclosure of return information for administration of 
                            certain veterans programs.
                     Subtitle F--Revenue Increases

               Part I--Provisions Relating to Businesses

Sec. 13601. Tax treatment of certain extraordinary dividends.
Sec. 13602. Registration of confidential corporate tax shelters.
Sec. 13603. Denial of deduction for interest on loans with respect to 
                            company-owned insurance.
Sec. 13604. Termination of suspense accounts for family corporations 
                            required to use accrual method of 
                            accounting.
Sec. 13605. Termination of Puerto Rico and possession tax credit.
Sec. 13606. Depreciation under income forecast method.
Sec. 13607. Transfers of excess pension assets.
                         Part II--Legal Reforms

Sec. 13611. Repeal of exclusion for punitive damages and for damages 
                            not attributable to physical injuries or 
                            sickness.
Sec. 13612. Reporting of certain payments made to attorneys.
 Part III--Treatment of Individuals Who Lose United States Citizenship

Sec. 13616. Revision of income, estate, and gift taxes on individuals 
                            who lose United States citizenship.
Sec. 13617. Information on individuals losing United States 
                            citizenship.
Sec. 13618. Report on tax compliance by United States citizens and 
                            residents living abroad.
             Part IV--Reforms Relating to Energy Provisions

Sec. 13621. Termination of credit for electricity produced from certain 
                            renewable resources.
Sec. 13622. Reduction of incentives for alcohol fuels.
Sec. 13623. Exclusion for energy conservation subsidies limited to 
                            subsidies with respect to dwelling units.
         Part V--Reforms Relating to Nonrecognition Provisions

Sec. 13626. Basis adjustment to property held by corporation where 
                            stock in corporation is replacement 
                            property under involuntary conversion 
                            rules.
Sec. 13627. Expansion of requirement that involuntarily converted 
                            property be replaced with property acquired 
                            from an unrelated person.
Sec. 13628. No rollover or exclusion of gain on sale of principal 
                            residence which is attributable to 
                            depreciation deductions.
Sec. 13629. Nonrecognition of gain on sale of principal residence by 
                            noncitizens limited to new residences 
                            located in the United States.
             Part VI--Reforms Relating to Gaming Activities

Sec. 13631. Treatment of Indian gaming activities under unrelated 
                            business income tax.
Sec. 13632. Repeal of targeted exemption from tax on unrelated trade or 
                            business income from gambling in certain 
                            States.
Sec. 13633. Extension of withholding to certain gambling winnings.
                        Part VII--Other Reforms

Sec. 13636. Sunset of low-income housing credit.
Sec. 13637. Repeal of credit for contributions to community development 
                            corporations.
Sec. 13638. Repeal of diesel fuel tax rebate to purchasers of diesel-
                            powered automobiles and light trucks.
Sec. 13639. Application of failure-to-pay penalty to substitute 
                            returns.
Sec. 13640. Repeal of special rule for rental use of vacation homes, 
                            etc., for less than 15 days.
Sec. 13641. Election to cease status as qualified scholarship funding 
                            corporation.
Sec. 13642. Certain amounts derived from foreign corporations treated 
                            as unrelated business taxable income.
      Part VIII--Excise Tax on Amounts of Private Excess Benefits

Sec. 13646. Excise taxes for failure by certain charitable 
                            organizations to meet certain qualification 
                            requirements.
Sec. 13647. Reporting of certain excise taxes and other information.
Sec. 13648. Exempt organizations required to provide copy of return.
Sec. 13649. Certain organizations required to disclose nonexempt 
                            status.
Sec. 13650. Increase in penalties on exempt organizations for failure 
                            to file complete and timely annual returns.
Sec. 13651. Studies.
           Subtitle G--Reform of the Earned Income Tax Credit

Sec. 13701. Repeal of earned income credit for individuals without 
                            qualifying children; modifications to 
                            credit phaseout.
Sec. 13702. Modification of adjusted gross income used for phaseout.
Sec. 13703. Earned income tax credit denied to individuals not 
                            authorized to be employed in the United 
                            States.
               Subtitle H--Increase in Public Debt Limit

Sec. 13801. Increase in public debt limit.
            Subtitle I--Coal Industry Retiree Health Equity

Sec. 13901. Repeal of reachback provisions of coal industry health 
                            benefit system.

           Subtitle A--Extension of Expiring Provisions, Etc.

              PART I--EXTENSIONS THROUGH DECEMBER 31, 1997

SEC. 13101. WORK OPPORTUNITY TAX CREDIT.

    (a) Amount of Credit.--Subsection (a) of section 51 is amended by 
striking ``40 percent'' and inserting ``35 percent''.
    (b) Members of Targeted Groups.--Subsection (d) of section 51 is 
amended to read as follows:
    ``(d) Members of Targeted Groups.--For purposes of this subpart--
            ``(1) In general.--An individual is a member of a targeted 
        group if such individual is--
                    ``(A) a qualified AFDC recipient,
                    ``(B) a qualified ex-felon,
                    ``(C) a high-risk youth,
                    ``(D) a vocational rehabilitation referral, or
                    ``(E) a qualified summer youth employee.
            ``(2) Qualified AFDC recipient.--
                    ``(A) In general.--The term `qualified AFDC 
                recipient' means any individual who is certified by the 
                designated local agency as being a member of a family 
                receiving assistance under an AFDC program for at least 
                a 9-month period ending during the 9-month period 
                ending on the hiring date.
                    ``(B) AFDC program.--For purposes of this 
                paragraph, the term `AFDC program' means any program 
                providing aid under a State plan approved under part A 
                of title IV of the Social Security Act (relating to aid 
                to families with dependent children) and any successor 
                of such program.
                    ``(C) Special rules for veterans.--In the case of a 
                veteran, subparagraph (A) shall be applied by 
                substituting `12-month' for `9-month' the second place 
                it appears.
                    ``(D) Veteran.--For purposes of subparagraph (C), 
                the term `veteran' means any individual who is 
                certified by the designated local agency as--
                            ``(i)(I) having served on active duty 
                        (other than active duty for training) in the 
                        Armed Forces of the United States for a period 
                        of more than 180 days, or
                            ``(II) having been discharged or released 
                        from active duty in the Armed Forces of the 
                        United States for a service-connected 
                        disability, and
                            ``(ii) not having any day during the 60-day 
                        period ending on the hiring date which was a 
                        day of extended active duty in the Armed Forces 
                        of the United States.
                For purposes of clause (ii), the term `extended active 
                duty' means a period of more than 90 days during which 
                the individual was on active duty (other than active 
                duty for training).
            ``(3) Qualified ex-felon.--The term `qualified ex-felon' 
        means any individual who is certified by the designated local 
        agency--
                    ``(A) as having been convicted of a felony under 
                any statute of the United States or any State,
                    ``(B) as having a hiring date which is not more 
                than 1 year after the last date on which such 
                individual was so convicted or was released from 
                prison, and
                    ``(C) as being a member of a family which had an 
                income during the 6 months immediately preceding the 
                earlier of the month in which such income determination 
                occurs or the month in which the hiring date occurs, 
                which, on an annual basis, would be 70 percent or less 
                of the Bureau of Labor Statistics lower living 
                standard.
        Any determination under subparagraph (C) shall be valid for the 
        45-day period beginning on the date such determination is made.
            ``(4) High-risk youth.--
                    ``(A) In general.--The term `high-risk youth' means 
                any individual who is certified by the designated local 
                agency--
                            ``(i) as having attained age 18 but not age 
                        25 on the hiring date, and
                            ``(ii) as having his principal place of 
                        abode within an empowerment zone or enterprise 
                        community.
                    ``(B) Youth must continue to reside in zone.--In 
                the case of a high-risk youth, the term `qualified 
                wages' shall not include wages paid or incurred for 
                services performed while such youth's principal place 
                of abode is outside an empowerment zone or enterprise 
                community.
            ``(5) Vocational rehabilitation referral.--The term 
        `vocational rehabilitation referral' means any individual who 
        is certified by the designated local agency as--
                    ``(A) having a physical or mental disability which, 
                for such individual, constitutes or results in a 
                substantial handicap to employment, and
                    ``(B) having been referred to the employer upon 
                completion of (or while receiving) rehabilitative 
                services pursuant to--
                            ``(i) an individualized written 
                        rehabilitation plan under a State plan for 
                        vocational rehabilitation services approved 
                        under the Rehabilitation Act of 1973, or
                            ``(ii) a program of vocational 
                        rehabilitation carried out under chapter 31 of 
                        title 38, United States Code.
            ``(6) Qualified summer youth employee.--
                    ``(A) In general.--The term `qualified summer youth 
                employee' means any individual--
                            ``(i) who performs services for the 
                        employer between May 1 and September 15,
                            ``(ii) who is certified by the designated 
                        local agency as having attained age 16 but not 
                        18 on the hiring date (or if later, on May 1 of 
                        the calendar year involved),
                            ``(iii) who has not been an employee of the 
                        employer during any period prior to the 90-day 
                        period described in subparagraph (B)(i), and
                            ``(iv) who is certified by the designated 
                        local agency as having his principal place of 
                        abode within an empowerment zone or enterprise 
                        community.
                    ``(B) Special rules for determining amount of 
                credit.--For purposes of applying this subpart to wages 
                paid or incurred to any qualified summer youth 
                employee--
                            ``(i) subsection (b)(2) shall be applied by 
                        substituting `any 90-day period between May 1 
                        and September 15' for `the 1-year period 
                        beginning with the day the individual begins 
                        work for the employer', and
                            ``(ii) subsection (b)(3) shall be applied 
                        by substituting `$3,000' for `$6,000'.
                The preceding sentence shall not apply to an individual 
                who, with respect to the same employer, is certified as 
                a member of another targeted group after such 
                individual has been a qualified summer youth employee.
                    ``(C) Youth must continue to reside in zone.--
                Paragraph (4)(B) shall apply for purposes of this 
                paragraph.
            ``(7) Hiring date.--The term `hiring date' means the day 
        the individual is hired by the employer.
            ``(8) Designated local agency.--The term `designated local 
        agency' means a State employment security agency established in 
        accordance with the Act of June 6, 1933, as amended (29 U.S.C. 
        49-49n).
            ``(9) Special rules for certifications.--
                    ``(A) In general.--An individual shall not be 
                treated as a member of a targeted group unless--
                            ``(i) on or before the day on which such 
                        individual begins work for the employer, the 
                        employer has received a certification from a 
                        designated local agency that such individual is 
                        a member of a targeted group, or
                            ``(ii)(I) on or before the day the 
                        individual is offered employment with the 
                        employer, a pre-screening notice is completed 
                        with respect to such individual, and
                            ``(II) not later than the 14th day after 
                        the individual begins work for the employer, 
                        the employer submits such notice to the 
                        designated local agency as part of a written 
                        request for such a certification from such 
                        agency.
                For purposes of this paragraph, the term `pre-screening 
                notice' means a document (in such form as the Secretary 
                shall prescribe) which is signed by the employer and 
                the individual under penalties of perjury and which 
                contains information provided by the individual on the 
                basis of which the employer believes that the 
                individual is a member of a targeted group.
                    ``(B) Incorrect certifications.--If--
                            ``(i) an individual has been certified by a 
                        designated local agency as a member of a 
                        targeted group, and
                            ``(ii) such certification is incorrect 
                        because it was based on false information 
                        provided by such individual,
                the certification shall be revoked and wages paid by 
                the employer after the date on which notice of 
                revocation is received by the employer shall not be 
                treated as qualified wages.
                    ``(C) Explanation of denial of request.--If a 
                designated local agency denies a request for 
                certification of membership in a targeted group, such 
                agency shall provide to the person making such request 
                a written explanation of the reasons for such denial.''
    (c) Minimum Employment Period.--Paragraph (3) of section 51(i) is 
amended to read as follows:
            ``(3) Individuals not meeting minimum employment period.--
        No wages shall be taken into account under subsection (a) with 
        respect to any individual unless such individual either--
                    ``(A) is employed by the employer at least 180 days 
                (20 days in the case of a qualified summer youth 
                employee), or
                    ``(B) has completed at least 500 hours (120 hours 
                in the case of a qualified summer youth employee) of 
                services performed for the employer.''
    (d) Definition of Wages.--Subsection (c) of section 51 is amended 
by striking paragraph (3).
    (e) Termination.--Paragraph (4) of section 51(c) is amended to read 
as follows:
            ``(3) Termination.--The term `wages' shall not include any 
        amount paid or incurred to an individual who begins work for 
        the employer--
                    ``(A) after December 31, 1994, and before January 
                1, 1996, or
                    ``(B) after December 31, 1997.''
    (f) Redesignation of Credit.--
            (1) Sections 38(b)(2) and 51(a) are each amended by 
        striking ``targeted jobs credit'' and inserting ``work 
        opportunity credit''.
            (2) The subpart heading for subpart F of part IV of 
        subchapter A of chapter 1 is amended by striking ``Targeted 
        Jobs Credit'' and inserting ``Work Opportunity Credit''.
            (3) The table of subparts for such part IV is amended by 
        striking ``targeted jobs credit'' and inserting ``work 
        opportunity credit''.
    (g) Business Awareness Program.--The Secretary of Labor shall 
implement a program to encourage small businesses to use the services 
of local agencies to identify individuals who qualify to be certified 
as members of targeted groups (as defined in section 51 of the Internal 
Revenue Code of 1986, as amended by this section). Such Secretary, and 
the heads of other Federal agencies, shall make every effort to 
encourage small businesses to benefit from the credit allowable under 
such section by simplifying procedures to the extent possible.
    (h) Technical Amendments.--
            (1) Paragraph (1) of section 51(c) is amended by striking 
        ``, subsection (d)(8)(D),''.
            (2) Paragraph (3) of section 51(i) is amended by striking 
        ``(d)(12)'' each place it appears and inserting ``(d)(6)''.
    (i) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after December 31, 
1995.

SEC. 13102. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE PROGRAMS.

    (a) Extension.--Subsection (d) of section 127 (relating to 
educational assistance programs) is amended by striking ``December 31, 
1994'' and inserting ``December 31, 1997''.
    (b) Limitation to Education Below Graduate Level.--The last 
sentence of section 127(c)(1) is amended by inserting before the period 
``or at the graduate level''.
    (c) Effective Dates.--
            (1) Extension.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 1994.
            (2) Limitation.--The amendment made by subsection (b) shall 
        apply to taxable years beginning after December 31, 1995.

SEC. 13103. RESEARCH CREDIT.

    (a) In General.--Subsection (h) of section 41 (relating to credit 
for research activities) is amended--
            (1) by striking ``June 30, 1995'' each place it appears and 
        inserting ``December 31, 1997'', and
            (2) by striking ``July 1, 1995'' each place it appears and 
        inserting ``January 1, 1998''.
    (b) Base Amount for Start-up Companies.--Clause (i) of section 
41(c)(3)(B) (relating to start-up companies) is amended to read as 
follows:
                            ``(i)  Taxpayers to which subparagraph 
                        applies.--The fixed-base percentage shall be 
                        determined under this subparagraph if--
                                    ``(I) the first taxable year in 
                                which a taxpayer had both gross 
                                receipts and qualified research 
                                expenses begins after December 31, 
                                1983, or
                                    ``(II) there are fewer than 3 
                                taxable years beginning after December 
                                31, 1983, and before January 1, 1989, 
                                in which the taxpayer had both gross 
                                receipts and qualified research 
                                expenses.''
    (c) Election of Alternative Incremental Credit.--Subsection (c) of 
section 41 is amended by redesignating paragraphs (4) and (5) as 
paragraphs (5) and (6), respectively, and by inserting after paragraph 
(3) the following new paragraph:
            ``(4) Election of alternative incremental credit.--
                    ``(A) In general.--At the election of the taxpayer, 
                the credit determined under subsection (a)(1) shall be 
                equal to the sum of--
                            ``(i) 1.65 percent of so much of the 
                        qualified research expenses for the taxable 
                        year as exceeds 1 percent of the average 
                        described in subsection (c)(1)(B) but does not 
                        exceed 1.5 percent of such average,
                            ``(ii) 2.2 percent of so much of such 
                        expenses as exceeds 1.5 percent of such average 
                        but does not exceed 2 percent of such average, 
                        and
                            ``(iii) 2.75 percent of so much of such 
                        expenses as exceeds 2 percent of such average.
                    ``(B) Election.--An election under this paragraph 
                may be made only for the first taxable year of the 
                taxpayer beginning after June 30, 1995. Such an 
                election shall apply to the taxable year for which made 
                and all succeeding taxable years unless revoked with 
                the consent of the Secretary.''
    (d) Increased Credit for Contract Research Expenses With Respect to 
Certain Research Consortia.--Paragraph (3) of section 41(b) is amended 
by adding at the end the following new subparagraph:
                    ``(C) Amounts paid to certain research consortia.--
                            ``(i) In general.--Subparagraph (A) shall 
                        be applied by substituting `75 percent' for `65 
                        percent' with respect to amounts paid or 
                        incurred by the taxpayer to a qualified 
                        research consortium for qualified research.
                            ``(ii) Qualified research consortium.--The 
                        term `qualified research consortium' means any 
                        organization described in subsection (e)(6)(B) 
                        if--
                                    ``(I) at least 15 unrelated 
                                taxpayers paid (during the calendar 
                                year in which the taxable year of the 
                                taxpayer begins) amounts to such 
                                organization for qualified research,
                                    ``(II) no 3 persons paid during 
                                such calendar year more than 50 percent 
                                of the total amounts paid during such 
                                calendar year for qualified research, 
                                and
                                    ``(III) no person contributed more 
                                than 20 percent of such total amounts.
                        For purposes of subclause (I), all persons 
                        treated as a single employer under subsection 
                        (a) or (b) of section 52 shall be treated as 
                        related taxpayers.''
    (e) Conforming Amendment.--Subparagraph (D) of section 28(b)(1) is 
amended by striking ``June 30, 1995'' and inserting ``December 31, 
1997''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        ending after June 30, 1995.
            (2) Subsections (c) and (d).--The amendments made by 
        subsections (c) and (d) shall apply to taxable years beginning 
        after June 30, 1995.

SEC. 13104. CONTRIBUTIONS OF STOCK TO PRIVATE FOUNDATIONS.

    (a) In General.--Subparagraph (D) of section 170(e)(5) is amended 
by striking ``December 31, 1994'' and inserting ``December 31, 1997''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after December 31, 1994.

SEC. 13105. CREDIT FOR CLINICAL TESTING EXPENSES.

    (a) In General.--Subsection (e) of section 28 is amended by 
striking ``December 31, 1994'' and inserting ``December 31, 1997''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after December 31, 1994.

 PART II--PERMANENT EXTENSION OF FUTA EXEMPTION FOR ALIEN AGRICULTURAL 
                                WORKERS

SEC. 13106. FUTA EXEMPTION FOR ALIEN AGRICULTURAL WORKERS.

    (a) In General.--Subparagraph (B) of section 3306(c)(1) (defining 
employment) is amended by striking ``before January 1, 1995,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services performed after December 31, 1994.

                   PART III--COMMERCIAL AVIATION FUEL

SEC. 13111. DELAY OF SCHEDULED INCREASE IN TAX ON FUEL USED IN 
              COMMERCIAL AVIATION.

    (a) 2-Year Delay.--Sections 4092(b)(2), 6421(f)(2)(B), and 
6427(l)(4)(B) are each amended by striking ``September 30, 1995'' and 
inserting ``September 30, 1997''.
    (b) Conforming Amendment.--Section 13245 of the Omnibus Budget 
Reconciliation Act of 1993 is hereby repealed.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on September 30, 1995.
            (2) Cross reference.--

                                For refund of tax paid on commercial 
aviation fuel before the date of the enactment of this Act, see section 
6427(l) of the Internal Revenue Code of 1986.
    (d) Floor Stocks Tax.--
            (1) Imposition of tax.--In the case of commercial aviation 
        fuel which is held by any person on October 1, 1997, there is 
        hereby imposed a floor stocks tax equal to 4.3 cents per 
        gallon.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding aviation 
                fuel on October 1, 1997, to which the tax imposed by 
                paragraph (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before April 30, 1998.
            (3) Definitions.--For purposes of this subsection--
                    (A) Held by a person.--Aviation fuel shall be 
                considered as ``held by a person'' if title thereto has 
                passed to such person (whether or not delivery to the 
                person has been made).
                    (B) Commercial aviation fuel.--The term 
                ``commercial aviation fuel'' means aviation fuel (as 
                defined in section 4093 of such Code) which is held on 
                October 1, 1997, for sale or use in commercial aviation 
                (as defined in section 4092(b) of such Code).
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or his delegate.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to aviation fuel held by any 
        person exclusively for any use for which a credit or refund of 
        the entire tax imposed by section 4091 of such Code (other than 
        the rate imposed by section 4091(b)(2) of such Code) is 
        allowable for aviation fuel so used.
            (5) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1) on aviation fuel held on October 1, 1997, 
                by any person if the aggregate amount of commercial 
                aviation fuel held by such person on such date does not 
                exceed 2,000 gallons. The preceding sentence shall 
                apply only if such person submits to the Secretary (at 
                the time and in the manner required by the Secretary) 
                such information as the Secretary shall require for 
                purposes of this paragraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4).
                    (C) Controlled groups.--For purposes of this 
                paragraph--
                            (i) Corporations.--
                                    (I) In general.--All persons 
                                treated as a controlled group shall be 
                                treated as 1 person.
                                    (II) Controlled group.--The term 
                                ``controlled group'' has the meaning 
                                given to such term by subsection (a) of 
                                section 1563 of such Code; except that 
                                for such purposes the phrase ``more 
                                than 50 percent'' shall be substituted 
                                for the phrase ``at least 80 percent'' 
                                each place it appears in such 
                                subsection.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group of persons 
                        under common control where 1 or more of such 
                        persons is not a corporation.
            (6) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4091 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply with respect to the floor stock taxes imposed 
        by paragraph (1) to the same extent as if such taxes were 
        imposed by such section 4091.
    (f) Study.--The Secretary of the Treasury or his delegate shall, in 
consultation with the Secretary of Transportation, conduct a study of 
the Federal excise tax burdens on each of the various modes of 
transportation and the benefits provided to each such mode from 
revenues derived from such excise taxes. The results of such study 
shall be submitted not later than June 30, 1996, to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate.

    PART IV--EXTENSION OF AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES

SEC. 13116. EXTENSION OF AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES.

    (a) Fuel Tax.--
            (1) Subparagraph (A) of section 4091(b)(3) is amended by 
        striking ``January 1, 1996'' and inserting ``October 1, 1996''.
            (2) Paragraph (2) of section 4081(d), as amended by section 
        14721 of this Act, is amended by striking ``January 1, 1996'' 
        and inserting ``October 1, 1996''.
    (b) Ticket Taxes.--Sections 4261(g) and 4271(d) are each amended by 
striking ``January 1, 1996'' and inserting ``October 1, 1996''.
    (c) Transfer to Airport and Airway Trust Fund.--
            (1) Subsection (b) of section 9502 is amended by striking 
        ``January 1, 1996'' each place it appears and inserting 
        ``October 1, 1996''.
            (2) Paragraph (3) of section 9502(f) is amended by striking 
        ``December 31, 1995'' and inserting ``September 30, 1996''.

                  Subtitle B--Medical Savings Accounts

SEC. 13201. MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Part VII of subchapter B of chapter 1 (relating to 
additional itemized deductions for individuals) is amended by 
redesignating section 220 as section 221 and by inserting after section 
219 the following new section:

``SEC. 220. MEDICAL SAVINGS ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an individual who is an 
eligible individual for any month during the taxable year, there shall 
be allowed as a deduction for the taxable year an amount equal to the 
aggregate amount paid in cash during such taxable year by such 
individual to a medical savings account of such individual.
    ``(b) Limitations.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the amount allowable as a deduction under 
        subsection (a) to an individual for the taxable year shall not 
        exceed the lesser of--
                    ``(A) $2,500, or
                    ``(B) the deductible under the catastrophic health 
                plan covering such individual.
        If the catastrophic health plan covering such individual 
        provides coverage for any other eligible individual who is the 
        spouse or any dependent (as defined in section 152) of the 
        taxpayer, subparagraph (A) shall be applied by substituting 
        `$5,000' for `$2,500'. The preceding sentence shall not apply 
        if the spouse or any dependent (as so defined) of such 
        individual is covered under any other catastrophic health plan.
            ``(2) Special rule for married individuals.--
                    ``(A) In general.--This subsection shall be applied 
                separately for each married individual.
                    ``(B) Special rule.--If individuals who are married 
                to each other are covered under the same catastrophic 
                health plan, then the amounts applicable under 
                subparagraphs (A) and (B) of paragraph (1) shall be 
                divided equally between them unless they agree on a 
                different division.
            ``(3) Coordination with exclusion for employer 
        contributions.--No deduction shall be allowed under this 
        section for any amount paid for any taxable year to a medical 
        savings account of an individual if--
                    ``(A) any amount is paid to any medical savings 
                account of such individual which is excludable from 
                gross income under section 106(b) for such year, or
                    ``(B) in a case described in paragraph (2), any 
                amount is paid to any medical savings account of either 
                spouse which is so excludable for such year.
            ``(4) Proration of limitation.--
                    ``(A) In general.--The limitation under paragraph 
                (1) shall be the sum of the monthly limitations for 
                months during the taxable year that the individual is 
                an eligible individual if--
                            ``(i) such individual is not an eligible 
                        individual for all months of the taxable year,
                            ``(ii) the deductible under the 
                        catastrophic health plan covering such 
                        individual is not the same throughout such 
                        taxable year, or
                            ``(iii) such limitation is determined using 
                        the next to the last sentence of paragraph (1) 
                        for some but not all months during such taxable 
                        year.
                    ``(B) Monthly limitation.--The monthly limitation 
                for any month shall be an amount equal to \1/12\ of the 
                limitation which would (but for this paragraph and 
                paragraph (3)) be determined under paragraph (1) if the 
                facts and circumstances as of the first day of such 
                month that such individual is covered under a 
                catastrophic health plan were true for the entire 
                taxable year.
            ``(5) Denial of deduction to dependents.--No deduction 
        shall be allowed under this section to any individual with 
        respect to whom a deduction under section 151 is allowable to 
        another taxpayer for a taxable year beginning in the calendar 
        year in which such individual's taxable year begins.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, any individual--
                            ``(i) who is covered under a catastrophic 
                        health plan at any time during such month, and
                            ``(ii) who is not, while covered under a 
                        catastrophic health plan, covered under any 
                        health plan--
                                    ``(I) which is not a catastrophic 
                                health plan, and
                                    ``(II) which provides coverage for 
                                any benefit which is covered under the 
                                catastrophic health plan.
                    ``(B) Certain coverage disregarded.--Subparagraph 
                (A)(ii) shall be applied without regard to--
                            ``(i) coverage for any benefit provided by 
                        permitted insurance, and
                            ``(ii) coverage (whether through insurance 
                        or otherwise) for accidents, dental care, 
                        vision care, or long-term care.
            ``(2) Catastrophic health plan.--The term `catastrophic 
        health plan' means any health plan which provides no 
        compensation for an individual's expenses covered by the plan 
        for any calendar year to the extent such expenses for such 
        calendar year do not exceed $1,500 ($3,000 if the catastrophic 
        health plan covering the taxpayer provides coverage for more 
        than 1 individual) or such higher amounts as may be specified 
        by the plan.
            ``(3) Permitted insurance.--The term `permitted insurance' 
        means--
                    ``(A) Medicare supplemental insurance,
                    ``(B) insurance if substantially all of the 
                coverage provided under such insurance relates to--
                            ``(i) liabilities incurred under workers' 
                        compensation laws,
                            ``(ii) tort liabilities,
                            ``(iii) liabilities relating to ownership 
                        or use of property,
                            ``(iv) credit insurance, or
                            ``(v) such other similar liabilities as the 
                        Secretary may specify by regulations,
                    ``(C) insurance for a specified disease or illness, 
                and
                    ``(D) insurance paying a fixed amount per day (or 
                other period) of hospitalization.
    ``(d) Medical Savings Account.--For purposes of this section--
            ``(1) Medical savings account.--The term `medical savings 
        account' means a trust created or organized in the United 
        States exclusively for the purpose of paying the qualified 
        medical expenses of the account holder, but only if the written 
        governing instrument creating the trust meets the following 
        requirements:
                    ``(A) Except in the case of a rollover contribution 
                described in subsection (f)(4), no contribution will be 
                accepted unless it is in cash.
                    ``(B) The trustee is a bank (as defined in section 
                408(n)), an insurance company (as defined in section 
                816), or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    ``(E) The interest of an individual in the balance 
                in his account is nonforfeitable.
            ``(2) Qualified medical expenses.--
                    ``(A) In general.--The term `qualified medical 
                expenses' means, with respect to an account holder, 
                amounts paid by such holder--
                            ``(i) for medical care (as defined in 
                        section 213(d)) for such individual, the spouse 
                        of such individual, and any dependent (as 
                        defined in section 152) of such individual, but 
                        only to the extent such amounts are not 
                        compensated for by insurance or otherwise, or
                            ``(ii) for long-term care insurance for 
                        such individual, spouse, or dependent.
                    ``(B) Health insurance may not be purchased from 
                account.--Subparagraph (A)(i) shall not apply to any 
                payment for insurance.
            ``(3) Account holder.--The term `account holder' means the 
        individual on whose behalf the medical savings account was 
        established.
            ``(4) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 219(d)(2) (relating to no deduction 
                for rollovers).
                    ``(B) Section 219(f)(3) (relating to time when 
                contributions deemed made).
                    ``(C) Except as provided in section 106(b), section 
                219(f)(5) (relating to employer payments).
                    ``(D) Section 408(g) (relating to community 
                property laws).
                    ``(E) Section 408(h) (relating to custodial 
                accounts).
    ``(e) Tax Treatment of Accounts.--
            ``(1) Account taxed as grantor trust.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the account holder of a medical 
                savings account shall be treated for purposes of this 
                title as the owner of such account and shall be subject 
                to tax thereon in accordance with subpart E of part I 
                of subchapter J of this chapter (relating to grantors 
                and others treated as substantial owners).
                    ``(B) Treatment of capital losses.--With respect to 
                assets held in a medical savings account, any capital 
                loss for a taxable year from the sale or exchange of 
                such an asset shall be allowed only to the extent of 
                capital gains from such assets for such taxable year. 
                Any capital loss which is disallowed under the 
                preceding sentence shall be treated as a capital loss 
                from the sale or exchange of such an asset in the next 
                taxable year. For purposes of this subparagraph, all 
                medical savings accounts of the account holder shall be 
                treated as 1 account.
            ``(2) Account assets treated as distributed in the case of 
        prohibited transactions or account pledged as security for 
        loan.--Rules similar to the rules of paragraphs (2) and (4) of 
        section 408(e) shall apply to medical savings accounts, and any 
        amount treated as distributed under such rules shall be treated 
        as not used to pay qualified medical expenses.
            ``(3) Treatment of account after death of account holder.--
                    ``(A) In general.--A trust shall not constitute a 
                medical savings account unless the written governing 
                instrument provides that, if the account holder dies 
                while there is a balance in the account, the entire 
                balance of the account holder will be distributed 
                within 5 years after the death of the account holder.
                    ``(B) Exception where spouse becomes account 
                holder.--Subparagraph (A) shall not apply if the 
                account is payable to (or for the benefit of) the 
                surviving spouse of the decedent.
    ``(f) Tax Treatment of Distributions.--
            ``(1) Inclusion of amounts not used for qualified medical 
        expenses.--
                    ``(A) In general.--No amount shall be included in 
                the gross income of the account holder by reason of a 
                payment or distribution from a medical savings account 
                which is used exclusively to pay the qualified medical 
                expenses of the account holder. Any amount paid or 
                distributed from a medical savings account which is not 
                so used shall be included in the gross income of such 
                holder to the extent such amount does not exceed the 
                excess of--
                            ``(i) the aggregate contributions to such 
                        account which were allowed as a deduction under 
                        this section or which were excluded under 
                        section 106(b), over
                            ``(ii) the aggregate prior payments or 
                        distributions from such account which were 
                        includible in gross income under this 
                        paragraph.
                    ``(B) Special rules.--For purposes of subparagraph 
                (A)--
                            ``(i) all medical savings accounts of the 
                        account holder shall be treated as 1 account,
                            ``(ii) all payments and distributions 
                        during any taxable year shall be treated as 1 
                        distribution, and
                            ``(iii) any distribution of property shall 
                        be taken into account at its fair market value 
                        on the date of the distribution.
            ``(2) Penalty for distributions not used for qualified 
        medical expenses.--
                    ``(A) In general.--The tax imposed by this chapter 
                for any taxable year in which there is a payment or 
                distribution from a medical savings account which is 
                not used exclusively to pay the qualified medical 
                expenses of the account holder shall be increased by 10 
                percent of the amount of such payment or distribution 
                which is includible in gross income under paragraph 
                (1).
                    ``(B) Exceptions.--Subparagraph (A) shall not apply 
                if the payment or distribution is made on or after the 
                date the account holder--
                            ``(i) attains age 59 \1/2\,
                            ``(ii) becomes disabled within the meaning 
                        of section 72(m)(7), or
                            ``(iii) dies.
            ``(3) Withdrawal of excess contributions.--Paragraph (1) 
        shall not apply to the distribution of any contribution paid 
        during a taxable year to a medical savings account if--
                    ``(A) such distribution is received on or before 
                the day prescribed by law (including extensions of 
                time) for filing such individual's return for such 
                taxable year,
                    ``(B) no deduction is allowed under this section 
                with respect to such contribution, and
                    ``(C) such distribution is accompanied by the 
                amount of net income attributable to such contribution.
In the case of such a distribution, for purposes of section 61, any net 
income described in subparagraph (C) shall be deemed to have been 
earned and receivable in the taxable year in which such contribution is 
made.
            ``(4) Rollovers.--Paragraph (1) shall not apply to any 
        amount paid or distributed out of a medical savings account to 
        the account holder if the entire amount received (including 
        money and any other property) is paid into another medical 
        savings account for the benefit of such holder not later than 
        the 60th day after the day on which he received the payment or 
        distribution.
            ``(5) Coordination with medical expense deduction.--For 
        purposes of section 213, any payment or distribution out of a 
        medical savings account for qualified medical expenses shall 
        not be treated as an expense paid for medical care to the 
        extent of the amount of such payment or distribution which is 
        excludable from gross income solely by reason of paragraph 
        (1)(A).
    ``(g) Cost-of-Living Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1996, each dollar amount in 
        subsection (b)(1) or in subsection (c)(2) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the medical care cost adjustment for such 
                calendar year.
        If any increase under the preceding sentence is not a multiple 
        of $50, such increase shall be rounded to the nearest multiple 
        of $50.
            ``(2) Medical care cost adjustment.--For purposes of 
        paragraph (1), the medical care cost adjustment for any 
        calendar year is the percentage (if any) by which--
                    ``(A) the medical care component of the Consumer 
                Price Index (as defined in section 1(f)(5)) for August 
                of the preceding calendar year, exceeds
                    ``(B) such component for August of 1995.
    ``(h) Reports.--The trustee of a medical savings account shall make 
such reports regarding such account to the Secretary and to the account 
holder with respect to contributions, distributions, and such other 
matters as the Secretary may require under regulations. The reports 
required by this subsection shall be filed at such time and in such 
manner and furnished to such individuals at such time and in such 
manner as may be required by those regulations.''
    (b) Deduction Allowed Whether or Not Individual Itemizes Other 
Deductions.--Subsection (a) of section 62 is amended by inserting after 
paragraph (15) the following new paragraph:
            ``(16) Medical savings accounts.--The deduction allowed by 
        section 220.''
    (c) Exclusions for Employer Contributions to Medical Savings 
Accounts.--
            (1) Exclusion from income tax.--The text of section 106 
        (relating to contributions by employer to accident and health 
        plans) is amended to read as follows:
    ``(a) General Rule.--Gross income of an employee does not include 
employer-provided coverage under an accident or health plan.
    ``(b) Contributions to Medical Savings Accounts.--
            ``(1) In general.--In the case of an employee who is an 
        eligible individual, gross income does not include amounts 
        contributed by such employee's employer to any medical savings 
        account of such employee.
            ``(2) Coordination with deduction limitation.--The amount 
        excluded from the gross income of an employee under this 
        subsection for any taxable year shall not exceed the limitation 
        under section 220(b)(1) (determined without regard to this 
        subsection) which is applicable to such employee for such 
        taxable year.''
            ``(3) No constructive receipt.--No amount shall be included 
        in the gross income of any employee solely because the employee 
        may choose between the contributions referred to in paragraph 
        (1) and employer contributions to another health plan of the 
        employer.
            ``(4) Special rule for deduction of employer 
        contributions.--Any employer contribution to a medical savings 
        account, if otherwise allowable as a deduction under this 
        chapter, shall be allowed only for the taxable year in which 
        paid.
            ``(5) Definitions.--For purposes of this subsection, the 
        terms `eligible individual' and `medical savings account' have 
        the respective meanings given to such terms by section 220.''
            (2) Exclusion from employment taxes.--
                    (A) Social security taxes.--
                            (i) Subsection (a) of section 3121 is 
                        amended by striking ``or'' at the end of 
                        paragraph (20), by striking the period at the 
                        end of paragraph (21) and inserting ``; or'', 
                        and by inserting after paragraph (21) the 
                        following new paragraph:
            ``(22) any payment made to or for the benefit of an 
        employee if at the time of such payment it is reasonable to 
        believe that the employee will be able to exclude such payment 
        from income under section 106(b).''
                            (ii) Subsection (a) of section 209 of the 
                        Social Security Act is amended by striking 
                        ``or'' at the end of paragraph (17), by 
                        striking the period at the end of paragraph 
                        (18) and inserting ``; or'', and by inserting 
                        after paragraph (18) the following new 
                        paragraph:
            ``(19) any payment made to or for the benefit of an 
        employee if at the time of such payment it is reasonable to 
        believe that the employee will be able to exclude such payment 
        from income under section 106(b) of the Internal Revenue Code 
        of 1986.''
                    (B) Railroad retirement tax.--Subsection (e) of 
                section 3231 is amended by adding at the end the 
                following new paragraph:
            ``(10) medical savings account contributions.--The term 
        `compensation' shall not include any payment made to or for the 
        benefit of an employee if at the time of such payment it is 
        reasonable to believe that the employee will be able to exclude 
        such payment from income under section 106(b).''
                    (C) Unemployment tax.--Subsection (b) of section 
                3306 is amended by striking ``or'' at the end of 
                paragraph (15), by striking the period at the end of 
                paragraph (16) and inserting ``; or'', and by inserting 
                after paragraph (16) the following new paragraph:
            ``(17) any payment made to or for the benefit of an 
        employee if at the time of such payment it is reasonable to 
        believe that the employee will be able to exclude such payment 
        from income under section 106(b).''
                    (D) Withholding tax.--Subsection (a) of section 
                3401 is amended by striking ``or'' at the end of 
                paragraph (19), by striking the period at the end of 
                paragraph (20) and inserting ``; or'', and by inserting 
                after paragraph (20) the following new paragraph:
            ``(21) any payment made to or for the benefit of an 
        employee if at the time of such payment it is reasonable to 
        believe that the employee will be able to exclude such payment 
        from income under section 106(b).''
    (d) Medical Savings Account Contributions Not Available Under 
Cafeteria Plans.--Subsection (f) of section 125 is amended by inserting 
``106(b),'' before ``117''.
    (e) Tax on Prohibited Transactions.--Section 4975 (relating to tax 
on prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for medical savings accounts.--An 
        individual for whose benefit a medical savings account (within 
        the meaning of section 220(d)) is established shall be exempt 
        from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be a medical savings account 
        by reason of the application of section 220(e)(2) to such 
        account.'', and
            (2) by inserting ``or a medical savings account described 
        in section 220(d)'' in subsection (e)(1) after ``described in 
        section 408(a)''.
    (f) Failure To Provide Reports on Medical Savings Accounts.--
Section 6693 (relating to failure to provide reports on individual 
retirement accounts or annuities) is amended--
            (1) by inserting ``or on medical savings accounts'' after 
        ``annuities'' in the heading of such section, and
            (2) by adding at the end of subsection (a) the following: 
        ``The person required by section 220(h) to file a report 
        regarding a medical savings account at the time and in the 
        manner required by such section shall pay a penalty of $50 for 
        each failure to so file unless it is shown that such failure is 
        due to reasonable cause.''
    (g) Clerical Amendments.--
            (1) The table of sections for part VII of subchapter B of 
        chapter 1 is amended by striking the last item and inserting 
        the following:

                              ``Sec. 220. Medical savings accounts.
                              ``Sec. 221. Cross reference.''
            (2) The table of sections for subchapter B of chapter 68 is 
        amended by inserting ``or on medical savings accounts'' after 
        ``annuities'' in the item relating to section 6693.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

          Subtitle C--Pickle-Johnson Taxpayer Bill of Rights 2

                       PART I--TAXPAYER ADVOCATE

SEC. 13301. ESTABLISHMENT OF POSITION OF TAXPAYER ADVOCATE WITHIN 
              INTERNAL REVENUE SERVICE.

    (a) General Rule.--Section 7802 (relating to Commissioner of 
Internal Revenue; Assistant Commissioner (Employee Plans and Exempt 
Organizations)) is amended by adding at the end the following new 
subsection:
    ``(d) Office of Taxpayer Advocate.--
            ``(1) In general.--There is established in the Internal 
        Revenue Service an office to be known as the `Office of the 
        Taxpayer Advocate'. Such office shall be under the supervision 
        and direction of an official to be known as the `Taxpayer 
        Advocate' who shall be appointed by and report directly to the 
        Commissioner of Internal Revenue. The Taxpayer Advocate shall 
        be entitled to compensation at the same rate as the highest 
        level official reporting directly to the Deputy Commissioner of 
        the Internal Revenue Service.
            ``(2) Functions of office.--
                    ``(A) In general.--It shall be the function of the 
                Office of Taxpayer Advocate to--
                            ``(i) assist taxpayers in resolving 
                        problems with the Internal Revenue Service,
                            ``(ii) identify areas in which taxpayers 
                        have problems in dealings with the Internal 
                        Revenue Service,
                            ``(iii) to the extent possible, propose 
                        changes in the administrative practices of the 
                        Internal Revenue Service to mitigate problems 
                        identified under clause (ii), and
                            ``(iv) identify potential legislative 
                        changes which may be appropriate to mitigate 
                        such problems.
                    ``(B) Annual reports.--
                            ``(i) Objectives.--Not later than June 30 
                        of each calendar year after 1995, the Taxpayer 
                        Advocate shall report to the Committee on Ways 
                        and Means of the House of Representatives and 
                        the Committee on Finance of the Senate on the 
                        objectives of the Taxpayer Advocate for the 
                        fiscal year beginning in such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information.
                            ``(ii) Activities.--Not later than December 
                        31 of each calendar year after 1995, the 
                        Taxpayer Advocate shall report to the Committee 
                        on Ways and Means of the House of 
                        Representatives and the Committee on Finance of 
                        the Senate on the activities of the Taxpayer 
                        Advocate during the fiscal year ending during 
                        such calendar year. Any such report shall 
                        contain full and substantive analysis, in 
                        addition to statistical information, and 
                        shall--
                                    ``(I) identify the initiatives the 
                                Taxpayer Advocate has taken on 
                                improving taxpayer services and 
                                Internal Revenue Service 
                                responsiveness,
                                    ``(II) contain recommendations 
                                received from individuals with the 
                                authority to issue Taxpayer Assistance 
                                Orders under section 7811,
                                    ``(III) contain a summary of at 
                                least 20 of the most serious problems 
                                encountered by taxpayers, including a 
                                description of the nature of such 
                                problems,
                                    ``(IV) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action has 
                                been taken and the result of such 
                                action,
                                    ``(V) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action 
                                remains to be completed and the period 
                                during which each item has remained on 
                                such inventory,
                                    ``(VI) contain an inventory of the 
                                items described in subclauses (II) and 
                                (III) for which no action has been 
                                taken, the period during which each 
                                item has remained on such inventory, 
                                the reasons for the inaction, and 
                                identify any Internal Revenue Service 
                                official who is responsible for such 
                                inaction,
                                    ``(VII) identify any Taxpayer 
                                Assistance Order which was not honored 
                                by the Internal Revenue Service in a 
                                timely manner, as specified under 
                                section 7811(b),
                                    ``(VIII) contain recommendations 
                                for such administrative and legislative 
                                action as may be appropriate to resolve 
                                problems encountered by taxpayers,
                                    ``(IX) describe the extent to which 
                                regional problem resolution officers 
                                participate in the selection and 
                                evaluation of local problem resolution 
                                officers, and
                                    ``(X) include such other 
                                information as the Taxpayer Advocate 
                                may deem advisable.
                            ``(iii) Report to be submitted directly.--
                        Each report required under this subparagraph 
                        shall be provided directly to the Committees 
                        referred to in clauses (i) and (ii) without any 
                        prior review or comment from the Commissioner, 
                        the Secretary of the Treasury, any other 
                        officer or employee of the Department of the 
                        Treasury, or the Office of Management and 
                        Budget.
            ``(3) Responsibilities of commissioner.--The Commissioner 
        of Internal Revenue shall establish procedures requiring a 
        formal response to all recommendations submitted to the 
        Commissioner by the Taxpayer Advocate within 3 months after 
        submission to the Commissioner.''
    (b) Conforming Amendments.--
            (1) Section 7811 (relating to Taxpayer Assistance Orders) 
        is amended--
                    (A) by striking ``the Office of Ombudsman'' in 
                subsection (a) and inserting ``the Office of the 
                Taxpayer Advocate'', and
                    (B) by striking ``Ombudsman'' each place it appears 
                (including in the headings of subsections (e) and (f)) 
                and inserting ``Taxpayer Advocate''.
            (2) The heading for section 7802 is amended to read as 
        follows:

``SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; ASSISTANT COMMISSIONERS; 
              TAXPAYER ADVOCATE.''

            (3) The table of sections for subchapter A of chapter 80 is 
        amended by striking the item relating to section 7802 and 
        inserting the following new item:

                              ``Sec. 7802. Commissioner of Internal 
                                        Revenue; Assistant 
                                        Commissioners; Taxpayer 
                                        Advocate.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 13302. EXPANSION OF AUTHORITY TO ISSUE TAXPAYER ASSISTANCE ORDERS.

    (a) Terms of Orders.--Subsection (b) of section 7811 (relating to 
terms of Taxpayer Assistance Orders) is amended--
            (1) by inserting ``within a specified time period'' after 
        ``the Secretary'', and
            (2) by inserting ``take any action as permitted by law,'' 
        after ``cease any action,''.
    (b) Limitation on Authority To Modify or Rescind.--Section 7811(c) 
(relating to authority to modify or rescind) is amended to read as 
follows:
    ``(c) Authority To Modify or Rescind.--Any Taxpayer Assistance 
Order issued by the Taxpayer Advocate under this section may be 
modified or rescinded--
            ``(1) only by the Taxpayer Advocate, the Commissioner of 
        Internal Revenue, the Deputy Commissioner of Internal Revenue, 
        or a regional problem resolution officer, and
            ``(2) only if a written explanation of the reasons for the 
        modification or rescission is provided to the Taxpayer 
        Advocate.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

       PART II--MODIFICATIONS TO INSTALLMENT AGREEMENT PROVISIONS

SEC. 13306. NOTIFICATION OF REASONS FOR TERMINATION OF INSTALLMENT 
              AGREEMENTS.

    (a) Terminations.--Subsection (b) of section 6159 (relating to 
extent to which agreements remain in effect) is amended by adding at 
the end the following new paragraph:
            ``(5) Notice requirements.--The Secretary may not take any 
        action under paragraph (2), (3), or (4) unless--
                    ``(A) a notice of such action is provided to the 
                taxpayer not later than the day 30 days before the date 
                of such action, and
                    ``(B) such notice includes an explanation why the 
                Secretary intends to take such action.
        The preceding sentence shall not apply in any case in which the 
        Secretary believes that collection of any tax to which an 
        agreement under this section relates is in jeopardy.''
    (b) Conforming Amendment.--Paragraph (3) of section 6159(b) is 
amended to read as follows:
            ``(3) Subsequent change in financial conditions.--If the 
        Secretary makes a determination that the financial condition of 
        a taxpayer with whom the Secretary has entered into an 
        agreement under subsection (a) has significantly changed, the 
        Secretary may alter, modify, or terminate such agreement.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date 6 months after the date of the enactment of this 
Act.

SEC. 13307. ADMINISTRATIVE REVIEW OF TERMINATION OF INSTALLMENT 
              AGREEMENT.

    (a) General Rule.--Section 6159 (relating to agreements for payment 
of tax liability in installments) is amended by adding at the end the 
following new subsection:
    ``(c) Administrative Review.--The Secretary shall establish 
procedures for an independent administrative review of terminations of 
installment agreements under this section for taxpayers who request 
such a review.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1996.

             PART III--ABATEMENT OF INTEREST AND PENALTIES

SEC. 13311. EXPANSION OF AUTHORITY TO ABATE INTEREST.

    (a) General Rule.--Paragraph (1) of section 6404(e) (relating to 
abatement of interest in certain cases) is amended--
            (1) by inserting ``unreasonable'' before ``error'' each 
        place it appears in subparagraphs (A) and (B), and
            (2) by striking ``in performing a ministerial act'' each 
        place it appears and inserting ``in performing a ministerial or 
        managerial act''.
    (b) Clerical Amendment.--The subsection heading for subsection (e) 
of section 6404 is amended--
            (1) by striking ``Assessments'' and inserting 
        ``Abatement'', and
            (2) by inserting ``Unreasonable'' before ``Errors''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest accruing with respect to deficiencies or payments for 
taxable years beginning after the date of the enactment of this Act.

SEC. 13312. REVIEW OF IRS FAILURE TO ABATE INTEREST.

    (a) In General.--Section 6404 is amended by adding at the end the 
following new subsection:
    ``(g) Review of Denial of Request for Abatement of Interest.--The 
Tax Court shall have jurisdiction over any action brought by a taxpayer 
who meets the requirements referred to in section 7430(c)(4)(A)(iii) to 
determine whether the Secretary's failure to abate interest under this 
section was an abuse of discretion if such action is brought within 6 
months after the date of the Secretary's final determination not to 
abate such interest.''
    (b) Effective Date.--The amendment made by this section shall apply 
to requests for abatement after the date of the enactment of this Act.

SEC. 13313. EXTENSION OF INTEREST-FREE PERIOD FOR PAYMENT OF TAX AFTER 
              NOTICE AND DEMAND.

    (a) General Rule.--Paragraph (3) of section 6601(e) (relating to 
payments made within 10 days after notice and demand) is amended to 
read as follows:
            ``(3) Payments made within specified period after notice 
        and demand.--If notice and demand is made for payment of any 
        amount and if such amount is paid within 21 calendar days (10 
        business days if the amount for which such notice and demand is 
        made equals or exceeds $100,000) after the date of such notice 
        and demand, interest under this section on the amount so paid 
        shall not be imposed for the period after the date of such 
        notice and demand.''
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 6601(e)(2) is amended by 
        striking ``10 days from the date of notice and demand 
        therefor'' and inserting ``21 calendar days from the date of 
        notice and demand therefor (10 business days if the amount for 
        which such notice and demand is made equals or exceeds 
        $100,000)''.
            (2) Paragraph (3) of section 6651(a) is amended by striking 
        ``10 days of the date of the notice and demand therefor'' and 
        inserting ``21 calendar days from the date of notice and demand 
        therefor (10 business days if the amount for which such notice 
        and demand is made equals or exceeds $100,000)''.
    (c) Effective Date.--The amendments made by this section shall 
apply in the case of any notice and demand given after June 30, 1996.

                         PART IV--JOINT RETURNS

SEC. 13316. STUDIES OF JOINT RETURN-RELATED ISSUES.

    The Secretary of the Treasury or his delegate and the Comptroller 
General of the United States shall each conduct separate studies of--
            (1) the effects of changing the liability for tax on a 
        joint return from being joint and several to being 
        proportionate to the tax attributable to each spouse,
            (2) the effects of providing that, if a divorce decree 
        allocates liability for tax on a joint return filed before the 
        divorce, the Secretary may collect such liability only in 
        accordance with the decree,
            (3) whether those provisions of the Internal Revenue Code 
        of 1986 intended to provide relief to innocent spouses provide 
        meaningful relief in all cases where such relief is 
        appropriate, and
            (4) the effect of providing that community income (as 
        defined in section 66(d) of such Code) which, in accordance 
        with the rules contained in section 879(a) of such Code, would 
        be treated as the income of one spouse is exempt from a levy 
        for failure to pay any tax imposed by subtitle A by the other 
        spouse for a taxable year ending before their marriage.
The reports of such studies shall be submitted to the Committee on Ways 
and Means of the House of Representatives and the Committee on Finance 
of the Senate within 6 months after the date of the enactment of this 
Act.

SEC. 13317. JOINT RETURN MAY BE MADE AFTER SEPARATE RETURNS WITHOUT 
              FULL PAYMENT OF TAX.

    (a) General Rule.--Paragraph (2) of section 6013(b) (relating to 
limitations on filing of joint return after filing separate returns) is 
amended by striking subparagraph (A) and redesignating the following 
subparagraphs accordingly.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 13318. DISCLOSURE OF COLLECTION ACTIVITIES.

    Subsection (e) of section 6103 (relating to disclosure to persons 
having material interest) is amended by adding at the end the following 
new paragraph:
            ``(8) Disclosure of collection activities with respect to 
        joint return.--If any deficiency of tax with respect to a joint 
        return is assessed and the individuals filing such return are 
        no longer married or no longer reside in the same household, 
        upon request in writing by either of such individuals, the 
        Secretary shall disclose in writing to the individual making 
        the request whether the Secretary has attempted to collect such 
        deficiency from such other individual, the general nature of 
        such collection activities, and the amount collected.''

                     PART V--COLLECTION ACTIVITIES

SEC. 13321. MODIFICATIONS TO LIEN AND LEVY PROVISIONS.

    (a) Withdrawal of Certain Notices.--Section 6323 (relating to 
validity and priority against certain persons) is amended by adding at 
the end the following new subsection:
    ``(j) Withdrawal of Notice in Certain Circumstances.--
            ``(1) In general.--The Secretary may withdraw a notice of a 
        lien filed under this section and this chapter shall be applied 
as if the withdrawn notice had not been filed, if the Secretary 
determines that--
                    ``(A) the filing of such notice was premature or 
                otherwise not in accordance with administrative 
                procedures of the Secretary,
                    ``(B) the taxpayer has entered into an agreement 
                under section 6159 to satisfy the tax liability for 
                which the lien was imposed by means of installment 
                payments, unless such agreement provides otherwise,
                    ``(C) the withdrawal of such notice will facilitate 
                the collection of the tax liability, or
                    ``(D) with the consent of the taxpayer or the 
                Taxpayer Advocate, the withdrawal of such notice would 
                be in the best interests of the taxpayer (as determined 
                by the Taxpayer Advocate) and the United States.
        Any such withdrawal shall be made by filing notice at the same 
        office as the withdrawn notice. A copy of such notice of 
        withdrawal shall be provided to the taxpayer.
            ``(2) Notice to credit agencies, etc.--Upon written request 
        by the taxpayer with respect to whom a notice of a lien was 
        withdrawn under paragraph (1), the Secretary shall promptly 
        make reasonable efforts to notify credit reporting agencies, 
        and any financial institution or creditor whose name and 
        address is specified in such request, of the withdrawal of such 
        notice. Any such request shall be in such form as the Secretary 
        may prescribe.''
    (b) Return of Levied Property in Certain Cases.--Section 6343 
(relating to authority to release levy and return property) is amended 
by adding at the end the following new subsection:
    ``(d) Return of Property in Certain Cases.--If--
            ``(1) any property has been levied upon, and
            ``(2) the Secretary determines that--
                    ``(A) the levy on such property was premature or 
                otherwise not in accordance with administrative 
                procedures of the Secretary,
                    ``(B) the taxpayer has entered into an agreement 
                under section 6159 to satisfy the tax liability for 
                which the levy was imposed by means of installment 
                payments, unless such agreement provides otherwise,
                    ``(C) the return of such property will facilitate 
                the collection of the tax liability, or
                    ``(D) with the consent of the taxpayer or the 
                Taxpayer Advocate, the return of such property would be 
                in the best interests of the taxpayer (as determined by 
                the Taxpayer Advocate) and the United States,
the provisions of subsection (b) shall apply in the same manner as if 
such property had been wrongly levied upon, except that no interest 
shall be allowed under subsection (c).''
    (c) Modifications in Certain Levy Exemption Amounts.--
            (1) Fuel, etc.--Paragraph (2) of section 6334(a) (relating 
        to fuel, provisions, furniture, and personal effects exempt 
        from levy) is amended--
                    (A) by striking ``If the taxpayer is the head of a 
                family, so'' and inserting ``So'',
                    (B) by striking ``his household'' and inserting 
                ``the taxpayer's household'', and
                    (C) by striking ``$1,650 ($1,550 in the case of 
                levies issued during 1989)'' and inserting ``$2,500''.
            (2) Inflation adjustment.--Section 6334 (relating to 
        property exempt from levy) is amended by adding at the end the 
        following new subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of any calendar year 
        beginning after 1996, each dollar amount referred to in 
        paragraphs (2) and (3) of subsection (a) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year, by 
                substituting `calendar year 1995' for `calendar year 
                1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount after being increased 
        under paragraph (1) is not a multiple of $10, such dollar 
        amount shall be rounded to the nearest multiple of $10.''
            (3) Technical amendment.--Paragraph (3) of section 6334(a) 
        is amended by striking ``($1,050 in the case of levies issued 
        during 1989)''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Exempt amounts.--The amendments made by subsection (c) 
        shall take effect with respect to levies issued after December 
        31, 1995.

SEC. 13322. OFFERS-IN-COMPROMISE.

    (a) Review Requirements.--Subsection (b) of section 7122 (relating 
to records) is amended by striking ``$500.'' and inserting ``$100,000. 
However, such compromise shall be subject to continuing quality review 
by the Secretary.''
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

                      PART VI--INFORMATION RETURNS

SEC. 13326. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION RETURNS.

    (a) General Rule.--Subchapter B of chapter 76 (relating to 
proceedings by taxpayers and third parties) is amended by redesignating 
section 7434 as section 7435 and by inserting after section 7433 the 
following new section:

``SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION 
              RETURNS.

    ``(a) In General.--If any person willfully files a fraudulent 
information return with respect to payments purported to be made to any 
other person, such other person may bring a civil action for damages 
against the person so filing such return.
    ``(b) Damages.--In any action brought under subsection (a), upon a 
finding of liability on the part of the defendant, the defendant shall 
be liable to the plaintiff in an amount equal to the greater of $5,000 
or the sum of--
            ``(1) any actual damages sustained by the plaintiff as a 
        proximate result of the filing of the fraudulent information 
        return (including any costs attributable to resolving 
        deficiencies asserted as a result of such filing),
            ``(2) the costs of the action, and
            ``(3) in the court's discretion, reasonable attorneys fees.
    ``(c) Period for Bringing Action.--Notwithstanding any other 
provision of law, an action to enforce the liability created under this 
section may be brought without regard to the amount in controversy and 
may be brought only within the later of--
            ``(1) 6 years after the date of the filing of the 
        fraudulent information return, or
            ``(2) 1 year after the date such fraudulent information 
        return would have been discovered by exercise of reasonable 
        care.
    ``(d) Copy of Complaint Filed With IRS.--Any person bringing an 
action under subsection (a) shall provide a copy of the complaint to 
the Internal Revenue Service upon the filing of such complaint with the 
court.
    ``(e) Finding of Court To Include Correct Amount of Payment.--The 
decision of the court awarding damages in an action brought under 
subsection (a) shall include a finding of the correct amount which 
should have been reported in the information return.
    ``(f) Information Return.--For purposes of this section, the term 
`information return' means any statement described in section 
6724(d)(1)(A).''
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 76 is amended by striking the item relating to section 7434 and 
inserting the following:

                              ``Sec. 7434. Civil damages for fraudulent 
                                        filing of information returns.
                              ``Sec. 7435. Cross references.''
    (c) Effective Date.--The amendments made by this section shall 
apply to fraudulent information returns filed after the date of the 
enactment of this Act.

SEC. 13327. REQUIREMENT TO CONDUCT REASONABLE INVESTIGATIONS OF 
              INFORMATION RETURNS.

    (a) General Rule.--Section 6201 (relating to assessment authority) 
is amended by redesignating subsection (d) as subsection (e) and by 
inserting after subsection (c) the following new subsection:
    ``(d) Required Reasonable Verification of Information Returns.--In 
any court proceeding, if a taxpayer asserts a reasonable dispute with 
respect to any item of income reported on an information return filed 
with the Secretary under subpart B or C of part III of subchapter A of 
chapter 61 by a third party and the taxpayer has fully cooperated with 
the Secretary (including providing, within a reasonable period of time, 
access to and inspection of all witnesses, information, and documents 
within the control of the taxpayer as reasonably requested by the 
Secretary), the Secretary shall have the burden of producing reasonable 
and probative information concerning such deficiency in addition to 
such information return.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

              PART VII--AWARDING OF COSTS AND CERTAIN FEES

SEC. 13331. UNITED STATES MUST ESTABLISH THAT ITS POSITION IN 
              PROCEEDING WAS SUBSTANTIALLY JUSTIFIED.

    (a) General Rule.--Subparagraph (A) of section 7430(c)(4) (defining 
prevailing party) is amended by striking clause (i) and by 
redesignating clauses (ii) and (iii) as clauses (i) and (ii), 
respectively.
    (b) Burden of Proof on United States.--Paragraph (4) of section 
7430(c) is amended by redesignating subparagraph (B) as subparagraph 
(C) and by inserting after subparagraph (A) the following new 
subparagraph:
                    ``(B) Exception if united states establishes that 
                its position was substantially justified.--
                            ``(i) General rule.--A party shall not be 
                        treated as the prevailing party in a proceeding 
                        to which subsection (a) applies if the United 
                        States establishes that the position of the 
                        United States in the proceeding was 
                        substantially justified.
                            ``(ii) Presumption of no justification if 
                        internal revenue service didn't follow certain 
                        published guidance.--For purposes of clause 
                        (i), the position of the United States shall be 
                        presumed not to be substantially justified if 
                        the Internal Revenue Service did not follow its 
                        applicable published guidance in the 
                        administrative proceeding. Such presumption may 
                        be rebutted.
                            ``(iii) Applicable published guidance.--For 
                        purposes of clause (ii), the term `applicable 
                        published guidance' means--
                                    ``(I) regulations, revenue rulings, 
                                revenue procedures, information 
                                releases, notices, and announcements, 
                                and
                                    ``(II) any of the following which 
                                are issued to the taxpayer: private 
                                letter rulings, technical advice 
                                memoranda, and determination letters.''
    (c) Conforming Amendments.--
            (1) Subparagraph (B) of section 7430(c)(2) is amended by 
        striking ``paragraph (4)(B)'' and inserting ``paragraph 
        (4)(C)''.
            (2) Subparagraph (C) of section 7430(c)(4), as redesignated 
        by subsection (b), is amended by striking ``subparagraph (A)'' 
        and inserting ``this paragraph''.
            (3) Sections 6404(g) and 6656(c)(1), as amended by this 
        title, are each amended by striking ``section 
        7430(c)(4)(A)(iii)'' and inserting ``section 
        7430(c)(4)(A)(ii)''.

SEC. 13332. INCREASED LIMIT ON ATTORNEY FEES.

    Paragraph (1) of section 7430(c) (defining reasonable litigation 
costs) is amended--
            (1) by striking ``$75'' in clause (iii) of subparagraph (B) 
        and inserting ``$110'',
            (2) by striking ``an increase in the cost of living or'' in 
        clause (iii) of subparagraph (B), and
            (3) by adding after clause (iii) the following:
        ``In the case of any calendar year beginning after 1996, the 
        dollar amount referred to in clause (iii) shall be increased by 
        an amount equal to such dollar amount multiplied by the cost-
        of-living adjustment determined under section 1(f)(3) for such 
        calendar year, by substituting `calendar year 1995' for 
        `calendar year 1992' in subparagraph (B) thereof. If any dollar 
        amount after being increased under the preceding sentence is 
        not a multiple of $10, such dollar amount shall be rounded to 
        the nearest multiple of $10.''

SEC. 13333. FAILURE TO AGREE TO EXTENSION NOT TAKEN INTO ACCOUNT.

    Paragraph (1) of section 7430(b) (relating to requirement that 
administrative remedies be exhausted) is amended by adding at the end 
the following new sentence: ``Any failure to agree to an extension of 
the time for the assessment of any tax shall not be taken into account 
for purposes of determining whether the prevailing party meets the 
requirements of the preceding sentence.''

SEC. 13334. AWARD OF LITIGATION COSTS PERMITTED IN DECLARATORY JUDGMENT 
              PROCEEDINGS.

    Subsection (b) of section 7430 is amended by striking paragraph (3) 
and by redesignating paragraph (4) as paragraph (3).

SEC. 13335. EFFECTIVE DATE.

    The amendments made by this part shall apply in the case of 
proceedings commenced after the date of the enactment of this Act.

 PART VIII--MODIFICATION TO RECOVERY OF CIVIL DAMAGES FOR UNAUTHORIZED 
                           COLLECTION ACTIONS

SEC. 13336. INCREASE IN LIMIT ON RECOVERY OF CIVIL DAMAGES FOR 
              UNAUTHORIZED COLLECTION ACTIONS.

    (a) General Rule.--Subsection (b) of section 7433 (relating to 
damages) is amended by striking ``$100,000'' and inserting 
``$1,000,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to actions by officers or employees of the Internal Revenue 
Service after the date of the enactment of this Act.

SEC. 13337. COURT DISCRETION TO REDUCE AWARD FOR LITIGATION COSTS FOR 
              FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES.

    (a) General Rule.--Paragraph (1) of section 7433(d) (relating to 
civil damages for certain unauthorized collection actions) is amended 
to read as follows:
            ``(1) Award for damages may be reduced if administrative 
        remedies not exhausted.--The amount of damages awarded under 
        subsection (b) may be reduced if the court determines that the 
        plaintiff has not exhausted the administrative remedies 
        available to such plaintiff within the Internal Revenue 
        Service.''
    (b) Effective Date.--The amendment made by this section shall apply 
in the case of proceedings commenced after the date of the enactment of 
this Act.

 PART IX--MODIFICATIONS TO PENALTY FOR FAILURE TO COLLECT AND PAY OVER 
                                  TAX

SEC. 13341. PRELIMINARY NOTICE REQUIREMENT.

    (a) In General.--Section 6672 (relating to failure to collect and 
pay over tax, or attempt to evade or defeat tax) is amended by 
redesignating subsection (b) as subsection (c) and by inserting after 
subsection (a) the following new subsection:
    ``(b) Preliminary Notice Requirement.--
            ``(1) In general.--No penalty shall be imposed under 
        subsection (a) unless the Secretary notifies the taxpayer in 
        writing by mail to an address as determined under section 
        6212(b) that the taxpayer shall be subject to an assessment of 
        such penalty.
            ``(2) Timing of notice.--The mailing of the notice 
        described in paragraph (1) shall precede any notice and demand 
        of any penalty under subsection (a) by at least 60 days.
            ``(3) Statute of limitations.--If a notice described in 
        paragraph (1) with respect to any penalty is mailed before the 
        expiration of the period provided by section 6501 for the 
        assessment of such penalty (determined without regard to this 
        paragraph), the period provided by such section for the 
        assessment of such penalty shall not expire before the later 
        of--
                    ``(A) the date 90 days after the date on which such 
                notice was mailed, or
                    ``(B) if there is a timely protest of the proposed 
                assessment, the date 30 days after the Secretary makes 
                a final administrative determination with respect to 
                such protest.
            ``(4) Exception for jeopardy.--This subsection shall not 
        apply if the Secretary finds that the collection of the penalty 
        is in jeopardy.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to proposed assessments made after June 30, 1996.

SEC. 13342. DISCLOSURE OF CERTAIN INFORMATION WHERE MORE THAN 1 PERSON 
              LIABLE FOR PENALTY FOR FAILURE TO COLLECT AND PAY OVER 
              TAX.

    (a) In General.--Subsection (e) of section 6103 (relating to 
disclosure to persons having material interest), as amended by section 
13318, is amended by adding at the end the following new paragraph:
            ``(9) Disclosure of certain information where more than 1 
        person subject to penalty under section 6672.--If the Secretary 
        determines that a person is liable for a penalty under section 
        6672(a) with respect to any failure, upon request in writing of 
        such person, the Secretary shall disclose in writing to such 
        person--
                    ``(A) the name of any other person whom the 
                Secretary has determined to be liable for such penalty 
                with respect to such failure, and
                    ``(B) whether the Secretary has attempted to 
                collect such penalty from such other person, the 
                general nature of such collection activities, and the 
                amount collected.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 13343. RIGHT OF CONTRIBUTION WHERE MORE THAN 1 PERSON LIABLE FOR 
              PENALTY FOR FAILURE TO COLLECT AND PAY OVER TAX.

    (a) In General.--Section 6672 (relating to failure to collect and 
pay over tax, or attempt to evade or defeat tax) is amended by adding 
at the end the following new subsection:
    ``(d) Right of Contribution Where More Than 1 Person Liable for 
Penalty.--If more than 1 person is liable for the penalty under 
subsection (a) with respect to any tax, each person who paid such 
penalty shall be entitled to recover from other persons who are liable 
for such penalty an amount equal to the excess of the amount paid by 
such person over such person's proportionate share of the penalty. Any 
claim for such a recovery may be made only in a proceeding which is 
separate from, and is not joined with--
            ``(1) an action for collection of such penalty brought by 
        the United States, or
            ``(2) a proceeding in which the United States files a 
        counterclaim or third-party complaint for the collection of 
        such penalty.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to penalties assessed after the date of the enactment of this 
Act.

SEC. 13344. VOLUNTEER BOARD MEMBERS OF TAX-EXEMPT ORGANIZATIONS EXEMPT 
              FROM PENALTY FOR FAILURE TO COLLECT AND PAY OVER TAX.

    (a) In General.--Section 6672 is amended by adding at the end the 
following new subsection:
    ``(e) Exception for Voluntary Board Members of Tax-Exempt 
Organizations.--No penalty shall be imposed by subsection (a) on any 
unpaid, volunteer member of any board of trustees or directors of an 
organization exempt from tax under subtitle A if such member--
            ``(1) is solely serving in an honorary capacity,
            ``(2) does not participate in the day-to-day or financial 
        operations of the organization, and
            ``(3) does not have actual knowledge of the failure on 
        which such penalty is imposed.
The preceding sentence shall not apply if it results in no person being 
liable for the penalty imposed by subsection (a).''
    (b) Public Information Requirements.--
            (1) In general.--The Secretary of the Treasury or the 
        Secretary's delegate (hereafter in this subsection referred to 
        as the ``Secretary'') shall take such actions as may be 
        appropriate to ensure that employees are aware of their 
        responsibilities under the Federal tax depository system, the 
        circumstances under which employees may be liable for the 
        penalty imposed by section 6672 of the Internal Revenue Code of 
        1986, and the responsibility to promptly report to the Internal 
        Revenue Service any failure referred to in subsection (a) of 
        such section 6672. Such actions shall include--
                    (A) printing of a warning on deposit coupon 
                booklets and the appropriate tax returns that certain 
                employees may be liable for the penalty imposed by such 
                section 6672, and
                    (B) the development of a special information 
                packet.
            (2) Development of explanatory materials.--The Secretary 
        shall develop materials explaining the circumstances under 
        which board members of tax-exempt organizations (including 
        voluntary and honorary members) may be subject to penalty under 
        section 6672 of such Code. Such materials shall be made 
        available to tax-exempt organizations.
            (3) IRS instructions.--The Secretary shall clarify the 
        instructions to Internal Revenue Service employees on the 
        application of the penalty under section 6672 of such Code with 
        regard to voluntary members of boards of trustees or directors 
        of tax- exempt organizations.

          PART X--MODIFICATIONS OF RULES RELATING TO SUMMONSES

SEC. 13346. ENROLLED AGENTS INCLUDED AS THIRD-PARTY RECORDKEEPERS.

    (a) In General.--Paragraph (3) of section 7609(a) (relating to 
third-party recordkeeper defined) is amended by striking ``and'' at the 
end of subparagraph (G), by striking the period at the end of 
subparagraph (H) and inserting ``; and'', and by adding at the end the 
following the subparagraph:
                    ``(I) any enrolled agent.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to summonses issued after the date of the enactment of this Act.

SEC. 13347. SAFEGUARDS RELATING TO DESIGNATED SUMMONSES.

    (a) Standard of Review.--Subparagraph (A) of section 6503(j)(2) 
(defining designated summons) is amended by redesignating clauses (i) 
and (ii) as clauses (ii) and (iii), respectively, and by inserting 
before clause (ii) (as so redesignated) the following new clause:
                            ``(i) the issuance of such summons is 
                        preceded by a review of such issuance by the 
                        regional counsel of the Office of Chief Counsel 
                        for the region in which the examination of the 
                        corporation is being conducted,''.
    (b) Limitation on Persons to Whom Designated Summons May Be 
Issued.--Paragraph (1) of section 6503(j) is amended by striking ``with 
respect to any return of tax by a corporation'' and inserting ``to a 
corporation (or to any other person to whom the corporation has 
transferred records) with respect to any return of tax by such 
corporation for a taxable year (or other period) for which such 
corporation is being examined under the coordinated examination program 
(or any successor program) of the Internal Revenue Service''.
    (c) Effective Date.--The amendments made by this section shall 
apply to summonses issued after the date of the enactment of this Act.

SEC. 13348. ANNUAL REPORT TO CONGRESS CONCERNING DESIGNATED SUMMONSES.

    Not later than December 31 of each calendar year after 1995, the 
Secretary of the Treasury or his delegate shall report to the Committee 
on Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate on the number of designated summonses (as defined 
in section 6503(j) of the Internal Revenue Code of 1986) which were 
issued during the preceding 12 months.

  PART XI--RELIEF FROM RETROACTIVE APPLICATION OF TREASURY DEPARTMENT 
                              REGULATIONS

SEC. 13351. RELIEF FROM RETROACTIVE APPLICATION OF TREASURY DEPARTMENT 
              REGULATIONS.

    (a) In General.--Subsection (b) of section 7805 (relating to rules 
and regulations) is amended to read as follows:
    ``(b) Retroactivity of Regulations.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, no temporary, proposed, or final regulation 
        relating to the internal revenue laws shall apply to any 
        taxable period ending before the earliest of the following 
        dates:
                    ``(A) The date on which such regulation is filed 
                with the Federal Register.
                    ``(B) In the case of any final regulation, the date 
                on which any proposed or temporary regulation to which 
                such final regulation relates was filed with the 
                Federal Register.
                    ``(C) The date on which any notice substantially 
                describing the expected contents of any temporary, 
                proposed, or final regulation is issued to the public.
            ``(2) Exception for promptly issued regulations.--Paragraph 
        (1) shall not apply to regulations filed or issued within 12 
        months of the date of the enactment of the statutory provision 
        to which the regulation relates.
            ``(3) Prevention of abuse.--The Secretary may provide that 
        any regulation may take effect or apply retroactively to 
        prevent abuse.
            ``(4) Correction of procedural defects.--The Secretary may 
        provide that any regulation may apply retroactively to correct 
        a procedural defect in the issuance of any prior regulation.
            ``(5) Internal regulations.--The limitation of paragraph 
        (1) shall not apply to any regulation relating to internal 
        Treasury Department policies, practices, or procedures.
            ``(6) Congressional authorization.--The limitation of 
        paragraph (1) may be superseded by a legislative grant from 
        Congress authorizing the Secretary to prescribe the effective 
        date with respect to any regulation.
            ``(7) Election to apply retroactively.--Paragraph (1) shall 
        not apply to any regulation which the taxpayer elects to apply 
        before the dates specified in paragraph (1) but only if such 
        election applies to all regulations which were issued with such 
        regulation under the statutory provision to which such 
        regulation relates.
            ``(8) Application to rulings.--The Secretary may prescribe 
        the extent, if any, to which any ruling (including any judicial 
        decision or any administrative determination other than by 
        regulation) relating to the internal revenue laws shall be 
        applied without retroactive effect.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to regulations which relate to statutory provisions 
enacted on or after the date of the enactment of this Act.

                   PART XII--MISCELLANEOUS PROVISIONS

SEC. 13356. REPORT ON PILOT PROGRAM FOR APPEAL OF ENFORCEMENT ACTIONS.

    Not later than March 1, 1996, the Secretary of the Treasury or his 
delegate shall submit to the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate a report 
on the pilot program for appeals of enforcement actions (including 
lien, levy, and seizure actions) to the Appeals Division of the 
Internal Revenue Service, together with such recommendations as he may 
deem advisable.

SEC. 13357. PHONE NUMBER OF PERSON PROVIDING PAYEE STATEMENTS REQUIRED 
              TO BE SHOWN ON SUCH STATEMENT.

    (a) General Rule.--The following provisions are each amended by 
striking ``name and address'' and inserting ``name, address, and phone 
number of the information contact'':
            (1) Section 6041(d)(1).
            (2) Section 6041A(e)(1).
            (3) Section 6042(c)(1).
            (4) Section 6044(e)(1).
            (5) Section 6045(b)(1).
            (6) Section 6049(c)(1)(A).
            (7) Section 6050B(b)(1).
            (8) Section 6050H(d)(1).
            (9) Section 6050I(e)(1).
            (10) Section 6050J(e).
            (11) Section 6050K(b)(1).
            (12) Section 6050N(b)(1).
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to statements required to be furnished after December 31, 1996 
(determined without regard to any extension).

SEC. 13358. REQUIRED NOTICE OF CERTAIN PAYMENTS.

    If any payment is received by the Secretary of the Treasury or his 
delegate from any taxpayer and the Secretary cannot associate such 
payment with such taxpayer, the Secretary shall make reasonable efforts 
to notify the taxpayer of such inability within 60 days after the 
receipt of such payment.

SEC. 13359. UNAUTHORIZED ENTICEMENT OF INFORMATION DISCLOSURE.

    (a) In General.--Subchapter B of chapter 76 (relating to 
proceedings by taxpayers and third parties), as amended by section 
13316(a), is amended by redesignating section 7435 as section 7436 and 
by inserting after section 7434 the following new section:

``SEC. 7435. CIVIL DAMAGES FOR UNAUTHORIZED ENTICEMENT OF INFORMATION 
              DISCLOSURE.

    ``(a) In General.--If any officer or employee of the United States 
intentionally compromises the determination or collection of any tax 
due from an attorney, certified public accountant, or enrolled agent 
representing a taxpayer in exchange for information conveyed by the 
taxpayer to the attorney, certified public accountant, or enrolled 
agent for purposes of obtaining advice concerning the taxpayer's tax 
liability, such taxpayer may bring a civil action for damages against 
the United States in a district court of the United States. Such civil 
action shall be the exclusive remedy for recovering damages resulting 
from such actions.
    ``(b) Damages.--In any action brought under subsection (a), upon a 
finding of liability on the part of the defendant, the defendant shall 
be liable to the plaintiff in an amount equal to the lesser of $500,000 
or the sum of--
            ``(1) actual, direct economic damages sustained by the 
        plaintiff as a proximate result of the information disclosure, 
        and
            ``(2) the costs of the action.
Damages shall not include the taxpayer's liability for any civil or 
criminal penalties, or other losses attributable to incarceration or 
the imposition of other criminal sanctions.
    ``(c) Payment Authority.--Claims pursuant to this section shall be 
payable out of funds appropriated under section 1304 of title 31, 
United States Code.
    ``(d) Period for Bringing Action.--Notwithstanding any other 
provision of law, an action to enforce liability created under this 
section may be brought without regard to the amount in controversy and 
may be brought only within 2 years after the date the actions creating 
such liability would have been discovered by exercise of reasonable 
care.
    ``(e) Mandatory Stay.--Upon a certification by the Commissioner or 
the Commissioner's delegate that there is an ongoing investigation or 
prosecution of the taxpayer, the district court before which an action 
under this section is pending, shall stay all proceedings with respect 
to such action pending the conclusion of the investigation or 
prosecution.
    ``(f) Crime-Fraud Exception.--Subsection (a) shall not apply to 
information conveyed to an attorney, certified public accountant, or 
enrolled agent for the purpose of perpetrating a fraud or crime.''
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 76, as amended by section 13316(b), is amended by striking the 
item relating to section 7435 and by adding at the end the following 
new items:

                              ``Sec. 7435. Civil damages for 
                                        unauthorized enticement of 
                                        information disclosure.
                              ``Sec. 7436. Cross references.''
    (c) Effective Date.--The amendments made by this section shall 
apply to actions after the date of the enactment of this Act.

SEC. 13360. ANNUAL REMINDERS TO TAXPAYERS WITH OUTSTANDING DELINQUENT 
              ACCOUNTS.

    (a) In General.--Chapter 77 (relating to miscellaneous provisions) 
is amended by adding at the end the following new section:

``SEC. 7524. ANNUAL NOTICE OF TAX DELINQUENCY.

    ``Not less often than annually, the Secretary shall send a written 
notice to each taxpayer who has a tax delinquent account of the amount 
of the tax delinquency as of the date of the notice.''
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

                              ``Sec. 7524. Annual notice of tax 
                                        delinquency.''
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years after 1995.

SEC. 13361. 5-YEAR EXTENSION OF AUTHORITY FOR UNDERCOVER OPERATIONS.

    (a) In General.--Paragraph (3) of section 7601(c) of the Anti-Drug 
Abuse Act of 1988 is amended by striking all that follows ``this Act'' 
and inserting a period.
    (b) Restoration of Authority for 5 Years.--Subsection (c) of 
section 7608 is amended by adding at the end the following new 
paragraph:
            ``(6) Application of section.--The provisions of this 
        subsection--
                    ``(A) shall apply after November 17, 1988, and 
                before January 1, 1990, and
                    ``(B) shall apply after the date of the enactment 
                of this paragraph and before January 1, 2001.
        All amounts expended pursuant to this subsection during the 
        period described in subparagraph (B) shall be recovered to the 
        extent possible, and deposited in the Treasury of the United 
        States as miscellaneous receipts, before January 1, 2001.''
    (c) Enhanced Oversight.--
            (1) Additional information required in reports to 
        congress.--Subparagraph (B) of section 7608(c)(4) is amended--
                    (A) by striking ``preceding the period'' in clause 
                (ii),
                    (B) by striking ``and'' at the end of clause (ii), 
                and
                    (C) by striking clause (iii) and inserting the 
                following:
                            ``(iii) the number, by programs, of 
                        undercover investigative operations closed in 
                        the 1-year period for which such report is 
                        submitted, and
                            ``(iv) the following information with 
                        respect to each undercover investigative 
                        operation pending as of the end of the 1-year 
                        period for which such report is submitted or 
                        closed during such 1-year period--
                                    ``(I) the date the operation began 
                                and the date of the certification 
                                referred to in the last sentence of 
                                paragraph (1),
                                    ``(II) the total expenditures under 
                                the operation and the amount and use of 
                                the proceeds from the operation,
                                    ``(III) a detailed description of 
                                the operation including the potential 
                                violation being investigated and 
                                whether the operation is being 
                                conducted under grand jury auspices, 
                                and
                                    ``(IV) the results of the operation 
                                including the results of criminal 
                                proceedings.''
            (2) Audits required without regard to amounts involved.--
        Subparagraph (C) of section 7608(c)(5) is amended to read as 
        follows:
                    ``(C) Undercover investigative operation.--The term 
                `undercover investigative operation' means any 
                undercover investigative operation of the Service; 
                except that, for purposes of subparagraphs (A) and (C) 
                of paragraph (4), such term only includes an operation 
                which is exempt from section 3302 or 9102 of title 31, 
                United States Code.''
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.

SEC. 13362. DISCLOSURE OF FORM 8300 INFORMATION ON CASH TRANSACTIONS.

    (a) In General.--Subsection (l) of section 6103 (relating to 
disclosure of returns and return information for purposes other than 
tax administration) is amended by adding at the end the following new 
paragraph:
            ``(15) Disclosure of returns filed under section 6050i.--
        The Secretary may, upon written request, disclose to officers 
        and employees of--
                    ``(A) any Federal agency,
                    ``(B) any agency of a State or local government, or
                    ``(C) any agency of the government of a foreign 
                country,
        information contained on returns filed under section 6050I. Any 
        such disclosure shall be made on the same basis, and subject to 
        the same conditions, as apply to disclosures of information on 
        reports filed under section 5313 of title 31, United States 
        Code; except that no disclosure under this paragraph shall be 
        made for purposes of the administration of any tax law.''
    (b) Conforming Amendments.--
            (1) Subsection (i) of section 6103 is amended by striking 
        paragraph (8).
            (2) Subparagraph (A) of section 6103(p)(3) is amended--
                    (A) by striking ``(7)(A)(ii), or (8)'' and 
                inserting ``or (7)(A)(ii)'', and
                    (B) by striking ``or (14)'' and inserting ``(14), 
                or (15)''.
            (3) The material preceding subparagraph (A) of section 
        6103(p)(4) is amended--
                    (A) by striking ``(5), or (8)'' and inserting ``or 
                (5)'',
                    (B) by striking ``(i)(3)(B)(i), or (8)'' and 
                inserting ``(i)(3)(B)(i),'', and
                    (C) by striking ``or (12)'' and inserting ``(12), 
                or (15)''.
            (4) Clause (ii) of section 6103(p)(4)(F) is amended--
                    (A) by striking ``(5), or (8)'' and inserting ``or 
                (5)'', and
                    (B) by striking ``or (14)'' and inserting ``(14), 
                or (15)''.
            (5) Paragraph (2) of section 7213(a) is amended by striking 
        ``or (12)'' and inserting ``(12), or (15)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 13363. DISCLOSURE OF RETURNS AND RETURN INFORMATION TO DESIGNEE OF 
              TAXPAYER.

    Subsection (c) of section 6103 (relating to disclosure of returns 
and return information to designee of taxpayer) is amended by striking 
``written request for or consent to such disclosure'' and inserting 
``request for or consent to such disclosure''.

SEC. 13364. STUDY OF NETTING OF INTEREST ON OVERPAYMENTS AND 
              LIABILITIES.

    (a) In General.--The Secretary of the Treasury or his delegate 
shall--
            (1) conduct a study of the manner in which the Internal 
        Revenue Service has implemented the netting of interest on 
        overpayments and underpayments and of the policy and 
        administrative implications of global netting, and
            (2) before submitting the report of such study, hold a 
        public hearing to receive comments on the matters included in 
        such study.
    (b) Report.--The report of such study shall be submitted not later 
than 6 months after the date of the enactment of this Act to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate.

SEC. 13365. CREDIT FOR EXPENSES OF CERTAIN TCMP AUDITS.

    (a) In General.--Subchapter B of chapter 65 is amended by adding at 
the end the following new section:

``SEC. 6428. CREDIT FOR EXPENSES OF 1994 TCMP AUDITS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by subtitle A an 
amount equal to the qualified TCMP expenses paid or incurred by the 
taxpayer during the taxable year.
    ``(b) Limitation.--The amount of the credit allowed by subsection 
(a) shall not exceed $3,000 with respect to an audit.
    ``(c) Qualified TCMP Expenses.--For purposes of this section, the 
term `qualified TCMP expenses' means amounts which would (but for 
subsection (d)) be allowed as a deduction under section 162 or 212(3) 
in connection with an audit under the Taxpayer Compliance Measurement 
Program of the taxpayer's return of tax imposed by chapter 1 for any 
taxable year beginning during 1994. Such term shall not include any 
expense in connection with an audit of an estate, trust, partnership, 
or S corporation.
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under chapter 1 for any amount for which a credit is allowed under this 
section.
    ``(e) Credit Treated as Subpart C Credit.--For purposes of this 
title, the credit allowed under subsection (a) shall be treated as a 
credit allowed under subpart C of part IV of subchapter A of chapter 
1.''
    (b) Technical Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 6428 of such Code''.
            (2) The table of sections for such subchapter B is amended 
        by adding at the end the following new item:

                              ``Sec. 6428. Credit for expenses of 1994 
                                        TCMP audits.''
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 1994, in taxable 
years ending after such date.

SEC. 13366. EXPENSES OF DETECTION OF UNDERPAYMENTS AND FRAUD, ETC.

    (a) In General.--Section 7623 (relating to expenses of deduction 
and punishment of frauds) is amended to read as follows:

``SEC. 7623. EXPENSES OF DETECTION OF UNDERPAYMENTS AND FRAUD, ETC.

    ``The Secretary, under regulations prescribed by the Secretary, is 
authorized to pay such sums as he deem necessary for--
            ``(1) detecting underpayments of tax, and
            ``(2) detecting and bringing to trial and punishment 
        persons guilty of violating the internal revenue laws or 
        conniving at the same,
in cases where such expenses are not otherwise provided for by law. Any 
amount payable under the preceding sentence shall be paid from the 
proceeds of amounts (other than interest) collected by reason of the 
information provided, and any amount so collected shall be available 
for such payments.''.
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 78 is amended by striking the item relating to section 7623 and 
inserting the following new item:

                              ``Sec. 7623. Expenses of detection of 
                                        underpayments and fraud, 
                                        etc.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date which is 6 months after the enactment of this Act.
    (d) Report.--The Secretary of the Treasury or his delegate shall 
submit an annual report to the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate on the 
payments under section 7623 of the Internal Revenue Code of 1986 during 
the year and on the amounts collected for which such payments were 
made.

              Subtitle D--Additional Technical Corrections

SEC. 13401. REPORTING OF REAL ESTATE TRANSACTIONS.

    (a) In General.--Paragraph (3) of section 6045(e) (relating to 
prohibition of separate charge for filing return) is amended by adding 
at the end the following new sentence: ``Nothing in this paragraph 
shall be construed to prohibit the real estate reporting person from 
taking into account its cost of complying with such requirement in 
establishing its charge (other than a separate charge for complying 
with such requirement) to any customer for performing services in the 
case of a real estate transaction.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in section 1015(e)(2)(A) of the Technical 
and Miscellaneous Revenue Act of 1988.

SEC. 13402. CLARIFICATION OF DENIAL OF DEDUCTION FOR STOCK REDEMPTION 
              EXPENSES.

    (a) In General.--Paragraph (1) of section 162(k) is amended by 
striking ``the redemption of its stock'' and inserting ``the 
reacquisition of its stock or of the stock of any related person (as 
defined in section 465(b)(3)(C))''.
    (b) Certain Deductions Permitted.--Subparagraph (A) of section 
162(k)(2) is amended by striking ``or'' at the end of clause (i), by 
redesignating clause (ii) as clause (iii), and by inserting after 
clause (i) the following new clause:
                            ``(ii) deduction for amounts which are 
                        properly allocable to indebtedness and 
                        amortized over the term of such indebtedness, 
                        or''.
    (c) Clerical Amendment.--The subsection heading for subsection (k) 
of section 162 is amended by striking ``Redemption'' and inserting 
``Reacquisition''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to amounts paid or 
        incurred after September 13, 1995, in taxable years ending 
        after such date.
            (2) Subsection (b).--The amendment made by subsection (b) 
        shall take effect as if included in the amendment made by 
        section 613 of the Tax Reform Act of 1986.

SEC. 13403. CLARIFICATION OF DEPRECIATION CLASS FOR CERTAIN ENERGY 
              PROPERTY.

    (a) In General.--Subparagraph (B) of section 168(e)(3) (relating to 
5-year property) is amended by adding at the end the following flush 
sentence:
                ``Nothing in any provision of law shall be construed to 
                treat property as not being described in clause (vi)(I) 
                (or the corresponding provisions of prior law) by 
                reason of being public utility property (within the 
                meaning of section 48(a)(3)).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the amendments made by section 11813 of 
the Revenue Reconciliation Act of 1990.

SEC. 13404. CLERICAL AMENDMENT TO SECTION 404.

    (a) In General.--Paragraph (1) of section 404(j) is amended by 
striking ``(10)'' and inserting ``(9)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the amendments made by section 
713(d)(4)(A) of the Deficit Reduction Act of 1984.

SEC. 13405. TREATMENT OF CERTAIN VETERANS' REEMPLOYMENT RIGHTS.

    (a) In General.--Section 414 is amended by adding at the end the 
following new subsection:
    ``(u) Special Rules Relating to Veterans' Reemployment Rights.--
            ``(1) Treatment of certain contributions made pursuant to 
        veterans' reemployment rights.--If any contribution is made by 
        an employer or an employee under an individual account plan 
        with respect to an employee, or by an employee to a defined 
        benefit pension plan that provides for employee contributions, 
        and such contribution is required by reason of such employee's 
        rights under chapter 43 of title 38, United States Code, 
        resulting from qualified military service, then--
                    ``(A) such contribution shall not be subject to any 
                otherwise applicable limitation contained in section 
                402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, or 
                457, and shall not be taken into account in applying 
                such limitations to other contributions or benefits 
                under such plan or any other plan, with respect to the 
                year in which the contribution is made,
                    ``(B) such contribution shall be subject to the 
                limitations referred to in subparagraph (A) with 
                respect to the year to which the contribution relates 
                (in accordance with rules prescribed by the Secretary), 
                and
                    ``(C) such plan shall not be treated as failing to 
                meet the requirements of section 401(a)(4), 401(a)(26), 
                401(k)(3), 401(m), 403(b)(12), 408(k)(3), 408(k)(6), 
                410(b), or 416 by reason of the making of such 
                contribution.
        For purposes of the preceding sentence, any elective deferral 
        or employee contribution made under paragraph (2) shall be 
        treated as required by reason of the employee's rights under 
        such chapter.
            ``(2) Reemployment rights with respect to elective 
        deferrals.--
                    ``(A) In general.--For purposes of this subchapter 
                and subchapter E, if an employee is entitled to the 
                benefits of chapter 43 of title 38, United States Code, 
                with respect to any plan which provides for elective 
                deferrals, the employer sponsoring the plan shall be 
                treated as meeting the requirements of such chapter 43 
                with respect to such elective deferrals only if such 
                employer--
                            ``(i) permits such employee to make 
                        additional elective deferrals under such plan 
                        (in the amount determined under subparagraph 
                        (B) or such lesser amount as is elected by the 
                        employee) during the period which begins on the 
                        date of the reemployment of such employee with 
                        such employer and has the same length as the 
                        lesser of--
                                    ``(I) the product of 3 and the 
                                period of qualified military service 
                                which resulted in such rights, and
                                    ``(II) 5 years, and
                            ``(ii) makes a matching contribution with 
                        respect to any additional elective deferral 
                        made pursuant to clause (i) which would have 
                        been required had such deferral actually been 
                        made during the period of such qualified 
                        military service.
                    ``(B) Amount of makeup required.--The amount 
                determined under this subparagraph with respect to any 
                plan is the maximum amount of the elective deferrals 
                that the individual would have been permitted to make 
                under the plan in accordance with the limitations 
                referred to in paragraph (1)(A) during his period of 
                qualified military service if he had continued to be 
                employed by the employer during such period and 
                received compensation as determined under paragraph 
                (7). Proper adjustment shall be made to the amount 
                determined under the preceding sentence for any 
                elective deferrals actually made during the period of 
                such qualified military service.
                    ``(C) Elective deferral.--For purposes of this 
                paragraph, the term `elective deferral' has the meaning 
                given such term by section 402(g)(3); except that such 
                term shall include any deferral of compensation under 
                an eligible deferred compensation plan (as defined in 
                section 457(b)).
                    ``(D) After-tax employee contributions.--References 
                in subparagraphs (A) and (B) to elective deferrals 
                shall be treated as including references to other 
                employee contributions.
            ``(3) Certain retroactive adjustments not required.--For 
        purposes of this subchapter and subchapter E, no provision of 
        chapter 43 of title 38, United States Code, shall be construed 
        as requiring--
                    ``(A) any crediting of earnings to an employee with 
                respect to any contribution before such contribution is 
                actually made, or
                    ``(B) any allocation of any forfeiture with respect 
                to the period of qualified military service.
            ``(4) Loan repayment suspensions permitted.--If any plan 
        suspends the obligation to repay any loan made to an employee 
        from such plan for any part of any period during which such 
        employee is performing qualified military service, such 
        suspension shall not be taken into account for purposes of 
        section 72(p), 401(a), or 4975(d)(1).
            ``(5) Qualified military service.--For purposes of this 
        subsection, the term `qualified military service' means any 
        service in the uniformed services (as defined in chapter 43 of 
        title 38, United States Code) by any individual if such 
        individual is entitled to reemployment rights under such 
        chapter with respect to such service.
            ``(6) Individual account plan.--For purposes of this 
        subsection, the term `individual account plan' means any 
        defined contribution plan, any tax-sheltered annuity plan under 
        section 403(b), and any eligible deferred compensation plan (as 
        defined in section 457(b)).
            ``(7) Compensation.--For purposes of section 415(c)(3), an 
        employee who is in qualified military service shall be treated 
        as receiving compensation from the employer during such period 
        of qualified military service equal to--
                    ``(A) the compensation the employee would have 
                received during such period if the employee were not in 
                qualified military service, determined based on the 
                rate of pay the employee would have received from the 
                employer but for absence during the period of qualified 
                military service, or
                    ``(B) if the compensation of the employee was not 
                based on a fixed rate, the employee's average 
                compensation from the employer during the 12-month 
                period immediately preceding the qualified military 
                service (or, if shorter, the period of employment 
                immediately preceding the qualified military service).
            ``(8) Requirements for qualified retirement plan.--For 
        purposes of this subchapter and subchapter E, an employer 
        sponsoring a plan shall be treated as meeting the requirements 
        of chapter 43 of title 38, United States Code, only if each of 
        the following requirements is met:
                    ``(A) An individual reemployed under such chapter 
                is treated with respect to such plan as not having 
incurred a break in service with the employer maintaining the plan by 
reason of such individual's period of qualified military service.
                    ``(B) Each period of qualified military service 
                served by an individual is, upon reemployment under 
                such chapter, deemed with respect to such plan to 
                constitute service with the employer maintaining the 
                plan for the purpose of determining the 
                nonforfeitability of the individual's accrued benefits 
                under such plan and for the purpose of determining the 
                accrual of benefits under such plan.
                    ``(C) An individual reemployed under such chapter 
                is entitled to accrued benefits that are contingent on 
                the making of, or derived from, employee contributions 
                or elective deferrals only to the extent the individual 
                makes payment to the plan with respect to such 
                contributions or deferrals. No such payment may exceed 
                the amount the individual would have been permitted or 
                required to contribute had the individual remained 
                continuously employed by the employer throughout the 
                period of qualified military service. Any payment to 
                such plan shall be made during the period beginning 
                with the date of reemployment and whose duration is 3 
                times the period of the qualified military service (but 
                not greater than 5 years).
            ``(9) References.--For purposes of this section, any 
        reference to chapter 43 of title 38, United States Code, shall 
        be treated as a reference to such chapter as in effect on 
        December 12, 1994 (without regard to any subsequent 
        amendment).''
    (b) Effective Date.--The amendments made by this section shall be 
effective as of December 12, 1994.

                  Subtitle E--Tax Information Sharing

SEC. 13501. DISCLOSURE OF RETURN INFORMATION FOR ADMINISTRATION OF 
              CERTAIN VETERANS PROGRAMS.

    (a) General Rule.--Subparagraph (D) of section 6103(l)(7) (relating 
to disclosure of return information to Federal, State, and local 
agencies administering certain programs) is amended by striking 
``Clause (viii) shall not apply after September 30, 1998.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

                     Subtitle F--Revenue Increases

               PART I--PROVISIONS RELATING TO BUSINESSES

SEC. 13601. TAX TREATMENT OF CERTAIN EXTRAORDINARY DIVIDENDS.

    (a) Treatment of Extraordinary Dividends in Excess of Basis.--
Paragraph (2) of section 1059(a) (relating to corporate shareholder's 
basis in stock reduced by nontaxed portion of extraordinary dividends) 
is amended to read as follows:
            ``(2) Amounts in excess of basis.--If the nontaxed portion 
        of such dividends exceeds such basis, such excess shall be 
        treated as gain from the sale or exchange of such stock for the 
        taxable year in which the extraordinary dividend is received.''
    (b) Treatment of Redemptions Where Options Involved.--Paragraph (1) 
of section 1059(e) (relating to treatment of partial liquidations and 
non-pro rata redemptions) is amended to read as follows:
            ``(1) Treatment of partial liquidations and certain 
        redemptions.--Except as otherwise provided in regulations--
                    ``(A) Redemptions.--In the case of any redemption 
                of stock--
                            ``(i) which is part of a partial 
                        liquidation (within the meaning of section 
                        302(e)) of the redeeming corporation,
                            ``(ii) which is not pro rata as to all 
                        shareholders, or
                            ``(iii) which would not have been treated 
                        (in whole or in part) as a dividend if any 
                        options had not been taken into account under 
                        section 318(a)(4),
                any amount treated as a dividend with respect to such 
                redemption shall be treated as an extraordinary 
                dividend to which paragraphs (1) and (2) of subsection 
                (a) apply without regard to the period the taxpayer 
                held such stock. In the case of a redemption described 
                in clause (iii), only the basis in the stock redeemed 
                shall be taken into account under subsection (a).
                    ``(B) Reorganizations, etc.--An exchange described 
                in section 356(a)(1) which is treated as a dividend 
                under section 356(a)(2) shall be treated as a 
                redemption of stock for purposes of applying 
                subparagraph (A).''
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to distributions after May 3, 1995.
            (2) Transition rule.--The amendments made by this section 
        shall not apply to any distribution made pursuant to the terms 
        of--
                    (A) a written binding contract in effect on May 3, 
                1995, and at all times thereafter before such 
                distribution, or
                    (B) a tender offer outstanding on May 3, 1995.
            (3) Certain dividends not pursuant to certain 
        redemptions.--In determining whether the amendment made by 
        subsection (a) applies to any extraordinary dividend other than 
        a dividend treated as an extraordinary dividend under section 
        1059(e)(1) of the Internal Revenue Code of 1986 (as amended by 
        this Act), paragraphs (1) and (2) shall be applied by 
        substituting ``September 13, 1995'' for ``May 3, 1995''.

SEC. 13602. REGISTRATION OF CONFIDENTIAL CORPORATE TAX SHELTERS.

    (a) In General.--Section 6111 (relating to registration of tax 
shelters) is amended by redesignating subsections (d) and (e) as 
subsections (e) and (f), respectively, and by inserting after 
subsection (c) the following new subsection:
    ``(d) Certain Confidential Arrangements Treated as Tax Shelters.--
            ``(1) In general.--For purposes of this section, the term 
        `tax shelter' includes any entity, plan, arrangement, or 
        transaction--
                    ``(A) a significant purpose of which is the 
                avoidance or evasion of Federal income tax for a 
                participant which is a corporation,
                    ``(B) which is offered to any potential participant 
                under conditions of confidentiality, and
                    ``(C) for which the tax shelter organizers may 
                receive fees in excess of $100,000 in the aggregate.
            ``(2) Conditions of confidentiality.--For purposes of 
        paragraph (1)(C), an offer is under conditions of 
        confidentiality if--
                    ``(A) the potential participant to whom the offer 
                is made (or any other person acting on behalf of such 
                participant) has an understanding or agreement with or 
                for the benefit of any promoter of the tax shelter that 
                such participant (or other person) will limit 
                disclosure of the tax shelter or any significant tax 
                features of the tax shelter, or
                    ``(B) any promoter of the tax shelter--
                            ``(i) claims, knows, or has reason to know,
                            ``(ii) knows or has reason to know that any 
                        other person (other than the potential 
                        participant) claims, or
                            ``(iii) causes another person to claim,
                that the tax shelter (or any aspect thereof) is 
                proprietary to any person other than the potential 
                participant or is otherwise protected from disclosure 
                to or use by others.
        For purposes of this subsection, the term `promoter' means any 
        person who participates in the organization, management, or 
        sale of the tax shelter.
            ``(3) Persons other than organizer required to register in 
        certain cases.--
                    ``(A) In general.--If--
                            ``(i) the requirements of subsection (a) 
                        are not met with respect to any tax shelter (as 
                        defined in paragraph (1)) by any tax shelter 
                        organizer, and
                            ``(ii) no tax shelter organizer is a United 
                        States person,
                then each United States person who discussed 
                participation in such shelter shall register such 
                shelter under subsection (a).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to a United States person who discussed participation 
                in a tax shelter if--
                            ``(i) such person notified the promoter in 
                        writing (not later than the close of the day on 
                        which such discussions began) that such person 
                        would not participate in such shelter, and
                            ``(ii) such person does not participate in 
                        such shelter.
            ``(4) Offer to participate treated as offer for sale.--For 
        purposes of subsections (a) and (b), an offer to participate in 
        a tax shelter (as defined in paragraph (1)) shall be treated as 
        an offer for sale.''
    (b) Penalty.--Subsection (a) of section 6707 (relating to failure 
to furnish information regarding tax shelters) is amended by adding at 
the end the following new paragraph:
            ``(3) Confidential arrangements.--
                    ``(A) In general.--In the case of a tax shelter (as 
                defined in section 6111(d)), the penalty imposed under 
                paragraph (1) shall be an amount equal to the greater 
                of--
                            ``(i) 50 percent of the fees paid to any 
                        promoter of the tax shelter with respect to 
                        offerings made before the date such shelter is 
                        registered under section 6111, or
                            ``(ii) $10,000.
                Clause (i) shall be applied by substituting `75 
                percent' for `50 percent' in the case of an intentional 
                failure or act described in paragraph (1).
                    ``(B) Special rule for participants required to 
                register shelter.--In the case of a person required to 
                register such a tax shelter by reason of section 
                6111(d)(3)--
                            ``(i) such person shall be required to pay 
                        the penalty under paragraph (1) only if such 
                        person actually participated in such shelter,
                            ``(ii) the amount of such penalty shall be 
                        determined by taking into account under 
                        subparagraph (A)(i) only the fees paid by such 
                        person, and
                            ``(iii) such penalty shall be in addition 
                        to the penalty imposed on any other person for 
                        failing to register such shelter.''
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 6707(a) is amended by striking 
        ``The penalty'' and inserting ``Except as provided in paragraph 
        (3), the penalty''.
            (2) Subparagraph (A) of section 6707(a)(1) is amended by 
        striking ``paragraph (2)'' and inserting ``paragraph (2) or 
        (3), as the case may be''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to any tax shelter (as defined in section 6111(d) of the 
        Internal Revenue Code of 1986, as amended by this section) 
        interests in which are offered to potential participants after 
        the date of the enactment of this Act.
            (2) Due date for registration.--The due date for 
        registering any tax shelter required to be registered by reason 
        of the amendments made by this section shall be not earlier 
        than the close of a reasonable period after the Secretary of 
        the Treasury prescribes guidance with respect to meeting such 
        requirements.

SEC. 13603. DENIAL OF DEDUCTION FOR INTEREST ON LOANS WITH RESPECT TO 
              COMPANY-OWNED INSURANCE.

    (a) In General.--Paragraph (4) of section 264(a) is amended--
            (1) by inserting ``or endowment or annuity contract'' after 
        ``life insurance policies'', and
            (2) by striking all that follows ``carried on by the 
        taxpayer'' and inserting a period.
    (b) Phasein of Disallowance.--Section 264 is amended by adding at 
the end the following new subsection:
    ``(d) Phasein of Disallowance Under Subsection (a)(4).--In the case 
of calendar years after 1995 and before 2000--
            ``(1) In general.--The amount of interest paid or accrued 
        during any period in any such calendar year with respect to 
        qualified indebtedness which is disallowed by reason of the 
        amendment made by section 13603(a) of the Revenue 
        Reconciliation Act of 1995 (determined without regard to this 
        subsection) shall not exceed the applicable percentage of such 
        interest which is so disallowed.
            ``(2) Qualified indebtedness.--For purposes of paragraph 
        (1), the term `qualified indebtedness' means indebtedness 
        incurred before September 18, 1995, with respect to a life 
        insurance policy covering only the life of the individual who 
        was insured under such policy on such date. Any increase on or 
        after such date in the amount of such indebtedness shall be 
        treated as indebtedness incurred after such date.
            ``(3) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage shall be determined in 
        accordance with the following table:

        ``In the case of periods
                                                         The applicable
        in calendar year:
                                                         percentage is:
                1996.................................   20 percent     
                1997.................................   40 percent     
                1998.................................   60 percent     
                1999................................. 80 percent.''    
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to interest paid or accrued after December 31, 1995.
            (2) Exception.--The amendments made by this section shall 
        not apply to contracts purchased on or before June 20, 1986.
    (d) 4-Year Spread of Income Inclusion on Surrender, Etc. of 
Contracts.--
            (1) In general.--In the case of indebtedness with respect 
        to any life insurance policy described in paragraph (4) of 
        section 264(a) of the Internal Revenue Code of 1986, if--
                    (A) the interest paid or accrued after December 31, 
                1995, on such indebtedness is not allowed as a 
                deduction under chapter 1 of such Code by reason of 
                such paragraph (4) (as amended by this section), and
                    (B) the entire amount of interest paid or accrued 
                on or before such date on such indebtedness was allowed 
                as a deduction under such chapter 1,
        then (in lieu of any other inclusion in gross income) the 
        qualified amount with respect to such policy shall be 
        includible in gross income ratably over the 4 taxable years 
        beginning with the taxable year such amount would (but for this 
        paragraph) be includible.
            (2) Qualified amount.--For purposes of paragraph (1), the 
        term ``qualified amount'' means, with respect to any policy, 
        the amount received under such policy--
                    (A) on the complete surrender, redemption, or 
                maturity of such policy during 1996, or
                    (B) in full discharge during 1996 of the obligation 
                under the policy which is in the nature of a refund of 
                the consideration paid for the policy,
        but only to the extent such amount is includible in gross 
        income for the taxable year in which the event described in 
        subparagraph (A) or (B) occurs.
            (3) Special rule.--A contract shall not be treated as 
        failing to meet the requirement of section 264(c)(1) of the 
        Internal Revenue Code of 1986 solely by reason of an occurrence 
        described in subparagraph (A) or (B) of paragraph (2) of this 
        subsection.

SEC. 13604. TERMINATION OF SUSPENSE ACCOUNTS FOR FAMILY CORPORATIONS 
              REQUIRED TO USE ACCRUAL METHOD OF ACCOUNTING.

    (a) In General.--Subsection (i) of section 447 (relating to method 
of accounting for corporations engaged in farming) is amended by adding 
at the end the following new paragraph:
            ``(7) Termination.--
                    ``(A) In general.--No suspense account may be 
                established under this subsection by any corporation 
                required by this section to change its method of 
                accounting for any taxable year ending after September 
                13, 1995.
                    ``(B) 20-year phaseout of existing suspense 
                accounts.--Each suspense account under this subsection 
                shall be reduced (but not below zero) for each of the 
                first 20 taxable years beginning after September 13, 
                1995, by an amount equal to the applicable portion of 
                such account. Any reduction in a suspense account under 
                this paragraph shall be included in gross income for 
                the taxable year of the reduction. The amount of the 
                reduction required under this paragraph for any taxable 
                year shall be reduced (but not below zero) by the 
                amount of any reduction required for such taxable year 
                under any other provision of this subsection.
                    ``(C) Applicable portion.--For purposes of 
                subparagraph (B), the term `applicable portion' means, 
                for any taxable year, the amount which would ratably 
                reduce the amount in the account (after taking into 
                account prior reductions) to zero over the period 
                consisting of such taxable year and the remaining 
                taxable years in such first 20 taxable years.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after September 13, 1995.

SEC. 13605. TERMINATION OF PUERTO RICO AND POSSESSION TAX CREDIT.

    (a) In General.--Section 936 is amended by adding at the end the 
following new subsection:
    ``(j) Termination.--
            ``(1) In general.--This section shall not apply to any 
        taxable year beginning after December 31, 1995.
            ``(2) Exception for existing claimants.--
                    ``(A) In general.--Paragraph (1) shall be applied 
                by substituting `2005' for `1995' in the case of an 
                existing credit claimant.
                    ``(B) Exception terminates if new line of business 
                added.--If, after September 13, 1995, a corporation 
                which would (but for this subparagraph) be an existing 
                credit claimant adds a substantial new line of 
                business, such corporation shall cease to be treated as 
                an existing credit claimant as of the close of the 
                taxable year ending before the date of such addition.
                    ``(C) Existing credit claimant.--For purposes of 
                this subsection, the term `existing credit claimant' 
                means any corporation which satisfied the conditions of 
                both subparagraph (A) and subparagraph (B) of 
                subsection (a)(2) for at least 1 base period year for 
                which such corporation elected the application of this 
                section.
            ``(3) Limit on credit of existing claimants.--
                    ``(A) In general.--In the case of an existing 
                credit claimant, the aggregate amount of income taken 
                into account under subsection (a)(1) for any taxable 
                year beginning after December 31, 1995 (hereinafter in 
                this subsection referred to as the `current year'), 
                shall not exceed the adjusted base period income of 
                such claimant.
                    ``(B) Coordination with subsection (a)(4).--The 
                amount of income described in subsection (a)(1)(A) 
                which is taken into account in applying subsection 
                (a)(4) shall be such income as reduced under this 
                paragraph. In determining such reduction, any reduction 
                under subparagraph (A) in the amount which would 
                otherwise be taken into account under subsection (a)(1) 
                shall be allocated between the income described in 
                subparagraph (A) thereof and the income described in 
                subparagraph (B) thereof in proportion to the 
                respective amounts of such incomes.
            ``(4) Adjusted base period income.--For purposes of 
        paragraph (3)--
                    ``(A) In general.--The term `adjusted base period 
                income' means the average of the inflation-adjusted 
                possession incomes of the corporation for each base 
                period year.
                    ``(B) Inflation-adjusted possession income.--For 
                purposes of subparagraph (A), the inflation-adjusted 
                possession income of any corporation for any base 
                period year shall be an amount equal to the possession 
                income of such corporation for such base period year 
                multiplied by the inflation adjustment percentage for 
                such base period year.
                    ``(C) Inflation adjustment percentage.--For 
                purposes of subparagraph (B), the inflation adjustment 
                percentage for any base period year means, with respect 
                to the current year, the percentage (if any) by which--
                            ``(i) the CPI for last calendar year ending 
                        before the beginning of the current year, 
                        exceeds
                            ``(ii) the CPI for last calendar year 
                        ending before the beginning of the base period 
                        year.
                For purposes of the preceding sentence, the CPI for any 
                calendar year is the CPI (as defined in section 
                1(f)(5)) for such year under section 1(f)(4).
                    ``(D) Increase in inflation adjustment percentage 
                for growth during base years.--The inflation adjustment 
                percentage (determined under subparagraph (C) without 
                regard to this subparagraph) for each of the 5 taxable 
                years referred to in paragraph (5)(A) shall be 
                increased by--
                            ``(i) 5 percentage points in the case of a 
                        taxable year ending during the 1-year period 
                        ending on September 12, 1995;
                            ``(ii) 10.25 percentage points in the case 
                        of a taxable year ending during the 1-year 
                        period ending on September 12, 1994;
                            ``(iii) 15.76 percentage points in the case 
                        of a taxable year ending during the 1-year 
                        period ending on September 12, 1993;
                            ``(iv) 21.55 percentage points in the case 
                        of a taxable year ending during the 1-year 
                        period ending on September 12, 1992; and
                            ``(v) 27.63 percentage points in the case 
                        of a taxable year ending during the 1-year 
                        period ending on September 12, 1991.
            ``(5) Base period year.--For purposes of this subsection--
                    ``(A) In general.--The term `base period year' 
                means each of 3 taxable years which are among the 5 
                most recent taxable years of the corporation ending 
                before September 13, 1995, determined by disregarding--
                            ``(i) one taxable year for which the 
                        corporation had the largest inflation-adjusted 
                        possession income, and
                            ``(ii) one taxable year for which the 
                        corporation had the smallest inflation-adjusted 
                        possession income.
                    ``(B) Corporations not having significant 
                possession income throughout 5-year period.--
                            ``(i) In general.--If a corporation does 
                        not have significant possession income for each 
                        of the most recent 5 taxable years ending 
                        before September 13, 1995, then, in lieu of 
                        applying subparagraph (A), the term `base 
                        period year' means only those taxable years (of 
                        such 5 taxable years) for which the corporation 
                        has significant possession income; except that, 
                        if such corporation has significant possession 
                        income for 4 of such 5 taxable years, the rule 
                        of subparagraph (A)(ii) shall apply.
                            ``(ii) Special rule.--If there is no year 
                        (of such 5 taxable years) for which a 
                        corporation has significant possession income--
                                    ``(I) the term `base period year' 
                                means the first taxable year ending on 
                                or after September 13, 1995, but
                                    ``(II) the amount of possession 
                                income for such year which is taken 
                                into account under paragraph (4) shall 
                                be the amount which would be determined 
                                if such year were a short taxable year 
                                ending on August 31, 1995.
                            ``(iii) Significant possession income.--For 
                        purposes of this subparagraph, the term 
                        `significant possession income' means 
                        possession income which exceeds 2 percent of 
                        the possession income of the taxpayer for the 
                        taxable year (of the period of 6 taxable years 
                        ending with the first taxable year ending on or 
                        after September 13, 1995) having the greatest 
                        possession income.
                    ``(C) Election to use one base period year.--
                            ``(i) In general.--At the election of the 
                        taxpayer, the term `base period year' means 
                        only the last taxable year of the corporation 
                        ending in calendar year 1992.
                            ``(ii) Election.--An election under this 
                        subparagraph by any possession corporation may 
                        be made only for the corporation's first 
                        taxable year beginning after December 31, 1995, 
                        for which it is a possession corporation. The 
                        rules of subclauses (II) and (III) of 
                        subsection (a)(4)(B)(iii) shall apply to the 
                        election under this subparagraph.
                    ``(D) Acquisitions and dispositions.--Rules similar 
                to the rules of subparagraphs (A) and (B) of section 
41(f)(3) shall apply for purposes of this subsection.
            ``(6) Possession income.--For purposes of this subsection, 
        the term `possession income' means the sum of the income 
        referred to in subsection (a)(1)(A) and the income referred to 
        in subsection (a)(1)(B). In no event shall possession income be 
        treated as being less than zero.
            ``(7) Short years.--If the current year or a base period 
        year is a short taxable year, the application of this 
        subsection shall be made with such annualizations as the 
        Secretary shall prescribe.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1995.

SEC. 13606. DEPRECIATION UNDER INCOME FORECAST METHOD.

    (a) General Rule.--Section 167 (relating to depreciation) is 
amended by redesignating subsection (g) as subsection (h) and by 
inserting after subsection (f) the following new subsection:
    ``(g) Depreciation Under Income Forecast Method.--
            ``(1) In general.--If the depreciation deduction allowable 
        under this section to any taxpayer with respect to any property 
        is determined under the income forecast method or any similar 
        method--
                    ``(A) in determining the amount of the depreciation 
                deduction under such method, the estimated income from 
                the property shall include all estimated income from 
                use of the property,
                    ``(B) the adjusted basis of the property shall only 
                include amounts with respect to which the requirements 
                of section 461(h) are satisfied,
                    ``(C) the depreciation deduction under such method 
                for the 10th taxable year beginning after the taxable 
                year in which the property was placed in service shall 
                be equal to the adjusted basis of such property as of 
                the beginning of such 10th taxable year, and
                    ``(D) such taxpayer shall pay (or be entitled to 
                receive) interest computed under the look-back method 
                of paragraph (2) for any recomputation year.
            ``(2) Look-back method.--The interest computed under the 
        look-back method of this paragraph for any recomputation year 
        shall be determined by--
                    ``(A) first determining the depreciation deductions 
                under this section with respect to such property which 
                would have been allowable for prior taxable years if 
                the determination of the amounts so allowable had been 
                made on the basis of the sum of the following (instead 
                of the estimated income with respect to such 
                property)--
                            ``(i) the actual income from such property 
                        for periods before the close of the 
                        recomputation year, and
                            ``(ii) an estimate of the future income 
                        with respect to such property for periods after 
                        the recomputation year,
                    ``(B) second, determining (solely for purposes of 
                computing such interest) the overpayment or 
                underpayment of tax for each such prior taxable year 
                which would result solely from the application of 
                subparagraph (A), and
                    ``(C) then using the adjusted overpayment rate (as 
                defined in section 460(b)(7)), compounded daily, on the 
                overpayment or underpayment determined under 
                subparagraph (B).
        For purposes of the preceding sentence, any cost incurred after 
        the property is placed in service (which is not treated as a 
        separate property under paragraph (5)) shall be taken into 
        account by discounting (using the Federal mid-term rate 
        determined under section 1274(d) as of the time such cost is 
        incurred) such cost to its value as of the date the property is 
        placed in service. The taxpayer may elect with respect to any 
        property to have the preceding sentence not apply to such 
        property.
            ``(3) Exception from look-back method.--Paragraph (1)(D) 
        shall not apply with respect to any property which, when placed 
        in service by the taxpayer, had a basis of $100,000 or less.
            ``(4) Recomputation year.--For purposes of this subsection, 
        except as provided in regulations, the term `recomputation 
        year' means, with respect to any property, the third and the 
        10th taxable years beginning after the taxable year in which 
        the property was placed in service, unless the actual income 
        from the property for such third or 10th taxable year (as the 
        case may be) and each prior taxable year is within 10 percent 
        of the estimated income from the property for each such year 
        which was taken into account under paragraph (1)(A).
            ``(5) Special rules.--
                    ``(A) Certain costs treated as separate property.--
                For purposes of this section, the following costs shall 
                be treated as separate properties:
                            ``(i) Any costs incurred with respect to 
                        any property after the 10th taxable year 
                        beginning after the taxable year in which the 
                        property was placed in service.
                            ``(ii) Any costs incurred after the 
                        property is placed in service and before the 
                        close of such 10th taxable year if such costs 
                        are significant and give rise to a significant 
                        increase in the income from the property which 
                        was not included in the estimated income from 
                        the property.
                    ``(B) Syndication income from television series.--
                In the case of property which is an episode in a 
                television series, estimated income from syndicating 
                such series shall not be required to be taken into 
                account under this subsection before the earlier of--
                            ``(i) the 4th taxable year beginning after 
                        the date the first episode in such series is 
                        placed in service, or
                            ``(ii) the earliest taxable year in which 
                        the taxpayer had a reasonable expectation that 
there would be a future syndication of such series.
                    ``(C) Collection of interest.--For purposes of 
                subtitle F (other than sections 6654 and 6655), any 
                interest required to be paid by the taxpayer under 
                paragraph (1) for any recomputation year shall be 
                treated as an increase in the tax imposed by this 
                chapter for such year.
                    ``(D) Determinations.--For purposes of this 
                subsection, determinations of the amount of income from 
                any property shall be determined in the same manner as 
                for purposes of applying the income forecast method; 
                except that any income from the disposition of such 
                property shall be taken into account.
                    ``(E) Treatment of pass-thru entities.--Rules 
                similar to the rules of section 460(b)(4) shall apply 
                for purposes of this subsection.''
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to property placed in service after September 13, 1995.
            (2) Binding contracts.--The amendment made by subsection 
        (a) shall not apply to any property produced or acquired by the 
        taxpayer pursuant to a written contract which was binding on 
        September 13, 1995, and at all times thereafter before such 
        production or acquisition.

SEC. 13607. TRANSFERS OF EXCESS PENSION ASSETS.

    (a) In General.--Section 420 (relating to transfers of excess 
pension assets to retiree health accounts) is amended by adding at the 
end the following new subsection:
    ``(f) Similar Rules To Apply to Other Transfers of Excess Plan 
Assets.--
            ``(1) In general.--If there is a qualified unrestricted 
        transfer of any excess pension assets of a defined benefit plan 
        (other than a multiemployer plan) to an employer--
                    ``(A) a trust which is part of such plan shall not 
                be treated as failing to meet the requirements of 
                section 401(a) or any other provision of law solely by 
                reason of such transfer (or any other action authorized 
                under this section), and
                    ``(B) such transfer shall not be treated as a 
                prohibited transaction for purposes of section 4975.
        The gross income of the employer shall include the amount of 
        any qualified transfer made during the taxable year.
            ``(2) Qualified unrestricted transfer.--For purposes of 
        this section--
                    ``(A) In general.--The term `qualified unrestricted 
                transfer' means a transfer--
                            ``(i) of excess pension assets of a defined 
                        benefit plan to the employer, and
                            ``(ii) with respect to which the 
                        requirements of subsection (c)(2)(A) are met 
                        (determined by treating such transfer as a 
                        qualified transfer).
                    ``(B) Coordination with transfers to retiree health 
                accounts.--Such term shall not include any qualified 
                transfer (as defined in subsection (b)).
                    ``(C) Expiration.--No transfer in any taxable year 
                beginning after December 31, 2000, shall be treated as 
                a qualified unrestricted transfer.
            ``(3) Definition and special rule.--For purposes of this 
        subsection--
                    ``(A) Excess pension assets.--The term `excess 
                pension assets' has the meaning given such term by 
                subsection (e)(2); except that the amount thereof shall 
                be the lesser of--
                            ``(i) the amount determined as of the most 
                        recent valuation date of the plan preceding the 
                        transfer, or
                            ``(ii) the amount determined as of January 
                        1, 1995 (or, if January 1, 1995, is not a 
                        valuation date, the most recent prior valuation 
                        date).
                    ``(B) Coordination with section 412.--In the case 
                of a qualified unrestricted transfer--
                            ``(i) any assets transferred in a plan year 
                        on or before the valuation date for such year 
                        (and any income allocable thereto) shall, for 
                        purposes of section 412, be treated as assets 
                        in the plan as of the valuation date for such 
                        year, and
                            ``(ii) the plan shall be treated as having 
                        a net experience loss under section 
                        412(b)(2)(B)(iv) in an amount equal to the 
                        amount of such transfer and for which 
                        amortization charges begin for the first plan 
                        year after the plan year in which such transfer 
                        occurs, except that such section shall be 
                        applied to such amount by substituting `10 plan 
                        years' for `5 plan years'.
                    ``(C) Treatment of transfers.--Except for purposes 
                of this section, a qualified unrestricted transfer 
                shall be treated as a qualified transfer to a health 
                benefits account.''
    (b) Reversion Tax.--Section 4980 (relating to tax on reversion of 
qualified plan assets to employers) is amended by adding at the end the 
following new subsection:
    ``(e) Special Rules for Qualified Unrestricted Transfers Under 
Section 420.--In the case of a qualified unrestricted transfer to which 
section 420(f) applies--
            ``(1) no tax shall be imposed by subsection (a) if such 
        transfer occurs before July 1, 1996,
            ``(2) subsection (a) shall be applied by substituting `6.5 
        percent' for `20 percent' if such transfer occurs after June 
        30, 1996, and
            ``(3) subsection (d) shall not apply.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1995.

                         PART II--LEGAL REFORMS

SEC. 13611. REPEAL OF EXCLUSION FOR PUNITIVE DAMAGES AND FOR DAMAGES 
              NOT ATTRIBUTABLE TO PHYSICAL INJURIES OR SICKNESS.

    (a) In General.--Paragraph (2) of section 104(a) (relating to 
compensation for injuries or sickness) is amended to read as follows:
            ``(2) the amount of any damages (other than punitive 
        damages) received (whether by suit or agreement and whether as 
        lump sums or as periodic payments) on account of personal 
        physical injuries or physical sickness;''.
    (b) Emotional Distress as Such Treated as Not Physical Injury or 
Physical Sickness.--Section 104(a) is amended by striking the last 
sentence and inserting the following new sentence: ``For purposes of 
paragraph (2), emotional distress shall not be treated as a physical 
injury or physical sickness. The preceding sentence shall not apply to 
an amount of damages not in excess of the amount paid for medical care 
(described in subparagraph (A) or (B) of section 213(d)(1)) 
attributable to emotional distress.''
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to amounts received 
        after December 31, 1995, in taxable years ending after such 
        date.
            (2) Exception.--The amendments made by this section shall 
        not apply to any amount received under a written binding 
        agreement, court decree, or mediation award in effect on (or 
        issued on or before) September 13, 1995.

SEC. 13612. REPORTING OF CERTAIN PAYMENTS MADE TO ATTORNEYS.

    (a) In General.--Section 6045 (relating to returns of brokers) is 
amended by adding at the end the following new subsection:
    ``(f) Return Required In The Case of Payments to Attorneys.--
            ``(1) In general.--Any person engaged in a trade or 
        business and making a payment (in the course of such trade or 
        business) to which this subsection applies shall file a return 
        under subsection (a) and a statement under subsection (b) with 
        respect to such payment.
            ``(2) Application of subsection.--
                    ``(A) In general.--This subsection shall apply to 
                any payment to an attorney in connection with legal 
                services (whether or not such services are performed 
                for the payor).
                    ``(B) Exception.--This subsection shall not apply 
                to the portion of any payment which is required to be 
                reported under section 6041(a) (or would be so required 
                but for the dollar limitation contained therein) or 
                section 6051.''
    (b) Reporting of Attorneys Fees Payable to Corporations.--The 
regulations providing an exception under section 6041 of the Internal 
Revenue Code of 1986 for payments made to corporations shall not apply 
to payments of attorneys fees.
    (c) Effective Date.--The amendment made by subsection (a), and 
subsection (b), shall apply to payments made after December 31, 1995.

 PART III--TREATMENT OF INDIVIDUALS WHO LOSE UNITED STATES CITIZENSHIP

SEC. 13616. REVISION OF INCOME, ESTATE, AND GIFT TAXES ON INDIVIDUALS 
              WHO LOSE UNITED STATES CITIZENSHIP.

    (a) In General.--Subsection (a) of section 877 is amended to read 
as follows:
    ``(a) Treatment of Expatriates.--
            ``(1) In general.--Every nonresident alien individual who, 
        within the 10-year period immediately preceding the close of 
        the taxable year, lost United States citizenship, unless such 
        loss did not have for 1 of its principal purposes the avoidance 
        of taxes under this subtitle or subtitle B, shall be taxable 
        for such taxable year in the manner provided in subsection (b) 
        if the tax imposed pursuant to such subsection exceeds the tax 
        which, without regard to this section, is imposed pursuant to 
        section 871.
            ``(2) Certain individuals treated as having tax avoidance 
        purpose.--For purposes of paragraph (1), an individual shall be 
        treated as having a principal purpose to avoid such taxes if--
                    ``(A) the average annual net income tax (as defined 
                in section 38(c)(1)) of such individual for the period 
                of 5 taxable years ending before the date of the loss 
                of United States citizenship is greater than $100,000, 
                or
                    ``(B) the net worth of the individual as of such 
                date is $500,000 or more.
        In the case of the loss of United States citizenship in any 
        calendar year after 1996, such $100,000 and $500,000 amounts 
        shall be increased by an amount equal to such dollar amount 
        multiplied by the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year by substituting `1994' 
        for `1992' in subparagraph (B) thereof. Any increase under the 
        preceding sentence shall be rounded to the nearest multiple of 
        $1,000.''
    (b) Exceptions.--
            (1) In general.--Section 877 is amended by striking 
        subsection (d), by redesignating subsection (c) as subsection 
        (d), and by inserting after subsection (b) the following new 
        subsection:
    ``(c) Tax Avoidance Not Presumed in Certain Cases.--
            ``(1) In general.--Subsection (a)(2) shall not apply to an 
        individual if--
                    ``(A) such individual is described in a 
                subparagraph of paragraph (2) of this subsection, and
                    ``(B) within the 1-year period beginning on the 
                date of the loss of United States citizenship, such 
                individual submits a ruling request for the Secretary's 
                determination as to whether such loss has for 1 of its 
                principal purposes the avoidance of taxes under this 
                subtitle or subtitle B.
            ``(2) Individuals described.--
                    ``(A) Dual citizenship, etc.--An individual is 
                described in this subparagraph if--
                            ``(i) the individual became at birth a 
                        citizen of the United States and a citizen of 
                        another country and continues to be a citizen 
                        of such other country, or
                            ``(ii) the individual becomes (not later 
                        than the close of a reasonable period after 
                        loss of United States citizenship) a citizen of 
                        the country in which--
                                    ``(I) such individual was born,
                                    ``(II) if such individual is 
                                married, such individual's spouse was 
                                born, or
                                    ``(III) either of such individual's 
                                parents were born.
                    ``(B) Long-term foreign residents.--An individual 
                is described in this subparagraph if, for each year in 
                the 10-year period ending on the date of loss of United 
                States citizenship, the individual was present in the 
                United States for 30 days or less. The rule of section 
                7701(b)(3)(D)(ii) shall apply for purposes of this 
                subparagraph.
                    ``(C) Renunciation upon reaching age of majority.--
                An individual is described in this subparagraph if the 
                individual's loss of United States citizenship occurs 
                before such individual attains age 18\1/2\.
                    ``(D) Individuals specified in regulations.--An 
                individual is described in this subparagraph if the 
                individual is described in a category of individuals 
                prescribed by regulation by the Secretary.''
            (2) Technical amendment.--Paragraph (1) of section 877(b) 
        of such Code is amended by striking ``subsection (c)'' and 
        inserting ``subsection (d)''.
    (c) Treatment of Property Disposed of in Nonrecognition 
Transactions; Treatment of Distributions From Certain Controlled 
Foreign Corporations.--Subsection (d) of section 877, as redesignated 
by subsection (b), is amended to read as follows:
    ``(d) Special Rules for Source, Etc.--For purposes of subsection 
(b)--
            ``(1) Source rules.--The following items of gross income 
        shall be treated as income from sources within the United 
        States:
                    ``(A) Sale of property.--Gains on the sale or 
                exchange of property (other than stock or debt 
                obligations) located in the United States.
                    ``(B) Stock or debt obligations.--Gains on the sale 
                or exchange of stock issued by a domestic corporation 
                or debt obligations of United States persons or of the 
                United States, a State or political subdivision 
                thereof, or the District of Columbia.
                    ``(C) Income or gain derived from controlled 
                foreign corporation.--Any income or gain derived from 
                stock in a foreign corporation but only--
                            ``(i) if the individual losing United 
                        States citizenship owned (within the meaning of 
                        section 958(a)), or is considered as owning (by 
                        applying the ownership rules of section 
                        958(b)), at any time during the 2-year period 
                        ending on the date of the loss of United States 
                        citizenship, more than 50 percent of--
                                    ``(I) the total combined voting 
                                power of all classes of stock entitled 
                                to vote of such corporation, or
                                    ``(II) the total value of the stock 
                                of such corporation, and
                            ``(ii) to the extent such income or gain 
                        does not exceed the earnings and profits 
                        attributable to such stock which were earned or 
                        accumulated before the loss of citizenship and 
                        during periods that the ownership requirements 
                        of clause (i) are met.
            ``(2) Gain recognition on certain exchanges.--
                    ``(A) In general.--In the case of any exchange of 
                property to which this paragraph applies, 
                notwithstanding any other provision of this title, such 
                property shall be treated as sold for its fair market 
                value on the date of such exchange, and any gain shall 
                be recognized for the taxable year which includes such 
                date.
                    ``(B) Exchanges to which paragraph applies.--This 
                paragraph shall apply to any exchange during the 10-
                year period described in subsection (a) if--
                            ``(i) gain would not (but for this 
                        paragraph) be recognized on such exchange in 
                        whole or in part for purposes of this subtitle,
                            ``(ii) income derived from such property 
                        was from sources within the United States (or, 
                        if no income was so derived, would have been 
                        from such sources), and
                            ``(iii) income derived from the property 
                        acquired in the exchange would be from sources 
                        outside the United States.
                    ``(C) Exception.--Subparagraph (A) shall not apply 
                if the individual enters into an agreement with the 
                Secretary which specifies that any income or gain 
                derived from the property acquired in the exchange (or 
                any other property which has a basis determined in 
                whole or part by reference to such property) during 
                such 10-year period shall be treated as from sources 
                within the United States. If the property transferred 
                in the exchange is disposed of by the person acquiring 
                such property, such agreement shall terminate and any 
                gain which was not recognized by reason of such 
                agreement shall be recognized as of the date of such 
                disposition.
                    ``(D) Secretary may extend period.--To the extent 
                provided in regulations prescribed by the Secretary, 
                subparagraph (B) shall be applied by substituting the 
                15-year period beginning 5 years before the loss of 
                United States citizenship for the 10-year period 
                referred to therein.
                    ``(E) Secretary may require recognition of gain in 
                certain cases.--To the extent provided in regulations 
                prescribed by the Secretary--
                            ``(i) the removal of appreciated tangible 
                        personal property from the United States, and
                            ``(ii) any other occurrence which (without 
                        recognition of gain) results in a change in the 
                        source of the income or gain from property from 
                        sources within the United States to sources 
                        outside the United States,
                shall be treated as an exchange to which this paragraph 
                applies.
            ``(3) Substantial diminishing of risks of ownership.--For 
        purposes of determining whether this section applies to any 
        gain on the sale or exchange of any property, the running of 
        the 10-year period described in subsection (a) shall be 
        suspended for any period during which the individual's risk of 
        loss with respect to the property is substantially diminished 
        by--
                    ``(A) the holding of a put with respect to such 
                property (or similar property),
                    ``(B) the holding by another person of a right to 
                acquire the property, or
                    ``(C) a short sale or any other transaction.''
    (d) Credit for Foreign Taxes Imposed on United States Source 
Income.--
            (1) Subsection (b) of section 877 is amended by adding at 
        the end the following new sentence: ``The tax imposed solely by 
        reason of this section shall be reduced (but not below zero) by 
        the amount of any income, war profits, and excess profits taxes 
        (within the meaning of section 903) paid to any foreign country 
        or possession of the United States on any income of the 
        taxpayer on which tax is imposed solely by reason of this 
        section.''
            (2) Subsection (a) of section 877, as amended by subsection 
        (a), is amended by inserting ``(after any reduction in such tax 
        under the last sentence of such subsection)'' after ``such 
        subsection''.
    (e) Comparable Estate and Gift Tax Treatment.--
            (1) Estate tax.--
                    (A) In general.--Subsection (a) of section 2107 is 
                amended to read as follows:
    ``(a) Treatment of Expatriates.--
            ``(1) Rate of tax.--A tax computed in accordance with the 
        table contained in section 2001 is hereby imposed on the 
        transfer of the taxable estate, determined as provided in 
        section 2106, of every decedent nonresident not a citizen of 
        the United States if, within the 10-year period ending with the 
        date of death, such decedent lost United States citizenship, 
        unless such loss did not have for 1 of its principal purposes 
        the avoidance of taxes under this subtitle or subtitle A.
            ``(2) Certain individuals treated as having tax avoidance 
        purpose.--
                    ``(A) In general.--For purposes of paragraph (1), 
                an individual shall be treated as having a principal 
                purpose to avoid such taxes if such individual is so 
                treated under section 877(a)(2).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to a decedent meeting the requirements of section 
                877(c)(1).''
                    (B) Credit for foreign death taxes.--Subsection (c) 
                of section 2107 is amended by redesignating paragraph 
                (2) as paragraph (3) and by inserting after paragraph 
                (1) the following new paragraph:
            ``(2) Credit for foreign death taxes.--
                    ``(A) In general.--The tax imposed by subsection 
                (a) shall be credited with the amount of any estate, 
                inheritance, legacy, or succession taxes actually paid 
                to any foreign country in respect of any property which 
                is included in the gross estate solely by reason of 
                subsection (b).
                    ``(B) Limitation on credit.--The credit allowed by 
                subparagraph (A) for such taxes paid to a foreign 
                country shall not exceed the lesser of--
                            ``(i) the amount which bears the same ratio 
                        to the amount of such taxes actually paid to 
                        such foreign country in respect of property 
                        included in the gross estate as the value of 
                        the property included in the gross estate 
                        solely by reason of subsection (b) bears to the 
                        value of all property subjected to such taxes 
                        by such foreign country, or
                            ``(ii) such property's proportionate share 
                        of the excess of--
                                    ``(I) the tax imposed by subsection 
                                (a), over
                                    ``(II) the tax which would be 
                                imposed by section 2101 but for this 
                                section.
                    ``(C) Proportionate share.--For purposes of 
                subparagraph (B), a property's proportionate share is 
                the percentage which the value of the property which is 
                included in the gross estate solely by reason of 
                subsection (b) bears to the total value of the gross 
                estate.''
                    (C) Expansion of inclusion in gross estate of stock 
                of foreign corporations.--Paragraph (2) of section 
                2107(b) is amended by striking ``more than 50 percent 
                of'' and all that follows and inserting ``more than 50 
                percent of--
                    ``(A) the total combined voting power of all 
                classes of stock entitled to vote of such corporation, 
                or
                    ``(B) the total value of the stock of such 
                corporation,''.
            (2) Gift tax.--
                    (A) In general.--Paragraph (3) of section 2501(a) 
                is amended to read as follows:
            ``(3) Exception.--
                    ``(A) Certain individuals.--Paragraph (2) shall not 
                apply in the case of a donor who, within the 10-year 
                period ending with the date of transfer, lost United 
                States citizenship, unless such loss did not have for 1 
                of its principal purposes the avoidance of taxes under 
                this subtitle or subtitle A.
                    ``(B) Certain individuals treated as having tax 
                avoidance purpose.--For purposes of subparagraph (A), 
                an individual shall be treated as having a principal 
                purpose to avoid such taxes if such individual is so 
                treated under section 877(a)(2).
                    ``(C) Exception for certain individuals.--
                Subparagraph (B) shall not apply to a decedent meeting 
                the requirements of section 877(c)(1).
                    ``(D) Credit for foreign gift taxes.--The tax 
                imposed by this section solely by reason of this 
                paragraph shall be credited with the amount of any gift 
                tax actually paid to any foreign country in respect of 
                any gift which is taxable under this section solely by 
                reason of this paragraph.''
    (f) Comparable Treatment of Lawful Permanent Residents Who Cease To 
Be Taxed as Residents.--
            (1) In general.--Section 877 is amended by redesignating 
        subsection (e) as subsection (f) and by inserting after 
        subsection (d) the following new subsection:
    ``(e) Comparable Treatment of Lawful Permanent Residents Who Cease 
To Be Taxed as Residents.--
            ``(1) In general.--Any long-term resident of the United 
        States who--
                    ``(A) ceases to be a lawful permanent resident of 
                the United States (within the meaning of section 
                7701(b)(6)), or
                    ``(B) commences to be treated as a resident of a 
                foreign country under the provisions of a tax treaty 
                between the United States and the foreign country and 
                who does not waive the benefits of such treaty 
                applicable to residents of the foreign country,
        shall be treated for purposes of this section and sections 
        2107, 2501, and 6039F in the same manner as if such resident 
        were a citizen of the United States who lost United States 
        citizenship on the date of such cessation or commencement.
            ``(2) Long-term resident.--For purposes of this subsection, 
        the term `long-term resident' means any individual (other than 
        a citizen of the United States) who is a lawful permanent 
        resident of the United States in at least 8 taxable years 
        during the period of 15 taxable years ending with the taxable 
        year during which the event described in subparagraph (A) or 
        (B) of paragraph (1) occurs. For purposes of the preceding 
        sentence, an individual shall not be treated as a lawful 
        permanent resident for any taxable year if such individual is 
        treated as a resident of a foreign country for the taxable year 
        under the provisions of a tax treaty between the United States 
        and the foreign country and does not waive the benefits of such 
        treaty applicable to residents of the foreign country.
            ``(3) Special rules.--
                    ``(A) Exceptions not to apply.--Subsection (c) 
                shall not apply to an individual who is treated as 
                provided in paragraph (1).
                    ``(B) Step-up in basis.--Solely for purposes of 
                determining any tax imposed by reason of this 
                subsection, property which was held by the long-term 
                resident on the date the individual first became a 
                resident of the United States shall be treated as 
                having a basis on such date of not less than the fair 
                market value of such property on such date. The 
                preceding sentence shall not apply if the individual 
                elects not to have such sentence apply. Such an 
                election, once made, shall be irrevocable.
            ``(4) Authority to exempt individuals.--This subsection 
        shall not apply to an individual who is described in a category 
        of individuals prescribed by regulation by the Secretary.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be appropriate to carry out this subsection, 
        including regulations providing for the application of this 
        subsection in cases where an alien individual becomes a 
        resident of the United States during the 10-year period after 
        being treated as provided in paragraph (1).''
            (2) Conforming amendments.--
                    (A) Section 2107 is amended by striking subsection 
                (d), by redesignating subsection (e) as subsection (d), 
                and by inserting after subsection (d) (as so 
                redesignated) the following new subsection:
    ``(e) Cross Reference.--

                                ``For comparable treatment of long-term 
lawful permanent residents who ceased to be taxed as residents, see 
section 877(e).''
                    (B) Paragraph (3) of section 2501(a) (as amended by 
                subsection (e)) is amended by adding at the end the 
                following new subparagraph:
                    ``(E) Cross reference.--

                                ``For comparable treatment of long-term 
lawful permanent residents who ceased to be taxed as residents, see 
section 877(e).''
    (g) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to--
                    (A) individuals losing United States citizenship 
                (within the meaning of section 877 of the Internal 
                Revenue Code of 1986) on or after February 6, 1995, and
                    (B) long-term residents of the United States with 
                respect to whom an event described in subparagraph (A) 
                or (B) of section 877(e)(1) of such Code occurs on or 
                after June 13, 1995.
            (2) Special rule.--
                    (A) In general.--In the case of an individual who 
                performed an act of expatriation specified in paragraph 
                (1), (2), (3), or (4) of section 349(a) of the 
                Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-
                (4)) before February 6, 1995, but who did not, on or 
                before such date, furnish to the United States 
                Department of State a signed statement of voluntary 
                relinquishment of United States nationality confirming 
                the performance of such act, the amendments made by 
                this section shall apply to such individual except 
                that--
                            (i) the 10-year period described in section 
                        877(a) of such Code shall not expire before the 
                        end of the 10-year period beginning on the date 
                        such statement is so furnished, and
                            (ii) the 1-year period referred to in 
                        section 877(c) of such Code, as amended by this 
                        section, shall not expire before the date which 
                        is 1 year after the date of the enactment of 
                        this Act.
                    (B) Exception.--Subparagraph (A) shall not apply if 
                the individual establishes to the satisfaction of the 
                Secretary of the Treasury that such loss of United 
                States citizenship occurred before February 6, 1994.

SEC. 13617. INFORMATION ON INDIVIDUALS LOSING UNITED STATES 
              CITIZENSHIP.

    (a) In General.--Subpart A of part III of subchapter A of chapter 
61 is amended by inserting after section 6039E the following new 
section:

``SEC. 6039F. INFORMATION ON INDIVIDUALS LOSING UNITED STATES 
              CITIZENSHIP.

    ``(a) In General.--Notwithstanding any other provision of law, any 
individual who loses United States citizenship (within the meaning of 
section 877(a)) shall provide a statement which includes the 
information described in subsection (b). Such statement shall be--
            ``(1) provided not later than the earliest date of any act 
        referred to in subsection (c), and
            ``(2) provided to the person or court referred to in 
        subsection (c) with respect to such act.
    ``(b) Information To Be Provided.--Information required under 
subsection (a) shall include--
            ``(1) the taxpayer's TIN,
            ``(2) the mailing address of such individual's principal 
        foreign residence,
            ``(3) the foreign country in which such individual is 
        residing,
            ``(4) the foreign country of which such individual is a 
        citizen,
            ``(5) in the case of an individual having a net worth of at 
        least the dollar amount applicable under section 877(a)(2)(B), 
        information detailing the assets and liabilities of such 
        individual, and
            ``(6) such other information as the Secretary may 
        prescribe.
    ``(c) Acts Described.--For purposes of this section, the acts 
referred to in this subsection are--
            ``(1) the individual's renunciation of his United States 
        nationality before a diplomatic or consular officer of the 
        United States pursuant to paragraph (5) of section 349(a) of 
        the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
            ``(2) the individual's furnishing to the United States 
        Department of State a signed statement of voluntary 
        relinquishment of United States nationality confirming the 
        performance of an act of expatriation specified in paragraph 
        (1), (2), (3), or (4) of section 349(a) of the Immigration and 
        Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
            ``(3) the issuance by the United States Department of State 
        of a certificate of loss of nationality to the individual, or
            ``(4) the cancellation by a court of the United States of a 
        naturalized citizen's certificate of naturalization.
    ``(d) Penalty.--Any individual failing to provide a statement 
required under subsection (a) shall be subject to a penalty for each 
year (of the 10-year period beginning on the date of loss of United 
States citizenship) during any portion of which such failure continues 
in an amount equal to the greater of--
            ``(1) 5 percent of the tax required to be paid under 
        section 877 for the taxable year ending during such year, or
            ``(2) $1,000,
unless it is shown that such failure is due to reasonable cause and not 
to willful neglect.
    ``(e) Information To Be Provided to Secretary.--Notwithstanding any 
other provision of law--
            ``(1) any Federal agency or court which collects (or is 
        required to collect) the statement under subsection (a) shall 
        provide to the Secretary--
                    ``(A) a copy of any such statement, and
                    ``(B) the name (and any other identifying 
                information) of any individual refusing to comply with 
                the provisions of subsection (a),
            ``(2) the Secretary of State shall provide to the Secretary 
        a copy of each certificate as to the loss of American 
        nationality under section 358 of the Immigration and 
        Nationality Act which is approved by the Secretary of State, 
        and
            ``(3) the Federal agency primarily responsible for 
        administering the immigration laws shall provide to the 
        Secretary the name of each lawful permanent resident of the 
        United States (within the meaning of section 7701(b)(6)) whose 
        status as such has been revoked or has been administratively or 
        judicially determined to have been abandoned.
Notwithstanding any other provision of law, not later than 30 days 
after the close of each calendar quarter, the Secretary shall publish 
in the Federal Register the name of each individual losing United 
States citizenship (within the meaning of section 877(a)) with respect 
to whom the Secretary receives information under the preceding sentence 
during such quarter.
    ``(f) Reporting by Long-Term Lawful Permanent Residents Who Cease 
To Be Taxed as Residents.--In lieu of applying the last sentence of 
subsection (a), any individual who is required to provide a statement 
under this section by reason of section 877(e)(1) shall provide such 
statement with the return of tax imposed by chapter 1 for the taxable 
year during which the event described in such section occurs.
    ``(g) Exemption.--The Secretary may by regulations exempt any class 
of individuals from the requirements of this section if he determines 
that applying this section to such individuals is not necessary to 
carry out the purposes of this section.''
    (b) Clerical Amendment.--The table of sections for such subpart A 
is amended by inserting after the item relating to section 6039E the 
following new item:

                              ``Sec. 6039F. Information on individuals 
                                        losing United States 
                                        citizenship.''
    (c) Effective Date.--The amendments made by this section shall 
apply to--
            (1) individuals losing United States citizenship (within 
        the meaning of section 877 of the Internal Revenue Code of 
        1986) after the date of the enactment of this Act, and
            (2) long-term residents of the United States with respect 
        to whom an event described in subparagraph (A) or (B) of 
        section 877(e)(1) of such Code occurs after such date.

SEC. 13618. REPORT ON TAX COMPLIANCE BY UNITED STATES CITIZENS AND 
              RESIDENTS LIVING ABROAD.

    Not later than 90 days after the date of the enactment of this Act, 
the Secretary of the Treasury shall prepare and submit to the Committee 
on Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate a report--
            (1) describing the compliance with subtitle A of the 
        Internal Revenue Code of 1986 by citizens and lawful permanent 
        residents of the United States (within the meaning of section 
        7701(b)(6) of such Code) residing outside the United States, 
        and
            (2) recommending measures to improve such compliance 
        (including improved coordination between executive branch 
        agencies).

             PART IV--REFORMS RELATING TO ENERGY PROVISIONS

SEC. 13621. TERMINATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
              RENEWABLE RESOURCES.

    (a) Facilities Must Be Placed in Service Before September 14, 
1995.--Paragraph (3) of section 45(c) (defining qualified facility) is 
amended by striking ``July 1, 1999'' and inserting ``September 14, 
1995''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to taxable years ending after September 13, 1995.
            (2) Binding contracts.--The amendment made by this section 
        shall not apply to any facility--
                    (A) which is constructed or acquired by the 
                taxpayer pursuant to a written contract which was 
                binding on September 13, 1995, and at all times 
                thereafter before such construction or acquisition, and
                    (B) which is placed in service before September 14, 
                1996.

SEC. 13622. REDUCTION OF INCENTIVES FOR ALCOHOL FUELS.

    (a) Denial of Credit for Alcohol Used To Produce Ether.--Subsection 
(b) of section 40 is amended by adding at the end the following new 
paragraph:
            ``(6) Denial of credit for alcohol used to produce ether.--
        No credit shall be allowed under this section for alcohol used 
        to produce any ether.''
    (b) Limitation on Alcohol Eligible for Credit for Alcohol Used as 
Fuel--
            (1) In general.--Subparagraph (A) of section 40(d)(1) 
        (defining alcohol) is amended by striking ``or'' at the end of 
        clause (i), by striking the period at the end of clause (ii) 
        and inserting ``, or'', and by adding at the end the following 
        new clause:
                            ``(iii) alcohol produced by a still (or 
                        other distilling apparatus) placed in service 
                        after September 13, 1995.''
            (2) Future credit limited to average historical 
        production.--Section 40 is amended by adding at the end the 
        following new subsection:
    ``(i) Expanded Production Ineligible for Credit.--
            ``(1) In general.--Subsection (a) shall apply to alcohol 
        produced after December 31, 1995, only if the alcohol is 
        designated under this subsection by a producer who is 
        registered under section 4101.
            ``(2) Designation based on historical production.--The 
        amount of alcohol produced by a producer during any calendar 
        year which may be designated under this subsection by any 
        producer other than an eligible small ethanol producer is the 
        amount equal to the average annual amount of alcohol (as 
        defined in subsection (d)(1)(A) without regard to clause 
        (iii))--
                    ``(A) which was produced by such producer (other 
                than casual off-farm production) during the 3-year 
                period ending on August 31, 1995, and
                    ``(B) which was sold or used by such producer for 
                any purpose described in clause (i) of subsection 
                (b)(4)(B).
        For purposes of the preceding sentence, a rule similar to the 
        rule of subsection (b)(4)(D) shall apply.
            ``(3) Production for less than entire base period.--
                    ``(A) In general.--If alcohol is produced by a 
                producer for less than the entire 3-year period 
                referred to in paragraph (2)(A), the average referred 
                to in paragraph (2) shall be treated as being equal to 
                50 percent of the annual productive capacity of such 
                producer as of September 13, 1995.
                    ``(B) Producer may establish higher average 
                production.--In the case of a producer who produced 
                alcohol during at least the last 3 months of such 3-
                year period, subparagraph (A) shall be applied by 
                substituting for `50 percent' the percentage 
                established by such producer to the satisfaction of the 
                Secretary as the percentage which such producer's 
                normal alcohol production is of its productive 
                capacity.
            ``(4) Acquisitions and dispositions.--Rules similar to the 
        rules of subparagraphs (A) and (B) of section 41(f)(3) shall 
        apply for purposes of this subsection.''
            (3) Conforming amendment.--Paragraph (1) of section 40(g) 
        is amended by striking ``clauses (i) and (ii)'' and inserting 
        ``clauses (i), (ii), and (iii)''.
    (c) Reduction of Credit for Ethanol by Reason of Carbon Dioxide 
Byproduct Benefit.--Subsection (h) of section 40 is amended--
            (1) by striking ``54 cents'' each place it appears and 
        inserting ``51 cents'', and
            (2) by striking ``40 cents'' each place it appears and 
        inserting ``38.25 cents''.
    (d) Conforming Reductions of Other Incentives for Ethanol Fuel.--
            (1) Repeal of reduced rate on ethanol fuel produced other 
        than from petroleum or natural gas.--Subsection (b) of section 
        4041 is amended to read as follows:
    ``(b) Exemption for Off-Highway Business Use.--
            ``(1) In general.--No tax shall be imposed by subsection 
        (a) or (d)(1) on liquids sold for use or used in an off-highway 
        business use.
            ``(2) Tax where other use.--If a liquid on which no tax was 
        imposed by reason of paragraph (1) is used otherwise than in an 
        off-highway business use, a tax shall be imposed by paragraph 
        (1)(B), (2)(B), or (3)(A)(ii) of subsection (a) (whichever is 
        appropriate) and by the corresponding provision of subsection 
        (d)(1) (if any).
            ``(3) Off-highway business use defined.--For purposes of 
        this subsection, the term `off-highway business use' has the 
        meaning given to such term by section 6421(e)(2); except that 
        such term shall not, for purposes of subsection (a)(1), include 
        use in a diesel-powered train.''
            (2) Repeal of reduced rate on ethanol fuel produced from 
        natural gas.--Subsection (m) of section 4041 is amended--
                    (A) by striking ``or ethanol'' each place it 
                appears (including the heading of paragraph (2)), and
                    (B) by striking ``, ethanol, or other alcohol'' in 
                paragraph (2) and inserting ``or other alcohol (other 
                than ethanol)''.
    (e) Conforming Amendments to Excise Taxes; Fuel Alcohol Taxed in 
Same Manner as Other Motor Fuels.--
            (1) In general.--Paragraph (1) of section 4083(a) (defining 
        taxable fuel) is amended by striking ``and'' at the end of 
        subparagraph (A), by striking the period at the end of 
        subparagraph (B) and inserting ``, and'', and by adding at the 
        end the following:
                    ``(C) fuel alcohol.''
            (2) Fuel alcohol.--Subsection (a) of section 4083 is 
        amended by adding at the end the following new paragraph:
            ``(4) Fuel alcohol.--The term `fuel alcohol' means any 
        alcohol (including ethanol and methanol)--
                    ``(A) which is produced other than from petroleum, 
                natural gas, or coal (including peat), and
                    ``(B) which is withdrawn from the distillery where 
                produced free of tax under chapter 51 by reason of 
                section 5181 or so much of section 5214(a)(1) as 
                relates to fuel use.
        Such term shall not include alcohol designated under section 
        40(i).''
            (3) Rate of tax.--Clause (i) of section 4081(a)(2)(A) is 
        amended by inserting ``or fuel alcohol'' after ``gasoline''.
            (4) Special rules for imposition of tax.--
                    (A) Paragraph (1) of section 4081(a) is amended by 
                adding at the end the following new subparagraph:
                    ``(C) Special rules for fuel alcohol.--In the case 
                of fuel alcohol--
                            ``(i) the distillery where produced shall 
                        be treated as a refinery, and
                            ``(ii) subparagraph (B) shall be applied by 
                        including transfers by truck or rail in excess 
                        of such minimum quantities as the Secretary 
                        shall prescribe.''
                    (B) Paragraph (1) of section 4081(b) is amended by 
                inserting ``(other than fuel alcohol designated under 
                section 40(i))'' after ``taxable fuel''.
            (5) Repeal of reduced rates on alcohol fuels.--
                    (A) Section 4041 is amended by striking subsection 
                (k).
                    (B) Section 4081 is amended by striking subsection 
                (c).
                    (C) Section 4091 is amended by striking subsection 
                (c).
            (6) Conforming amendments.--
                    (A) Subsection (c) of section 40 is amended by 
                striking all that follows ``application of'' and 
                inserting ``the last sentence of section 4083(a)(4)''.
                    (B) Paragraph (4) of section 40(d) is amended to 
                read as follows:
            ``(4) Volume of alcohol.--For purposes of determining under 
        subsection (a) the number of gallons of alcohol with respect to 
        which a credit is allowable under subsection (a), the volume of 
        alcohol shall include the volume of any denaturant (including 
        gasoline) which is added under any formulas approved by the 
        Secretary to the extent that such denaturants do not exceed 5 
        percent of the volume of such alcohol (including 
        denaturants).''
                    (C) Paragraph (2) of section 4041(a) is amended by 
                adding at the end the following: ``No tax shall be 
                imposed by this paragraph on the sale or use of any 
                liquid if tax was imposed on such liquid under section 
                4081 and the tax thereon was not credited or 
                refunded.''
                    (D) Section 6427 is amended by striking subsection 
                (f).
                    (E) Subsection (i) of section 6427 is amended by 
                striking paragraph (3).
                    (F) Paragraph (2) of section 6427(k) is amended by 
                striking ``(3)''.
                    (G)(i) Paragraph (1) of section 6427(l) is amended 
                by striking ``or'' at the end of subparagraph (A), by 
                redesignating subparagraph (B) as subparagraph (C), and 
                by inserting after subparagraph (A) the following new 
                subparagraph:
                    ``(B) any fuel alcohol (as defined in section 4083) 
                on which tax has been imposed by section 4081, or''.
                    (ii) Paragraph (2) of section 6427(l) is amended by 
                striking ``and'' at the end of subparagraph (A), by 
                redesignating subparagraph (B) as subparagraph (C), and 
                by inserting after subparagraph (A) the following new 
                subparagraph:
                    ``(B) in the case of fuel alcohol (as so defined), 
                any use which is exempt from the tax imposed by section 
                4041(a)(2) other than by reason of a prior imposition 
                of tax, and''.
                    (iii) The heading of subsection (l) of section 6427 
                is amended by inserting ``, Fuel Alcohol,'' after 
                ``Diesel Fuel''.
                    (H) Sections 9503(b)(1)(E) and 9508(b)(2) are each 
                amended by striking ``and kerosene'' and inserting 
                ``kerosene, and fuel alcohol''.
                    (I) Section 9502 is amended by striking subsection 
                (e) and by redesignating subsection (f) as subsection 
                (e).
                    (J) Subsection (e) of section 9502 (as redesignated 
                by subparagraph (I)) is amended by striking paragraph 
                (2) and by redesignating paragraph (3) as paragraph 
                (2).
                    (K) Subsection (b) of section 9503 is amended by 
                striking paragraph (5).
                    (L) Paragraph (3) of section 9503(f) is amended to 
                read as follows:
            ``(3) Partially exempt methanol or ethanol fuel.--In the 
        case of a rate of tax determined under section 4041(m), the 
        Highway Trust Fund financing rate is the excess (if any) of the 
        rate so determined over--
                    ``(A) 5.55 cents per gallon after September 30, 
                1993, and before October 1, 1995, and
                    ``(B) 4.3 cents per gallon after September 30, 
                1995.''
    (f) Increase in Small Ethanol Producer Credit.--Subparagraph (A) of 
section 40(b)(4) is amended by striking ``10 cents'' and inserting ``13 
cents''.
    (g) Effective Date.--
            (1) Amendments relating to credit.--The amendments made by 
        subsections (a), (b), (c), and (f) shall apply to alcohol 
        produced after December 31, 1995, in taxable years ending after 
        such date.
            (2) Amendments relating to excise taxes.--The amendments 
        made by subsections (d) and (e) shall take effect on January 1, 
        1996.
            (3) Stills placed in service pursuant to binding 
        contracts.--For purposes of subsections (d)(1)(A)(iii) and 
        (i)(3)(A) of section 40 of the Internal Revenue Code of 1986, 
        as amended by this section, a still (or other distilling 
        apparatus) shall be treated as placed in service before 
        September 14, 1995, if such still (or other apparatus)--
                    (A) is constructed or acquired by the taxpayer 
                pursuant to a written contract which was binding on 
                September 13, 1995, and at all times thereafter before 
                such construction or acquisition, and
                    (B) is placed in service before September 14, 1996.
    (h) Floor Stock Taxes.--
            (1) Imposition of tax.--In the case of fuel alcohol which 
        is held on January 1, 1996, by any person, there is hereby 
        imposed a floor stocks tax of 18.4 cents per gallon.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding fuel 
                alcohol on January 1, 1996, to which the tax imposed by 
                paragraph (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before June 30, 1996.
            (3) Definitions.--For purposes of this subsection--
                    (A) Fuel alcohol.--The term ``fuel alcohol'' has 
                the meaning given such term by section 4083 of the 
                Internal Revenue Code of 1986, as amended by this 
                section.
                    (B) Held by a person.--Fuel alcohol shall be 
                considered as ``held by a person'' if title thereto has 
                passed to such person (whether or not delivery to the 
                person has been made).
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or his delegate.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to fuel alcohol held by any 
        person exclusively for any use to the extent a credit or refund 
        of the tax imposed by section 4081 of the Internal Revenue Code 
        of 1986 is allowable for such use.
            (5) Exception for fuel held in vehicle tank.--No tax shall 
        be imposed by paragraph (1) on fuel alcohol held in the tank of 
        a motor vehicle or motorboat.
            (6) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1) on fuel alcohol held on January 1, 1996, 
                by any person if the aggregate amount of fuel alcohol 
                held by such person on such date does not exceed 2,000 
                gallons. The preceding sentence shall apply only if 
                such person submits to the Secretary (at the time and 
                in the manner required by the Secretary) such 
                information as the Secretary shall require for purposes 
                of this paragraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4) or (5).
                    (C) Controlled groups.--For purposes of this 
                paragraph--
                            (i) Corporations.--
                                    (I) In general.--All persons 
                                treated as a controlled group shall be 
                                treated as 1 person.
                                    (II) Controlled group.--The term 
                                ``controlled group'' has the meaning 
                                given to such term by subsection (a) of 
                                section 1563 of such Code; except that 
                                for such purposes the phrase ``more 
                                than 50 percent'' shall be substituted 
                                for the phrase ``at least 80 percent'' 
                                each place it appears in such 
                                subsection.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group of persons 
                        under common control where 1 or more of such 
                        persons is not a corporation.
            (7) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4081 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply with respect to the floor stock taxes imposed 
        by paragraph (1) to the same extent as if such taxes were 
        imposed by such section 4081.

SEC. 13623. EXCLUSION FOR ENERGY CONSERVATION SUBSIDIES LIMITED TO 
              SUBSIDIES WITH RESPECT TO DWELLING UNITS.

    (a) In General.--Paragraph (1) of section 136(c) (defining energy 
conservation measure) is amended by striking ``energy demand--'' and 
all that follows and inserting ``energy demand with respect to a 
dwelling unit.''
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 136 is amended to read as 
        follows:
    ``(a) Exclusion.--Gross income shall not include the value of any 
subsidy provided (directly or indirectly) by a public utility to a 
customer for the purchase or installation of any energy conservation 
measure.''
            (2) Paragraph (2) of section 136(c) is amended--
                    (A) by striking subparagraph (A) and by 
                redesignating subparagraphs (B) and (C) as 
                subparagraphs (A) and (B), respectively, and
                    (B) by striking ``and special rules'' in the 
                paragraph heading.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received after September 13, 1995, unless received 
pursuant to a written binding contract in effect on September 13, 1995, 
and at all times thereafter.

         PART V--REFORMS RELATING TO NONRECOGNITION PROVISIONS

SEC. 13626. BASIS ADJUSTMENT TO PROPERTY HELD BY CORPORATION WHERE 
              STOCK IN CORPORATION IS REPLACEMENT PROPERTY UNDER 
              INVOLUNTARY CONVERSION RULES.

    (a) In General.--Subsection (b) of section 1033 is amended to read 
as follows:
    ``(b) Basis of Property Acquired Through Involuntary Conversion.--
            ``(1) Conversions described in subsection (a)(1).--If the 
        property was acquired as the result of a compulsory or 
        involuntary conversion described in subsection (a)(1), the 
        basis shall be the same as in the case of the property so 
        converted--
                    ``(A) decreased in the amount of any money received 
                by the taxpayer which was not expended in accordance 
                with the provisions of law (applicable to the year in 
                which such conversion was made) determining the taxable 
                status of the gain or loss upon such conversion, and
                    ``(B) increased in the amount of gain or decreased 
                in the amount of loss to the taxpayer recognized upon 
                such conversion under the law applicable to the year in 
                which such conversion was made.
            ``(2) Conversions described in subsection (a)(2).--In the 
        case of property purchased by the taxpayer in a transaction 
        described in subsection (a)(2) which resulted in the 
        nonrecognition of any part of the gain realized as the result 
        of a compulsory or involuntary conversion, the basis shall be 
        the cost of such property decreased in the amount of the gain 
        not so recognized; and if the property purchased consists of 
        more than 1 piece of property, the basis determined under this 
        sentence shall be allocated to the purchased properties in 
        proportion to their respective costs.
            ``(3) Property held by corporation the stock of which is 
        replacement property.--
                    ``(A) In general.--If the basis of stock in a 
                corporation is decreased under paragraph (2), an amount 
                equal to such decrease shall also be applied to reduce 
                the basis of property held by the corporation at the 
                time the taxpayer acquired control (as defined in 
                subsection (a)(2)(E)) of such corporation.
                    ``(B) Limitation.--Subparagraph (A) shall not apply 
                to the extent that it would (but for this subparagraph) 
                require a reduction in the aggregate adjusted bases of 
                the property of the corporation below the taxpayer's 
                adjusted basis of the stock in the corporation 
                (determined immediately after such basis is decreased 
                under paragraph (2)).
                    ``(C) Allocation of basis reduction.--The decrease 
                required under subparagraph (A) shall be allocated--
                            ``(i) first to property which is similar or 
                        related in service or use to the converted 
                        property,
                            ``(ii) second to depreciable property (as 
                        defined in section 1017(b)(3)(B)) not described 
                        in clause (i), and
                            ``(iii) then to other property.
                    ``(D) Special rules.--
                            ``(i) Reduction not to exceed adjusted 
                        basis of property.--No reduction in the basis 
                        of any property under this paragraph shall 
                        exceed the adjusted basis of such property 
                        (determined without regard to such reduction).
                            ``(ii) Allocation of reduction among 
                        properties.--If more than 1 property is 
                        described in a clause of subparagraph (C), the 
                        reduction under this paragraph shall be 
                        allocated among such property in proportion to 
                        the adjusted bases of such property (determined 
                        without regard to such reduction).''
    (b) Effective Date.--The amendment made by this section shall apply 
to involuntary conversions occurring after September 13, 1995.

SEC. 13627. EXPANSION OF REQUIREMENT THAT INVOLUNTARILY CONVERTED 
              PROPERTY BE REPLACED WITH PROPERTY ACQUIRED FROM AN 
              UNRELATED PERSON.

    (a) In General.--Subsection (i) of section 1033 is amended to read 
as follows:
    ``(i) Replacement Property Must Be Acquired From Unrelated Person 
in Certain Cases.--
            ``(1) In general.--If the property which is involuntarily 
        converted is held by a taxpayer to which this subsection 
        applies, subsection (a) shall not apply if the replacement 
        property or stock is acquired from a related person. The 
        preceding sentence shall not apply to the extent that the 
        related person acquired the replacement property or stock from 
        an unrelated person during the period applicable under 
        subsection (a)(2)(B).
            ``(2) Taxpayers to which subsection applies.--This 
        subsection shall apply to--
                    ``(A) a C corporation,
                    ``(B) a partnership in which 1 or more C 
                corporations own, directly or indirectly (determined in 
                accordance with section 707(b)(3)), more than 50 
                percent of the capital interest, or profits interest, 
                in such partnership at the time of the involuntary 
                conversion, and
                    ``(C) any other taxpayer if, with respect to 
                property which is involuntarily converted during the 
                taxable year, the aggregate of the amount of realized 
                gain on such property on which there is realized gain 
                exceeds $100,000.
        In the case of a partnership, subparagraph (C) shall apply with 
        respect to the partnership and with respect to each partner. A 
        similar rule shall apply in the case of an S corporation and 
        its shareholders.
            ``(3) Related person.--For purposes of this subsection, a 
        person is related to another person if the person bears a 
        relationship to the other person described in section 267(b) or 
        707(b)(1).''
    (b) Effective Date.--The amendment made by this section shall apply 
to involuntary conversions occurring after September 13, 1995.

SEC. 13628. NO ROLLOVER OR EXCLUSION OF GAIN ON SALE OF PRINCIPAL 
              RESIDENCE WHICH IS ATTRIBUTABLE TO DEPRECIATION 
              DEDUCTIONS.

    (a) In General.--Subsection (d) of section 1034 (relating to 
limitations) is amended by adding at the end the following new 
paragraph:
            ``(3) Recognition of gain attributable to depreciation.--
        Subsection (a) shall not apply to so much of the gain from the 
        sale of any residence as does not exceed the portion of the 
        depreciation adjustments (as defined in section 1250(b)(3)) 
        attributable to periods after December 31, 1995, in respect of 
        such residence.''
    (b) Comparable Treatment Under 1-Time Exclusion of Gain on Sale of 
Principal Residence.--Subsection (d) of section 121 is amended by 
adding at the end the following new paragraph:
            ``(10) Recognition of gain attributable to depreciation.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to so much of the gain from the sale of any property as 
                does not exceed the portion of the depreciation 
                adjustments (as defined in section 1250(b)(3)) 
                attributable to periods after December 31, 1995, in 
                respect of such property.
                    ``(B) Coordination with paragraph (5).--If this 
                section does not apply to gain attributable to a 
                portion of a residence by reason of paragraph (5), 
                subparagraph (A) shall not apply to depreciation 
                adjustments attributable to such portion.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1995.

SEC. 13629. NONRECOGNITION OF GAIN ON SALE OF PRINCIPAL RESIDENCE BY 
              NONCITIZENS LIMITED TO NEW RESIDENCES LOCATED IN THE 
              UNITED STATES.

    (a) In General.--Subsection (d) of section 1034 (relating to 
limitations) (as amended by section 13628) is amended by adding at the 
end the following new paragraph:
            ``(4) New residence must be located in united states in 
        certain cases.--
                    ``(A) In general.--In the case of a sale of an old 
                residence by a taxpayer--
                            ``(i) who is not a citizen of the United 
                        States at the time of sale, and
                            ``(ii) who is not a citizen or resident of 
                        the United States on the date which is 2 years 
                        after the date of the sale of such old 
                        residence,
                subsection (a) shall apply only if the new residence is 
                located in the United States or a possession of the 
                United States.
                    ``(B) Property held jointly by husband and wife.--
                Subparagraph (A) shall not apply if--
                            ``(i) the old residence is held by a 
                        husband and wife as joint tenants, tenants by 
                        the entirety, or community property,
                            ``(ii) such husband and wife make a joint 
                        return for the taxable year of the sale or 
                        exchange, and
                            ``(iii) one spouse is a citizen of the 
                        United States at the time of sale.''
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to sales of old residences after December 31, 1995.
            (2) Treatment of purchases of new residences.--The 
        amendment made by this section shall not apply to new 
        residences--
                    (A) purchased before September 13, 1995, or
                    (B) purchased on or after such date pursuant to a 
                binding contract in effect on such date and at all 
                times thereafter before such purchase.
            (3) Certain rules to apply.--For purposes of this 
        subsection, the rules of paragraphs (1), (2), and (3) of 
        section 1034(c) of the Internal Revenue Code of 1986 shall 
        apply.

             PART VI--REFORMS RELATING TO GAMING ACTIVITIES

SEC. 13631. TREATMENT OF INDIAN GAMING ACTIVITIES UNDER UNRELATED 
              BUSINESS INCOME TAX.

    (a) In General.--Paragraph (2) of section 511(a) (relating to 
imposition of tax on unrelated business income of charitable, etc., 
organizations) is amended by adding at the end the following new 
subparagraph:
                    ``(C) Gaming activities of indian tribes.--
                            ``(i) In general.--The tax imposed by 
                        paragraph (1) shall apply to any Indian tribal 
                        organization; except that, notwithstanding any 
                        other provision of this part, in the case of 
                        such an organization, the term `unrelated trade 
                        or business' means only a trade or business of 
                        conducting any class II or class III gaming 
                        activity (as defined in section 4 of the Indian 
                        Gaming Regulatory Act (25 U.S.C. 2701 et seq.), 
                        as in effect on the date of the enactment of 
                        this subparagraph), including a gaming activity 
                        described in section 513(a)(1).
                            ``(ii) Indian tribal organization.--For 
                        purposes of clause (i), the term `Indian tribal 
                        organization' means any Indian tribe and any 
                        organization which is immune or exempt from tax 
                        under this subtitle solely by reason of being 
                        owned or controlled by an Indian tribe.''
    (b) Treatment of Amounts Paid for Charitable Purposes, Etc., by 
Reason of State or Federal Law.--Subsection (b) of section 512 is 
amended by adding at the end the following new paragraph:
            ``(17) In the case of an Indian tribal organization (as 
        defined in section 511(a)(3)), if, by reason of State or 
        Federal law or of a contract with the United States or with any 
        State or political subdivision thereof, such organization is 
        required to use any portion of the net proceeds of any gaming 
        activity for specified purposes, the deduction for so using 
        such proceeds shall be treated as allowed under section 170 for 
        purposes of applying paragraph (10). The preceding sentence 
        shall not apply to such proceeds which are paid as general 
        revenues to the United States or to any State or political 
        subdivision thereof.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1996.
    (d) Study of Gambling Conducted by Tax-Exempt Organizations.--The 
Secretary of the Treasury or his delegate shall conduct a study on the 
nature and extent of gaming activities conducted by organizations 
exempt from tax under section 501(a) of the Internal Revenue Code of 
1986, including an examination of--
            (1) the types of gaming activities (including bingo, pull 
        tabs, and casino nights) engaged in by charities and other 
        nonprofit organizations and the frequency of such activities;
            (2) the dollar volume of such gaming activities;
            (3) the nature and extent of the involvement of for-profit 
        entities and private parties in the management or operation of 
        gaming activities of such organizations;
            (4) competition between taxable gaming activities and 
        gaming activities that are exempt from Federal income tax; and
            (5) an analysis of the present law tax treatment of gaming 
        activities of tax-exempt organizations.
The study may include any recommendations for change, including 
examination of the South End decision and the special exception for 
bingo games. The Secretary shall submit the results of the study to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate not later than July 1, 1996.

SEC. 13632. REPEAL OF TARGETED EXEMPTION FROM TAX ON UNRELATED TRADE OR 
              BUSINESS INCOME FROM GAMBLING IN CERTAIN STATES.

    (a) In General.--Section 311 of the Tax Reform Act of 1984 is 
hereby repealed.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to games of chance conducted after December 31, 1995, in taxable 
years ending after such date.

SEC. 13633. EXTENSION OF WITHHOLDING TO CERTAIN GAMBLING WINNINGS.

    (a) Repeal of Exemption for Bingo and Keno.--Paragraph (5) of 
section 3402(q) is amended to read as follows:
            ``(5) Exemption for slot machines.--The tax imposed under 
        paragraph (1) shall not apply to winnings from a slot 
        machine.''
    (b) Threshold Amount.--Paragraph (3) of section 3402(q) is 
amended--
            (1) by striking ``(B) and (C)'' in subparagraph (A) and 
        inserting ``(B), (C), and (D)'', and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Bingo and keno.--Proceeds of more than $5,000 
                from a wager placed in a bingo or keno game.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1996.

                        PART VII--OTHER REFORMS

SEC. 13636. SUNSET OF LOW-INCOME HOUSING CREDIT.

    (a) Repeal of Reallocation of Unused Credits Among States.--
Subparagraph (D) of section 42(h)(3) is amended by adding at the end 
the following new clause:
                            ``(v) Termination.--No amount may be 
                        allocated under this paragraph for any calendar 
                        year after 1995.''
    (b) Termination.--Section 42 is amended by adding at the end the 
following new subsection:
    ``(o) Termination.--
            ``(1) In general.--Except as provided in paragraph (2)--
                    ``(A) clause (i) of subsection (h)(3)(C) shall not 
                apply to any amount allocated after December 31, 1997, 
                and
                    ``(B) subsection (h)(4) shall not apply to any 
                building placed in service after such date.
            ``(2) Exception for bond-financed buildings in progress.--
        For purposes of paragraph (1)(B), a building shall be treated 
        as placed in service before January 1, 1998, if--
                    ``(A) the bonds with respect to such building are 
                issued before such date,
                    ``(B) the taxpayer's basis in the project (of which 
                the building is a part) as of December 31, 1997, is 
                more than 10 percent of the taxpayer's reasonably 
                expected basis in such project as of December 31, 1999, 
                and
                    ``(C) such building is placed in service before 
                January 1, 2000.''

SEC. 13637. REPEAL OF CREDIT FOR CONTRIBUTIONS TO COMMUNITY DEVELOPMENT 
              CORPORATIONS.

    (a) In General.--Section 13311 of the Revenue Reconciliation Act of 
1993 (relating to credit for contributions to certain community 
development corporations) is hereby repealed.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to contributions made after the date of the enactment of this Act 
(other than contributions made pursuant to a legally enforceable 
agreement which is effect on the date of the enactment of this Act).

SEC. 13638. REPEAL OF DIESEL FUEL TAX REBATE TO PURCHASERS OF DIESEL-
              POWERED AUTOMOBILES AND LIGHT TRUCKS.

    (a) In General.--Section 6427 is amended by striking subsection 
(g).
    (b) Conforming Amendments.--
            (1) Paragraph (3) of section 34(a) is amended to read as 
        follows:
            ``(3) under section 6427 with respect to fuels used for 
        nontaxable purposes or resold during the taxable year 
        (determined without regard to section 6427(k)).''
            (2) Paragraphs (1) and (2)(A) of section 6427(i) are each 
        amended--
                    (A) by striking ``(g),'', and
                    (B) by striking ``(or a qualified diesel powered 
                highway vehicle purchased)'' each place it appears.
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles purchased after December 31, 1995.

SEC. 13639. APPLICATION OF FAILURE-TO-PAY PENALTY TO SUBSTITUTE 
              RETURNS.

    (a) General Rule.--Section 6651 (relating to failure to file tax 
return or to pay tax) is amended by adding at the end the following new 
subsection:
    ``(g) Treatment of Returns Prepared by Secretary Under Section 
6020(b).--In the case of any return made by the Secretary under section 
6020(b)--
            ``(1) such return shall be disregarded for purposes of 
        determining the amount of the addition under paragraph (1) of 
        subsection (a), but
            ``(2) such return shall be treated as the return filed by 
        the taxpayer for purposes of determining the amount of the 
        addition under paragraphs (2) and (3) of subsection (a).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply in the case of any return the due date for which (determined 
without regard to extensions) is after the date of the enactment of 
this Act.

SEC. 13640. REPEAL OF SPECIAL RULE FOR RENTAL USE OF VACATION HOMES, 
              ETC., FOR LESS THAN 15 DAYS.

    (a) In General.--Section 280A (relating to disallowance of certain 
expenses in connection with business use of home, rental of vacation 
homes, etc.) is amended by striking subsection (g).
    (b) No Basis Reduction Unless Depreciation Claimed.--Section 1016 
is amended by redesignating subsection (e) as subsection (f) and by 
inserting after subsection (d) the following new subsection:
    ``(e) Special Rule Where Rental Use of Vacation Home, Etc., for 
Less Than 15 Days.--If a dwelling unit is used during the taxable year 
by the taxpayer as a residence and such dwelling unit is actually 
rented for less than 15 days during the taxable year, the reduction 
under subsection (a)(2) by reason of such rental use in any taxable 
year beginning after December 31, 1995, shall not exceed the 
depreciation deduction allowed for such rental use.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 13641. ELECTION TO CEASE STATUS AS QUALIFIED SCHOLARSHIP FUNDING 
              CORPORATION.

    (a) In General.--Subsection (d) of section 150 (relating to 
definitions and special rules) is amended by adding at the end thereof 
the following new paragraph:
            ``(3) Election to cease status as qualified scholarship 
        funding corporation.--
                    ``(A) In general.--Any qualified scholarship 
                funding bond, and qualified student loan bond, 
                outstanding on the date of the issuer's election under 
                this paragraph (and any bond (or series of bonds) 
                issued to refund such a bond) shall not fail to be a 
                tax-exempt bond solely because the issuer ceases to be 
                described in subparagraphs (A) and (B) of paragraph (2) 
                if the issuer meets the requirements of subparagraphs 
                (B) and (C) of this paragraph.
                    ``(B) Assets and liabilities of issuer transferred 
                to taxable subsidiary.--The requirements of this 
                subparagraph are met by an issuer if--
                            ``(i) all of the student loan notes of the 
                        issuer and other assets pledged to secure the 
                        repayment of qualified scholarship funding bond 
                        indebtedness of the issuer are transferred to 
                        another corporation within a reasonable period 
                        after the election is made under this 
                        paragraph;
                            ``(ii) such transferee corporation assumes 
                        or otherwise provides for the payment of all of 
                        the qualified scholarship funding bond 
                        indebtedness of the issuer within a reasonable 
                        period after the election is made under this 
                        paragraph;
                            ``(iii) to the extent permitted by law, 
                        such transferee corporation assumes all of the 
                        responsibilities, and succeeds to all of the 
                        rights, of the issuer under the issuer's 
                        agreements with the Secretary of Education in 
                        respect of student loans;
                            ``(iv) immediately after such transfer, the 
                        issuer, together with any other issuer which 
                        has made an election under this paragraph in 
                        respect of such transferee, hold all of the 
                        senior stock in such transferee corporation; 
                        and
                            ``(v) such transferee corporation is not 
                        exempt from tax under this chapter.
                    ``(C) Issuer to operate as independent organization 
                described in section 501(c)(3).--The requirements of 
                this subparagraph are met by an issuer if, within a 
                reasonable period after the transfer referred to in 
                subparagraph (B)--
                            ``(i) the issuer is described in section 
                        501(c)(3) and exempt from tax under section 
                        501(a);
                            ``(ii) the issuer no longer is described in 
                        subparagraphs (A) and (B) of paragraph (2); and
                            ``(iii) at least 80 percent of the members 
                        of the board of directors of the issuer are 
                        independent members.
                    ``(D) Senior stock.--For purposes of this 
                paragraph, the term `senior stock' means stock--
                            ``(i) which participates pro rata and fully 
                        in the equity value of the corporation with all 
                        other common stock of the corporation but which 
                        has the right to payment of liquidation 
                        proceeds prior to payment of liquidation 
                        proceeds in respect of other common stock of 
                        the corporation;
                            ``(ii) which has a fixed right upon 
                        liquidation and upon redemption to an amount 
                        equal to the greater of--
                                    ``(I) the fair market value of such 
                                stock on the date of liquidation or 
                                redemption (whichever is applicable); 
                                or
                                    ``(II) the fair market value of all 
                                assets transferred in exchange for such 
                                stock and reduced by the amount of all 
                                liabilities of the corporation which 
                                has made an election under this 
                                paragraph assumed by the transferee 
                                corporation in such transfer;
                            ``(iii) the holder of which has the right 
                        to require the transferee corporation to redeem 
                        on a date that is not later than 10 years after 
                        the date on which an election under this 
                        paragraph was made and pursuant to such 
                        election such stock was issued; and
                            ``(iv) in respect of which, during the time 
                        such stock is outstanding, there is not 
                        outstanding any equity interest in the 
                        corporation having any liquidation, redemption 
                        or dividend rights in the corporation which are 
                        superior to those of such stock.
                    ``(E) Independent member.--The term `independent 
                member' means a member of the board of directors of the 
                issuer who (except for services as a member of such 
                board) receives no compensation directly or 
                indirectly--
                            ``(i) for services performed in connection 
                        with such transferee corporation, or
                            ``(ii) for services as a member of the 
                        board of directors or as an officer of such 
                        transferee corporation.
                For purposes of clause (ii), the term `officer' 
                includes any individual having powers or 
                responsibilities similar to those of officers.
                    ``(F) Coordination with certain private foundation 
                taxes.--For purposes of sections 4942 (relating to the 
                excise tax on a failure to distribute income) and 4943 
                (relating to the excise tax on excess business 
                holdings), the transferee corporation referred to in 
                subparagraph (B) shall be treated as a functionally 
                related business (within the meaning of section 
                4942(j)(4)) with respect to the issuer during the 
period commencing with the date on which an election is made under this 
paragraph and ending on the date that is the earlier of--
                            ``(i) the last day of the last taxable year 
                        for which more than 50 percent of the gross 
                        income of such transferee corporation is 
                        derived from, or more than 50 percent of the 
                        assets (by value) of such transferee 
                        corporation consists of, student loan notes 
                        incurred under the Higher Education Act of 
                        1965; or
                            ``(ii) the last day of the taxable year of 
                        the issuer during which occurs the date which 
                        is 10 years after the date on which the 
                        election under this paragraph is made.
                    ``(G) Election.--An election under this paragraph 
                may be revoked only with the consent of the 
                Secretary.''
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 13642. CERTAIN AMOUNTS DERIVED FROM FOREIGN CORPORATIONS TREATED 
              AS UNRELATED BUSINESS TAXABLE INCOME.

    (a) General Rule.--Subsection (b) of section 512 (relating to 
modifications) is amended by adding at the end thereof the following 
new paragraph:
            ``(18) Treatment of certain amounts derived from foreign 
        corporations.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                any amount included in gross income under section 
                951(a)(1)(A) shall be included as an item of gross 
                income derived from an unrelated trade or business to 
                the extent the amount so included is attributable to 
                insurance income (as defined in section 953) which, if 
                derived directly by the organization, would be treated 
                as gross income from an unrelated trade or business. 
                There shall be allowed all deductions directly 
                connected with amounts included in gross income under 
                the preceding sentence.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to income attributable to a policy of insurance or 
                reinsurance with respect to which the person (directly 
                or indirectly) insured is--
                            ``(i) such organization,
                            ``(ii) an affiliate of such organization 
                        which is exempt from tax under section 501(a), 
                        or
                            ``(iii) a director, officer, or employee of 
                        such organization or affiliate but only if the 
                        insurance covers solely risks associated with 
                        the performance of services for the benefit of 
                        such organization or affiliate.
                    ``(C) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary or appropriate to 
                carry out the purposes of this paragraph, including 
                regulations for the application of this paragraph in 
                the case of income paid through 1 or more entities or 
                between 2 or more chains of entities.''
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts included in gross income in any taxable year beginning after 
December 31, 1995.

      PART VIII--EXCISE TAX ON AMOUNTS OF PRIVATE EXCESS BENEFITS

SEC. 13646. EXCISE TAXES FOR FAILURE BY CERTAIN CHARITABLE 
              ORGANIZATIONS TO MEET CERTAIN QUALIFICATION REQUIREMENTS.

    (a) In General.--Chapter 42 (relating to private foundations and 
certain other tax-exempt organizations) is amended by redesignating 
subchapter D as subchapter E and by inserting after subchapter C the 
following new subchapter:

  ``Subchapter D--Failure By Certain Charitable Organizations To Meet 
                   Certain Qualification Requirements

                              ``Sec. 4958. Taxes on excess benefit 
                                        transactions.

``SEC. 4958. TAXES ON EXCESS BENEFIT TRANSACTIONS.

    ``(a) Initial Taxes.--
            ``(1) On the disqualified person.--There is hereby imposed 
        on each excess benefit transaction a tax equal to 25 percent of 
        the excess benefit. The tax imposed by this paragraph shall be 
        paid by any disqualified person referred to in subsection 
        (f)(1) with respect to such transaction.
            ``(2) On the management.--In any case in which a tax is 
        imposed by paragraph (1), there is hereby imposed on the 
        participation of any organization manager in the excess benefit 
        transaction, knowing that it is such a transaction, a tax equal 
        to 10 percent of the excess benefit, unless such participation 
        is not willful and is due to reasonable cause. The tax imposed 
        by this paragraph shall be paid by any organization manager who 
        participated in the excess benefit transaction.
    ``(b) Additional Tax On the Disqualified Person.--In any case in 
which an initial tax is imposed by subsection (a)(1) on an excess 
benefit transaction and the excess benefit involved in such transaction 
is not corrected within the taxable period, there is hereby imposed a 
tax equal to 200 percent of the excess benefit involved. The tax 
imposed by this subsection shall be paid by any disqualified person 
referred to in subsection (f)(1) with respect to such transaction.
    ``(c) Excess Benefit Transaction; Excess Benefit.--For purposes of 
this section--
            ``(1) Excess benefit transaction.--
                    ``(A) In general.--The term `excess benefit 
                transaction' means any transaction in which an economic 
                benefit is provided by an applicable tax-exempt 
                organization directly or indirectly to or for the use 
                of any disqualified person if the value of the economic 
benefit provided exceeds the value of the consideration (including the 
performance of services) received for providing such benefit. For 
purposes of the preceding sentence, an economic benefit shall not be 
treated as consideration for the performance of services unless such 
organization clearly indicated its intent to so treat such benefit.
                    ``(B) Excess benefit.--The term `excess benefit' 
                means the excess referred to in subparagraph (A).
            ``(2) Authority to include certain other private 
        inurement.--To the extent provided in regulations prescribed by 
        the Secretary, the term `excess benefit transaction' includes 
        any transaction in which the amount of any economic benefit 
        provided to or for the use of a disqualified person is 
        determined in whole or in part by the revenues of 1 or more 
        activities of the organization but only if such transaction 
        results in inurement not permitted under paragraph (3) or (4) 
        of section 501(c), as the case may be. In the case of any such 
        transaction, the excess benefit shall be the amount of the 
        inurement not so permitted.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Joint and several liability.--If more than 1 person 
        is liable for any tax imposed by subsection (a) or subsection 
        (b), all such persons shall be jointly and severally liable for 
        such tax.
            ``(2) Limit for management.--With respect to any 1 excess 
        benefit transaction, the maximum amount of the tax imposed by 
        subsection (a)(2) shall not exceed $10,000.
    ``(e) Applicable Tax-Exempt Organization.--For purposes of this 
subchapter, the term `applicable tax-exempt organization' means any 
organization which (without regard to any excess benefit) would be 
described in paragraph (3) or (4) of section 501(c) and exempt from tax 
under section 501(a). Such term shall not include a private foundation 
(as defined in section 509(a)).
    ``(f) Other Definitions.--For purposes of this section--
            ``(1) Disqualified person.--The term `disqualified person' 
        means, with respect to any transaction--
                    ``(A) any person who was, at any time during the 5-
                year period ending on the date of such transaction--
                            ``(i) an organization manager, or
                            ``(ii) an individual (other than an 
                        organization manager) in a position to exercise 
                        substantial influence over the affairs of the 
                        organization,
                    ``(B) a member of the family of an individual 
                described in subparagraph (A), and
                    ``(C) a 35-percent controlled entity.
            ``(2) Organization manager.--The term `organization 
        manager' means, with respect to any applicable tax-exempt 
        organization, any officer, director, or trustee of such 
        organization (or any individual having powers or 
        responsibilities similar to those of officers, directors, or 
        trustees of the organization).
            ``(3) 35-percent controlled entity.--
                    ``(A) In general.--The term `35-percent controlled 
                entity' means--
                            ``(i) a corporation in which persons 
                        described in subparagraph (A) or (B) of 
                        paragraph (1) own more than 35 percent of the 
                        total combined voting power,
                            ``(ii) a partnership in which such persons 
                        own more than 35 percent of the profits 
                        interest, and
                            ``(iii) a trust or estate in which such 
                        persons own more than 35 percent of the 
                        beneficial interest.
                    ``(B) Constructive ownership rules.--Rules similar 
                to the rules of paragraphs (3) and (4) of section 
                4946(a) shall apply for purposes of this paragraph.
            ``(4) Family members.--The members of an individual's 
        family shall be determined under section 4946(d); except that 
        such members also shall include the brothers and sisters 
        (whether by the whole or half blood) of the individual and 
        their spouses.
            ``(5) Taxable period.--The term `taxable period' means, 
        with respect to any excess benefit transaction, the period 
        beginning with the date on which the transaction occurs and 
        ending on the earliest of--
                    ``(A) the date of mailing a notice of deficiency 
                under section 6212 with respect to the tax imposed by 
                subsection (a)(1), or
                    ``(B) the date on which the tax imposed by 
                subsection (a)(1) is assessed.
            ``(6) Correction.--The terms `correction' and `correct' 
        mean, with respect to any excess benefit transaction, undoing 
        the excess benefit to the extent possible, and where fully 
undoing the excess benefit is not possible, such additional corrective 
action as is prescribed by the Secretary by regulations.
    ``(g) Treatment of Previously Exempt Organizations.--
            ``(1) In general.--For purposes of this section, the status 
        of any organization as an applicable tax-exempt organization 
        shall be terminated only if--
                    ``(A)(i) such organization notifies the Secretary 
                (at such time and in such manner as the Secretary may 
                by regulations prescribe) of its intent to accomplish 
                such termination, or
                    ``(ii) there is a final determination by the 
                Secretary that such status has terminated, and
                    ``(B)(i) such organization pays the tax imposed by 
                paragraph (2) (or any portion not abated pursuant to 
                paragraph (3)), or
                    ``(ii) the entire amount of such tax is abated 
                pursuant to paragraph (3).
            ``(2) Imposition of tax.--There is hereby imposed on each 
        organization referred to in paragraph (1) a tax equal to the 
        lesser of--
                    ``(A) the amount which the organization 
                substantiates by adequate records or other 
                corroborating evidence as the aggregate tax benefit 
                resulting from its exemption from tax under section 
                501(a), or
                    ``(B) the value of the net assets of such 
                organization.
            ``(3) Abatement of tax.--The Secretary may abate the unpaid 
        portion of the assessment of any tax imposed by paragraph (2), 
        or any liability in respect thereof, if the applicable tax-
        exempt organization distributes all of its net assets to 1 or 
        more organizations each of which has been in existence, and 
        described in section 501(c)(3), for a continuous period of at 
        least 60 calendar months. If the distributing organization is 
        described in section 501(c)(4), the preceding sentence shall be 
        applied by treating the reference to section 501(c)(3) as 
        including a reference to section 501(c)(4).
            ``(4) Certain rules made applicable.--Rules similar to the 
        rules of subsections (d), (e), and (f) of section 507 shall 
        apply for purposes of this subsection.''
    (b) Application of Private Inurement Rule to Tax-Exempt 
Organizations Described in Section 501(c)(4).--Paragraph (4) of section 
501(c) is amended by inserting ``(A)'' after ``(4)'' and by adding at 
the end the following:
            ``(B) Subparagraph (A) shall not apply to an entity unless 
        no part of the net earnings of such entity inures to the 
        benefit of any private shareholder or individual.''
    (c) Technical and Conforming Amendments.--
            (1) Subsection (e) of section 4955 is amended--
                    (A) by striking ``Section 4945'' in the heading and 
                inserting ``Sections 4945 and 4958'', and
                    (B) by inserting before the period ``or an excess 
                benefit for purposes of section 4958''.
            (2) Subsections (a), (b), and (c) of section 4963 are each 
        amended by inserting ``4958,'' after ``4955,''.
            (3) Subsection (e) of section 6213 is amended by inserting 
        ``4958 (relating to private excess benefit),'' before ``4971''.
            (4) Paragraphs (2) and (3) of section 7422(g) are each 
        amended by inserting ``4958,'' after ``4955,''.
            (5) Subsection (b) of section 7454 is amended by inserting 
        ``or whether an organization manager (as defined in section 
        4958(f)(2)) has `knowingly' participated in an excess benefit 
        transaction (as defined in section 4958(c)),'' after ``section 
        4912(b),''.
            (6) The table of subchapters for chapter 42 is amended by 
        striking the last item and inserting the following:

                              ``Subchapter D. Failure by certain 
                                        charitable organizations to 
                                        meet certain qualification 
                                        requirements.
                              ``Subchapter E. Abatement of first and 
                                        second tier taxes in certain 
                                        cases.''
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section (other 
        than subsection (b)) shall apply to excess benefit transactions 
        occurring on or after September 14, 1995.
            (2) Binding contracts for personal services.--The 
        amendments referred to in paragraph (1) shall not apply to any 
        transaction pursuant to any written contract for the 
        performance of personal services which was binding on September 
        13, 1995, and at all times thereafter before such transaction 
        occurred.
            (3) Application of private inurement rule to tax-exempt 
        organizations described in section 501(c)(4).--
                    (A) In general.--The amendment made by subsection 
                (b) shall apply to inurement occurring on or after 
                September 14, 1995.
                    (B) Binding contracts.--The amendment made by 
                subsection (b) shall not apply to any inurement 
                occurring before January 1, 1997, pursuant to a written 
                contract which was binding on September 13, 1995, and 
                at all times thereafter before such inurement occurred.

SEC. 13647. REPORTING OF CERTAIN EXCISE TAXES AND OTHER INFORMATION.

    (a) Reporting By Organizations Described in Section 501(c)(3).--
Subsection (b) of section 6033 (relating to certain organizations 
described in section 501(c)(3)) is amended by striking ``and'' at the 
end of paragraph (9), by redesignating paragraph (10) as paragraph 
(14), and by inserting after paragraph (9) the following new 
paragraphs:
            ``(10) the respective amounts (if any) of the taxes paid by 
        the organization during the taxable year under the following 
        provisions:
                    ``(A) section 4911 (relating to tax on excess 
                expenditures to influence legislation),
                    ``(B) section 4912 (relating to tax on 
                disqualifying lobbying expenditures of certain 
                organizations), and
                    ``(C) section 4955 (relating to taxes on political 
                expenditures of section 501(c)(3) organizations),
            ``(11) the respective amounts (if any) of the taxes paid by 
        the organization or any disqualified person during the taxable 
        year under section 4958 (relating to taxes on private excess 
        benefit from certain charitable organizations),
            ``(12) such information as the Secretary may require with 
        respect to any excess benefit transaction (as defined in 
        section 4958),
            ``(13) the name of each disqualified person who receives an 
        economic benefit from an applicable tax-exempt organization (as 
        defined in section 4958(e)) and such other information as the 
        Secretary may prescribe with respect to such benefit, and''.
    (b) Organizations Described in Section 501(c)(4).--Section 6033 is 
amended by redesignating subsection (f) as subsection (g) and by 
inserting after subsection (e) the following new subsection:
    ``(f) Certain Organizations Described in Section 501(c)(4).--Every 
organization described in section 501(c)(4) which is subject to the 
requirements of subsection (a) shall include on the return required 
under subsection (a) the information referred to in paragraphs (10), 
(11), (12) and (13) of subsection (b) with respect to such 
organization.''
    (c) Effective Date.--The amendments made by this section shall 
apply to returns for taxable years beginning after the date of the 
enactment of this Act.

SEC. 13648. EXEMPT ORGANIZATIONS REQUIRED TO PROVIDE COPY OF RETURN.

    (a) General Rule.--
            (1) Subparagraph (A) of section 6104(e)(1) (relating to 
        public inspection of annual returns) is amended to read as 
        follows:
                    ``(A) In general.--During the 3-year period 
                beginning on the filing date--
                            ``(i) a copy of the annual return filed 
                        under section 6033 (relating to returns by 
                        exempt organizations) by any organization to 
                        which this paragraph applies shall be made 
                        available by such organization for inspection 
                        during regular business hours by any individual 
                        at the principal office of such organization 
                        and, if such organization regularly maintains 1 
                        or more regional or district offices having 3 
                        or more employees, at each such regional or 
                        district office, and
                            ``(ii) upon request of an individual made 
                        at such principal office or such a regional or 
                        district office, a copy of such annual return 
                        shall be provided to such individual without 
                        charge other than a reasonable fee for any 
                        reproduction and mailing costs.
                If the request under clause (ii) is made in person, 
                such copy shall be provided immediately and, if made 
                other than in person, shall be provided within 30 
                days.''
            (2) Clause (ii) of section 6104(e)(2)(A) is amended by 
        inserting before the period at the end thereof the following: 
        ``(and, upon request of an individual made at such principal 
        office or such a regional or district office, a copy of the 
        material required to be available for inspection under this 
        subparagraph shall be provided (in accordance with the last 
        sentence of paragraph (1)(A)) to such individual without charge 
        other than a reasonable fee for any reproduction and mailing 
        costs)''.
            (3) Subsection (e) of section 6104 is amended by adding at 
        the end the following new paragraph:
            ``(3) Limitation.--Paragraph (1)(A)(ii) (and the 
        corresponding provision of paragraph (2)) shall not apply to 
        any request if the Secretary determines, upon application by an 
        organization, that such request is part of a harassment 
        campaign and that compliance with such request is not in the 
        public interest.''
    (b) Advertisements Etc., Required To Disclose Availability of 
Annual Return.--
            (1) Paragraph (1) of section 6104(e) is amended by adding 
        at the end thereof the following new subparagraph:
                    ``(E) Advertisements etc., required to disclose 
                availability of annual return.--In the case of an 
                organization required by subparagraph (A) to provide a 
                copy of its annual return under section 6033 upon 
                request to individuals, each written advertisement or 
                solicitation by (or on behalf of) such organization 
                shall contain an express statement (in a conspicuous 
                and easily recognizable format) that such return shall 
                be provided to individuals upon request.''
            (2) Section 6716, as added by section 13649 of this title, 
        is amended--
                    (A) by striking ``section 6116'' each place it 
                appears and inserting ``section 6116 or section 
                6104(e)(1)(E)'',
                    (B) by striking ``$1,000'' in subsection (a) and 
                inserting ``$1,000 ($100 in the case of a failure to 
                meet the requirements of 6104(e)(1)(E))'', and
                    (C) by inserting before the period at the end of 
                the section heading ``; failure of certain exempt 
                organizations to disclose availability of annual 
                return''.
            (3) Subparagraph (C) of section 6652(c)(1) is amended by 
        striking ``(e)(1)'' and inserting ``(e)(1) (other than 
        subparagraph (E))'', by striking ``$10'' and inserting ``$20'', 
        and by striking ``$5,000'' and inserting ``$10,000''.
            (4) Subparagraph (D) of section 6652(c)(1) is amended by 
        striking ``$10'' and inserting ``$20''.
            (5) The item relating to section 6716 in the table of 
        sections for part I of subchapter B of chapter 68 is amended by 
        inserting before the period ``; failure of certain exempt 
        organizations to disclose availability of annual return''.
    (c) Increase in Penalty for Willful Failure To Allow Public 
Inspection of Certain Returns, Etc.--Section 6685 is amended by 
striking ``$1,000'' and inserting ``$5,000''.
    (d) Copies of Returns of Exempt Organizations Available From 
Secretary in Certain Cases.--Subsection (b) of section 6104 is amended 
to read as follows:
    ``(b) Inspection of Annual Information Returns.--
            ``(1) In general.--The information required to be furnished 
        by sections 6033, 6034, and 6058, together with the names and 
        addresses of such organizations and trusts, shall be made 
        available to the public at such times and in such places as the 
        Secretary may prescribe. Nothing in this subsection shall 
        authorize the Secretary to disclose the name or address of any 
        contributor to any organization or trust (other than a private 
        foundation, as defined in section 509(a)) which is required to 
        furnish such information.
            ``(2) Copies provided of returns filed under section 6033 
        and applications filed under section 508 in certain cases.--The 
        Secretary shall provide copies of returns filed under section 
        6033 and applications for exemption filed under section 508 by 
        any organization to which subsection (d) or (e)(1) applies to 
        any person who agrees (subject to such conditions as the 
        Secretary shall prescribe)--
                    ``(A) to accept broad categories of such returns 
                and applications, and
                    ``(B) to provide electronic access to the provided 
                returns and applications on an electronic network 
                available to the general public.
        Such copies shall be provided without charge if such person 
        agrees to provide such access without charge. Otherwise, the 
        Secretary may impose a reasonable fee for any reproduction and 
        mailing costs.
            ``(3) Returns and applications filed before 1996.--
        Paragraph (2) shall apply to returns and applications filed 
        before January 1, 1996, only to the extent provided by the 
        Secretary.''
    (e) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1996 (or, if later, the 90th day after the date of 
the enactment of this Act).

SEC. 13649. CERTAIN ORGANIZATIONS REQUIRED TO DISCLOSE NONEXEMPT 
              STATUS.

    (a) General Rule.--Subchapter B of chapter 61 (relating to 
miscellaneous provisions) is amended by redesignating section 6116 as 
section 6117 and by inserting after section 6115 the following new 
section:

``SEC. 6116. CERTAIN ORGANIZATIONS REQUIRED TO DISCLOSE NONEXEMPT 
              STATUS.

    ``(a) In General.--If--
            ``(1) in an advertisement or solicitation by (or on behalf 
        of) an organization, such organization is referred to as being 
        nonprofit, and
            ``(2) such organization is not exempt from tax under 
        subtitle A,
such advertisement or solicitation shall contain an express statement 
(in a conspicuous and easily recognizable format) that such 
organization is not exempt from Federal income taxes.
    ``(b) Cross Reference.--

                                ``For penalties for violation of 
subsection (a), see section 6716.''
    (b) Penalty.--Part I of subchapter B of chapter 68 is amended by 
adding at the end thereof the following new section:

``SEC. 6716. FAILURE TO DISCLOSE NONEXEMPT STATUS.

    ``(a) Imposition of Penalty.--If there is a failure to meet the 
requirements of section 6116 with respect to any advertisement or 
solicitation by (or on behalf of) an organization, such organization 
shall pay a penalty of $1,000 for each day on which such a failure 
occurred. The maximum penalty imposed under this subsection on failures 
by any organization during any calendar year shall not exceed $10,000.
    ``(b) Reasonable Cause Exemption.--No penalty shall be imposed 
under this section with respect to any failure if it is shown that such 
failure is due to reasonable cause.
    ``(c) $10,000 Limitation Not To Apply Where Intentional 
Disregard.--If any failure to which subsection (a) applies is due to 
intentional disregard of the requirements of section 6116--
            ``(1) the penalty under subsection (a) for the day on which 
        failure occurred shall be the greater of--
                    ``(A) $1,000, or
                    ``(B) 50 percent of the aggregate cost of the 
                advertisements and solicitations which occurred on such 
                day and with respect to which there was such failure,
            ``(2) the $10,000 limitation of subsection (a) shall not 
        apply to any penalty under subsection (a) for the day on which 
        such failure occurred, and
            ``(3) such penalty shall not be taken into account in 
        applying such limitation to other penalties under subsection 
        (a).
    ``(d) Day on Which Failure Occurs.--For purposes of this section, 
rules similar to the rules of section 6710(d) shall apply in 
determining the day on which any failure occurs.''
    (c) Clerical Amendments.--
            (1) The table of sections for subchapter B of chapter 61 is 
        amended by striking the item relating to section 6116 and 
        inserting the following:

                                  ``Sec. 6116. Certain organizations 
                                        required to disclose nonexempt 
                                        status.
                                  ``Sec. 6117. Cross reference.''
            (2) The table of sections of part I of subchapter B of 
        chapter 68 is amended by adding at the end thereof the 
        following new item:

                                  ``Sec. 6716. Failure to disclose 
                                        nonexempt status.''
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1996 (or, if later, the 90th day after the date of 
the enactment of this Act).

SEC. 13650. INCREASE IN PENALTIES ON EXEMPT ORGANIZATIONS FOR FAILURE 
              TO FILE COMPLETE AND TIMELY ANNUAL RETURNS.

    (a) In General.--Subparagraph (A) of section 6652(c)(1) (relating 
to annual returns under section 6033) is amended by striking ``$10'' 
and inserting ``$20'' and by striking ``$5,000'' and inserting 
``$10,000''.
    (b) Larger Penalty on Organizations Having Gross Receipts in Excess 
of $1,000,000.--Subparagraph (A) of section 6652(c)(1) is amended by 
adding at the end the following new sentence: ``In the case of an 
organization having gross receipts exceeding $1,000,000 for any year, 
with respect to the return required under section 6033 for such year, 
the first sentence of this subparagraph shall be applied by 
substituting `$100' for `$20' and, in lieu of applying the second 
sentence of this subparagraph, the maximum penalty under this 
subparagraph shall not exceed $50,000.''
    (c) Effective Date.--The amendments made by this section shall 
apply to returns for taxable years ending on or after December 31, 
1995.

SEC. 13651. STUDIES.

    (a) In General.--The Secretary of the Treasury or his delegate 
shall conduct a study of--
            (1) whether the statutory prohibition on private inurement, 
        and the provisions of section 4958 of the Internal Revenue Code 
        of 1986 (as added by this part), should apply to other tax-
        exempt organizations,
            (2) whether State officials responsible for overseeing 
        charitable organizations should be provided with Federal tax 
        information in addition to the information available under 
        section 6103 of such Code for purposes of such oversight, and
            (3) whether the return required to be filed by section 6033 
        of such Code should be modified to assure the return's utility 
        to such Secretary and to the public and to reduce any 
        unnecessary reporting burdens.
    (b) Report.--Not later than January 1, 1997, the report of such 
study shall be submitted to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate.

           Subtitle G--Reform of the Earned Income Tax Credit

SEC. 13701. REPEAL OF EARNED INCOME CREDIT FOR INDIVIDUALS WITHOUT 
              QUALIFYING CHILDREN; MODIFICATIONS TO CREDIT PHASEOUT.

    (a) Repeal of Credit for Individuals Without Children.--
Subparagraph (A) of section 32(c)(1) (defining eligible individual) is 
amended to read as follows:
                    ``(A) In general.--The term `eligible individual' 
                means any individual who has a qualifying child for the 
                taxable year.''
    (b) Modifications to Phaseout.--
            (1) Subsection (b) of section 32 is amended to read as 
        follows:
    ``(b) Percentages.--
            ``(1) In general.--The credit percentage and the phaseout 
        percentage shall be determined as follows:

                                                                                                                
    ``In the case of an eligible                                                                                
          individual with:                 The credit percentage is:            The phaseout percentage is:     
                                                                                                                
1 qualifying child.................  34..................................                    18                 
2 or more qualifying children......  40..................................                    23                 
                                                                                                                

      
            ``(2) Amounts.--The earned income amount and the phaseout 
        amount shall be determined as follows:

                                                                                                                
    ``In the case of an eligible                                                                                
          individual with:               The earned income amount is:             The phaseout amount is:       
                                                                                                                
1 qualifying child.................  $6,340..............................                 $11,630               
2 or more qualifying children......  $8,910..............................                $11,630.''             
                                                                                                                

      
            (2) Subsection (j) of section 32 is amended--
                    (A) by striking ``subsection (b)(2)(A)'' and 
                inserting ``subsection (b)(2)'',
                    (B) by striking ``1994'' and inserting ``1996'', 
                and
                    (C) by striking ``1993'' and inserting ``1995''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 13702. MODIFICATION OF ADJUSTED GROSS INCOME USED FOR PHASEOUT.

    (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of 
section 32 are each amended by striking ``adjusted gross income'' each 
place it appears and inserting ``modified adjusted gross income''.
    (b) Modified Adjusted Gross Income.--Subsection (c) of section 32 
is amended by adding at the end the following new paragraph:
            ``(5) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income increased by--
                    ``(A) any amount received as a pension or annuity, 
                and any distribution or payment received from an 
                individual retirement plan, by the taxpayer during the 
                taxable year to the extent not otherwise included in 
                gross income, and
                    ``(B) the social security benefits (as defined in 
                section 86(d)) received by the taxpayer during the 
                taxable year to the extent not included in gross 
                income.
        Any amount which is not includible in gross income by reason of 
        paragraph (3), (4), or (5) of section 408(d) or section 402(c), 
        403(a)(4), 403(b)(8), or 457(e)(10) shall be treated as not 
        described in subparagraph (A).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 13703. EARNED INCOME TAX CREDIT DENIED TO INDIVIDUALS NOT 
              AUTHORIZED TO BE EMPLOYED IN THE UNITED STATES.

    (a) In General.--Section 32(c)(1) (relating to individuals eligible 
to claim the earned income tax credit) is amended by adding at the end 
the following new subparagraph:
                    ``(F) Identification number requirement.--The term 
                `eligible individual' does not include any individual 
                who does not include on the return of tax for the 
                taxable year--
                            ``(i) such individual's taxpayer 
                        identification number, and
                            ``(ii) if the individual is married (within 
                        the meaning of section 7703), the taxpayer 
                        identification number of such individual's 
                        spouse.''
    (b) Special Identification Number.--Section 32 is amended by adding 
at the end the following new subsection:
    ``(l) Identification Numbers.--Solely for purposes of subsections 
(c)(1)(F) and (c)(3)(D), a taxpayer identification number means a 
social security number issued to an individual by the Social Security 
Administration (other than a social security number issued pursuant to 
clause (II) (or that portion of clause (III) that relates to clause 
(II)) of section 205(c)(2)(B)(i) of the Social Security Act).''
    (c) Extension of Procedures Applicable to Mathematical or Clerical 
Errors.--Section 6213(g)(2) (relating to the definition of mathematical 
or clerical errors) is amended by striking ``and' at the end of 
subparagraph (D), by striking the period at the end of subparagraph (E) 
and inserting a comma, and by inserting after subparagraph (E) the 
following new subparagraphs:
                    ``(F) an omission of a correct taxpayer 
                identification number required under section 32 
                (relating to the earned income tax credit) to be 
                included on a return, and
                    ``(G) an entry on a return claiming the credit 
                under section 32 with respect to net earnings from 
                self-employment described in section 32(c)(2)(A) to the 
                extent the tax imposed by section 1401 (relating to 
                self-employment tax) on such net earnings has not been 
                paid.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

               Subtitle H--Increase in Public Debt Limit

SEC. 13801. INCREASE IN PUBLIC DEBT LIMIT.

    Subsection (b) of section 3101 of title 31, United States Code, is 
amended by striking the dollar amount contained therein and inserting 
``$5,500,000,000,000''.

            Subtitle I--Coal Industry Retiree Health Equity

SEC. 13901. REPEAL OF REACHBACK PROVISIONS OF COAL INDUSTRY HEALTH 
              BENEFIT SYSTEM.

    (a) Amendments Related to Definitions.--
            (1) Agreements.--
                    (A) In general.--Paragraph (1) of section 9701(b) 
                (relating to agreements) is amended to read as follows:
            ``(1) Coal wage agreements.--
                    ``(A) 1988 agreement.--The term `1988 agreement' 
                means the collective bargaining agreement between the 
                settlors which became effective on February 1, 1988.
                    ``(B) Coal wage agreement.--The term `coal wage 
                agreement' means any predecessor to the 1988 
                agreement.''
                    (B) Conforming amendment.--Section 9701(b) is 
                amended by striking paragraph (3).
            (2) Operators.--
                    (A) Signatory operator.--Paragraph (1) of section 
                9701(c) (relating to operators) is amended to read as 
                follows:
            ``(1) Signatory operator.--The term `signatory operator' 
        means a 1988 agreement operator.''
                    (B) 1988 agreement operator.--Paragraph (3) of 
                section 9701(c) is amended to read as follows:
            ``(3) 1988 agreement operator.--The term `1988 agreement 
        operator' means--
                    ``(A) an operator which was a signatory to the 1988 
                agreement, or
                    ``(B) a person in business which, during the term 
                of the 1988 agreement, was a signatory to an agreement 
                (other than the National Coal Mine Construction 
                Agreement and the Coal Haulers' Agreement) containing 
                pension and health care contribution and benefit 
                provisions which are the same as those contained in the 
                1988 agreement.
        Such term shall not include any operator who was assessed, and 
        did pay the full amount of, contractual withdrawal liability to 
        the 1950 UMWA Benefit Plan, the 1974 UMWA Benefit Plan, or the 
        Combined Fund.''
                    (C) Last signatory operator.--Section 9701(c)(4) is 
                amended by inserting ``bituminous'' before ``coal'' 
                each place it appears.
    (b) Combined Benefit Fund.--Section 9702(b)(1) is amended to read 
as follows:
    ``(b) Board of Trustees.--
            ``(1) In general.--For purposes of subsection (a), the 
        board of trustees for the Combined Fund shall be appointed as 
        follows:
                    ``(A) two individuals who represent employers in 
                the coal mining industry shall be designated by the 
                BCOA;
                    ``(B) two individuals designated by the United Mine 
                Workers of America; and
                    ``(C) three persons selected by the persons 
                appointed under subparagraphs (A) and (B).''
    (c) Assignment of Eligible Beneficiaries.--Subsection (a) of 
section 9706 is amended by adding at the end the following new flush 
sentence:
``For purposes of assessing premiums on or after October 1, 1995, under 
this chapter, the Commissioner of Social Security shall, effective 
October 1, 1995, revoke all assignments previously made (and shall make 
no further assignments and shall terminate all unpaid liabilities for 
any pending assignments) to all persons other than signatory operators 
and shall deem each affected coal industry retiree who is an eligible 
beneficiary to be an unassigned beneficiary under section 9706. The 
preceding sentence shall not be construed to prevent any transfer, or 
any treatment of a successor as an assigned operator, under subsection 
(b)(2).''
    (d) 1992 UMWA Benefit Plan.--Section 9712(d) is amended--
            (1) by striking paragraph (3) and by redesignating 
        paragraphs (4), (5), and (6) as paragraphs (3), (4), and (5), 
        respectively, and
            (2) by striking ``or last signatory operator described in 
        paragraph (3),'' in paragraph (3) (as redesignated under 
        paragraph (1)).
    (e) Information Requirements.--
            (1) In general.--Subsection (h) of section 9704 is amended 
        by adding at the end the following new paragraph:
            ``(2) Information to contributors.--
                    ``(A) In general.--The trustees of the Combined 
                Fund shall, within 30 days of a written request, make 
                available to any person required to make contributions 
                to the Combined Fund, or their agent--
                            ``(i) all documents which reflect its 
                        financial and operational status, including 
                        documents under which it is operated, and
                            ``(ii) all documents prepared at the 
                        request of the trustees or staff of the 
                        Combined Fund which form the basis for any of 
                        its actions or reports, including the 
                        eligibility of participants in predecessor 
                        plans.
                    ``(B) Fees.--The trustees may charge reasonable 
                fees (not in excess of actual expenses) for providing 
                documents under this paragraph.''
            (2) Conforming amendment.--Subsection (h) of section 9704 
        is amended by striking ``(h) Information.--The'' and inserting 
        the following:
    ``(h) Information.--
            ``(1) Information to secretary.--The''.
    (f) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after September 30, 1995.

       TITLE XIV--COMMITTEE ON WAYS AND MEANS--TAX SIMPLIFICATION

SEC. 14001. SHORT TITLE; AMENDMENT TO 1986 CODE.

    (a) Short Title.--This title may be cited as the ``Tax 
Simplification Act of 1995''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this title is as 
follows:

       TITLE XIV--COMMITTEE ON WAYS AND MEANS--TAX SIMPLIFICATION

Sec. 14001. Short title; amendment to 1986 Code.
             Subtitle A--Provisions Relating to Individuals

 Part I--Provisions Relating to Rollover of Gain on Sale of Principal 
                               Residence

Sec. 14101. Multiple sales within rollover period.
Sec. 14102. Special rules in case of divorce.
Sec. 14103. One-time exclusion of gain from sale of principal residence 
                            for certain spouses.
                       Part II--Other Provisions

Sec. 14111. Payment of tax by commercially acceptable means.
Sec. 14112. Simplified foreign tax credit limitation for individuals.
Sec. 14113. Treatment of personal transactions by individuals under 
                            foreign currency rules.
Sec. 14114. Treatment of certain reimbursed expenses of rural mail 
                            carriers.
Sec. 14115. Exclusion of combat pay from withholding limited to amount 
                            excludable from gross income.
Sec. 14116. Treatment of traveling expenses of certain Federal 
                            employees engaged in criminal 
                            investigations.
                   Subtitle B--Pension Simplification

                 Part I--Simplified Distribution Rules

Sec. 14201. Repeal of 5-year income averaging for lump-sum 
                            distributions.
Sec. 14202. Repeal of $5,000 exclusion of employees' death benefits.
Sec. 14203. Simplified method for taxing annuity distributions under 
                            certain employer plans.
Sec. 14204. Required distributions.
               Part II--Increased Access to Pension Plans

Sec. 14211. Modifications of simplified employee pensions.
Sec. 14212. State and local governments and tax-exempt organizations 
                            eligible under section 401(k).
                 Part III--Nondiscrimination Provisions

Sec. 14221. Definition of highly compensated employees.
Sec. 14222. Repeal of family aggregation rules.
Sec. 14223. Modification of additional participation requirements.
Sec. 14224. Nondiscrimination rules for qualified cash or deferred 
                            arrangements and matching contributions.
                 Part IV--Miscellaneous Simplification

Sec. 14231. Treatment of leased employees.
Sec. 14232. Plans covering self-employed individuals.
Sec. 14233. Elimination of special vesting rule for multiemployer 
                            plans.
Sec. 14234. Distributions under rural cooperative plans.
Sec. 14235. Treatment of governmental plans under section 415.
Sec. 14236. Uniform retirement age.
Sec. 14237. Uniform penalty provisions to apply to certain pension 
                            reporting requirements.
Sec. 14238. Contributions on behalf of disabled employees.
Sec. 14239. Treatment of deferred compensation plans of State and local 
                            governments and tax-exempt organizations.
Sec. 14240. Trust requirement for deferred compensation plans of State 
                            and local governments.
Sec. 14241. Transition rule for computing maximum benefits under 
                            section 415 limitations.
Sec. 14242. Multiple salary reduction agreements permitted under 
                            section 403(b).
Sec. 14243. Waiver of minimum period for joint and survivor annuity 
                            explanation before annuity starting date.
Sec. 14244. Repeal of limitation in case of defined benefit plan and 
                            defined contribution plan for same 
                            employee.
Sec. 14245. Date for adoption of plan amendments.
              Subtitle C--Treatment of Large Partnerships

                       Part I--General Provisions

Sec. 14301. Simplified flow-through for large partnerships.
Sec. 14302. Simplified audit procedures for large partnerships.
Sec. 14303. Due date for furnishing information to partners of large 
                            partnerships.
Sec. 14304. Returns may be required on magnetic media.
Sec. 14305. Treatment of partnership items of individual retirement 
                            accounts.
Sec. 14306. Effective date.
     Part II--Provisions Related to Certain Partnership Proceedings

Sec. 14311. Treatment of partnership items in deficiency proceedings.
Sec. 14312. Partnership return to be determinative of audit procedures 
                            to be followed.
Sec. 14313. Provisions relating to statute of limitations.
Sec. 14314. Expansion of small partnership exception.
Sec. 14315. Exclusion of partial settlements from 1-year limitation on 
                            assessment.
Sec. 14316. Extension of time for filing a request for administrative 
                            adjustment.
Sec. 14317. Availability of innocent spouse relief in context of 
                            partnership proceedings.
Sec. 14318. Determination of penalties at partnership level.
Sec. 14319. Provisions relating to court jurisdiction, etc.
Sec. 14320. Treatment of premature petitions filed by notice partners 
                            or 5-percent groups.
Sec. 14321. Bonds in case of appeals from certain proceeding.
Sec. 14322. Suspension of interest where delay in computational 
                            adjustment resulting from certain 
                            settlements.
Sec. 14323. Special rules for administrative adjustment requests with 
                            respect to bad debts or worthless 
                            securities.
                     Subtitle D--Foreign Provisions

   Part I--Modifications to Treatment of Passive Foreign Investment 
                               Companies

Sec. 14401. United States shareholders of controlled foreign 
                            corporations not subject to PFIC inclusion.
Sec. 14402. Election of mark to market for marketable stock in passive 
                            foreign investment company.
Sec. 14403. Modifications to definition of passive income.
Sec. 14404. Effective date.
         Part II--Treatment of Controlled Foreign Corporations

Sec. 14411. Gain on certain stock sales by controlled foreign 
                            corporations treated as dividends.
Sec. 14412. Miscellaneous modifications to subpart F.
Sec. 14413. Indirect foreign tax credit allowed for certain lower tier 
                            companies.
Sec. 14414. Repeal of inclusion of certain earnings invested in excess 
                            passive assets.
                       Part III--Other Provisions

Sec. 14421. Exchange rate used in translating foreign taxes.
Sec. 14422. Election to use simplified section 904 limitation for 
                            alternative minimum tax.
Sec. 14423. Modification of section 1491.
Sec. 14424. Modification of section 367(b).
Sec. 14425. Increase in filing thresholds for returns as to 
                            organization of foreign corporations and 
                            acquisitions of stock in such corporations.
Sec. 14426. Application of uniform capitalization rules to foreign 
                            persons.
Sec. 14427. Certain prizes and awards.
Sec. 14428. Treatment for estate tax purposes of short-term obligations 
                            held by nonresident aliens.
                Subtitle E--Other Income Tax Provisions

             Part I--Provisions Relating to S Corporations

Sec. 14501. S corporations permitted to have 75 shareholders.
Sec. 14502. Electing small business trusts.
Sec. 14503. Expansion of post-death qualification for certain trusts.
Sec. 14504. Financial institutions permitted to hold safe harbor debt.
Sec. 14505. Rules relating to inadvertent terminations and invalid 
                            elections.
Sec. 14506. Agreement to terminate year.
Sec. 14507. Expansion of post-termination transition period.
Sec. 14508. S corporations permitted to hold subsidiaries.
Sec. 14509. Treatment of distributions during loss years.
Sec. 14510. Treatment of S corporations under subchapter C.
Sec. 14511. Elimination of certain earnings and profits.
Sec. 14512. Carryover of disallowed losses and deductions under at-risk 
                            rules allowed.
Sec. 14513. Adjustments to basis of inherited S stock to reflect 
                            certain items of income.
Sec. 14514. S corporations eligible for rules applicable to real 
                            property subdivided for sale by 
                            noncorporate taxpayers.
Sec. 14515. Effective date.
     Part II--Provisions Relating to Regulated Investment Companies

Sec. 14521. Repeal of 30-percent gross income limitation.
     Part III--Provisions Relating to Real Estate Investment Trusts

Sec. 14531. Clarification of limitation on maximum number of 
                            shareholders.
Sec. 14532. De minimis rule for tenant services income.
Sec. 14533. Attribution rules applicable to tenant ownership.
Sec. 14534. Credit for tax paid by REIT on retained capital gains.
Sec. 14535. Repeal of 30-percent gross income requirement.
Sec. 14536. Modification of earnings and profits rules for determining 
                            whether REIT has earnings and profits from 
                            non-REIT year.
Sec. 14537. Treatment of foreclosure property.
Sec. 14538. Payments under hedging instruments.
Sec. 14539. Excess noncash income.
Sec. 14540. Prohibited transaction safe harbor.
Sec. 14541. Shared appreciation mortgages.
Sec. 14542. Wholly owned subsidiaries.
Sec. 14543. Effective date.
                     Part IV--Accounting Provisions

Sec. 14551. Modifications to look-back method for long-term contracts.
Sec. 14552. Application of mark to market accounting method to traders 
                            in securities.
Sec. 14553. Modification of ruling amounts for nuclear decommissioning 
                            costs.
Sec. 14554. Election of alternative taxable years by partnerships and S 
                            corporations.
Sec. 14555. Special rule for crop insurance proceeds and disaster 
                            payments.
                   Part V--Tax-Exempt Bond Provisions

Sec. 14561. Repeal of $100,000 limitation on unspent proceeds under 1-
                            year exception from rebate.
Sec. 14562. Exception from rebate for earnings on bona fide debt 
                            service fund under construction bond rules.
Sec. 14563. Repeal of debt service-based limitation on investment in 
                            certain nonpurpose investments.
Sec. 14564. Repeal of expired provisions.
Sec. 14565. Effective dates.
                     Part VI--Insurance Provisions

Sec. 14571. Treatment of certain insurance contracts on retired lives.
Sec. 14572. Treatment of modified guaranteed contracts.
Sec. 14573. Minimum tax treatment of certain property and casualty 
                            insurance companies.
                       Part VII--Other Provisions

Sec. 14581. Closing of partnership taxable year with respect to 
                            deceased partner, etc.
Sec. 14582. Credit for Social Security taxes paid with respect to 
                            employee cash tips.
Sec. 14583. Due date for first quarter estimated tax payments by 
                            private foundations.
Sec. 14584. Treatment of dues paid to agricultural or horticultural 
                            organizations.
                     Subtitle F--Estates and Trusts

                     Part I--Income Tax Provisions

Sec. 14601. Certain revocable trusts treated as part of estate.
Sec. 14602. Distributions during first 65 days of taxable year of 
                            estate.
Sec. 14603. Separate share rules available to estates.
Sec. 14604. Executor of estate and beneficiaries treated as related 
                            persons for disallowance of losses, etc.
Sec. 14605. Limitation on taxable year of estates.
Sec. 14606. Repeal of certain throwback rules applicable to domestic 
                            trusts.
Sec. 14607. Treatment of funeral trusts.
                Part II--Estate and Gift Tax Provisions

Sec. 14611. Clarification of waiver of certain rights of recovery.
Sec. 14612. Adjustments for gifts within 3 years of decedent's death.
Sec. 14613. Clarification of qualified terminable interest rules.
Sec. 14614. Transitional rule under section 2056A.
Sec. 14615. Opportunity to correct certain failures under section 
                            2032A.
Sec. 14616. Unified credit of decedent increased by unified credit of 
                            spouse used on split gift included in 
                            decedent's gross estate.
Sec. 14617. Reformation of defective bequests, etc. to spouse of 
                            decedent.
Sec. 14618. Gifts may not be revalued for estate tax purposes after 
                            expiration of statute of limitations.
Sec. 14619. Clarifications relating to disclaimers.
Sec. 14620. Clarification of treatment of survivor annuities under 
                            qualified terminable interest rules.
Sec. 14621. Treatment under qualified domestic trust rules of forms of 
                            ownership which are not trusts.
Sec. 14622. Authority to waive requirement of United States trustee for 
                            qualified domestic trusts.
              Part III--Generation-Skipping Tax Provisions

Sec. 14631. Severing of trusts holding property having an inclusion 
                            ratio of greater than zero.
Sec. 14632. Clarification of who is transferor where subsequent gift by 
                            reason of power of appointment.
Sec. 14633. Taxable termination not to include direct skips.
Sec. 14634. Expansion of exception from generation-skipping transfer 
                            tax for transfers to individuals with 
                            deceased parents.
                 Subtitle G--Excise Tax Simplification

    Part I--Provisions Related to Distilled Spirits, Wines, and Beer

Sec. 14701. Credit or refund for imported bottled distilled spirits 
                            returned to distilled spirits plant.
Sec. 14702. Authority to cancel or credit export bonds without 
                            submission of records.
Sec. 14703. Repeal of required maintenance of records on premises of 
                            distilled spirits plant.
Sec. 14704. Fermented material from any brewery may be received at a 
                            distilled spirits plant.
Sec. 14705. Repeal of requirement for wholesale dealers in liquors to 
                            post sign.
Sec. 14706. Refund of tax on wine returned to bond not limited to 
                            unmerchantable wine.
Sec. 14707. Use of additional ameliorating material in certain wines.
Sec. 14708. Domestically produced beer may be withdrawn free of tax for 
                            use of foreign embassies, legations, etc.
Sec. 14709. Beer may be withdrawn free of tax for destruction.
Sec. 14710. Authority to allow drawback on exported beer without 
                            submission of records.
Sec. 14711. Transfer to brewery of beer imported in bulk without 
                            payment of tax.
          Part II--Consolidation of Taxes on Aviation Gasoline

Sec. 14721. Consolidation of taxes on aviation gasoline.
                 Part III--Other Excise Tax Provisions

Sec. 14731. Authority to grant exemptions from registration 
                            requirements.
Sec. 14732. Certain combinations not treated as manufacture under 
                            retail sales tax on heavy trucks.
Sec. 14733. Exemption from diesel fuel dyeing requirements with respect 
                            to certain States.
Sec. 14734. Repeal of expired provisions.
                 Subtitle H--Administrative Provisions

                       Part I--General Provisions

Sec. 14801. Repeal of authority to disclose whether prospective juror 
                            has been audited.
Sec. 14802. Clarification of statute of limitations.
Sec. 14803. Certain notices disregarded under provision increasing 
                            interest rate on large corporate 
                            underpayments.
Sec. 14804. Clarification of authority to withhold Puerto Rico income 
                            taxes from salaries of Federal employees.
                     Part II--Tax Court Procedures

Sec. 14811. Overpayment determinations of tax court.
Sec. 14812. Awarding of administrative costs.
Sec. 14813. Redetermination of interest pursuant to motion.
Sec. 14814. Application of net worth requirement for awards of 
                            litigation costs.
         Part III--Authority for Certain Cooperative Agreements

Sec. 14821. Cooperative agreements with State tax authorities.

             Subtitle A--Provisions Relating to Individuals

 PART I--PROVISIONS RELATING TO ROLLOVER OF GAIN ON SALE OF PRINCIPAL 
                               RESIDENCE

SEC. 14101. MULTIPLE SALES WITHIN ROLLOVER PERIOD.

    (a) General Rule.--
            (1) Section 1034 (relating to rollover of gain on sale of 
        principal residence) is amended by striking subsection (d).
            (2) Paragraph (4) of section 1034(c) is amended to read as 
        follows:
            ``(4) If the taxpayer, during the period described in 
        subsection (a), purchases more than 1 residence which is used 
        by him as his principal residence at some time within 2 years 
        after the date of the sale of the old residence, only the first 
        of such residences so used by him after the date of such sale 
        shall constitute the new residence.''
            (3) Subsections (h)(1) and (k) of section 1034 are each 
        amended by striking ``(other than the 2 years referred to in 
        subsection (c)(4))''.
    (b) Effective Date.--The amendments made by this section shall 
apply to sales of old residences (within the meaning of section 1034 of 
the Internal Revenue Code of 1986) after the date of the enactment of 
this Act.

SEC. 14102. SPECIAL RULES IN CASE OF DIVORCE.

    (a) In General.--Subsection (c) of section 1034 is amended by 
adding at the end the following new paragraph:
            ``(5) If--
                    ``(A) a residence is sold by an individual pursuant 
                to a divorce or marital separation, and
                    ``(B) the taxpayer used such residence as his 
                principal residence at any time during the 2-year 
                period ending on the date of such sale,
        for purposes of this section, such residence shall be treated 
        as the taxpayer's principal residence at the time of such 
        sale.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to sales of old residences (within the meaning of section 1034 of 
the Internal Revenue Code of 1986) after the date of the enactment of 
this Act.

SEC. 14103. ONE-TIME EXCLUSION OF GAIN FROM SALE OF PRINCIPAL RESIDENCE 
              FOR CERTAIN SPOUSES.

    (a) In General.--Paragraph (2) of section 121(b) (relating to one-
time exclusion of gain from sale of principal residence by individual 
who has attained age 55) is amended by adding at the end the following 
new sentence: ``For purposes of applying the preceding sentence to 
individuals who are married to each other, an election by one 
individual with respect to a sale or exchange occurring before the 
marriage shall be disregarded for purposes of permitting an election 
with respect to property owned and used by the other individual as his 
principal residence throughout the 3-year period ending on the date of 
the marriage.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply for purposes of determining whether an election may be made under 
section 121 of the Internal Revenue Code of 1986 with respect to a sale 
or exchange occurring after September 13, 1995.

                       PART II--OTHER PROVISIONS

SEC. 14111. PAYMENT OF TAX BY COMMERCIALLY ACCEPTABLE MEANS.

    (a) General Rule.--Section 6311 is amended to read as follows:

``SEC. 6311. PAYMENT OF TAX BY COMMERCIALLY ACCEPTABLE MEANS.

    ``(a) Authority To Receive.--It shall be lawful for the Secretary 
to receive for internal revenue taxes (or in payment for internal 
revenue stamps) any commercially acceptable means that the Secretary 
deems appropriate to the extent and under the conditions provided in 
regulations prescribed by the Secretary.
    ``(b) Ultimate Liability.--If a check, money order, or other method 
of payment, including payment by credit card, debit card, or charge 
card so received is not duly paid, or is paid and subsequently charged 
back to the Secretary, the person by whom such check, or money order, 
or other method of payment has been tendered shall remain liable for 
the payment of the tax or for the stamps, and for all legal penalties 
and additions, to the same extent as if such check, money order, or 
other method of payment had not been tendered.
    ``(c) Liability of Banks and Others.--If any certified, 
treasurer's, or cashier's check (or other guaranteed draft), or any 
money order, or any other means of payment that has been guaranteed by 
a financial institution (such as a credit card, debit card, or charge 
card transaction which has been guaranteed expressly by a financial 
institution) so received is not duly paid, the United States shall, in 
addition to its right to exact payment from the party originally 
indebted therefor, have a lien for--
            ``(1) the amount of such check (or draft) upon all assets 
        of the financial institution on which drawn,
            ``(2) the amount of such money order upon all the assets of 
        the issuer thereof, or
            ``(3) the guaranteed amount of any other transaction upon 
        all the assets of the institution making such guarantee,
and such amount shall be paid out of such assets in preference to any 
other claims whatsoever against such financial institution, issuer, or 
guaranteeing institution, except the necessary costs and expenses of 
administration and the reimbursement of the United States for the 
amount expended in the redemption of the circulating notes of such 
financial institution.
    ``(d) Payment by Other Means.--
            ``(1) Authority to prescribe regulations.--The Secretary 
        shall prescribe such regulations as the Secretary deems 
        necessary to receive payment by commercially acceptable means, 
        including regulations that--
                    ``(A) specify which methods of payment by 
                commercially acceptable means will be acceptable,
                    ``(B) specify when payment by such means will be 
                considered received,
                    ``(C) identify types of nontax matters related to 
                payment by such means that are to be resolved by 
                persons ultimately liable for payment and financial 
                intermediaries, without the involvement of the 
                Secretary, and
                    ``(D) ensure that tax matters will be resolved by 
                the Secretary, without the involvement of financial 
                intermediaries.
            ``(2) Authority to enter into contracts.--Notwithstanding 
        section 3718(f) of title 31, United States Code, the Secretary 
        is authorized to enter into contracts to obtain services 
        related to receiving payment by other means where cost 
        beneficial to the Government. The Secretary may not pay any fee 
        or provide any other consideration under such contracts.
            ``(3) Special provisions for use of credit cards.--If use 
        of credit cards is accepted as a method of payment of taxes 
        pursuant to subsection (a)--
                    ``(A) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) by a person by use 
                of a credit card shall not be subject to section 161 of 
                the Truth-in-Lending Act (15 U.S.C. 1666), or to any 
                similar provisions of State law, if the error alleged 
                by the person is an error relating to the underlying 
                tax liability, rather than an error relating to the 
                credit card account such as a computational error or 
                numerical transposition in the credit card transaction 
                or an issue as to whether the person authorized payment 
                by use of the credit card,
                    ``(B) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) shall not be 
                subject to section 170 of the Truth-in-Lending Act (15 
                U.S.C. 1666i), or to any similar provisions of State 
                law,
                    ``(C) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) by a person by use 
                of a debit card shall not be subject to section 908 of 
                the Electronic Fund Transfer Act (15 U.S.C. 1693f), or 
                to any similar provisions of State law, if the error 
                alleged by the person is an error relating to the 
                underlying tax liability, rather than an error relating 
                to the debit card account such as a computational error 
                or numerical transposition in the debit card 
                transaction or an issue as to whether the person 
                authorized payment by use of the debit card,
                    ``(D) the term `creditor' under section 103(f) of 
                the Truth-in-Lending Act (15 U.S.C. 1602(f)) shall not 
                include the Secretary with respect to credit card 
                transactions in payment of internal revenue taxes (or 
                payment for internal revenue stamps), and
                    ``(E) notwithstanding any other provision of law to 
                the contrary, in the case of payment made by credit 
                card or debit card transaction of an amount owed to a 
                person as the result of the correction of an error 
                under section 161 of the Truth-in-Lending Act (15 
                U.S.C. 1666) or section 908 of the Electronic Fund 
                Transfer Act (15 U.S.C. 1693f), the Secretary is 
                authorized to provide such amount to such person as a 
                credit to that person's credit card or debit 
card account through the applicable credit card or debit card system.
    ``(e) Confidentiality of Information.--
            ``(1) In general.--Except as otherwise authorized by this 
        subsection, no person may use or disclose any information 
        relating to credit or debit card transactions obtained pursuant 
        to section 6103(k)(8) other than for purposes directly related 
        to the processing of such transactions, or the billing or 
        collection of amounts charged or debited pursuant thereto.
            ``(2) Exceptions.--
                    ``(A) Debit or credit card issuers or others acting 
                on behalf of such issuers may also use and disclose 
                such information for purposes directly related to 
                servicing an issuer's accounts.
                    ``(B) Debit or credit card issuers or others 
                directly involved in the processing of credit or debit 
                card transactions or the billing or collection of 
                amounts charged or debited thereto may also use and 
                disclose such information for purposes directly related 
                to--
                            ``(i) statistical risk and profitability 
                        assessment;
                            ``(ii) transferring receivables, accounts, 
                        or interest therein;
                            ``(iii) auditing the account information;
                            ``(iv) complying with Federal, State, or 
                        local law; and
                            ``(v) properly authorized civil, criminal, 
                        or regulatory investigation by Federal, State, 
                        or local authorities.
            ``(3) Procedures.--Use and disclosure of information under 
        this paragraph shall be made only to the extent authorized by 
        written procedures promulgated by the Secretary.
            ``(4) Cross reference.--

                                ``For provision providing for civil 
damages for violation of paragraph (1), see section 7431.''
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 64 is amended by striking the item relating to section 6311 and 
inserting the following:

                              ``Sec. 6311. Payment of tax by 
                                        commercially acceptable 
                                        means.''
    (c) Amendments to Sections 6103 and 7431 With Respect to Disclosure 
Authorization.--
            (1) Subsection (k) of section 6103 (relating to 
        confidentiality and disclosure of returns and return 
        information) is amended by adding at the end the following new 
        paragraph:
            ``(8) Disclosure of information to administer section 
        6311.--The Secretary may disclose returns or return information 
        to financial institutions and others to the extent the 
        Secretary deems necessary for the administration of section 
        6311. Disclosures of information for purposes other than to 
        accept payments by checks or money orders shall be made only to 
        the extent authorized by written procedures promulgated by the 
        Secretary.''
            (2) Section 7431 (relating to civil damages for 
        unauthorized disclosure of returns and return information) is 
        amended by adding at the end the following new subsection:
    ``(g) Special Rule for Information Obtained Under Section 
6103(k)(8).--For purposes of this section, any reference to section 
6103 shall be treated as including a reference to section 6311(e).''
            (3) Section 6103(p)(3)(A) is amended by striking ``or (6)'' 
        and inserting ``(6), or (8)''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the day 9 months after the date of the enactment of this Act.

SEC. 14112. SIMPLIFIED FOREIGN TAX CREDIT LIMITATION FOR INDIVIDUALS.

    (a) General Rule.--Section 904 (relating to limitations on foreign 
tax credit) is amended by redesignating subsection (j) as subsection 
(k) and by inserting after subsection (i) the following new subsection:
    ``(j) Simplified Limitation for Certain Individuals.--
            ``(1) In general.--In the case of an individual to whom 
        this subsection applies for any taxable year, the limitation of 
        subsection (a) shall be the lesser of--
                    ``(A) 25 percent of such individual's gross income 
                for the taxable year from sources without the United 
                States, or
                    ``(B) the amount of the creditable foreign taxes 
                paid or accrued by the individual during the taxable 
                year (determined without regard to subsection (c)).
        No taxes paid or accrued by the individual during such taxable 
        year may be deemed paid or accrued in any other taxable year 
        under subsection (c).
            ``(2) Individuals to whom subsection applies.--This 
        subsection shall apply to an individual for any taxable year 
        if--
                    ``(A) the entire amount of such individual's gross 
                income for the taxable year from sources without the 
                United States consists of qualified passive income,
                    ``(B) the amount of the creditable foreign taxes 
                paid or accrued by the individual during the taxable 
                year does not exceed $200 ($400 in the case of a joint 
                return), and
                    ``(C) such individual elects to have this 
                subsection apply for the taxable year.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Qualified passive income.--The term 
                `qualified passive income' means any item of gross 
                income if--
                            ``(i) such item of income is passive income 
                        (as defined in subsection (d)(2)(A) without 
                        regard to clause (iii) thereof), and
                            ``(ii) such item of income is shown on a 
                        payee statement furnished to the individual.
                    ``(B) Creditable foreign taxes.--The term 
                `creditable foreign taxes' means any taxes for which a 
                credit is allowable under section 901; except that such 
                term shall not include any tax unless such tax is shown 
                on a payee statement furnished to such individual.
                    ``(C) Payee statement.--The term `payee statement' 
                has the meaning given to such term by section 
                6724(d)(2).
                    ``(D) Estates and trusts not eligible.--This 
                subsection shall not apply to any estate or trust.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14113. TREATMENT OF PERSONAL TRANSACTIONS BY INDIVIDUALS UNDER 
              FOREIGN CURRENCY RULES.

    (a) General Rule.--Subsection (e) of section 988 (relating to 
application to individuals) is amended to read as follows:
    ``(e) Application to Individuals.--
            ``(1) In general.--The preceding provisions of this section 
        shall not apply to any section 988 transaction entered into by 
        an individual which is a personal transaction.
            ``(2) Exclusion for certain personal transactions.--If--
                    ``(A) nonfunctional currency is disposed of by an 
                individual in any transaction, and
                    ``(B) such transaction is a personal transaction,
        no gain shall be recognized for purposes of this subtitle by 
        reason of changes in exchange rates after such currency was 
        acquired by such individual and before such disposition. The 
        preceding sentence shall not apply if the gain which would 
        otherwise be recognized exceeds $200.
            ``(3) Personal transactions.--For purposes of this 
        subsection, the term `personal transaction' means any 
        transaction entered into by an individual, except that such 
        term shall not include any transaction to the extent that 
        expenses properly allocable to such transaction meet the 
        requirements of section 162 or 212 (other than that part of 
        section 212 dealing with expenses incurred in connection with 
        taxes).''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14114. TREATMENT OF CERTAIN REIMBURSED EXPENSES OF RURAL MAIL 
              CARRIERS.

    (a) In General.--Section 162 (relating to trade or business 
expenses) is amended by redesignating subsection (o) as subsection (p) 
and by inserting after subsection (n) the following new subsection:
    ``(o) Treatment of Certain Reimbursed Expenses of Rural Mail 
Carriers.--
            ``(1) General rule.--In the case of any employee of the 
        United States Postal Service who performs services involving 
        the collection and delivery of mail on a rural route and who 
        receives qualified reimbursements for the expenses incurred by 
        such employee for the use of a vehicle in performing such 
        services--
                    ``(A) the amount allowable as a deduction under 
                this chapter for the use of a vehicle in performing 
                such services shall be equal to the amount of such 
                qualified reimbursements; and
                    ``(B) such qualified reimbursements shall be 
                treated as paid under a reimbursement or other expense 
                allowance arrangement for purposes of section 
                62(a)(2)(A) (and section 62(c) shall not apply to such 
                qualified reimbursements).
            ``(2) Definition of qualified reimbursements.--For purposes 
        of this subsection, the term `qualified reimbursements' means 
        the amounts paid by the United States Postal Service to 
        employees as an equipment maintenance allowance under the 1991 
        collective bargaining agreement between the United States 
        Postal Service and the National Rural Letter Carriers' 
        Association. Amounts paid as an equipment maintenance allowance 
        by such Postal Service under later collective bargaining 
        agreements that supersede the 1991 agreement shall be 
        considered qualified reimbursements if such amounts do not 
        exceed the amounts that would have been paid under the 1991 
        agreement, adjusted for changes in the Consumer Price Index (as 
        defined in section 1(f)(5)) since 1991.''
    (b) Technical Amendment.--Section 6008 of the Technical and 
Miscellaneous Revenue Act of 1988 is hereby repealed.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14115. EXCLUSION OF COMBAT PAY FROM WITHHOLDING LIMITED TO AMOUNT 
              EXCLUDABLE FROM GROSS INCOME.

    (a) In General.--Paragraph (1) of section 3401(a) (defining wages) 
is amended by inserting before the semicolon the following: ``to the 
extent remuneration for such service is excludable from gross income 
under such section''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to remuneration paid after December 31, 1995.

SEC. 14116. TREATMENT OF TRAVELING EXPENSES OF CERTAIN FEDERAL 
              EMPLOYEES ENGAGED IN CRIMINAL INVESTIGATIONS.

    (a) In General.--Subsection (a) of section 162 is amended by adding 
at the end the following new sentence: ``The preceding sentence shall 
not apply to any Federal employee during any period for which such 
employee is certified by the Attorney General (or the designee thereof) 
as traveling on behalf of the United States in temporary duty status to 
investigate, or provide support services for the investigation of, a 
Federal crime.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years ending after the date of the enactment of this 
Act.

                   Subtitle B--Pension Simplification

                 PART I--SIMPLIFIED DISTRIBUTION RULES

SEC. 14201. REPEAL OF 5-YEAR INCOME AVERAGING FOR LUMP-SUM 
              DISTRIBUTIONS.

    (a) In General.--Subsection (d) of section 402 (relating to 
taxability of beneficiary of employees' trust) is amended by adding at 
the end the following new paragraph:
            ``(8) Termination.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), this subsection shall not apply to 
                any taxable year beginning after December 31, 1995.
                    ``(B) Retention of certain transition rules.--
                Subparagraph (A) shall not apply to any distribution 
                for which the taxpayer elects the benefits of section 
                1122 (h)(3) or (h)(5) of the Tax Reform Act of 1986.''

SEC. 14202. REPEAL OF $5,000 EXCLUSION OF EMPLOYEES' DEATH BENEFITS.

    (a) In General.--Subsection (b) of section 101 is hereby repealed.
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 101 is amended by striking 
        ``subsection (a) or (b)'' and inserting ``subsection (a)''.
            (2) Sections 406(e) and 407(e) are each amended by striking 
        paragraph (2) and by redesignating paragraph (3) as paragraph 
        (2).
            (3) Section 7701(a)(20) is amended by striking ``, for the 
        purposes of applying the provisions of section 101(b) with 
        respect to employees' death benefits''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14203. SIMPLIFIED METHOD FOR TAXING ANNUITY DISTRIBUTIONS UNDER 
              CERTAIN EMPLOYER PLANS.

    (a) General Rule.--Subsection (d) of section 72 (relating to 
annuities; certain proceeds of endowment and life insurance contracts) 
is amended to read as follows:
    ``(d) Special Rules for Qualified Employer Retirement Plans.--
            ``(1) Simplified method of taxing annuity payments.--
                    ``(A) In general.--In the case of any amount 
                received as an annuity under a qualified employer 
                retirement plan--
                            ``(i) subsection (b) shall not apply, and
                            ``(ii) the investment in the contract shall 
                        be recovered as provided in this paragraph.
                    ``(B) Method of recovering investment in 
                contract.--
                            ``(i) In general.--Gross income shall not 
                        include so much of any monthly annuity payment 
                        under a qualified employer retirement plan as 
                        does not exceed the amount obtained by 
                        dividing--
                                    ``(I) the investment in the 
                                contract (as of the annuity starting 
                                date), by
                                    ``(II) the number of anticipated 
                                payments determined under the table 
                                contained in clause (iii) (or, in the 
                                case of a contract to which subsection 
                                (c)(3)(B) applies, the number of 
                                monthly annuity payments under such 
                                contract).
                            ``(ii) Certain rules made applicable.--
                        Rules similar to the rules of paragraphs (2) 
                        and (3) of subsection (b) shall apply for 
                        purposes of this paragraph.
                            ``(iii) Number of anticipated payments.--

                         ``If the age of the
                                                                       
                           primary annuitant on
                                                             The number
                           the annuity starting
                                                         of anticipated
                           date is:
                                                           payments is:
                               Not more than 55......           300    
                               More than 55 but not             260    
                            more than 60.
                               More than 60 but not             240    
                            more than 65.
                               More than 65 but not             170    
                            more than 70.
                               More than 70..........           120    
                    ``(C) Adjustment for refund feature not 
                applicable.--For purposes of this paragraph, investment 
                in the contract shall be determined under subsection 
                (c)(1) without regard to subsection (c)(2).
                    ``(D) Special rule where lump sum paid in 
                connection with commencement of annuity payments.--If, 
                in connection with the commencement of annuity payments 
                under any qualified employer retirement plan, the 
                taxpayer receives a lump sum payment--
                            ``(i) such payment shall be taxable under 
                        subsection (e) as if received before the 
                        annuity starting date, and
                            ``(ii) the investment in the contract for 
                        purposes of this paragraph shall be determined 
                        as if such payment had been so received.
                    ``(E) Exception.--This paragraph shall not apply in 
                any case where the primary annuitant has attained age 
                75 on the annuity starting date unless there are fewer 
                than 5 years of guaranteed payments under the annuity.
                    ``(F) Adjustment where annuity payments not on 
                monthly basis.--In any case where the annuity payments 
                are not made on a monthly basis, appropriate 
                adjustments in the application of this paragraph shall 
                be made to take into account the period on the basis of 
                which such payments are made.
                    ``(G) Qualified employer retirement plan.--For 
                purposes of this paragraph, the term `qualified 
                employer retirement plan' means any plan or contract 
                described in paragraph (1), (2), or (3) of section 
                4974(c).
            ``(2) Treatment of employee contributions under defined 
        contribution plans.--For purposes of this section, employee 
        contributions (and any income allocable thereto) under a 
        defined contribution plan may be treated as a separate 
        contract.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply in cases where the annuity starting date is after December 31, 
1995.

SEC. 14204. REQUIRED DISTRIBUTIONS.

    (a) In General.--Section 401(a)(9)(C) (defining required beginning 
date) is amended to read as follows:
                    ``(C) Required beginning date.--For purposes of 
                this paragraph--
                            ``(i) In general.--The term `required 
                        beginning date' means April 1 of the calendar 
                        year following the later of--
                                    ``(I) the calendar year in which 
                                the employee attains age 70\1/2\, or
                                    ``(II) the calendar year in which 
                                the employee retires.
                            ``(ii) Exception.--Subclause (II) of clause 
                        (i) shall not apply--
                                    ``(I) except as provided in section 
                                409(d), in the case of an employee who 
                                is a 5-percent owner (as defined in 
                                section 416) with respect to the plan 
                                year ending in the calendar year in 
                                which the employee attains age 70\1/2\, 
                                or
                                    ``(II) for purposes of section 408 
                                (a)(6) or (b)(3).
                            ``(iii) Actuarial adjustment.--In the case 
                        of an employee to whom clause (i)(II) applies 
                        who retires in a calendar year after the 
                        calendar year in which the employee attains age 
                        70\1/2\, the employee's accrued benefit shall 
                        be actuarially increased to take into account 
                        the period after age 70\1/2\ in which the 
                        employee was not receiving any benefits under 
                        the plan.
                            ``(iv) Exception for governmental and 
                        church plans.--Clauses (ii) and (iii) shall not 
                        apply in the case of a governmental plan or 
                        church plan. For purposes of this clause, the 
                        term `church plan' means a plan maintained by a 
                        church for church employees, and the term 
                        `church' means any church (as defined in 
                        section 3121(w)(3)(A)) or qualified church-
                        controlled organization (as defined in section 
                        3121(w)(3)(B)).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to years beginning after December 31, 1995.

               PART II--INCREASED ACCESS TO PENSION PLANS

SEC. 14211. MODIFICATIONS OF SIMPLIFIED EMPLOYEE PENSIONS.

    (a) Increase in Number of Allowable Participants for Salary 
Reduction Arrangements.--Section 408(k)(6)(B) is amended by striking 
``25'' each place it appears in the text and heading thereof and 
inserting ``100''.
    (b) Repeal of Participation Requirement.--
            (1) In general.--Section 408(k)(6)(A) is amended by 
        striking clause (ii) and by redesignating clauses (iii) and 
        (iv) as clauses (ii) and (iii), respectively.
            (2) Conforming amendments.--Clause (ii) of section 
        408(k)(6)(C) and clause (ii) of section 408(k)(6)(F) are each 
        amended by striking ``subparagraph (A)(iii)'' and inserting 
        ``subparagraph (A)(ii)''.
    (c) Alternative Test.--Clause (ii) of section 408(k)(6)(A), as 
redesignated by subsection (b)(1), is amended by adding at the end the 
following new flush sentence:
                        ``The requirements of the preceding sentence 
                        are met if the employer makes contributions to 
                        the simplified employee pension meeting the 
                        requirements of sections 401(k)(11) (B) or (C), 
                        401(k)(11)(D), and 401(m)(10)(B).''
    (d) Year for Computing Nonhighly Compensated Employee Percentage.--
Clause (ii) of section 408(k)(6)(A), as redesignated by subsection 
(b)(1), is amended--
            (1) by striking ``such year'' in subclause (I) and 
        inserting ``the preceding year'', and
            (2) by adding at the end the following new flush sentence:
                        ``In the case of the first plan year for which 
                        an employer makes contributions to a simplified 
                        employee pension, rules similar to the rules of 
                        section 401(k)(3)(E) shall apply.''
    (e) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1995.

SEC. 14212. STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS 
              ELIGIBLE UNDER SECTION 401(k).

    (a) In General.--Subparagraph (B) of section 401(k)(4) is amended 
to read as follows:
                    ``(B) Eligibility of state and local governments 
                and tax-exempt organizations.--Any--
                            ``(i) State or local government or 
                        political subdivision thereof, or any agency or 
                        instrumentality thereof, and
                            ``(ii) any organization exempt from tax 
                        under this subtitle,
                may include a qualified cash or deferred arrangement as 
                part of a plan maintained by it unless the entity 
                maintains an eligible deferred compensation plan (as 
                defined in section 457(b)). This subparagraph shall not 
                apply to a rural cooperative plan.''
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after December 31, 1996, but shall not apply to 
any cash or deferred arrangement to which clause (i) or (ii) of section 
1116(f)(2)(B) of the Tax Reform Act of 1986 applies.

                 PART III--NONDISCRIMINATION PROVISIONS

SEC. 14221. DEFINITION OF HIGHLY COMPENSATED EMPLOYEES.

    (a) In General.--Paragraph (1) of section 414(q) (defining highly 
compensated employee) is amended to read as follows:
            ``(1) In general.--The term `highly compensated employee' 
        means any employee who--
                    ``(A) was a 5-percent owner at any time during the 
                year or the preceding year, or
                    ``(B) had compensation for the preceding year from 
                the employer in excess of $80,000.
        The Secretary shall adjust the $80,000 amount under 
        subparagraph (B) at the same time and in the same manner as 
        under section 415(d), except that the base period in applying 
        such section for purposes of this paragraph shall be the 
        calendar quarter ending September 30, 1995.''
    (b) Conforming Amendments.--
            (1)(A) Subsection (q) of section 414 is amended by striking 
        paragraphs (2), (4), (5), (8), and (12) and by redesignating 
        paragraphs (3), (6), (7), (9), (10), and (11) as paragraphs (2) 
        through (7), respectively.
            (B) Section 129(d)(8)(B), 401(a)(5)(D)(ii), 408(k)(2)(C), 
        and 416(i)(1)(D) are each amended by striking ``section 
        414(q)(7)'' and inserting ``section 414(q)(4)''.
            (C) Sections 401(a)(17) and 404(l) are each amended by 
        striking ``section 414(q)(6)'' and inserting ``section 
        414(q)(3)''.
            (D) Section 416(i)(1)(A) is amended by striking ``section 
        414(q)(8)'' and inserting ``section 414(r)(9)''.
            (2)(A) Section 414(r) is amended by adding at the end the 
        following new paragraph:
            ``(9) Excluded employees.--For purposes of paragraph 
        (2)(A), the following employees shall be excluded:
                    ``(A) Employees who have not completed 6 months of 
                service.
                    ``(B) Employees who normally work less than 17\1/2\ 
                hours per week.
                    ``(C) Employees who normally work not more than 6 
                months during any year.
                    ``(D) Employees who have not attained the age of 
                21.
                    ``(E) Except to the extent provided in regulations, 
                employees who are included in a unit of employees 
                covered by an agreement which the Secretary of Labor 
                finds to be a collective bargaining agreement between 
                employee representatives and the employer.
        Except as provided by the Secretary, the employer may elect to 
        apply subparagraph (A), (B), (C), or (D) by substituting a 
        shorter period of service, smaller number of hours or months, 
        or lower age for the period of service, number of hours or 
        months, or age (as the case may be) specified in such 
        subparagraph.''
            (B) Subparagraph (A) of section 414(r)(2) is amended by 
        striking ``subsection (q)(8)'' and inserting ``paragraph (9)''.
            (3) Section 1114(c)(4) of the Tax Reform Act of 1986 is 
        amended by adding at the end the following new sentence: ``Any 
        reference in this paragraph to section 414(q) shall be treated 
        as a reference to such section as in effect before the Tax 
        Simplification Act of 1995''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1995.

SEC. 14222. REPEAL OF FAMILY AGGREGATION RULES.

    (a) In General.--Paragraph (6) of section 414(q) is hereby 
repealed.
    (b) Compensation Limit.--Subparagraph (A) of section 401(a)(17) is 
amended by striking the last sentence.
    (c) Deduction.--Subsection (l) of section 404 is amended by 
striking the last sentence.
    (d) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1995.

SEC. 14223. MODIFICATION OF ADDITIONAL PARTICIPATION REQUIREMENTS.

    (a) General Rule.--Section 401(a)(26)(A) (relating to additional 
participation requirements) is amended to read as follows:
                    ``(A) In general.--In the case of a trust which is 
                a part of a defined benefit plan, such trust shall not 
                constitute a qualified trust under this subsection 
                unless on each day of the plan year such trust benefits 
                at least the lesser of--
                            ``(i) 50 employees of the employer, or
                            ``(ii) the greater of--
                                    ``(I) 40 percent of all employees 
                                of the employer, or
                                    ``(II) 2 employees (or if there is 
                                only 1 employee, such employee).''
    (b) Separate Line of Business Test.--Section 401(a)(26)(G) 
(relating to separate line of business) is amended by striking 
``paragraph (7)'' and inserting ``paragraph (2)(A) or (7)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 1995.

SEC. 14224. NONDISCRIMINATION RULES FOR QUALIFIED CASH OR DEFERRED 
              ARRANGEMENTS AND MATCHING CONTRIBUTIONS.

    (a) Alternative Methods of Satisfying Section 401(k) 
Nondiscrimination Tests.--Section 401(k) (relating to cash or deferred 
arrangements) is amended by adding at the end the following new 
paragraph:
            ``(11) Alternative methods of meeting nondiscrimination 
        requirements.--
                    ``(A) In general.--A cash or deferred arrangement 
                shall be treated as meeting the requirements of 
                paragraph (3)(A)(ii) if such arrangement--
                            ``(i) meets the contribution requirements 
                        of subparagraph (B) or (C), and
                            ``(ii) meets the notice requirements of 
                        subparagraph (D).
                    ``(B) Matching contributions.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if, under the arrangement, 
                        the employer makes matching contributions on 
                        behalf of each employee who is not a highly 
                        compensated employee in an amount equal to--
                                    ``(I) 100 percent of the elective 
                                contributions of the employee to the 
                                extent such elective contributions do 
                                not exceed 3 percent of the employee's 
                                compensation, and
                                    ``(II) 50 percent of the elective 
                                contributions of the employee to the 
                                extent that such elective contributions 
                                exceed 3 percent but do not exceed 5 
                                percent of the employee's compensation.
                            ``(ii) Rate for highly compensated 
                        employees.--The requirements of this 
                        subparagraph are not met if, under the 
                        arrangement, the matching contribution with 
                        respect to any elective contribution of a 
                        highly compensated employee at any level of 
                        compensation is greater than that with respect 
                        to an employee who is not a highly compensated 
                        employee.
                            ``(iii) Alternative plan designs.--If the 
                        matching contribution with respect to any 
                        elective contribution at any specific level of 
                        compensation is not equal to the percentage 
                        required under clause (i), an arrangement shall 
                        not be treated as failing to meet the 
                        requirements of clause (i) if--
                                    ``(I) the level of an employer's 
                                matching contribution does not increase 
                                as an employee's elective contributions 
                                increase, and
                                    ``(II) the aggregate amount of 
                                matching contributions with respect to 
                                elective contributions not in excess of 
                                such level of compensation is at least 
                                equal to the amount of matching 
                                contributions which would be made if 
                                matching contributions were made on the 
                                basis of the percentages described in 
                                clause (i).
                    ``(C) Nonelective contributions.--The requirements 
                of this subparagraph are met if, under the arrangement, 
                the employer is required, without regard to whether the 
                employee makes an elective contribution or employee 
                contribution, to make a contribution to a defined 
                contribution plan on behalf of each employee who is not 
                a highly compensated employee and who is eligible to 
                participate in the arrangement in an amount equal to at 
                least 3 percent of the employee's compensation.
                    ``(D) Notice requirement.--An arrangement meets the 
                requirements of this paragraph if, under the 
                arrangement, each employee eligible to participate is, 
                within a reasonable period before any year, given 
                written notice of the employee's rights and obligations 
                under the arrangement which--
                            ``(i) is sufficiently accurate and 
                        comprehensive to apprise the employee of such 
                        rights and obligations, and
                            ``(ii) is written in a manner calculated to 
                        be understood by the average employee eligible 
                        to participate.
                    ``(E) Other requirements.--
                            ``(i) Withdrawal and vesting 
                        restrictions.--An arrangement shall not be 
                        treated as meeting the requirements 
of subparagraph (B) or (C) unless the requirements of subparagraphs (B) 
and (C) of paragraph (2) are met with respect to all employer 
contributions (including matching contributions).
                            ``(ii) Social security and similar 
                        contributions not taken into account.--An 
                        arrangement shall not be treated as meeting the 
                        requirements of subparagraph (B) or (C) unless 
                        such requirements are met without regard to 
                        subsection (l), and, for purposes of subsection 
                        (l), employer contributions under subparagraph 
                        (B) or (C) shall not be taken into account.
                    ``(F) Other plans.--An arrangement shall be treated 
                as meeting the requirements under subparagraph (A)(i) 
                if any other plan maintained by the employer meets such 
                requirements with respect to employees eligible under 
                the arrangement.''
    (b) Alternative Methods of Satisfying Section 401(m) 
Nondiscrimination Tests.--Section 401(m) (relating to nondiscrimination 
test for matching contributions and employee contributions) is amended 
by redesignating paragraph (10) as paragraph (11) and by adding after 
paragraph (9) the following new paragraph:
            ``(10) Alternative method of satisfying tests.--
                    ``(A) In general.--A defined contribution plan 
                shall be treated as meeting the requirements of 
                paragraph (2) with respect to matching contributions if 
                the plan--
                            ``(i) meets the contribution requirements 
                        of subparagraph (B) or (C) of subsection 
                        (k)(11),
                            ``(ii) meets the notice requirements of 
                        subsection (k)(11)(D), and
                            ``(iii) meets the requirements of 
                        subparagraph (B).
                    ``(B) Limitation on matching contributions.--The 
                requirements of this subparagraph are met if--
                            ``(i) matching contributions on behalf of 
                        any employee may not be made with respect to an 
                        employee's contributions or elective deferrals 
                        in excess of 6 percent of the employee's 
                        compensation,
                            ``(ii) the level of an employer's matching 
                        contribution does not increase as an employee's 
                        contributions or elective deferrals increase, 
                        and
                            ``(iii) the matching contribution with 
                        respect to any highly compensated employee at a 
                        specific level of compensation is not greater 
                        than that with respect to an employee who is 
                        not a highly compensated employee.''
    (c) Year for Computing Nonhighly Compensated Employee Percentage.--
            (1) Cash or deferred arrangements.--Clause (ii) of section 
        401(k)(3)(A) is amended--
                    (A) by striking ``such year'' and inserting ``the 
                plan year'', and
                    (B) by striking ``for such plan year'' and 
                inserting ``the preceding plan year''.
            (2) Matching and employee contributions.--Section 
        401(m)(2)(A) is amended--
                    (A) by inserting ``for such plan year'' after 
                ``highly compensated employees'', and
                    (B) by inserting ``for the preceding plan year'' 
                after ``eligible employees'' each place it appears in 
                clause (i) and clause (ii).
    (d) Special Rule for Determining Average Deferral Percentage for 
First Plan Year, Etc.--
            (1) Paragraph (3) of section 401(k) is amended by adding at 
        the end the following new subparagraph:
                    ``(E) For purposes of this paragraph, in the case 
                of the first plan year of any plan, the amount taken 
                into account as the actual deferral percentage of 
                nonhighly compensated employees for the preceding plan 
                year shall be--
                            ``(i) 3 percent, or
                            ``(ii) if the employer makes an election 
                        under this subclause, the actual deferral 
                        percentage of nonhighly compensated employees 
                        determined for such first plan year.''
            (2) Paragraph (3) of section 401(m) is amended by adding at 
        the end the following: ``Rules similar to the rules of 
        subsection (k)(3)(E) shall apply for purposes of this 
        subsection.''
    (e) Distribution of Excess Contributions.--
            (1) Subparagraph (C) of section 401(k)(8) (relating to 
        arrangement not disqualified if excess contributions 
        distributed) is amended by striking ``on the basis of the 
        respective portions of the excess contributions attributable to 
        each of such employees'' and inserting ``on the basis of the 
        amount of contributions by, or on behalf of, each of such 
        employees''.
            (2) Subparagraph (C) of section 401(m)(6) (relating to 
        method of distributing excess aggregate contributions) is 
        amended by striking ``on the basis of the respective portions 
        of such amounts attributable to each of such employees'' and 
        inserting ``on the basis of the amount of contributions on 
        behalf of, or by, each such employee''.
    (f) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1995.

                 PART IV--MISCELLANEOUS SIMPLIFICATION

SEC. 14231. TREATMENT OF LEASED EMPLOYEES.

    (a) General Rule.--Subparagraph (C) of section 414(n)(2) (defining 
leased employee) is amended to read as follows:
                    ``(C) such services are performed under significant 
                direction or control by the recipient.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to years beginning after December 31, 1995, but shall not apply 
to any relationship determined under an Internal Revenue Service ruling 
issued before the date of the enactment of this Act pursuant to section 
414(n)(2)(C) of the Internal Revenue Code of 1986 (as in effect on the 
day before such date) not to involve a leased employee.

SEC. 14232. PLANS COVERING SELF-EMPLOYED INDIVIDUALS.

    (a) Aggregation Rules.--Section 401(d) (relating to additional 
requirements for qualification of trusts and plans benefiting owner-
employees) is amended to read as follows:
    ``(d) Contribution Limit on Owner-Employees.--A trust forming part 
of a pension or profit-sharing plan which provides contributions or 
benefits for employees some or all of whom are owner-employees shall 
constitute a qualified trust under this section only if, in addition to 
meeting the requirements of subsection (a), the plan provides that 
contributions on behalf of any owner-employee may be made only with 
respect to the earned income of such owner-employee which is derived 
from the trade or business with respect to which such plan is 
established.''
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1995.

SEC. 14233. ELIMINATION OF SPECIAL VESTING RULE FOR MULTIEMPLOYER 
              PLANS.

    (a) In General.--Paragraph (2) of section 411(a) (relating to 
minimum vesting standards) is amended--
            (1) by striking ``subparagraph (A), (B), or (C)'' and 
        inserting ``subparagraph (A) or (B)''; and
            (2) by striking subparagraph (C).
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after the earlier of--
            (1) the later of--
                    (A) January 1, 1996, or
                    (B) the date on which the last of the collective 
                bargaining agreements pursuant to which the plan is 
                maintained terminates (determined without regard to any 
                extension thereof after the date of the enactment of 
                this Act), or
            (2) January 1, 1998.
Such amendments shall not apply to any individual who does not have 
more than 1 hour of service under the plan on or after the 1st day of 
the 1st plan year to which such amendments apply.

SEC. 14234. DISTRIBUTIONS UNDER RURAL COOPERATIVE PLANS.

    (a) Distributions After Certain Age.--Section 401(k)(7) is amended 
by adding at the end the following new subparagraph:
                    ``(C) Special rule for certain distributions.--A 
                rural cooperative plan which includes a qualified cash 
                or deferred arrangement shall not be treated as 
                violating the requirements of section 401(a) merely by 
                reason of a distribution to a participant after 
                attainment of age 59\1/2\.''
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after December 31, 1995.

SEC. 14235. TREATMENT OF GOVERNMENTAL PLANS UNDER SECTION 415.

    (a) Definition of Compensation.--Subsection (k) of section 415 
(regarding limitations on benefits and contributions under qualified 
plans) is amended by adding immediately after paragraph (2) the 
following new paragraph:
            ``(3) Definition of compensation for governmental plans.--
        For purposes of this section, in the case of a governmental 
        plan (as defined in section 414(d)), the term `compensation' 
        includes, in addition to the amounts described in subsection 
        (c)(3)--
                    ``(A) any elective deferral (as defined in section 
                402(g)(3)), and
                    ``(B) any amount which is contributed by the 
                employer at the election of the employee and which is 
                not includible in the gross income of an employee under 
                section 125 or 457.''
    (b) Compensation Limit.--Subsection (b) of section 415 is amended 
by adding immediately after paragraph (10) the following new paragraph:
            ``(11) Special limitation rule for governmental plans.--In 
        the case of a governmental plan (as defined in section 414(d)), 
        subparagraph (B) of paragraph (1) shall not apply.''
    (c) Treatment of Certain Excess Benefit Plans.--
            (1) In general.--Section 415 is amended by adding at the 
        end the following new subsection:
    ``(m) Treatment of Qualified Governmental Excess Benefit 
Arrangements.--
            ``(1) Governmental plan not affected.--In determining 
        whether a governmental plan (as defined in section 414(d)) 
        meets the requirements of this section, benefits provided under 
        a qualified governmental excess benefit arrangement shall not 
        be taken into account. Income accruing to a governmental plan 
        (or to a trust that is maintained solely for the purpose of 
        providing benefits under a qualified governmental excess 
        benefit arrangement) in respect of a qualified governmental 
        excess benefit arrangement shall constitute income derived from 
        the exercise of an essential governmental function upon which 
        such governmental plan (or trust) shall be exempt from tax 
        under section 115.
            ``(2) Taxation of participant.--For purposes of this 
        chapter--
                    ``(A) the taxable year or years for which amounts 
                in respect of a qualified governmental excess benefit 
                arrangement are includible in gross income by a 
                participant, and
                    ``(B) the treatment of such amounts when so 
                includible by the participant,
        shall be determined as if such qualified governmental excess 
        benefit arrangement were treated as a plan for the deferral of 
        compensation which is maintained by a corporation not exempt 
        from tax under this chapter and which does not meet the 
        requirements for qualification under section 401.
            ``(3) Qualified governmental excess benefit arrangement.--
        For purposes of this subsection, the term `qualified 
        governmental excess benefit arrangement' means a portion of a 
        governmental plan if--
                    ``(A) such portion is maintained solely for the 
                purpose of providing to participants in the plan that 
                part of the participant's annual benefit otherwise 
                payable under the terms of the plan that exceeds the 
                limitations on benefits imposed by this section,
                    ``(B) under such portion no election is provided at 
                any time to the participant (directly or indirectly) to 
                defer compensation, and
                    ``(C) benefits described in subparagraph (A) are 
                not paid from a trust forming a part of such 
                governmental plan unless such trust is maintained 
                solely for the purpose of providing such benefits.''
            (2) Coordination with section 457.--Subsection (e) of 
        section 457 is amended by adding at the end the following new 
        paragraph:
            ``(15) Treatment of qualified governmental excess benefit 
        arrangements.--Subsections (b)(2) and (c)(1) shall not apply to 
        any qualified governmental excess benefit arrangement (as 
        defined in section 415(m)(3)), and benefits provided under such 
        an arrangement shall not be taken into account in determining 
        whether any other plan is an eligible deferred compensation 
        plan.''
            (3) Conforming amendment.--Paragraph (2) of section 457(f) 
        is amended by striking ``and'' at the end of subparagraph (C), 
        by striking the period at the end of subparagraph (D) and 
        inserting ``, and'', and by inserting immediately thereafter 
        the following new subparagraph:
                    ``(E) a qualified governmental excess benefit 
                arrangement described in section 415(m).''
    (d) Exemption for Survivor and Disability Benefits.--Paragraph (2) 
of section 415(b) is amended by adding at the end the following new 
subparagraph:
                    ``(I) Exemption for survivor and disability 
                benefits provided under governmental plans.--
                Subparagraph (B) of paragraph (1), subparagraph (C) of 
                this paragraph, and paragraph (5) shall not apply to--
                            ``(i) income received from a governmental 
                        plan (as defined in section 414(d)) as a 
                        pension, annuity, or similar allowance as the 
                        result of the recipient becoming disabled by 
                        reason of personal injuries or sickness, or
                            ``(ii) amounts received from a governmental 
                        plan by the beneficiaries, survivors, or the 
                        estate of an employee as the result of the 
                        death of the employee.''
    (e) Revocation of Grandfather Election.--
            (1) In general.--Subparagraph (C) of section 415(b)(10) is 
        amended by adding at the end the following new clause:
                            ``(ii) Revocation of election.--An election 
                        under clause (i) may be revoked not later than 
                        the last day of the third plan year beginning 
                        after the date of the enactment of this clause. 
                        The revocation shall apply to all plan years to 
                        which the election applied and to all 
                        subsequent plan years. Any amount paid by a 
                        plan in a taxable year ending after the 
                        revocation shall be includible in income in 
                        such taxable year under the rules of this 
                        chapter in effect for such taxable year, except 
                        that, for purposes of applying the limitations 
                        imposed by this section, any portion of such 
                        amount which is attributable to any taxable 
                        year during which the election was in effect 
                        shall be treated as received in such taxable 
                        year.''
            (2) Conforming amendment.--Subparagraph (C) of section 
        415(b)(10) is amended by striking ``This'' and inserting:
                            ``(i) In general.--This''.
    (f) Effective Date.--
            (1) In general.--The amendments made by subsections (a), 
        (b), (c), and (d) shall apply to taxable years beginning on or 
        after the date of the enactment of this Act. The amendment made 
        by subsection (e) shall apply with respect to election 
        revocations adopted after the date of the enactment of this 
        Act.
            (2) Treatment for years beginning before date of 
        enactment.--In the case of a governmental plan (as defined in 
        section 414(d) of the Internal Revenue Code of 1986), such plan 
        shall be treated as satisfying the requirements of section 415 
        of such Code for all taxable years beginning before the date of 
        the enactment of this Act.

SEC. 14236. UNIFORM RETIREMENT AGE.

    (a) Discrimination Testing.--Paragraph (5) of section 401(a) 
(relating to special rules relating to non discrimination requirements) 
is amended by adding at the end the following new subparagraph:
                    ``(F) Social security retirement age.--For purposes 
                of testing for discrimination under paragraph (4)--
                            ``(i) the social security retirement age 
                        (as defined in section 415(b)(8)) shall be 
                        treated as a uniform retirement age, and
                            ``(ii) subsidized early retirement benefits 
                        and joint and survivor annuities shall not be 
                        treated as being unavailable to employees on 
                        the same terms merely because such benefits or 
                        annuities are based in whole or in part on an 
                        employee's social security retirement age (as 
                        so defined).''
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 1995.

SEC. 14237. UNIFORM PENALTY PROVISIONS TO APPLY TO CERTAIN PENSION 
              REPORTING REQUIREMENTS.

    (a) Penalties.--
            (1) Statements.--Paragraph (1) of section 6724(d) is 
        amended by striking ``and'' at the end of subparagraph (A), by 
        striking the period at the end of subparagraph (B) and 
        inserting ``, and'', and by inserting after subparagraph (B) 
        the following new subparagraph:
                    ``(C) any statement of the amount of payments to 
                another person required to be made to the Secretary 
                under--
                            ``(i) section 408(i) (relating to reports 
                        with respect to individual retirement accounts 
                        or annuities), or
                            ``(ii) section 6047(d) (relating to reports 
                        by employers, plan administrators, etc.).''
            (2) Reports.--Paragraph (2) of section 6724(d) is amended 
        by striking ``or'' at the end of subparagraph (S), by striking 
        the period at the end of subparagraph (T) and inserting a 
        comma, and by inserting after subparagraph (T) the following 
        new subparagraphs:
                    ``(U) section 408(i) (relating to reports with 
                respect to individual retirement plans) to any person 
                other than the Secretary with respect to the amount of 
                payments made to such person, or
                    ``(V) section 6047(d) (relating to reports by plan 
                administrators) to any person other than the Secretary 
                with respect to the amount of payments made to such 
                person.''
    (b) Modification of Reportable Designated Distributions.--
            (1) Section 408.--Subsection (i) of section 408 (relating 
        to individual retirement account reports) is amended by 
        inserting ``aggregating $10 or more in any calendar year'' 
        after ``distributions''.
            (2) Section 6047.--Paragraph (1) of section 6047(d) 
        (relating to reports by employers, plan administrators, etc.) 
        is amended by adding at the end the following new sentence: 
        ``No return or report may be required under the preceding 
        sentence with respect to distributions to any person during any 
        year unless such distributions aggregate $10 or more.''
    (c) Qualifying Rollover Distributions.--Section 6652(i) is 
amended--
            (1) by striking ``the $10'' and inserting ``$100'', and
            (2) by striking ``$5,000'' and inserting ``$50,000''.
    (d) Conforming Amendments.--
            (1) Paragraph (1) of section 6047(f) is amended to read as 
        follows:

                                ``(1) For provisions relating to 
penalties for failures to file returns and reports required under this 
section, see sections 6652(e), 6721, and 6722.''
            (2) Subsection (e) of section 6652 is amended by adding at 
        the end the following new sentence: ``This subsection shall not 
        apply to any return or statement which is an information return 
        described in section 6724(d)(1)(C)(ii) or a payee statement 
        described in section 6724(d)(2)(U).''
            (3) Subsection (a) of section 6693 is amended by adding at 
        the end the following new sentence: ``This subsection shall not 
        apply to any report which is an information return described in 
        section 6724(d)(1)(C)(i) or a payee statement described in 
        section 6724(d)(2)(T).''
    (e) Effective Date.--The amendments made by this section shall 
apply to returns, reports, and other statements the due date for which 
(determined without regard to extensions) is after December 31, 1995.

SEC. 14238. CONTRIBUTIONS ON BEHALF OF DISABLED EMPLOYEES.

    (a) All Disabled Participants Receiving Contributions.--Section 
415(c)(3)(C) is amended by adding at the end the following: ``If a 
defined contribution plan provides for the continuation of 
contributions on behalf of all participants described in clause (i) for 
a fixed or determinable period, this subparagraph shall be applied 
without regard to clauses (ii) and (iii).''
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 1995.

SEC. 14239. TREATMENT OF DEFERRED COMPENSATION PLANS OF STATE AND LOCAL 
              GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS.

    (a) Special Rules for Plan Distributions.--Paragraph (9) of section 
457(e) (relating to other definitions and special rules) is amended to 
read as follows:
            ``(9) Benefits not treated as made available by reason of 
        certain elections, etc.--
                    ``(A) Total amount payable is $3,500 or less.--The 
                total amount payable to a participant under the plan 
                shall not be treated as made available merely because 
                the participant may elect to receive such amount (or 
                the plan may distribute such amount without the 
                participant's consent) if--
                            ``(i) such amount does not exceed $3,500, 
                        and
                            ``(ii) such amount may be distributed only 
                        if--
                                    ``(I) no amount has been deferred 
                                under the plan with respect to such 
                                participant during the 2-year period 
                                ending on the date of the distribution, 
                                and
                                    ``(II) there has been no prior 
                                distribution under the plan to such 
                                participant to which this subparagraph 
                                applied.
                A plan shall not be treated as failing to meet the 
                distribution requirements of subsection (d) by reason 
                of a distribution to which this subparagraph applies.
                    ``(B) Election to defer commencement of 
                distributions.--The total amount payable to a 
                participant under the plan shall not be treated as made 
                available merely because the participant may elect to 
                defer commencement of distributions under the plan if--
                            ``(i) such election is made after amounts 
                        may be available under the plan in accordance 
                        with subsection (d)(1)(A) and before 
                        commencement of such distributions, and
                            ``(ii) the participant may make only 1 such 
                        election.''
    (b) Cost-of-Living Adjustment of Maximum Deferral Amount.--
Subsection (e) of section 457 is amended by adding at the end the 
following new paragraph:
            ``(14) Cost-of-living adjustment of maximum deferral 
        amount.--The Secretary shall adjust the $7,500 amount specified 
        in subsections (b)(2) and (c)(1) at the same time and in the 
        same manner as under section 415(d) (determined without regard 
        to paragraph (4)), except that the base period in applying such 
        section for purposes of this paragraph shall be the calendar 
        quarter ending September 30, 1994.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14240. TRUST REQUIREMENT FOR DEFERRED COMPENSATION PLANS OF STATE 
              AND LOCAL GOVERNMENTS.

    (a) In General.--Section 457 is amended by adding at the end the 
following new subsection:
    ``(g) Governmental Plans Must Maintain Set Asides for Exclusive 
Benefit of Participants.--
            ``(1) In general.--A plan maintained by an eligible 
        employer described in subsection (e)(1)(A) shall not be treated 
        as an eligible deferred compensation plan unless all assets and 
        income of the plan described in subsection (b)(6) are held in 
        trust for the exclusive benefit of participants and their 
        beneficiaries.
            ``(2) Taxability of trusts and participants.--For purposes 
        of this title--
                    ``(A) a trust described in paragraph (1) shall be 
                treated as an organization exempt from taxation under 
                section 501(a), and
                    ``(B) notwithstanding any other provision of this 
                title, amounts in the trust shall be includible in the 
                gross income of participants and beneficiaries only to 
                the extent, and at the time, provided in this section.
            ``(3) Custodial accounts and contracts.--For purposes of 
        this subsection, custodial accounts and contracts described in 
        section 401(f) shall be treated as trusts under rules similar 
        to the rules under section 401(f).''
    (b) Conforming Amendment.--Paragraph (6) of section 457(b) is 
amended by inserting ``except as provided in subsection (g),'' before 
``which provides that''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to assets and 
        income described in section 457(b)(6) of the Internal Revenue 
        Code of 1986 held by a plan on and after the date of the 
        enactment of this Act.
            (2) Transition rule.--In the case of assets and income 
        described in paragraph (1) held by a plan before the 90th day 
        after the date of the enactment of this Act, a trust need not 
        be established by reason of the amendments made by this section 
        before such 90th day.

SEC. 14241. TRANSITION RULE FOR COMPUTING MAXIMUM BENEFITS UNDER 
              SECTION 415 LIMITATIONS.

    (a) In General.--Subparagraph (A) of section 767(d)(3) of the 
Uruguay Round Agreements Act is amended to read as follows:
                    ``(A) Exception.--A plan that was adopted and in 
                effect before December 8, 1994, shall not be required 
                to apply the amendments made by subsection (b) with 
                respect to benefits accrued before the earlier of--
                            ``(i) the later of the date a plan 
                        amendment applying such amendment is adopted or 
                        made effective, or
                            ``(ii) the first day of the first 
                        limitation year beginning after December 31, 
                        1999.
                Determinations under section 415(b)(2)(E) of the 
                Internal Revenue Code of 1986 shall be made with 
                respect to such benefits on the basis of such section 
                as in effect on December 7, 1994, and the provisions of 
                the plan as in effect on December 7, 1994, but only if 
                such provisions of the plan meet the requirements of 
                such section (as so in effect).''
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the provisions of section 767 of the Uruguay 
Round Agreements Act.
    (c) Transitional Rule.--In the case of a plan that was adopted and 
in effect before December 8, 1994, if--
            (1) a plan amendment was adopted or made effective on or 
        before the date of the enactment of this Act applying the 
        amendments made by section 767(b) of the Uruguay Round 
        Agreements Act, and
            (2) within 1 year after the date of the enactment of this 
        Act, a plan amendment is adopted which repeals the amendment 
        referred to in paragraph (1),
the amendment referred to in paragraph (1) shall not be taken into 
account in applying section 767(d)(3)(A) of the Uruguay Round 
Agreements Act, as amended by subsection (a).

SEC. 14242. MULTIPLE SALARY REDUCTION AGREEMENTS PERMITTED UNDER 
              SECTION 403(b).

    (a) General Rule.--For purposes of section 403(b) of the Internal 
Revenue Code of 1986, the frequency that an employee is permitted to 
enter into a salary reduction agreement, the salary to which such an 
agreement may apply, and the ability to revoke such an agreement shall 
be determined under the rules applicable to cash or deferred elections 
under section 401(k) of such Code.
    (b) Effective Date.--Subsection (a) shall apply to taxable years 
beginning after December 31, 1995.

SEC. 14243. WAIVER OF MINIMUM PERIOD FOR JOINT AND SURVIVOR ANNUITY 
              EXPLANATION BEFORE ANNUITY STARTING DATE.

    (a) General Rule.--For purposes of section 417(a)(3)(A) of the 
Internal Revenue Code of 1986 (relating to plan to provide written 
explanations), the minimum period prescribed by the Secretary of the 
Treasury between the date that the explanation referred to in such 
section is provided and the annuity starting date shall not apply if 
waived by the participant and, if applicable, the participant's spouse.
    (b) Effective Date.--Subsection (a) shall apply to plan years 
beginning after December 31, 1995.

SEC. 14244. REPEAL OF LIMITATION IN CASE OF DEFINED BENEFIT PLAN AND 
              DEFINED CONTRIBUTION PLAN FOR SAME EMPLOYEE.

    (a) In General.--Section 415(e) is repealed.
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 415(b)(5) is amended by 
        striking ``and subsection (e)''.
            (2) Paragraph (1) of section 415(f) is amended by striking 
        ``subsections (b), (c), and (e)'' and inserting ``subsections 
        (b) and (c)''.
            (3) Subsection (g) of section 415 is amended by striking 
        ``subsections (e) and (f)'' in the last sentence and inserting 
        ``subsection (f)''.
            (4) Clause (i) of section 415(k)(2)(A) is amended to read 
        as follows:
                            ``(i) any contribution made directly by an 
                        employee under such an arrangement shall not be 
                        treated as an annual addition for purposes of 
                        subsection (c), and''.
            (5) Clause (ii) of section 415(k)(2)(A) is amended by 
        striking ``subsections (c) and (e)'' and inserting ``subsection 
        (c)''.
            (6) Section 416 is amended by striking subsection (h).
    (c) Effective Date.--The amendments made by this section shall 
apply to limitation years beginning after December 31, 1996.

SEC. 14245. DATE FOR ADOPTION OF PLAN AMENDMENTS.

    If any amendment made by this title requires an amendment to any 
plan, such plan amendment shall not be required to be made before the 
first day of the first plan year beginning on or after January 1, 1997, 
if--
            (1) during the period after such amendment takes effect and 
        before such first plan year, the plan is operated in accordance 
        with the requirements of such amendment, and
            (2) such plan amendment applies retroactively to such 
        period.

              Subtitle C--Treatment of Large Partnerships

                       PART I--GENERAL PROVISIONS

SEC. 14301. SIMPLIFIED FLOW-THROUGH FOR LARGE PARTNERSHIPS.

    (a) General Rule.--Subchapter K (relating to partners and 
partnerships) is amended by adding at the end the following new part:

            ``PART IV--SPECIAL RULES FOR LARGE PARTNERSHIPS

                              ``Sec. 771. Application of subchapter to 
                                        large partnerships.
                              ``Sec. 772. Simplified flow-through.
                              ``Sec. 773. Computations at partnership 
                                        level.
                              ``Sec. 774. Other modifications.
                              ``Sec. 775. Large partnership defined.
                              ``Sec. 776. Special rules for 
                                        partnerships holding oil and 
                                        gas properties.
                              ``Sec. 777. Regulations.

``SEC. 771. APPLICATION OF SUBCHAPTER TO LARGE PARTNERSHIPS.

    ``The preceding provisions of this subchapter to the extent 
inconsistent with the provisions of this part shall not apply to a 
large partnership and its partners.

``SEC. 772. SIMPLIFIED FLOW-THROUGH.

    ``(a) General Rule.--In determining the income tax of a partner of 
a large partnership, such partner shall take into account separately 
such partner's distributive share of the partnership's--
            ``(1) taxable income or loss from passive loss limitation 
        activities,
            ``(2) taxable income or loss from other activities,
            ``(3) net capital gain (or net capital loss)--
                    ``(A) to the extent allocable to passive loss 
                limitation activities, and
                    ``(B) to the extent allocable to other activities,
            ``(4) tax-exempt interest,
            ``(5) applicable net AMT adjustment separately computed 
        for--
                    ``(A) passive loss limitation activities, and
                    ``(B) other activities,
            ``(6) general credits,
            ``(7) low-income housing credit determined under section 
        42,
            ``(8) rehabilitation credit determined under section 47,
            ``(9) foreign income taxes,
            ``(10) the credit allowable under section 29, and
            ``(11) other items to the extent that the Secretary 
        determines that the separate treatment of such items is 
        appropriate.
    ``(b) Separate Computations.--In determining the amounts required 
under subsection (a) to be separately taken into account by any 
partner, this section and section 773 shall be applied separately with 
respect to such partner by taking into account such partner's 
distributive share of the items of income, gain, loss, deduction, or 
credit of the partnership.
    ``(c) Treatment at Partner Level.--
            ``(1) In general.--Except as provided in this subsection, 
        rules similar to the rules of section 702(b) shall apply to any 
        partner's distributive share of the amounts referred to in 
        subsection (a).
            ``(2) Income or loss from passive loss limitation 
        activities.--For purposes of this chapter, any partner's 
        distributive share of any income or loss described in 
        subsection (a)(1) shall be treated as an item of income or loss 
        (as the case may be) from the conduct of a trade or business 
        which is a single passive activity (as defined in section 469). 
        A similar rule shall apply to a partner's distributive share of 
        amounts referred to in paragraphs (3)(A) and (5)(A) of 
        subsection (a).
            ``(3) Income or loss from other activities.--
                    ``(A) In general.--For purposes of this chapter, 
                any partner's distributive share of any income or loss 
                described in subsection (a)(2) shall be treated as an 
                item of income or expense (as the case may be) with 
                respect to property held for investment.
                    ``(B) Deductions for loss not subject to section 
                67.--The deduction under section 212 for any loss 
                described in subparagraph (A) shall not be treated as a 
                miscellaneous itemized deduction for purposes of 
                section 67.
            ``(4) Treatment of net capital gain or loss.--For purposes 
        of this chapter, any partner's distributive share of any gain 
        or loss described in subsection (a)(3) shall be treated as a 
        long-term capital gain or loss, as the case may be.
            ``(5) Minimum tax treatment.--In determining the 
        alternative minimum taxable income of any partner, such 
        partner's distributive share of any applicable net AMT 
        adjustment shall be taken into account in lieu of making the 
        separate adjustments provided in sections 56, 57, and 58 with 
        respect to the items of the partnership. Except as provided in 
        regulations, the applicable net AMT adjustment shall be 
        treated, for purposes of section 53, as an adjustment or item 
        of tax preference not specified in section 53(d)(1)(B)(ii).
            ``(6) General credits.--A partner's distributive share of 
        the amount referred to in paragraph (6) of subsection (a) shall 
        be taken into account as a current year business credit.
    ``(d) Operating Rules.--For purposes of this section--
            ``(1) Passive loss limitation activity.--The term `passive 
        loss limitation activity' means--
                    ``(A) any activity which involves the conduct of a 
                trade or business, and
                    ``(B) any rental activity.
        For purposes of the preceding sentence, the term `trade or 
        business' includes any activity treated as a trade or business 
        under paragraph (5) or (6) of section 469(c).
            ``(2) Tax-exempt interest.--The term `tax-exempt interest' 
        means interest excludable from gross income under section 103.
            ``(3) Applicable net amt adjustment.--
                    ``(A) In general.--The applicable net AMT 
                adjustment is--
                            ``(i) with respect to taxpayers other than 
                        corporations, the net adjustment determined by 
                        using the adjustments applicable to 
                        individuals, and
                            ``(ii) with respect to corporations, the 
                        net adjustment determined by using the 
                        adjustments applicable to corporations.
                    ``(B) Net adjustment.--The term `net adjustment' 
                means the net adjustment in the items attributable to 
                passive loss activities or other activities (as the 
                case may be) which would result if such items were 
                determined with the adjustments of sections 56, 57, and 
                58.
            ``(4) Treatment of certain separately stated items.--
                    ``(A) Exclusion for certain purposes.--In 
                determining the amounts referred to in paragraphs (1) 
                and (2) of subsection (a), any net capital gain or net 
                capital loss (as the case may be), and any item 
                referred to in subsection (a)(11), shall be excluded.
                    ``(B) Allocation rules.--The net capital gain shall 
                be treated--
                            ``(i) as allocable to passive loss 
                        limitation activities to the extent the net 
                        capital gain does not exceed the net capital 
                        gain determined by only taking into account 
                        gains and losses from sales and exchanges of 
                        property used in connection with such 
                        activities, and
                            ``(ii) as allocable to other activities to 
                        the extent such gain exceeds the amount 
                        allocated under clause (i).
                A similar rule shall apply for purposes of allocating 
                any net capital loss.
                    ``(C) Net capital loss.--The term `net capital 
                loss' means the excess of the losses from sales or 
                exchanges of capital assets over the gains from sales 
                or exchange of capital assets.
            ``(5) General credits.--The term `general credits' means 
        any credit other than the low-income housing credit, the 
        rehabilitation credit, the foreign tax credit, and the credit 
        allowable under section 29.
            ``(6) Foreign income taxes.--The term `foreign income 
        taxes' means taxes described in section 901 which are paid or 
        accrued to foreign countries and to possessions of the United 
        States.
    ``(e) Special Rule for Unrelated Business Tax.--In the case of a 
partner which is an organization subject to tax under section 511, such 
partner's distributive share of any items shall be taken into account 
separately to the extent necessary to comply with the provisions of 
section 512(c)(1).
    ``(f) Special Rules for Applying Passive Loss Limitations.--If any 
person holds an interest in a large partnership other than as a limited 
partner--
            ``(1) paragraph (2) of subsection (c) shall not apply to 
        such partner, and
            ``(2) such partner's distributive share of the partnership 
        items allocable to passive loss limitation activities shall be 
        taken into account separately to the extent necessary to comply 
        with the provisions of section 469.
The preceding sentence shall not apply to any items allocable to an 
interest held as a limited partner.

``SEC. 773. COMPUTATIONS AT PARTNERSHIP LEVEL.

    ``(a) General Rule.--
            ``(1) Taxable income.--The taxable income of a large 
        partnership shall be computed in the same manner as in the case 
        of an individual except that--
                    ``(A) the items described in section 772(a) shall 
                be separately stated, and
                    ``(B) the modifications of subsection (b) shall 
                apply.
            ``(2) Elections.--All elections affecting the computation 
        of the taxable income of a large partnership or the computation 
        of any credit of a large partnership shall be made by the 
        partnership; except that the election under section 901, and 
        any election under section 108, shall be made by each partner 
        separately.
            ``(3) Limitations, etc.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), all limitations and other provisions 
                affecting the computation of the taxable income of a 
                large partnership or the computation of any credit of a 
                large partnership shall be applied at the partnership 
                level (and not at the partner level).
                    ``(B) Certain limitations applied at partner 
                level.--The following provisions shall be applied at 
                the partner level (and not at the partnership level):
                            ``(i) Section 68 (relating to overall 
                        limitation on itemized deductions).
                            ``(ii) Sections 49 and 465 (relating to at 
                        risk limitations).
                            ``(iii) Section 469 (relating to limitation 
                        on passive activity losses and credits).
                            ``(iv) Any other provision specified in 
                        regulations.
            ``(4) Coordination with other provisions.--Paragraphs (2) 
        and (3) shall apply notwithstanding any other provision of this 
        chapter other than this part.
    ``(b) Modifications to Determination of Taxable Income.--In 
determining the taxable income of a large partnership--
            ``(1) Certain deductions not allowed.--The following 
        deductions shall not be allowed:
                    ``(A) The deduction for personal exemptions 
                provided in section 151.
                    ``(B) The net operating loss deduction provided in 
                section 172.
                    ``(C) The additional itemized deductions for 
                individuals provided in part VII of subchapter B (other 
                than section 212 thereof).
            ``(2) Charitable deductions.--In determining the amount 
        allowable under section 170, the limitation of section 
        170(b)(2) shall apply.
            ``(3) Coordination with section 67.--In lieu of applying 
        section 67, 70 percent of the amount of the miscellaneous 
        itemized deductions shall be disallowed.
    ``(c) Special Rules for Income From Discharge of Indebtedness.--If 
a large partnership has income from the discharge of any indebtedness--
            ``(1) such income shall be excluded in determining the 
        amounts referred to in section 772(a), and
            ``(2) in determining the income tax of any partner of such 
        partnership--
                    ``(A) such income shall be treated as an item 
                required to be separately taken into account under 
                section 772(a), and
                    ``(B) the provisions of section 108 shall be 
                applied without regard to this part.

``SEC. 774. OTHER MODIFICATIONS.

    ``(a) Treatment of Certain Optional Adjustments, Etc.--In the case 
of a large partnership--
            ``(1) computations under section 773 shall be made without 
        regard to any adjustment under section 743(b) or 108(b), but
            ``(2) a partner's distributive share of any amount referred 
        to in section 772(a) shall be appropriately adjusted to take 
        into account any adjustment under section 743(b) or 108(b) with 
        respect to such partner.
    ``(b) Credit Recapture Determined at Partnership Level.--
            ``(1) In general.--In the case of a large partnership--
                    ``(A) any credit recapture shall be taken into 
                account by the partnership, and
                    ``(B) the amount of such recapture shall be 
                determined as if the credit with respect to which the 
                recapture is made had been fully utilized to reduce 
                tax.
            ``(2) Method of taking recapture into account.--A large 
        partnership shall take into account a credit recapture by 
        reducing the amount of the appropriate current year credit to 
        the extent thereof, and if such recapture exceeds the amount of 
        such current year credit, the partnership shall be liable to 
        pay such excess.
            ``(3) Dispositions not to trigger recapture.--No credit 
        recapture shall be required by reason of any transfer of an 
        interest in a large partnership.
            ``(4) Credit recapture.--For purposes of this subsection, 
        the term `credit recapture' means any increase in tax under 
        section 42(j) or 50(a).
    ``(c) Partnership Not Terminated by Reason of Change in 
Ownership.--Subparagraph (B) of section 708(b)(1) shall not apply to a 
large partnership.
    ``(d) Partnership Entitled to Certain Credits.--The following shall 
be allowed to a large partnership and shall not be taken into account 
by the partners of such partnership:
            ``(1) The credit provided by section 34.
            ``(2) Any credit or refund under section 852(b)(3)(D).
    ``(e) Treatment of REMIC Residuals.--For purposes of applying 
section 860E(e)(6) to any large partnership--
            ``(1) all interests in such partnership shall be treated as 
        held by disqualified organizations,
            ``(2) in lieu of applying subparagraph (C) of section 
        860E(e)(6), the amount subject to tax under section 860E(e)(6) 
        shall be excluded from the gross income of such partnership, 
        and
            ``(3) subparagraph (D) of section 860E(e)(6) shall not 
        apply.
    ``(f) Special Rules for Applying Certain Installment Sale Rules.--
In the case of a large partnership--
            ``(1) the provisions of sections 453(l)(3) and 453A shall 
        be applied at the partnership level, and
            ``(2) in determining the amount of interest payable under 
        such sections, such partnership shall be treated as subject to 
        tax under this chapter at the highest rate of tax in effect 
        under section 1 or 11.

``SEC. 775. LARGE PARTNERSHIP DEFINED.

    ``(a) General Rule.--For purposes of this part--
            ``(1) In general.--Except as otherwise provided in this 
        section or section 776, the term `large partnership' means, 
        with respect to any partnership taxable year, any partnership 
        if the number of persons who were partners in such partnership 
        in any preceding partnership taxable year beginning after 
        December 31, 1995, equaled or exceeded 250. To the extent 
        provided in regulations, a partnership shall cease to be 
        treated as a large partnership for any partnership taxable year 
        if in such taxable year fewer than 100 persons were partners in 
        such partnership.
            ``(2) Election for partnerships with at least 100 
        partners.--If a partnership makes an election under this 
        paragraph, paragraph (1) shall be applied by substituting `100' 
        for `250'. Such an election shall apply to the taxable year for 
        which made and all subsequent taxable years unless revoked with 
        the consent of the Secretary.
    ``(b) Special Rules for Certain Service Partnerships.--
            ``(1) Certain partners not counted.--For purposes of this 
        section, the term `partner' does not include any individual 
        performing substantial services in connection with the 
        activities of the partnership and holding an interest in such 
        partnership, or an individual who formerly performed 
        substantial services in connection with such activities and who 
        held an interest in such partnership at the time the individual 
        performed such services.
            ``(2) Exclusion.--For purposes of this part, the term 
        `large partnership' does not include any partnership if 
        substantially all the partners of such partnership--
                    ``(A) are individuals performing substantial 
                services in connection with the activities of such 
                partnership or are personal service corporations (as 
                defined in section 269A(b)) the owner-employees (as 
                defined in section 269A(b)) of which perform such 
                substantial services,
                    ``(B) are retired partners who had performed such 
                substantial services, or
                    ``(C) are spouses of partners who are performing 
                (or had previously performed) such substantial 
                services.
            ``(3) Special rule for lower tier partnerships.--For 
        purposes of this subsection, the activities of a partnership 
        shall include the activities of any other partnership in which 
        the partnership owns directly an interest in the capital and 
        profits of at least 80 percent.
    ``(c) Exclusion of Commodity Pools.--For purposes of this part, the 
term `large partnership' does not include any partnership the principal 
activity of which is the buying and selling of commodities (not 
described in section 1221(1)), or options, futures, or forwards with 
respect to such commodities.
    ``(d) Secretary May Rely on Treatment on Return.--If, on the 
partnership return of any partnership, such partnership is treated as a 
large partnership, such treatment shall be binding on such partnership 
and all partners of such partnership but not on the Secretary.

``SEC. 776. SPECIAL RULES FOR PARTNERSHIPS HOLDING OIL AND GAS 
              PROPERTIES.

    ``(a) Exception for Partnerships Holding Significant Oil and Gas 
Properties.--
            ``(1) In general.--For purposes of this part, the term 
        `large partnership' shall not include any partnership if the 
        average percentage of assets (by value) held by such 
        partnership during the taxable year which are oil or gas 
        properties is at least 25 percent. For purposes of the 
        preceding sentence, any interest held by a partnership in 
        another partnership shall be disregarded, except that the 
        partnership shall be treated as holding its proportionate share 
        of the assets of such other partnership.
            ``(2) Election to waive exception.--Any partnership may 
        elect to have paragraph (1) not apply. Such an election shall 
        apply to the partnership taxable year for which made and all 
        subsequent partnership taxable years unless revoked with the 
        consent of the Secretary.
    ``(b) Special Rules Where Part Applies.--
            ``(1) Computation of percentage depletion.--In the case of 
        a large partnership, except as provided in paragraph (2)--
                    ``(A) the allowance for depletion under section 611 
                with respect to any partnership oil or gas property 
                shall be computed at the partnership level without 
                regard to any provision of section 613A requiring such 
                allowance to be computed separately by each partner,
                    ``(B) such allowance shall be determined without 
                regard to the provisions of section 613A(c) limiting 
                the amount of production for which percentage depletion 
                is allowable and without regard to paragraph (1) of 
                section 613A(d), and
                    ``(C) paragraph (3) of section 705(a) shall not 
                apply.
            ``(2) Treatment of certain partners.--
                    ``(A) In general.--In the case of a disqualified 
                person, the treatment under this chapter of such 
                person's distributive share of any item of income, 
                gain, loss, deduction, or credit attributable to any 
                partnership oil or gas property shall be determined 
                without regard to this part. Such person's distributive 
                share of any such items shall be excluded for purposes 
                of making determinations under sections 772 and 773.
                    ``(B) Disqualified person.--For purposes of 
                subparagraph (A), the term `disqualified person' means, 
                with respect to any partnership taxable year--
                            ``(i) any person referred to in paragraph 
                        (2) or (4) of section 613A(d) for such person's 
                        taxable year in which such partnership taxable 
                        year ends, and
                            ``(ii) any other person if such person's 
                        average daily production of domestic crude oil 
                        and natural gas for such person's taxable year 
                        in which such partnership taxable year ends 
                        exceeds 500 barrels.
                    ``(C) Average daily production.--For purposes of 
                subparagraph (B), a person's average daily production 
                of domestic crude oil and natural gas for any taxable 
                year shall be computed as provided in section 
                613A(c)(2)--
                            ``(i) by taking into account all production 
                        of domestic crude oil and natural gas 
                        (including such person's proportionate share of 
                        any production of a partnership),
                            ``(ii) by treating 6,000 cubic feet of 
                        natural gas as a barrel of crude oil, and
                            ``(iii) by treating as 1 person all persons 
                        treated as 1 taxpayer under section 613A(c)(8) 
                        or among whom allocations are required under 
                        such section.

``SEC. 777. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
appropriate to carry out the purposes of this part.''
    (b) Clerical Amendment.--The table of parts for subchapter K of 
chapter 1 is amended by adding at the end the following new item:

                              ``Part IV. Special rules for large 
                                        partnerships.''

SEC. 14302. SIMPLIFIED AUDIT PROCEDURES FOR LARGE PARTNERSHIPS.

    (a) General Rule.--Chapter 63 is amended by adding at the end the 
following new subchapter:

            ``Subchapter D--Treatment of Large Partnerships

                              ``Part I. Treatment of partnership items 
                                        and adjustments.
                              ``Part II. Partnership level adjustments.
                              ``Part III. Definitions and special 
                                        rules.

        ``PART I--TREATMENT OF PARTNERSHIP ITEMS AND ADJUSTMENTS

                              ``Sec. 6240. Application of subchapter.
                              ``Sec. 6241. Partner's return must be 
                                        consistent with partnership 
                                        return.
                              ``Sec. 6242. Procedures for taking 
                                        partnership adjustments into 
                                        account.

``SEC. 6240. APPLICATION OF SUBCHAPTER.

    ``(a) General Rule.--This subchapter shall only apply to large 
partnerships and partners in such partnerships.
    ``(b) Coordination With Other Partnership Audit Procedures.--
            ``(1) In general.--Subchapter C of this chapter shall not 
        apply to any large partnership other than in its capacity as a 
        partner in another partnership which is not a large 
        partnership.
            ``(2) Treatment where partner in other partnership.--If a 
        large partnership is a partner in another partnership which is 
        not a large partnership--
                    ``(A) subchapter C of this chapter shall apply to 
                items of such large partnership which are partnership 
                items with respect to such other partnership, but
                    ``(B) any adjustment under such subchapter C shall 
                be taken into account in the manner provided by section 
                6242.

``SEC. 6241. PARTNER'S RETURN MUST BE CONSISTENT WITH PARTNERSHIP 
              RETURN.

    ``(a) General Rule.--A partner of any large partnership shall, on 
the partner's return, treat each partnership item attributable to such 
partnership in a manner which is consistent with the treatment of such 
partnership item on the partnership return.
    ``(b) Underpayment Due to Inconsistent Treatment Assessed as Math 
Error.--Any underpayment of tax by a partner by reason of failing to 
comply with the requirements of subsection (a) shall be assessed and 
collected in the same manner as if such underpayment were on account of 
a mathematical or clerical error appearing on the partner's return. 
Paragraph (2) of section 6213(b) shall not apply to any assessment of 
an underpayment referred to in the preceding sentence.
    ``(c) Adjustments Not To Affect Prior Year of Partners.--
            ``(1) In general.--Except as provided in paragraph (2), 
        subsections (a) and (b) shall apply without regard to any 
        adjustment to the partnership item under part II.
            ``(2) Certain changes in distributive share taken into 
        account by partner.--
                    ``(A) In general.--To the extent that any 
                adjustment under part II involves a change under 
                section 704 in a partner's distributive share of the 
                amount of any partnership item shown on the partnership 
                return, such adjustment shall be taken into account in 
                applying this title to such partner for the partner's 
                taxable year for which such item was required to be 
                taken into account.
                    ``(B) Coordination with deficiency procedures.--
                            ``(i) In general.--Subchapter B shall not 
                        apply to the assessment or collection of any 
                        underpayment of tax attributable to an 
                        adjustment referred to in subparagraph (A).
                            ``(ii) Adjustment not precluded.--
                        Notwithstanding any other law or rule of law, 
                        nothing in subchapter B (or in any proceeding 
                        under subchapter B) shall preclude the 
                        assessment or collection of any underpayment of 
                        tax (or the allowance of any credit or refund 
                        of any overpayment of tax) attributable to an 
                        adjustment referred to in subparagraph (A) and 
                        such assessment or collection or allowance (or 
                        any notice thereof) shall not preclude any 
                        notice, proceeding, or determination under 
                        subchapter B.
                    ``(C) Period of limitations.--The period for--
                            ``(i) assessing any underpayment of tax, or
                            ``(ii) filing a claim for credit or refund 
                        of any overpayment of tax,
                attributable to an adjustment referred to in 
                subparagraph (A) shall not expire before the close of 
                the period prescribed by section 6248 for making 
adjustments with respect to the partnership taxable year involved.
                    ``(D) Tiered structures.--If the partner referred 
                to in subparagraph (A) is another partnership or an S 
                corporation, the rules of this paragraph shall also 
                apply to persons holding interests in such partnership 
                or S corporation (as the case may be); except that, if 
                such partner is a large partnership, the adjustment 
                referred to in subparagraph (A) shall be taken into 
                account in the manner provided by section 6242.
    ``(d) Addition to Tax for Failure To Comply With Section.--

                                ``For addition to tax in case of 
partner's disregard of requirements of this section, see part II of 
subchapter A of chapter 68.

``SEC. 6242. PROCEDURES FOR TAKING PARTNERSHIP ADJUSTMENTS INTO 
              ACCOUNT.

    ``(a) Adjustments Flow Through to Partners for Year in Which 
Adjustment Takes Effect.--
            ``(1) In general.--If any partnership adjustment with 
        respect to any partnership item takes effect (within the 
        meaning of subsection (d)(2)) during any partnership taxable 
        year and if an election under paragraph (2) does not apply to 
        such adjustment, such adjustment shall be taken into account in 
        determining the amount of such item for the partnership taxable 
        year in which such adjustment takes effect. In applying this 
        title to any person who is (directly or indirectly) a partner 
        in such partnership during such partnership taxable year, such 
        adjustment shall be treated as an item actually arising during 
        such taxable year.
            ``(2) Partnership liable in certain cases.--If--
                    ``(A) a partnership elects under this paragraph to 
                not take an adjustment into account under paragraph 
                (1),
                    ``(B) a partnership does not make such an election 
                but in filing its return for any partnership taxable 
                year fails to take fully into account any partnership 
                adjustment as required under paragraph (1), or
                    ``(C) any partnership adjustment involves a 
                reduction in a credit which exceeds the amount of such 
                credit determined for the partnership taxable year in 
                which the adjustment takes effect,
        the partnership shall pay to the Secretary an amount determined 
        by applying the rules of subsection (b)(4) to the adjustments 
        not so taken into account and any excess referred to in 
        subparagraph (C). A partnership may make an election under 
        subparagraph (A) only if such partnership meets such 
        requirements as the Secretary may prescribe to assure payment 
        of such amount.
            ``(3) Offsetting adjustments taken into account.--If a 
        partnership adjustment requires another adjustment in a taxable 
        year after the adjusted year and before the partnership taxable 
        year in which such partnership adjustment takes effect, such 
        other adjustment shall be taken into account under this 
        subsection for the partnership taxable year in which such 
        partnership adjustment takes effect.
            ``(4) Coordination with part ii.--Amounts taken into 
        account under this subsection for any partnership taxable year 
        shall continue to be treated as adjustments for the adjusted 
        year for purposes of determining whether such amounts may be 
        readjusted under part II.
    ``(b) Partnership Liable for Interest and Penalties.--
            ``(1) In general.--If a partnership adjustment takes effect 
        during any partnership taxable year and such adjustment results 
        in an imputed underpayment for the adjusted year, the 
        partnership--
                    ``(A) shall pay to the Secretary interest computed 
                under paragraph (2), and
                    ``(B) shall be liable for any penalty, addition to 
                tax, or additional amount as provided in paragraph (3).
            ``(2) Determination of amount of interest.--The interest 
        computed under this paragraph with respect to any partnership 
        adjustment is the interest which would be determined under 
        chapter 67--
                    ``(A) on the imputed underpayment determined under 
                paragraph (4) with respect to such adjustment,
                    ``(B) for the period beginning on the day after the 
                return due date for the adjusted year and ending on the 
                return due date for the partnership taxable year in 
                which such adjustment takes effect (or, if earlier, in 
                the case of any adjustment to which subsection (a)(2) 
                applies, the date on which the payment under subsection 
                (a)(2) is made).
        Proper adjustments in the amount determined under the preceding 
        sentence shall be made for adjustments required for partnership 
        taxable years after the adjusted year and before the year in 
        which the partnership adjustment takes effect by reason of such 
        partnership adjustment.
            ``(3) Penalties.--A partnership shall be liable for any 
        penalty, addition to tax, or additional amount for which it 
        would have been liable if such partnership had been an 
        individual subject to tax under chapter 1 for the adjusted year 
        and the imputed underpayment determined under paragraph (4) 
        were an actual underpayment (or understatement) for such year.
            ``(4) Imputed underpayment.--For purposes of this 
        subsection, the imputed underpayment determined under this 
        paragraph with respect to any partnership adjustment is the 
        underpayment (if any) which would result--
                    ``(A) by netting all adjustments to items of 
                income, gain, loss, or deduction and by treating any 
                net increase in income as an underpayment equal to the 
                amount of such net increase multiplied by the highest 
                rate of tax in effect under section 1 or 11 for the 
                adjusted year, and
                    ``(B) by taking adjustments to credits into account 
                as increases or decreases (whichever is appropriate) in 
                the amount of tax.
        For purposes of the preceding sentence, any net decrease in a 
        loss shall be treated as an increase in income and a similar 
        rule shall apply to a net increase in a loss.
    ``(c) Administrative Provisions.--
            ``(1) In general.--Any payment required by subsection 
        (a)(2) or (b)(1)(A)--
                    ``(A) shall be assessed and collected in the same 
                manner as if it were a tax imposed by subtitle C, and
                    ``(B) shall be paid on or before the return due 
                date for the partnership taxable year in which the 
                partnership adjustment takes effect.
            ``(2) Interest.--For purposes of determining interest, any 
        payment required by subsection (a)(2) or (b)(1)(A) shall be 
        treated as an underpayment of tax.
            ``(3) Penalties.--
                    ``(A) In general.--In the case of any failure by 
                any partnership to pay on the date prescribed therefor 
                any amount required by subsection (a)(2) or (b)(1)(A), 
                there is hereby imposed on such partnership a penalty 
                of 10 percent of the underpayment. For purposes of the 
                preceding sentence, the term `underpayment' means the 
                excess of any payment required under this section over 
                the amount (if any) paid on or before the date 
                prescribed therefor.
                    ``(B) Accuracy-related and fraud penalties made 
                applicable.--For purposes of part II of subchapter A of 
                chapter 68, any payment required by subsection (a)(2) 
                shall be treated as an underpayment of tax.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Partnership adjustment.--The term `partnership 
        adjustment' means any adjustment in the amount of any 
        partnership item of a large partnership.
            ``(2) When adjustment takes effect.--A partnership 
        adjustment takes effect--
                    ``(A) in the case of an adjustment pursuant to the 
                decision of a court in a proceeding brought under part 
                II, when such decision becomes final,
                    ``(B) in the case of an adjustment pursuant to any 
                administrative adjustment request under section 6251, 
                when such adjustment is allowed by the Secretary, or
                    ``(C) in any other case, when such adjustment is 
                made.
            ``(3) Adjusted year.--The term `adjusted year' means the 
        partnership taxable year to which the item being adjusted 
        relates.
            ``(4) Return due date.--The term `return due date' means, 
        with respect to any taxable year, the date prescribed for 
        filing the partnership return for such taxable year (determined 
        without regard to extensions).
            ``(5) Adjustments involving changes in character.--Under 
        regulations, appropriate adjustments in the application of this 
        section shall be made for purposes of taking into account 
        partnership adjustments which involve a change in the character 
        of any item of income, gain, loss, or deduction.
    ``(e) Payments Nondeductible.--No deduction shall be allowed under 
subtitle A for any payment required to be made by a large partnership 
under this section.

                ``PART II--PARTNERSHIP LEVEL ADJUSTMENTS

                              ``Subpart A. Adjustments by Secretary.
                              ``Subpart B. Claims for adjustments by 
                                        partnership.

                 ``Subpart A--Adjustments by Secretary

                              ``Sec. 6245. Secretarial authority.
                              ``Sec. 6246. Restrictions on partnership 
                                        adjustments.
                              ``Sec. 6247. Judicial review of 
                                        partnership adjustment.
                              ``Sec. 6248. Period of limitations for 
                                        making adjustments.

``SEC. 6245. SECRETARIAL AUTHORITY.

    ``(a) General Rule.--The Secretary is authorized and directed to 
make adjustments at the partnership level in any partnership item to 
the extent necessary to have such item be treated in the manner 
required.
    ``(b) Notice of Partnership Adjustment.--
            ``(1) In general.--If the Secretary determines that a 
        partnership adjustment is required, the Secretary is authorized 
        to send notice of such adjustment to the partnership by 
        certified mail or registered mail. Such notice shall be 
        sufficient if mailed to the partnership at its last known 
        address even if the partnership has terminated its existence.
            ``(2) Further notices restricted.--If the Secretary mails a 
        notice of a partnership adjustment to any partnership for any 
        partnership taxable year and the partnership files a petition 
        under section 6247 with respect to such notice, in the absence 
        of a showing of fraud, malfeasance, or misrepresentation of a 
        material fact, the Secretary shall not mail another such notice 
        to such partnership with respect to such taxable year.
            ``(3) Authority to rescind notice with partnership 
        consent.--The Secretary may, with the consent of the 
        partnership, rescind any notice of a partnership adjustment 
        mailed to such partnership. Any notice so rescinded shall not 
        be treated as a notice of a partnership adjustment, for 
        purposes of this section, section 6246, and section 6247, and 
        the taxpayer shall have no right to bring a proceeding under 
        section 6247 with respect to such notice. Nothing in this 
        subsection shall affect any suspension of the running of any 
        period of limitations during any period during which the 
        rescinded notice was outstanding.

``SEC. 6246. RESTRICTIONS ON PARTNERSHIP ADJUSTMENTS.

    ``(a) General Rule.--Except as otherwise provided in this chapter, 
no adjustment to any partnership item may be made (and no levy or 
proceeding in any court for the collection of any amount resulting from 
such adjustment may be made, begun or prosecuted) before--
            ``(1) the close of the 90th day after the day on which a 
        notice of a partnership adjustment was mailed to the 
        partnership, and
            ``(2) if a petition is filed under section 6247 with 
        respect to such notice, the decision of the court has become 
        final.
    ``(b) Premature Action May Be Enjoined.--Notwithstanding section 
7421(a), any action which violates subsection (a) may be enjoined in 
the proper court, including the Tax Court. The Tax Court shall have no 
jurisdiction to enjoin any action under this subsection unless a timely 
petition has been filed under section 6247 and then only in respect of 
the adjustments that are the subject of such petition.
    ``(c) Exceptions to Restrictions on Adjustments.--
            ``(1) Adjustments arising out of math or clerical errors.--
                    ``(A) In general.--If the partnership is notified 
                that, on account of a mathematical or clerical error 
                appearing on the partnership return, an adjustment to a 
                partnership item is required, rules similar to the 
                rules of paragraphs (1) and (2) of section 6213(b) 
                shall apply to such adjustment.
                    ``(B) Special rule.--If a large partnership is a 
                partner in another large partnership, any adjustment on 
                account of such partnership's failure to comply with 
                the requirements of section 6241(a) with respect to its 
                interest in such other partnership shall be treated as 
                an adjustment referred to in subparagraph (A), except 
                that paragraph (2) of section 6213(b) shall not apply 
                to such adjustment.
            ``(2) Partnership may waive restrictions.--The partnership 
        shall at any time (whether or not a notice of partnership 
        adjustment has been issued) have the right, by a signed notice 
        in writing filed with the Secretary, to waive the restrictions 
        provided in subsection (a) on the making of any partnership 
        adjustment.
    ``(d) Limit Where No Proceeding Begun.--If no proceeding under 
section 6247 is begun with respect to any notice of a partnership 
adjustment during the 90-day period described in subsection (a), the 
amount for which the partnership is liable under section 6242 (and any 
increase in any partner's liability for tax under chapter 1 by reason 
of any adjustment under section 6242(a)) shall not exceed the amount 
determined in accordance with such notice.

``SEC. 6247. JUDICIAL REVIEW OF PARTNERSHIP ADJUSTMENT.

    ``(a) General Rule.--Within 90 days after the date on which a 
notice of a partnership adjustment is mailed to the partnership with 
respect to any partnership taxable year, the partnership may file a 
petition for a readjustment of the partnership items for such taxable 
year with--
            ``(1) the Tax Court,
            ``(2) the district court of the United States for the 
        district in which the partnership's principal place of business 
        is located, or
            ``(3) the Claims Court.
    ``(b) Jurisdictional Requirement for Bringing Action in District 
Court or Claims Court.--
            ``(1) In general.--A readjustment petition under this 
        section may be filed in a district court of the United States 
        or the Claims Court only if the partnership filing the petition 
        deposits with the Secretary, on or before the date the petition 
        is filed, the amount for which the partnership would be liable 
        under section 6242(b) (as of the date of the filing of the 
        petition) if the partnership items were adjusted as provided by 
        the notice of partnership adjustment. The court may by order 
        provide that the jurisdictional requirements of this paragraph 
        are satisfied where there has been a good faith attempt to 
satisfy such requirement and any shortfall of the amount required to be 
deposited is timely corrected.
            ``(2) Interest payable.--Any amount deposited under 
        paragraph (1), while deposited, shall not be treated as a 
        payment of tax for purposes of this title (other than chapter 
        67).
    ``(c) Scope of Judicial Review.--A court with which a petition is 
filed in accordance with this section shall have jurisdiction to 
determine all partnership items of the partnership for the partnership 
taxable year to which the notice of partnership adjustment relates and 
the proper allocation of such items among the partners (and the 
applicability of any penalty, addition to tax, or additional amount for 
which the partnership may be liable under section 6242(b)).
    ``(d) Determination of Court Reviewable.--Any determination by a 
court under this section shall have the force and effect of a decision 
of the Tax Court or a final judgment or decree of the district court or 
the Claims Court, as the case may be, and shall be reviewable as such. 
The date of any such determination shall be treated as being the date 
of the court's order entering the decision.
    ``(e) Effect of Decision Dismissing Action.--If an action brought 
under this section is dismissed other than by reason of a rescission 
under section 6245(b)(3), the decision of the court dismissing the 
action shall be considered as its decision that the notice of 
partnership adjustment is correct, and an appropriate order shall be 
entered in the records of the court.

``SEC. 6248. PERIOD OF LIMITATIONS FOR MAKING ADJUSTMENTS.

    ``(a) General Rule.--Except as otherwise provided in this section, 
no adjustment under this subpart to any partnership item for any 
partnership taxable year may be made after the date which is 3 years 
after the later of--
            ``(1) the date on which the partnership return for such 
        taxable year was filed, or
            ``(2) the last day for filing such return for such year 
        (determined without regard to extensions).
    ``(b) Extension by Agreement.--The period described in subsection 
(a) (including an extension period under this subsection) may be 
extended by an agreement entered into by the Secretary and the 
partnership before the expiration of such period.
    ``(c) Special Rule in Case of Fraud, Etc.--
            ``(1) False return.--In the case of a false or fraudulent 
        partnership return with intent to evade tax, the adjustment may 
        be made at any time.
            ``(2) Substantial omission of income.--If any partnership 
        omits from gross income an amount properly includible therein 
        which is in excess of 25 percent of the amount of gross income 
        stated in its return, subsection (a) shall be applied by 
        substituting `6 years' for `3 years'.
            ``(3) No return.--In the case of a failure by a partnership 
        to file a return for any taxable year, the adjustment may be 
        made at any time.
            ``(4) Return filed by secretary.--For purposes of this 
        section, a return executed by the Secretary under subsection 
        (b) of section 6020 on behalf of the partnership shall not be 
        treated as a return of the partnership.
    ``(d) Suspension When Secretary Mails Notice of Adjustment.--If 
notice of a partnership adjustment with respect to any taxable year is 
mailed to the partnership, the running of the period specified in 
subsection (a) (as modified by the other provisions of this section) 
shall be suspended--
            ``(1) for the period during which an action may be brought 
        under section 6247 (and, if a petition is filed under section 
        6247 with respect to such notice, until the decision of the 
        court becomes final), and
            ``(2) for 1 year thereafter.

           ``Subpart B--Claims for Adjustments by Partnership

                              ``Sec. 6251. Administrative adjustment 
                                        requests.
                              ``Sec. 6252. Judicial review where 
                                        administrative adjustment 
                                        request is not allowed in full.

``SEC. 6251. ADMINISTRATIVE ADJUSTMENT REQUESTS.

    ``(a) General Rule.--A partnership may file a request for an 
administrative adjustment of partnership items for any partnership 
taxable year at any time which is--
            ``(1) within 3 years after the later of--
                    ``(A) the date on which the partnership return for 
                such year is filed, or
                    ``(B) the last day for filing the partnership 
                return for such year (determined without regard to 
                extensions), and
            ``(2) before the mailing to the partnership of a notice of 
        a partnership adjustment with respect to such taxable year.
    ``(b) Secretarial Action.--If a partnership files an administrative 
adjustment request under subsection (a), the Secretary may allow any 
part of the requested adjustments.
    ``(c) Special Rule in Case of Extension Under Section 6248.--If the 
period described in section 6248(a) is extended pursuant to an 
agreement under section 6248(b), the period prescribed by subsection 
(a)(1) shall not expire before the date 6 months after the expiration 
of the extension under section 6248(b).

``SEC. 6252. JUDICIAL REVIEW WHERE ADMINISTRATIVE ADJUSTMENT REQUEST IS 
              NOT ALLOWED IN FULL.

    ``(a) In General.--If any part of an administrative adjustment 
request filed under section 6251 is not allowed by the Secretary, the 
partnership may file a petition for an adjustment with respect to the 
partnership items to which such part of the request relates with--
            ``(1) the Tax Court,
            ``(2) the district court of the United States for the 
        district in which the principal place of business of the 
        partnership is located, or
            ``(3) the Claims Court.
    ``(b) Period for Filing Petition.--A petition may be filed under 
subsection (a) with respect to partnership items for a partnership 
taxable year only--
            ``(1) after the expiration of 6 months from the date of 
        filing of the request under section 6251, and
            ``(2) before the date which is 2 years after the date of 
        such request.
The 2-year period set forth in paragraph (2) shall be extended for such 
period as may be agreed upon in writing by the partnership and the 
Secretary.
    ``(c) Coordination With Subpart A.--
            ``(1) Notice of partnership adjustment before filing of 
        petition.--No petition may be filed under this section after 
        the Secretary mails to the partnership a notice of a 
        partnership adjustment for the partnership taxable year to 
        which the request under section 6251 relates.
            ``(2) Notice of partnership adjustment after filing but 
        before hearing of petition.--If the Secretary mails to the 
        partnership a notice of a partnership adjustment for the 
        partnership taxable year to which the request under section 
        6251 relates after the filing of a petition under this 
        subsection but before the hearing of such petition, such 
        petition shall be treated as an action brought under section 
        6247 with respect to such notice, except that subsection (b) of 
        section 6247 shall not apply.
            ``(3) Notice must be before expiration of statute of 
        limitations.--A notice of a partnership adjustment for the 
        partnership taxable year shall be taken into account under 
        paragraphs (1) and (2) only if such notice is mailed before the 
        expiration of the period prescribed by section 6248 for making 
        adjustments to partnership items for such taxable year.
    ``(d) Scope of Judicial Review.--Except in the case described in 
paragraph (2) of subsection (c), a court with which a petition is filed 
in accordance with this section shall have jurisdiction to determine 
only those partnership items to which the part of the request under 
section 6251 not allowed by the Secretary relates and those items with 
respect to which the Secretary asserts adjustments as offsets to the 
adjustments requested by the partnership.
    ``(e) Determination of Court Reviewable.--Any determination by a 
court under this subsection shall have the force and effect of a 
decision of the Tax Court or a final judgment or decree of the district 
court or the Claims Court, as the case may be, and shall be reviewable 
as such. The date of any such determination shall be treated as being 
the date of the court's order entering the decision.

               ``PART III--DEFINITIONS AND SPECIAL RULES

                              ``Sec. 6255. Definitions and special 
                                        rules.

``SEC. 6255. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Large partnership.--The term `large partnership' has 
        the meaning given to such term by section 775 without regard to 
        section 776(a).
            ``(2) Partnership item.--The term `partnership item' has 
        the meaning given to such term by section 6231(a)(3).
    ``(b) Partners Bound by Actions of Partnership, Etc.--
            ``(1) Designation of partner.--Each large partnership shall 
        designate (in the manner prescribed by the Secretary) a partner 
        (or other person) who shall have the sole authority to act on 
        behalf of such partnership under this subchapter. In any case 
        in which such a designation is not in effect, the Secretary may 
        select any partner as the partner with such authority.
            ``(2) Binding effect.--A large partnership and all partners 
        of such partnership shall be bound--
                    ``(A) by actions taken under this subchapter by the 
                partnership, and
                    ``(B) by any decision in a proceeding brought under 
                this subchapter.
    ``(c) Partnerships Having Principal Place of Business Outside the 
United States.--For purposes of sections 6247 and 6252, a principal 
place of business located outside the United States shall be treated as 
located in the District of Columbia.
    ``(d) Treatment Where Partnership Ceases To Exist.--If a 
partnership ceases to exist before a partnership adjustment under this 
subchapter takes effect, such adjustment shall be taken into account by 
the former partners of such partnership under regulations prescribed by 
the Secretary.
    ``(e) Date Decision Becomes Final.--For purposes of this 
subchapter, the principles of section 7481(a) shall be applied in 
determining the date on which a decision of a district court or the 
Claims Court becomes final.
    ``(f) Partnerships in Cases Under Title 11 of the United States 
Code.--The running of any period of limitations provided in this 
subchapter on making a partnership adjustment (or provided by section 
6501 or 6502 on the assessment or collection of any amount required to 
be paid under section 6242) shall, in a case under title 11 of the 
United States Code, be suspended during the period during which the 
Secretary is prohibited by reason of such case from making the 
adjustment (or assessment or collection) and--
            ``(1) for adjustment or assessment, 60 days thereafter, and
            ``(2) for collection, 6 months thereafter.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this subchapter, 
including regulations--
            ``(1) to prevent abuse through manipulation of the 
        provisions of this subchapter, and
            ``(2) providing that this subchapter shall not apply to any 
        case described in section 6231(c)(1) (or the regulations 
        prescribed thereunder) where the application of this subchapter 
        to such a case would interfere with the effective and efficient 
        enforcement of this title.
In any case to which this subchapter does not apply by reason of 
paragraph (2), rules similar to the rules of sections 6229(f) and 
6255(f) shall apply.''
    (b) Clerical Amendment.--The table of subchapters for chapter 63 is 
amended by adding at the end the following new item:

           ``Subchapter D. Treatment of large partnerships.''

SEC. 14303. DUE DATE FOR FURNISHING INFORMATION TO PARTNERS OF LARGE 
              PARTNERSHIPS.

    (a) General Rule.--Subsection (b) of section 6031 (relating to 
copies to partners) is amended by adding at the end the following new 
sentence: ``In the case of a large partnership (as defined in sections 
775 and 776(a)), such information shall be furnished on or before the 
first March 15 following the close of such taxable year.''
    (b) Treatment as Information Return.--Section 6724 is amended by 
adding at the end the following new subsection:
    ``(e) Special Rule for Certain Partnership Returns.--If any 
partnership return under section 6031(a) is required under section 
6011(e) to be filed on magnetic media or in other machine-readable 
form, for purposes of this part, each schedule required to be included 
with such return with respect to each partner shall be treated as a 
separate information return.''

SEC. 14304. RETURNS MAY BE REQUIRED ON MAGNETIC MEDIA.

    Paragraph (2) of section 6011(e) (relating to returns on magnetic 
media) is amended by adding at the end the following new sentence:
        ``Notwithstanding the preceding sentence, the Secretary shall 
        require partnerships having more than 100 partners to file 
        returns on magnetic media.''

SEC. 14305. TREATMENT OF PARTNERSHIP ITEMS OF INDIVIDUAL RETIREMENT 
              ACCOUNTS.

    Subsection (b) of section 6012 is amended by adding at the end the 
following new paragraph:
            ``(6) IRA share of partnership income.--In the case of a 
        trust which is exempt from taxation under section 408(e), for 
        purposes of this section, the trust's distributive share of 
        items of gross income and gain of any partnership to which 
        subchapter C or D of chapter 63 applies shall be treated as 
        equal to the trust's distributive share of the taxable income 
        of such partnership.''

SEC. 14306. EFFECTIVE DATE.

    The amendments made by this part shall apply to partnership taxable 
years beginning after December 31, 1995.

     PART II--PROVISIONS RELATED TO CERTAIN PARTNERSHIP PROCEEDINGS

SEC. 14311. TREATMENT OF PARTNERSHIP ITEMS IN DEFICIENCY PROCEEDINGS.

    (a) In General.--Subchapter C of chapter 63 is amended by adding at 
the end the following new section:

``SEC. 6234. DECLARATORY JUDGMENT RELATING TO TREATMENT OF ITEMS OTHER 
              THAN PARTNERSHIP ITEMS WITH RESPECT TO AN OVERSHELTERED 
              RETURN.

    ``(a) General Rule.--If--
            ``(1) a taxpayer files an oversheltered return for a 
        taxable year,
            ``(2) the Secretary makes a determination with respect to 
        the treatment of items (other than partnership items) of such 
        taxpayer for such taxable year, and
            ``(3) the adjustments resulting from such determination do 
        not give rise to a deficiency (as defined in section 6211) but 
        would give rise to a deficiency if there were no net loss from 
        partnership items,
the Secretary is authorized to send a notice of adjustment reflecting 
such determination to the taxpayer by certified or registered mail.
    ``(b) Oversheltered Return.--For purposes of this section, the term 
`oversheltered return' means an income tax return which--
            ``(1) shows no taxable income for the taxable year, and
            ``(2) shows a net loss from partnership items.
    ``(c) Judicial Review in the Tax Court.--Within 90 days, or 150 
days if the notice is addressed to a person outside the United States, 
after the day on which the notice of adjustment authorized in 
subsection (a) is mailed to the taxpayer, the taxpayer may file a 
petition with the Tax Court for redetermination of the adjustments. 
Upon the filing of such a petition, the Tax Court shall have 
jurisdiction to make a declaration with respect to all items (other 
than partnership items and affected items which require partner level 
determinations as described in section 6230(a)(2)(A)(i)) for the 
taxable year to which the notice of adjustment relates, in accordance 
with the principles of section 6214(a). Any such declaration shall have 
the force and effect of a decision of the Tax Court and shall be 
reviewable as such.
    ``(d) Failure To File Petition.--
            ``(1) In general.--Except as provided in paragraph (2), if 
        the taxpayer does not file a petition with the Tax Court within 
        the time prescribed in subsection (c), the determination of the 
        Secretary set forth in the notice of adjustment that was mailed 
        to the taxpayer shall be deemed to be correct.
            ``(2) Exception.--Paragraph (1) shall not apply after the 
        date that the taxpayer--
                    ``(A) files a petition with the Tax Court within 
                the time prescribed in subsection (c) with respect to a 
                subsequent notice of adjustment relating to the same 
                taxable year, or
                    ``(B) files a claim for refund of an overpayment of 
                tax under section 6511 for the taxable year involved.
        If a claim for refund is filed by the taxpayer, then solely for 
        purposes of determining (for the taxable year involved) the 
        amount of any computational adjustment in connection with a 
        partnership proceeding under this subchapter (other than under 
        this section) or the amount of any deficiency attributable to 
        affected items in a proceeding under section 6230(a)(2), the 
        items that are the subject of the notice of adjustment shall be 
        presumed to have been correctly reported on the taxpayer's 
        return during the pendency of the refund claim (and, if within 
        the time prescribed by section 6532 the taxpayer commences a 
        civil action for refund under section 7422, until the decision 
        in the refund action becomes final).
    ``(e) Limitations Period.--
            ``(1) In general.--Any notice to a taxpayer under 
        subsection (a) shall be mailed before the expiration of the 
        period prescribed by section 6501 (relating to the period of 
        limitations on assessment).
            ``(2) Suspension when secretary mails notice of 
        adjustment.--If the Secretary mails a notice of adjustment to 
        the taxpayer for a taxable year, the period of limitations on 
        the making of assessments shall be suspended for the period 
        during which the Secretary is prohibited from making the 
        assessment (and, in any event, if a proceeding in respect of 
        the notice of adjustment is placed on the docket of the Tax 
Court, until the decision of the Tax Court becomes final), and for 60 
days thereafter.
            ``(3) Restrictions on assessment.--Except as otherwise 
        provided in section 6851, 6852, or 6861, no assessment of a 
        deficiency with respect to any tax imposed by subtitle A 
        attributable to any item (other than a partnership item or any 
        item affected by a partnership item) shall be made--
                    ``(A) until the expiration of the applicable 90-day 
                or 150-day period set forth in subsection (c) for 
                filing a petition with the Tax Court, or
                    ``(B) if a petition has been filed with the Tax 
                Court, until the decision of the Tax Court has become 
                final.
    ``(f) Further Notices of Adjustment Restricted.--If the Secretary 
mails a notice of adjustment to the taxpayer for a taxable year and the 
taxpayer files a petition with the Tax Court within the time prescribed 
in subsection (c), the Secretary may not mail another such notice to 
the taxpayer with respect to the same taxable year in the absence of a 
showing of fraud, malfeasance, or misrepresentation of a material fact.
    ``(g) Coordination With Other Proceedings Under This Subchapter.--
            ``(1) In general.--The treatment of any item that has been 
        determined pursuant to subsection (c) or (d) shall be taken 
        into account in determining the amount of any computational 
        adjustment that is made in connection with a partnership 
        proceeding under this subchapter (other than under this 
        section), or the amount of any deficiency attributable to 
        affected items in a proceeding under section 6230(a)(2), for 
        the taxable year involved. Notwithstanding any other law or 
        rule of law pertaining to the period of limitations on the 
        making of assessments, for purposes of the preceding sentence, 
        any adjustment made in accordance with this section shall be 
        taken into account regardless of whether any assessment has 
        been made with respect to such adjustment.
            ``(2) Special rule in case of computational adjustment.--In 
        the case of a computational adjustment that is made in 
        connection with a partnership proceeding under this subchapter 
        (other than under this section), the provisions of paragraph 
        (1) shall apply only if the computational adjustment is made 
        within the period prescribed by section 6229 for assessing any 
        tax under subtitle A which is attributable to any partnership 
        item or affected item for the taxable year involved.
            ``(3) Conversion to deficiency proceeding.--If--
                    ``(A) after the notice referred to in subsection 
                (a) is mailed to a taxpayer for a taxable year but 
                before the expiration of the period for filing a 
                petition with the Tax Court under subsection (c) (or, 
                if a petition is filed with the Tax Court, before the 
                Tax Court makes a declaration for that taxable year), 
                the treatment of any partnership item for the taxable 
                year is finally determined, or any such item ceases to 
                be a partnership item pursuant to section 6231(b), and
                    ``(B) as a result of that final determination or 
                cessation, a deficiency can be determined with respect 
                to the items that are the subject of the notice of 
                adjustment,
        the notice of adjustment shall be treated as a notice of 
        deficiency under section 6212 and any petition filed in respect 
        of the notice shall be treated as an action brought under 
        section 6213.
            ``(4) Finally determined.--For purposes of this subsection, 
        the treatment of partnership items shall be treated as finally 
        determined if--
                    ``(A) the Secretary enters into a settlement 
                agreement (within the meaning of section 6224) with the 
                taxpayer regarding such items,
                    ``(B) a notice of final partnership administrative 
                adjustment has been issued and--
                            ``(i) no petition has been filed under 
                        section 6226 and the time for doing so has 
                        expired, or
                            ``(ii) a petition has been filed under 
                        section 6226 and the decision of the court has 
                        become final, or
                    ``(C) the period within which any tax attributable 
                to such items may be assessed against the taxpayer has 
                expired.
    ``(h) Special Rules if Secretary Incorrectly Determines Applicable 
Procedure.--
            ``(1) Special rule if secretary erroneously mails notice of 
        adjustment.--If the Secretary erroneously determines that 
        subchapter B does not apply to a taxable year of a taxpayer and 
        consistent with that determination timely mails a notice of 
        adjustment to the taxpayer pursuant to subsection (a) of this 
        section, the notice of adjustment shall be treated as a notice 
        of deficiency under section 6212 and any petition that is filed 
        in respect of the notice shall be treated as an action brought 
        under section 6213.
            ``(2) Special rule if secretary erroneously mails notice of 
        deficiency.--If the Secretary erroneously determines that 
        subchapter B applies to a taxable year of a taxpayer and 
        consistent with that determination timely mails a notice of 
        deficiency to the taxpayer pursuant to section 6212, the notice 
        of deficiency shall be treated as a notice of adjustment under 
        subsection (a) and any petition that is filed in respect of the 
        notice shall be treated as an action brought under subsection 
        (c).''
    (b) Treatment of Partnership Items in Deficiency Proceedings.--
Section 6211 (defining deficiency) is amended by adding at the end the 
following new subsection:
    ``(c) Coordination With Subchapter C.--In determining the amount of 
any deficiency for purposes of this subchapter, adjustments to 
partnership items shall be made only as provided in subchapter C.''
    (c) Clerical Amendment.--The table of sections for subchapter C of 
chapter 63 is amended by adding at the end the following new item:

                              ``Sec. 6234. Declaratory judgment 
                                        relating to treatment of items 
                                        other than partnership items 
                                        with respect to an 
                                        oversheltered return.''
    (d) Effective Date.--The amendments made by this section shall 
apply to partnership taxable years ending after the date of the 
enactment of this Act.

SEC. 14312. PARTNERSHIP RETURN TO BE DETERMINATIVE OF AUDIT PROCEDURES 
              TO BE FOLLOWED.

    (a) In General.--Section 6231 (relating to definitions and special 
rules) is amended by adding at the end the following new subsection:
    ``(g) Partnership Return To Be Determinative of Whether Subchapter 
Applies.--
            ``(1) Determination that subchapter applies.--If, on the 
        basis of a partnership return for a taxable year, the Secretary 
        reasonably determines that this subchapter applies to such 
        partnership for such year but such determination is erroneous, 
        then the provisions of this subchapter are hereby extended to 
        such partnership (and its items) for such taxable year and to 
        partners of such partnership.
            ``(2) Determination that subchapter does not apply.--If, on 
        the basis of a partnership return for a taxable year, the 
        Secretary reasonably determines that this subchapter does not 
        apply to such partnership for such year but such determination 
        is erroneous, then the provisions of this subchapter shall not 
        apply to such partnership (and its items) for such taxable year 
        or to partners of such partnership.''
    (b) Effective Date.--The amendment made by this section shall apply 
to partnership taxable years ending after the date of the enactment of 
this Act.

SEC. 14313. PROVISIONS RELATING TO STATUTE OF LIMITATIONS.

    (a) Suspension of Statute Where Untimely Petition Filed.--Paragraph 
(1) of section 6229(d) (relating to suspension where Secretary makes 
administrative adjustment) is amended by striking all that follows 
``section 6226'' and inserting the following: ``(and, if a petition is 
filed under section 6226 with respect to such administrative 
adjustment, until the decision of the court becomes final), and''.
    (b) Suspension of Statute During Bankruptcy Proceeding.--Section 
6229 is amended by adding at the end the following new subsection:
    ``(h) Suspension During Pendency of Bankruptcy Proceeding.--If a 
petition is filed naming a partner as a debtor in a bankruptcy 
proceeding under title 11 of the United States Code, the running of the 
period of limitations provided in this section with respect to such 
partner shall be suspended--
            ``(1) for the period during which the Secretary is 
        prohibited by reason of such bankruptcy proceeding from making 
        an assessment, and
            ``(2) for 60 days thereafter.''
    (c) Tax Matters Partner in Bankruptcy.--Section 6229(b) is amended 
by redesignating paragraph (2) as paragraph (3) and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) Special rule with respect to debtors in title 11 
        cases.--Notwithstanding any other law or rule of law, if an 
        agreement is entered into under paragraph (1)(B) and the 
        agreement is signed by a person who would be the tax matters 
        partner but for the fact that, at the time that the agreement 
        is executed, the person is a debtor in a bankruptcy proceeding 
        under title 11 of the United States Code, such agreement shall 
        be binding on all partners in the partnership unless the 
        Secretary has been notified of the bankruptcy proceeding in 
        accordance with regulations prescribed by the Secretary.''
    (d) Effective Dates.--
            (1) Subsections (a) and (b).--The amendments made by 
        subsections (a) and (b) shall apply to partnership taxable 
        years with respect to which the period under section 6229 of 
        the Internal Revenue Code of 1986 for assessing tax has not 
        expired on or before the date of the enactment of this Act.
            (2) Subsection (c).--The amendment made by subsection (c) 
        shall apply to agreements entered into after the date of the 
        enactment of this Act.

SEC. 14314. EXPANSION OF SMALL PARTNERSHIP EXCEPTION.

    (a) In General.--Clause (i) of section 6231(a)(1)(B) (relating to 
exception for small partnerships) is amended to read as follows:
                            ``(i) In general.--The term `partnership' 
                        shall not include any partnership having 10 or 
                        fewer partners each of whom is an individual 
                        (other than a nonresident alien), a C 
                        corporation, or an estate of a deceased 
                        partner. For purposes of the preceding 
                        sentence, a husband and wife (and their 
                        estates) shall be treated as 1 partner.''
    (b) Effective Date.--The amendment made by this section shall apply 
to partnership taxable years ending after the date of the enactment of 
this Act.

SEC. 14315. EXCLUSION OF PARTIAL SETTLEMENTS FROM 1-YEAR LIMITATION ON 
              ASSESSMENT.

    (a) In General.--Subsection (f) of section 6229 (relating to items 
becoming nonpartnership items) is amended--
            (1) by striking ``(f) Items Becoming Nonpartnership 
        Items.--If'' and inserting the following:
    ``(f) Special Rules.--
            ``(1) Items becoming nonpartnership items.--If'',
            (2) by moving the text of such subsection 2 ems to the 
        right, and
            (3) by adding at the end the following new paragraph:
            ``(2) Special rule for partial settlement agreements.--If a 
        partner enters into a settlement agreement with the Secretary 
        with respect to the treatment of some of the partnership items 
        in dispute for a partnership taxable year but other partnership 
        items for such year remain in dispute, the period of 
        limitations for assessing any tax attributable to the settled 
        items shall be determined as if such agreement had not been 
        entered into.''
    (b) Effective Date.--The amendment made by this section shall apply 
to settlements entered into after the date of the enactment of this 
Act.

SEC. 14316. EXTENSION OF TIME FOR FILING A REQUEST FOR ADMINISTRATIVE 
              ADJUSTMENT.

    (a) In General.--Section 6227 (relating to administrative 
adjustment requests) is amended by redesignating subsections (b) and 
(c) as subsections (c) and (d), respectively, and by inserting after 
subsection (a) the following new subsection:
    ``(b) Special Rule in Case of Extension of Period of Limitations 
Under Section 6229.--The period prescribed by subsection (a)(1) for 
filing of a request for an administrative adjustment shall be 
extended--
            ``(1) for the period within which an assessment may be made 
        pursuant to an agreement (or any extension thereof) under 
        section 6229(b), and
            ``(2) for 6 months thereafter.''
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 402 of the Tax 
Equity and Fiscal Responsibility Act of 1982.

SEC. 14317. AVAILABILITY OF INNOCENT SPOUSE RELIEF IN CONTEXT OF 
              PARTNERSHIP PROCEEDINGS.

    (a) In General.--Subsection (a) of section 6230 is amended by 
adding at the end the following new paragraph:
            ``(3) Special rule in case of assertion by partner's spouse 
        of innocent spouse relief.--
                    ``(A) Notwithstanding section 6404(b), if the 
                spouse of a partner asserts that section 6013(e) 
                applies with respect to a liability that is 
                attributable to any adjustment to a partnership item, 
                then such spouse may file with the Secretary within 60 
                days after the notice of computational adjustment is 
                mailed to the spouse a request for abatement of the 
                assessment specified in such notice. Upon receipt of 
                such request, the Secretary shall abate the assessment. 
                Any reassessment of the tax with respect to which an 
                abatement is made under this subparagraph shall be 
                subject to the deficiency procedures prescribed by 
                subchapter B. The period for making any such 
                reassessment shall not expire before the expiration of 
                60 days after the date of such abatement.
                    ``(B) If the spouse files a petition with the Tax 
                Court pursuant to section 6213 with respect to the 
                request for abatement described in subparagraph (A), 
                the Tax Court shall only have jurisdiction pursuant to 
                this section to determine whether the requirements of 
                section 6013(e) have been satisfied. For purposes of 
                such determination, the treatment of partnership items 
                under the settlement, the final partnership 
                administrative adjustment, or the decision of the court 
                (whichever is appropriate) that gave rise to the 
                liability in question shall be conclusive.
                    ``(C) Rules similar to the rules contained in 
                subparagraphs (B) and (C) of paragraph (2) shall apply 
                for purposes of this paragraph.''
    (b) Claims for Refund.--Subsection (c) of section 6230 is amended 
by adding at the end the following new paragraph:
            ``(5) Rules for seeking innocent spouse relief.--
                    ``(A) In general.--The spouse of a partner may file 
                a claim for refund on the ground that the Secretary 
                failed to relieve the spouse under section 6013(e) from 
                a liability that is attributable to an adjustment to a 
                partnership item.
                    ``(B) Time for filing claim.--Any claim under 
                subparagraph (A) shall be filed within 6 months after 
                the day on which the Secretary mails to the spouse the 
                notice of computational adjustment referred to in 
                subsection (a)(3)(A).
                    ``(C) Suit if claim not allowed.--If the claim 
                under subparagraph (B) is not allowed, the spouse may 
                bring suit with respect to the claim within the period 
                specified in paragraph (3).
                    ``(D) Prior determinations are binding.--For 
                purposes of any claim or suit under this paragraph, the 
                treatment of partnership items under the settlement, 
                the final partnership administrative adjustment, or the 
                decision of the court (whichever is appropriate) that 
                gave rise to the liability in question shall be 
                conclusive.''
    (c) Technical Amendments.--
            (1) Paragraph (1) of section 6230(a) is amended by striking 
        ``paragraph (2)'' and inserting ``paragraph (2) or (3)''.
            (2) Subsection (a) of section 6503 is amended by striking 
        ``section 6230(a)(2)(A)'' and inserting ``paragraph (2)(A) or 
        (3) of section 6230(a)''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 402 of the Tax 
Equity and Fiscal Responsibility Act of 1982.

SEC. 14318. DETERMINATION OF PENALTIES AT PARTNERSHIP LEVEL.

    (a) In General.--Section 6221 (relating to tax treatment determined 
at partnership level) is amended by striking ``item'' and inserting 
``item (and the applicability of any penalty, addition to tax, or 
additional amount which relates to an adjustment to a partnership 
item)''.
    (b) Conforming Amendments.--
            (1) Subsection (f) of section 6226 is amended--
                    (A) by striking ``relates and'' and inserting 
                ``relates,'', and
                    (B) by inserting before the period ``, and the 
                applicability of any penalty, addition to tax, or 
                additional amount which relates to an adjustment to a 
                partnership item''.
            (2) Clause (i) of section 6230(a)(2)(A) is amended to read 
        as follows:
                            ``(i) affected items which require partner 
                        level determinations (other than penalties, 
                        additions to tax, and additional amounts that 
                        relate to adjustments to partnership items), 
                        or''.
            (3)(A) Subparagraph (A) of section 6230(a)(3), as added by 
        section 14317, is amended by inserting ``(including any 
        liability for any penalty, addition to tax, or additional 
        amount relating to such adjustment)'' after ``partnership 
        item''.
            (B) Subparagraph (B) of such section is amended by 
        inserting ``(and the applicability of any penalties, additions 
        to tax, or additional amounts)'' after ``partnership items''.
            (C) Subparagraph (A) of section 6230(c)(5), as added by 
        section 14317, is amended by inserting before the period 
        ``(including any liability for any penalties, additions to tax, 
        or additional amounts relating to such adjustment)''.
            (D) Subparagraph (D) of section 6230(c)(5), as added by 
        section 14317, is amended by inserting ``(and the applicability 
        of any penalties, additions to tax, or additional amounts)'' 
        after ``partnership items''.
            (4) Paragraph (1) of section 6230(c) is amended by striking 
        ``or'' at the end of subparagraph (A), by striking the period 
        at the end of subparagraph (B) and inserting ``, or'', and by 
        adding at the end the following new subparagraph:
                    ``(C) the Secretary erroneously imposed any 
                penalty, addition to tax, or additional amount which 
                relates to an adjustment to a partnership item.''
            (5) So much of subparagraph (A) of section 6230(c)(2) as 
        precedes ``shall be filed'' is amended to read as follows:
                    ``(A) Under paragraph (1) (a) or (c).--Any claim 
                under subparagraph (A) or (C) of paragraph (1)''.
            (6) Paragraph (4) of section 6230(c) is amended by adding 
        at the end the following: ``In addition, the determination 
        under the final partnership administrative adjustment or under 
        the decision of the court (whichever is appropriate) concerning 
        the applicability of any penalty, addition to tax, or 
        additional amount which relates to an adjustment to a 
        partnership item shall also be conclusive. Notwithstanding the 
        preceding sentence, the partner shall be allowed to assert any 
        partner level defenses that may apply or to challenge the 
        amount of the computational adjustment.''
    (c) Effective Date.--The amendments made by this section shall 
apply to partnership taxable years ending after the date of the 
enactment of this Act.

SEC. 14319. PROVISIONS RELATING TO COURT JURISDICTION, ETC.

    (a) Tax Court Jurisdiction To Enjoin Premature Assessments of 
Deficiencies Attributable to Partnership Items.--Subsection (b) of 
section 6225 is amended by striking ``the proper court.'' and inserting 
``the proper court, including the Tax Court. The Tax Court shall have 
no jurisdiction to enjoin any action or proceeding under this 
subsection unless a timely petition for a readjustment of the 
partnership items for the taxable year has been filed and then only in 
respect of the adjustments that are the subject of such petition.''
    (b) Jurisdiction To Consider Statute of Limitations With Respect to 
Partners.--Paragraph (1) of section 6226(d) is amended by adding at the 
end the following new sentence:
        ``Notwithstanding subparagraph (B), any person treated under 
        subsection (c) as a party to an action shall be permitted to 
        participate in such action (or file a readjustment petition 
        under subsection (b) or paragraph (2) of this subsection) 
        solely for the purpose of asserting that the period of 
        limitations for assessing any tax attributable to partnership 
        items has expired with respect to such person, and the court 
        having jurisdiction of such action shall have jurisdiction to 
        consider such assertion.''
    (c) Tax Court Jurisdiction To Determine Overpayments Attributable 
to Affected Items.--
            (1) Paragraph (6) of section 6230(d) is amended by striking 
        ``(or an affected item)''.
            (2) Paragraph (3) of section 6512(b) is amended by adding 
        at the end the following new sentence:
        ``In the case of a credit or refund relating to an affected 
        item (within the meaning of section 6231(a)(5)), the preceding 
        sentence shall be applied by substituting the periods under 
        sections 6229 and 6230(d) for the periods under section 
        6511(b)(2), (c), and (d).''
    (d) Venue on Appeal.--
            (1) Paragraph (1) of section 7482(b) is amended by striking 
        ``or'' at the end of subparagraph (D), by striking the period 
        at the end of subparagraph (E) and inserting ``, or'', and by 
        inserting after subparagraph (E) the following new 
        subparagraph:
                    ``(F) in the case of a petition under section 
                6234(c)--
                            ``(i) the legal residence of the petitioner 
                        if the petitioner is not a corporation, and
                            ``(ii) the place or office applicable under 
                        subparagraph (B) if the petitioner is a 
                        corporation.''
            (2) The last sentence of section 7482(b)(1) is amended by 
        striking ``or 6228(a)'' and inserting ``, 6228(a), or 
        6234(c)''.
    (e) Other Provisions.--
            (1) Subsection (c) of section 7459 is amended by striking 
        ``or section 6228(a)'' and inserting ``, 6228(a), or 6234(c)''.
            (2) Subsection (o) of section 6501 is amended by adding at 
        the end the following new paragraph:
            ``(3) For declaratory judgment relating to treatment of 
        items other than partnership items with respect to an 
        oversheltered return, see section 6234.''
    (f) Effective Date.--The amendments made by this section shall 
apply to partnership taxable years ending after the date of the 
enactment of this Act.

SEC. 14320. TREATMENT OF PREMATURE PETITIONS FILED BY NOTICE PARTNERS 
              OR 5-PERCENT GROUPS.

    (a) In General.--Subsection (b) of section 6226 (relating to 
judicial review of final partnership administrative adjustments) is 
amended by redesignating paragraph (5) as paragraph (6) and by 
inserting after paragraph (4) the following new paragraph:
            ``(5) Treatment of premature petitions.--If--
                    ``(A) a petition for a readjustment of partnership 
                items for the taxable year involved is filed by a 
                notice partner (or a 5-percent group) during the 90-day 
                period described in subsection (a), and
                    ``(B) no action is brought under paragraph (1) 
                during the 60-day period described therein with respect 
                to such taxable year which is not dismissed,
        such petition shall be treated for purposes of paragraph (1) as 
        filed on the last day of such 60-day period.''
    (b) Effective Date.--The amendment made by this section shall apply 
to petitions filed after the date of the enactment of this Act.

SEC. 14321. BONDS IN CASE OF APPEALS FROM CERTAIN PROCEEDING.

    (a) In General.--Subsection (b) of section 7485 (relating to bonds 
to stay assessment of collection) is amended--
            (1) by inserting ``penalties,'' after ``any interest,'', 
        and
            (2) by striking ``aggregate of such deficiencies'' and 
        inserting ``aggregate liability of the parties to the action''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 402 of the Tax 
Equity and Fiscal Responsibility Act of 1982.

SEC. 14322. SUSPENSION OF INTEREST WHERE DELAY IN COMPUTATIONAL 
              ADJUSTMENT RESULTING FROM CERTAIN SETTLEMENTS.

    (a) In General.--Subsection (c) of section 6601 (relating to 
interest on underpayment, nonpayment, or extension of time for payment, 
of tax) is amended by adding at the end the following new sentence: 
``In the case of a settlement under section 6224(c) which results in 
the conversion of partnership items to nonpartnership items pursuant to 
section 6231(b)(1)(C), the preceding sentence shall apply to a 
computational adjustment resulting from such settlement in the same 
manner as if such adjustment were a deficiency and such settlement were 
a waiver referred to in the preceding sentence.''
    (b) Effective Date.--The amendment made by this section shall apply 
to adjustments with respect to partnership taxable years beginning 
after the date of the enactment of this Act.

SEC. 14323. SPECIAL RULES FOR ADMINISTRATIVE ADJUSTMENT REQUESTS WITH 
              RESPECT TO BAD DEBTS OR WORTHLESS SECURITIES.

    (a) General Rule.--Section 6227 (relating to administrative 
adjustment requests) is amended by adding at the end the following new 
subsection:
    ``(e) Requests With Respect to Bad Debts or Worthless Securities.--
In the case of that portion of any request for an administrative 
adjustment which relates to the deductibility by the partnership under 
section 166 of a debt as a debt which became worthless, or under 
section 165(g) of a loss from worthlessness of a security, the period 
prescribed in subsection (a)(1) shall be 7 years from the last day for 
filing the partnership return for the year with respect to which such 
request is made (determined without regard to extensions).''
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        take effect as if included in the amendments made by section 
        402 of the Tax Equity and Fiscal Responsibility Act of 1982.
            (2) Treatment of requests filed before date of enactment.--
        In the case of that portion of any request (filed before the 
        date of the enactment of this Act) for an administrative 
        adjustment which relates to the deductibility of a debt as a 
        debt which became worthless or the deductibility of a loss from 
        the worthlessness of a security--
                    (A) paragraph (2) of section 6227(a) of the 
                Internal Revenue Code of 1986 shall not apply,
                    (B) the period for filing a petition under section 
                6228 of the Internal Revenue Code of 1986 with respect 
                to such request shall not expire before the date 6 
                months after the date of the enactment of this Act, and
                    (C) such a petition may be filed without regard to 
                whether there was a notice of the beginning of an 
                administrative proceeding or a final partnership 
                administrative adjustment.

                     Subtitle D--Foreign Provisions

   PART I--MODIFICATIONS TO TREATMENT OF PASSIVE FOREIGN INVESTMENT 
                               COMPANIES

SEC. 14401. UNITED STATES SHAREHOLDERS OF CONTROLLED FOREIGN 
              CORPORATIONS NOT SUBJECT TO PFIC INCLUSION.

    Section 1296 is amended by adding at the end the following new 
subsection:
    ``(e) Exception for United States Shareholders of Controlled 
Foreign Corporations.--
            ``(1) In general.--For purposes of this part, a corporation 
        shall not be treated with respect to a shareholder as a passive 
        foreign investment company during the qualified portion of such 
        shareholder's holding period with respect to stock in such 
        corporation.
            ``(2) Qualified portion.--For purposes of this subsection, 
        the term `qualified portion' means the portion of the 
        shareholder's holding period--
                    ``(A) which is after December 31, 1995, and
                    ``(B) during which the shareholder is a United 
                States shareholder (as defined in section 951(b)) of 
                the corporation and the corporation is a controlled 
                foreign corporation.
            ``(3) New holding period if qualified portion ends.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if the qualified portion of a 
                shareholder's holding period with respect to any stock 
                ends after December 31, 1995, solely for purposes of 
                this part, the shareholder's holding period with 
                respect to such stock shall be treated as beginning as 
                of the first day following such period.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                if such stock was, with respect to such shareholder, 
                stock in a passive foreign investment company at any 
                time before the qualified portion of the shareholder's 
                holding period with respect to such stock and no 
                election under section 1298(b)(1) is made.''

SEC. 14402. ELECTION OF MARK TO MARKET FOR MARKETABLE STOCK IN PASSIVE 
              FOREIGN INVESTMENT COMPANY.

    (a) In General.--Part VI of subchapter P of chapter 1 is amended by 
redesignating subpart C as subpart D, by redesignating sections 1296 
and 1297 as sections 1297 and 1298, respectively, and by inserting 
after subpart B the following new subpart:

      ``Subpart C--Election of Mark to Market For Marketable Stock

                              ``Sec. 1296. Election of mark to market 
                                        for marketable stock.

``SEC. 1296. ELECTION OF MARK TO MARKET FOR MARKETABLE STOCK.

    ``(a) General Rule.--In the case of marketable stock in a passive 
foreign investment company which is owned (or treated under subsection 
(g) as owned) by a United States person at the close of any taxable 
year of such person, at the election of such person--
            ``(1) If the fair market value of such stock as of the 
        close of such taxable year exceeds its adjusted basis, such 
        United States person shall include in gross income for such 
        taxable year an amount equal to the amount of such excess.
            ``(2) If the adjusted basis of such stock exceeds the fair 
        market value of such stock as of the close of such taxable 
        year, such United States person shall be allowed a deduction 
        for such taxable year equal to the lesser of--
                    ``(A) the amount of such excess, or
                    ``(B) the unreversed inclusions with respect to 
                such stock.
    ``(b) Basis Adjustments.--
            ``(1) In general.--The adjusted basis of stock in a passive 
        foreign investment company--
                    ``(A) shall be increased by the amount included in 
                the gross income of the United States person under 
                subsection (a)(1) with respect to such stock, and
                    ``(B) shall be decreased by the amount allowed as a 
                deduction to the United States person under subsection 
                (a)(2) with respect to such stock.
            ``(2) Special rule for stock constructively owned.--In the 
        case of stock in a passive foreign investment company which the 
        United States person is treated as owning under subsection 
        (g)--
                    ``(A) the adjustments under paragraph (1) shall 
                apply to such stock in the hands of the person actually 
                holding such stock but only for purposes of determining 
                the subsequent treatment under this chapter of the 
                United States person with respect to such stock, and
                    ``(B) similar adjustments shall be made to the 
                adjusted basis of the property by reason of which the 
                United States person is treated as owning such stock.
    ``(c) Character and Source Rules.--
            ``(1) Ordinary treatment.--
                    ``(A) Gain.--Any amount included in gross income 
                under subsection (a)(1), and any gain on the sale or 
                other disposition of marketable stock in a passive 
                foreign investment company (with respect to which an 
                election under this section is in effect), shall be 
                treated as ordinary income.
                    ``(B) Loss.--Any--
                            ``(i) amount allowed as a deduction under 
                        subsection (a)(2), and
                            ``(ii) loss on the sale or other 
                        disposition of marketable stock in a passive 
                        foreign investment company (with respect to 
                        which an election under this section is in 
                        effect) to the extent that the amount of such 
                        loss does not exceed the unreversed inclusions 
                        with respect to such stock,
                shall be treated as an ordinary loss. The amount so 
                treated shall be treated as a deduction allowable in 
                computing adjusted gross income.
            ``(2) Source.--The source of any amount included in gross 
        income under subsection (a)(1) (or allowed as a deduction under 
        subsection (a)(2)) shall be determined in the same manner as if 
        such amount were gain or loss (as the case may be) from the 
        sale of stock in the passive foreign investment company.
    ``(d) Unreversed Inclusions.--For purposes of this section, the 
term `unreversed inclusions' means, with respect to any stock in a 
passive foreign investment company, the excess (if any) of--
            ``(1) the amount included in gross income of the taxpayer 
        under subsection (a)(1) with respect to such stock for prior 
        taxable years, over
            ``(2) the amount allowed as a deduction under subsection 
        (a)(2) with respect to such stock for prior taxable years.
The amount referred to in paragraph (1) shall include any amount which 
would have been included in gross income under subsection (a)(1) with 
respect to such stock for any prior taxable year but for section 1291.
    ``(e) Marketable Stock.--For purposes of this section--
            ``(1) In general.--The term `marketable stock' means--
                    ``(A) any stock which is regularly traded on--
                            ``(i) a national securities exchange which 
                        is registered with the Securities and Exchange 
                        Commission or the national market system 
                        established pursuant to section 11A of the 
                        Securities and Exchange Act of 1934, or
                            ``(ii) any exchange or other market which 
                        the Secretary determines has rules adequate to 
                        carry out the purposes of this part,
                    ``(B) to the extent provided in regulations, stock 
                in any foreign corporation which is comparable to a 
                regulated investment company and which offers for sale 
                or has outstanding any stock of which it is the issuer 
                and which is redeemable at its net asset value, and
                    ``(C) to the extent provided in regulations, any 
                option on stock described in subparagraph (A) or (B).
            ``(2) Special rule for regulated investment companies.--In 
        the case of any regulated investment company which is offering 
        for sale or has outstanding any stock of which it is the issuer 
        and which is redeemable at its net asset value, all stock in a 
        passive foreign investment company which it owns directly or 
        indirectly shall be treated as marketable stock for purposes of 
        this section. Except as provided in regulations, similar 
        treatment as marketable stock shall apply in the case of any 
        other regulated investment company which publishes net asset 
        valuations at least annually.
    ``(f) Treatment of Controlled Foreign Corporations Which are 
Shareholders in Passive Foreign Investment Companies.--In the case of a 
foreign corporation which is a controlled foreign corporation and which 
owns (or is treated under subsection (g) as owning) stock in a passive 
foreign investment company--
            ``(1) this section (other than subsection (c)(2)) shall 
        apply to such foreign corporation in the same manner as if such 
        corporation were a United States person, and
            ``(2) for purposes of subpart F of part III of subchapter 
        N--
                    ``(A) any amount included in gross income under 
                subsection (a)(1) shall be treated as foreign personal 
                holding company income described in section 
                954(c)(1)(A), and
                    ``(B) any amount allowed as a deduction under 
                subsection (a)(2) shall be treated as a deduction 
                allocable to foreign personal holding company income so 
                described.
    ``(g) Stock Owned Through Certain Foreign Entities.--Except as 
provided in regulations--
            ``(1) In general.--For purposes of this section, stock 
        owned, directly or indirectly, by or for a foreign partnership 
        or foreign trust or foreign estate shall be considered as being 
        owned proportionately by its partners or beneficiaries. Stock 
        considered to be owned by a person by reason of the application 
        of the preceding sentence shall, for purposes of applying such 
        sentence, be treated as actually owned by such person.
            ``(2) Treatment of certain dispositions.--In any case in 
        which a United States person is treated as owning stock in a 
        passive foreign investment company by reason of paragraph (1)--
                    ``(A) any disposition by the United States person 
                or by any other person which results in the United 
                States person being treated as no longer owning such 
                stock, and
                    ``(B) any disposition by the person owning such 
                stock,
        shall be treated as a disposition by the United States person 
        of the stock in the passive foreign investment company.
    ``(h) Coordination With Section 851(b).--For purposes of paragraphs 
(2) and (3) of section 851(b), any amount included in gross income 
under subsection (a) shall be treated as a dividend.
    ``(i) Stock Acquired From a Decedent.--In the case of stock of a 
passive foreign investment company which is acquired by bequest, 
devise, or inheritance (or by the decedent's estate) and with respect 
to which an election under this section was in effect as of the date of 
the decedent's death, notwithstanding section 1014, the basis of such 
stock in the hands of the person so acquiring it shall be the adjusted 
basis of such stock in the hands of the decedent immediately before his 
death (or, if lesser, the basis which would have been determined under 
section 1014 without regard to this subsection).
    ``(j) Coordination With Section 1291 For First Year of Election.--
            ``(1) Taxpayers other than regulated investment 
        companies.--
                    ``(A) In general.--If the taxpayer elects the 
                application of this section with respect to any 
                marketable stock in a corporation after the beginning 
                of the taxpayer's holding period in such stock, and if 
                the requirements of subparagraph (B) are not satisfied, 
                section 1291 shall apply to--
                            ``(i) any distributions with respect to, or 
                        disposition of, such stock in the first taxable 
                        year of the taxpayer for which such election is 
                        made, and
                            ``(ii) any amount which, but for section 
                        1291, would have been included in gross income 
                        under subsection (a) with respect to such stock 
                        for such taxable year in the same manner as if 
                        such amount were gain on the disposition of 
                        such stock.
                    ``(B) Requirements.--The requirements of this 
                subparagraph are met if, with respect to each of such 
                corporation's taxable years for which such corporation 
                was a passive foreign investment company and which 
                begin after December 31, 1986, and included any portion 
                of the taxpayer's holding period in such stock, such 
                corporation was treated as a qualified electing fund 
                under this part with respect to the taxpayer.
            ``(2) Special rules for regulated investment companies.--
                    ``(A) In general.--If a regulated investment 
                company elects the application of this section with 
                respect to any marketable stock in a corporation after 
                the beginning of the taxpayer's holding period in such 
                stock, then, with respect to such company's first 
                taxable year for which such company elects the 
                application of this section with respect to such 
                stock--
                            ``(i) section 1291 shall not apply to such 
                        stock with respect to any distribution or 
                        disposition during, or amount included in gross 
                        income under this section for, such first 
                        taxable year, but
                            ``(ii) such regulated investment company's 
                        tax under this chapter for such first taxable 
                        year shall be increased by the aggregate amount 
                        of interest which would have been determined 
                        under section 1291(c)(3) if section 1291 were 
                        applied without regard to this subparagraph.
                Clause (ii) shall not apply if for the preceding 
                taxable year the company elected to mark to market the 
                stock held by such company as of the last day of such 
                preceding taxable year.
                    ``(B) Disallowance of deduction.--No deduction 
                shall be allowed to any regulated investment company 
                for the increase in tax under subparagraph (A)(ii).
    ``(k) Election.--This section shall apply to marketable stock in a 
passive foreign investment company which is held by a United States 
person only if such person elects to apply this section with respect to 
such stock. Such an election shall apply to the taxable year for which 
made and all subsequent taxable years unless--
            ``(1) such stock ceases to be marketable stock, or
            ``(2) the Secretary consents to the revocation of such 
        election.
    ``(l) Transition Rule for Individuals Becoming Subject to United 
States Tax.--If any individual becomes a United States person in a 
taxable year beginning after December 31, 1995, solely for purposes of 
this section, the adjusted basis (before adjustments under subsection 
(b)) of any marketable stock in a passive foreign investment company 
owned by such individual on the first day of such taxable year shall be 
treated as being the greater of its fair market value on such first day 
or its adjusted basis on such first day.''
    (b) Coordination With Interest Charge, Etc.--
            (1) Paragraph (1) of section 1291(d) is amended by adding 
        at the end the following new flush sentence:
        ``Except as provided in section 1296(j), this section also 
        shall not apply if an election under section 1296(k) is in 
        effect for the taxpayer's taxable year.''
            (2) The subsection heading for subsection (d) of section 
        1291 is amended by striking ``Subpart B'' and inserting 
        ``Subparts B and C''.
            (3) Subparagraph (A) of section 1291(a)(3) is amended to 
        read as follows:
                    ``(A) Holding period.--The taxpayer's holding 
                period shall be determined under section 1223; except 
                that--
                            ``(i) for purposes of applying this section 
                        to an excess distribution, such holding period 
                        shall be treated as ending on the date of such 
                        distribution, and
                            ``(ii) if section 1296 applied to such 
                        stock with respect to the taxpayer for any 
                        prior taxable year, such holding period shall 
be treated as beginning on the first day of the first taxable year 
beginning after the last taxable year for which section 1296 so 
applied.''
    (c) Conforming Amendments.--
            (1) Sections 532(b)(4) and 542(c)(10) are each amended by 
        striking ``section 1296'' and inserting ``section 1297''.
            (2) Subsection (f) of section 551 is amended by striking 
        ``section 1297(b)(5)'' and inserting ``section 1298(b)(5)''
            (3) Subsections (a)(1) and (d) of section 1293 are each 
        amended by striking ``section 1297(a)'' and inserting ``section 
        1298(a)''.
            (4) Paragraph (3) of section 1297(b), as redesignated by 
        subsection (a), is hereby repealed.
            (5) The table of sections for subpart D of part VI of 
        subchapter P of chapter 1, as redesignated by subsection (a), 
        is amended to read as follows:

                              ``Sec. 1297. Passive foreign investment 
                                        company.
                              ``Sec. 1298. Special rules.''
            (6) The table of subparts for part VI of subchapter P of 
        chapter 1 is amended by striking the last item and inserting 
        the following new items:

                              ``Subpart C. Election of mark to market 
                                        for marketable stock.
                              ``Subpart D. General provisions.''
    (d) Clarification of Gain Recognition Election.--The last sentence 
of section 1298(b)(1), as so redesignated, is amended by inserting 
``(determined without regard to the preceding sentence)'' after 
``investment company''.

SEC. 14403. MODIFICATIONS TO DEFINITION OF PASSIVE INCOME.

    (a) Exception for Same Country Income Not To Apply.--Paragraph (1) 
of section 1297(b) (defining passive income), as redesignated by 
section 14402, is amended by inserting before the period ``without 
regard to paragraph (3) thereof''.
    (b) Passive Income Not To Include FSC Income.--Paragraph (2) of 
section 1297(b), as so redesignated, is amended by striking ``or'' at 
the end of subparagraph (B), by striking the period at the end of 
subparagraph (C) and inserting ``, or'', and by inserting after 
subparagraph (C) the following new subparagraph:
                    ``(D) any foreign trade income of a FSC.''

SEC. 14404. EFFECTIVE DATE.

    The amendments made by this part shall apply to--
            (1) taxable years of United States persons beginning after 
        December 31, 1995, and
            (2) taxable years of foreign corporations ending with or 
        within such taxable years of United States persons.

         PART II--TREATMENT OF CONTROLLED FOREIGN CORPORATIONS

SEC. 14411. GAIN ON CERTAIN STOCK SALES BY CONTROLLED FOREIGN 
              CORPORATIONS TREATED AS DIVIDENDS.

    (a) General Rule.--Section 964 (relating to miscellaneous 
provisions) is amended by adding at the end the following new 
subsection:
    ``(e) Gain on Certain Stock Sales by Controlled Foreign 
Corporations Treated as Dividends.--
            ``(1) In general.--If a controlled foreign corporation 
        sells or exchanges stock in any other foreign corporation, gain 
        recognized on such sale or exchange shall be included in the 
        gross income of such controlled foreign corporation as a 
        dividend to the same extent that it would have been so included 
        under section 1248(a) if such controlled foreign corporation 
        were a United States person. For purposes of determining the 
        amount which would have been so includible, the determination 
        of whether such other foreign corporation was a controlled 
        foreign corporation shall be made without regard to the 
        preceding sentence.
            ``(2) Same country exception not applicable.--Clause (i) of 
        section 954(c)(3)(A) shall not apply to any amount treated as a 
        dividend by reason of paragraph (1).
            ``(3) Clarification of deemed sales.--For purposes of this 
        subsection, a controlled foreign corporation shall be treated 
        as having sold or exchanged any stock if, under any provision 
        of this subtitle, such controlled foreign corporation is 
        treated as having gain from the sale or exchange of such 
        stock.''
    (b) Amendment of Section 904(d).--Clause (i) of section 
904(d)(2)(E) is amended by striking ``and except as provided in 
regulations, the taxpayer was a United States shareholder in such 
corporation''.
    (c) Effective Dates.--
            (1) The amendment made by subsection (a) shall apply to 
        gain recognized on transactions occurring after the date of the 
        enactment of this Act.
            (2) The amendment made by subsection (b) shall apply to 
        distributions after the date of the enactment of this Act.

SEC. 14412. MISCELLANEOUS MODIFICATIONS TO SUBPART F.

    (a) Section 1248 Gain Taken Into Account in Determining Pro Rata 
Share.--
            (1) In general.--Paragraph (2) of section 951(a) (defining 
        pro rata share of subpart F income) is amended by adding at the 
        end the following new sentence: ``For purposes of subparagraph 
        (B), any gain included in the gross income of any person as a 
        dividend under section 1248 shall be treated as a distribution 
        received by such person with respect to the stock involved.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to dispositions after the date of the enactment of 
        this Act.
    (b) Basis Adjustments in Stock Held by Foreign Corporation.--
            (1) In general.--Section 961 (relating to adjustments to 
        basis of stock in controlled foreign corporations and of other 
        property) is amended by adding at the end the following new 
        subsection:
    ``(c) Basis Adjustments in Stock Held by Foreign Corporation.--
Under regulations prescribed by the Secretary, if a United States 
shareholder is treated under section 958(a)(2) as owning any stock in a 
controlled foreign corporation which is actually owned by another 
controlled foreign corporation, adjustments similar to the adjustments 
provided by subsections (a) and (b) shall be made to the basis of such 
stock in the hands of such other controlled foreign corporation, but 
only for the purposes of determining the amount included under section 
951 in the gross income of such United States shareholder (or any other 
United States shareholder who acquires from any person any portion of 
the interest of such United States shareholder by reason of which such 
shareholder was treated as owning such stock, but only to the extent of 
such portion, and subject to such proof of identity of such interest as 
the Secretary may prescribe by regulations).''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply for purposes of determining inclusions for taxable 
        years of United States shareholders beginning after December 
        31, 1995.
    (c) Determination of Previously Taxed Income in Section 304 
Distributions, Etc.--
            (1) In general.--Section 959 (relating to exclusion from 
        gross income of previously taxed earnings and profits) is 
        amended by adding at the end the following new subsection:
    ``(g) Adjustments for Certain Transactions.--If by reason of--
            ``(1) a transaction to which section 304 applies,
            ``(2) the structure of a United States shareholder's 
        holdings in controlled foreign corporations, or
            ``(3) other circumstances,
there would be a multiple inclusion of any item in income (or an 
inclusion or exclusion without an appropriate basis adjustment) by 
reason of this subpart, the Secretary may prescribe regulations 
providing such modifications in the application of this subpart as may 
be necessary to eliminate such multiple inclusion or provide such basis 
adjustment, as the case may be.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act.
    (d) Clarification of Treatment of Branch Tax Exemptions or 
Reductions.--
            (1) In general.--Subsection (b) of section 952 is amended 
        by adding at the end the following new sentence: ``For purposes 
        of this subsection, any exemption (or reduction) with respect 
        to the tax imposed by section 884 shall not be taken into 
        account.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after December 31, 1986.

SEC. 14413. INDIRECT FOREIGN TAX CREDIT ALLOWED FOR CERTAIN LOWER TIER 
              COMPANIES.

    (a) Section 902 Credit.--
            (1) In general.--Subsection (b) of section 902 (relating to 
        deemed taxes increased in case of certain 2nd and 3rd tier 
        foreign corporations) is amended to read as follows:
    ``(b) Deemed Taxes Increased in Case of Certain Lower Tier 
Corporations.--
            ``(1) In general.--If--
                    ``(A) any foreign corporation is a member of a 
                qualified group, and
                    ``(B) such foreign corporation owns 10 percent or 
                more of the voting stock of another member of such 
                group from which it receives dividends in any taxable 
                year,
        such foreign corporation shall be deemed to have paid the same 
        proportion of such other member's post-1986 foreign income 
        taxes as would be determined under subsection (a) if such 
        foreign corporation were a domestic corporation.
            ``(2) Qualified group.--For purposes of paragraph (1), the 
        term `qualified group' means--
                    ``(A) the foreign corporation described in 
                subsection (a), and
                    ``(B) any other foreign corporation if--
                            ``(i) the domestic corporation owns at 
                        least 5 percent of the voting stock of such 
                        other foreign corporation indirectly through a 
                        chain of foreign corporations connected through 
                        stock ownership of at least 10 percent of their 
                        voting stock,
                            ``(ii) the foreign corporation described in 
                        subsection (a) is the first tier corporation in 
                        such chain, and
                            ``(iii) such other corporation is not below 
                        the sixth tier in such chain.
        The term `qualified group' shall not include any foreign 
        corporation below the third tier in the chain referred to in 
        clause (i) unless such foreign corporation is a controlled 
        foreign corporation (as defined in section 957) and the 
        domestic corporation is a United States shareholder (as defined 
        in section 951(b)) in such foreign corporation. Paragraph (1) 
        shall apply to those taxes paid by a member of the qualified 
        group below the third tier only with respect to periods during 
        which it was a controlled foreign corporation.''
            (2) Conforming amendments.--
                    (A) Subparagraph (B) of section 902(c)(3) is 
                amended by adding ``or'' at the end of clause (i) and 
                by striking clauses (ii) and (iii) and inserting the 
                following new clause:
                            ``(ii) the requirements of subsection 
                        (b)(2) are met with respect to such foreign 
                        corporation.''
                    (B) Subparagraph (B) of section 902(c)(4) is 
                amended by striking ``3rd foreign corporation'' and 
                inserting ``sixth tier foreign corporation''.
                    (C) The heading for paragraph (3) of section 902(c) 
                is amended by striking ``where domestic corporation 
                acquires 10 percent of foreign corporation'' and 
                inserting ``where foreign corporation first 
                qualifies''.
                    (D) Paragraph (3) of section 902(c) is amended by 
                striking ``ownership'' each place it appears.
    (b) Section 960 Credit.--Paragraph (1) of section 960(a) (relating 
to special rules for foreign tax credits) is amended to read as 
follows:
            ``(1) Deemed paid credit.--For purposes of subpart A of 
        this part, if there is included under section 951(a) in the 
        gross income of a domestic corporation any amount attributable 
        to earnings and profits of a foreign corporation which is a 
        member of a qualified group (as defined in section 902(b)) with 
        respect to the domestic corporation, then, except to the extent 
        provided in regulations, section 902 shall be applied as if the 
        amount so included were a dividend paid by such foreign 
        corporation (determined by applying section 902(c) in 
        accordance with section 904(d)(3)(B)).''
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes of foreign corporations for taxable years of 
        such corporations beginning after the date of enactment of this 
        Act.
            (2) Special rule.--In the case of any chain of foreign 
        corporations described in clauses (i) and (ii) of section 
        902(b)(2)(B) of the Internal Revenue Code of 1986 (as amended 
        by this section), no liquidation, reorganization, or similar 
        transaction in a taxable year beginning after the date of the 
        enactment of this Act shall have the effect of permitting taxes 
        to be taken into account under section 902 of the Internal 
        Revenue Code of 1986 which could not have been taken into 
        account under such section but for such transaction.

SEC. 14414. REPEAL OF INCLUSION OF CERTAIN EARNINGS INVESTED IN EXCESS 
              PASSIVE ASSETS.

    (a) In General.--
            (1) Repeal of inclusion.--Paragraph (1) of section 951(a) 
        (relating to amounts included in gross income of United States 
        shareholders) is amended by striking subparagraph (C), by 
        striking ``; and'' at the end of subparagraph (B) and inserting 
        a period, and by adding ``and'' at the end of subparagraph (A).
            (2) Repeal of inclusion amount.--Section 956A (relating to 
        earnings invested in excess passive assets) is repealed.
    (b) Conforming Amendments.--
            (1) Subparagraph (G) of section 904(d)(3) is amended by 
        striking ``subparagraph (B) or (C) of section 951(a)(1)'' and 
        inserting ``section 951(a)(1)(B)''.
            (2) Paragraph (1) of section 956(b) is amended to read as 
        follows:
            ``(1) Applicable earnings.--For purposes of this section, 
        the term `applicable earnings' means, with respect to any 
        controlled foreign corporation, the sum of--
                    ``(A) the amount (not including a deficit) referred 
                to in section 316(a)(1), and
                    ``(B) the amount referred to in section 316(a)(2),
        but reduced by distributions made during the taxable year.''
            (3) Paragraph (3) of section 956(b) is amended to read as 
        follows:
            ``(3) Special rule where corporation ceases to be 
        controlled foreign corporation.--If any foreign corporation 
        ceases to be a controlled foreign corporation during any 
        taxable year--
                    ``(A) the determination of any United States 
                shareholder's pro rata share shall be made on the basis 
                of stock owned (within the meaning of section 958(a)) 
                by such shareholder on the last day during the taxable 
                year on which the foreign corporation is a controlled 
                foreign corporation,
                    ``(B) the average referred to in subsection 
                (a)(1)(A) for such taxable year shall be determined by 
                only taking into account quarters ending on or before 
                such last day, and
                    ``(C) in determining applicable earnings, the 
                amount taken into account by reason of being described 
                in paragraph (2) of section 316(a) shall be the portion 
                of the amount so described which is allocable (on a pro 
                rata basis) to the part of such year during which the 
                corporation is a controlled foreign corporation.''
            (4) Subsection (a) of section 959 (relating to exclusion 
        from gross income of previously taxed earnings and profits) is 
        amended by adding ``or'' at the end of paragraph (1), by 
        striking ``or'' at the end of paragraph (2), and by striking 
        paragraph (3).
            (5) Subsection (a) of section 959 is amended by striking 
        ``paragraphs (2) and (3)'' in the last sentence and inserting 
        ``paragraph (2)''.
            (6) Subsection (c) of section 959 is amended by adding at 
        the end the following flush sentence:
``References in this subsection to section 951(a)(1)(C) and subsection 
(a)(3) shall be treated as references to such provisions as in effect 
on the day before the date of the enactment of the Tax Simplification 
Act of 1995.''
            (7) Paragraph (1) of section 959(f) is amended to read as 
        follows:
            ``(1) In general.--For purposes of this section, amounts 
        that would be included under subparagraph (B) of section 
        951(a)(1) (determined without regard to this section) shall be 
        treated as attributable first to earnings described in 
        subsection (c)(2), and then to earnings described in subsection 
        (c)(3).''
            (8) Paragraph (2) of section 959(f) is amended by striking 
        ``subparagraphs (B) and (C) of section 951(a)(1)'' and 
        inserting ``section 951(a)(1)(B)''.
            (9) Subsection (b) of section 989 is amended by striking 
        ``subparagraph (B) or (C) of section 951(a)(1)'' and inserting 
        ``section 951(a)(1)(B)''.
            (10) Paragraph (9) of section 1298(b), as redesignated by 
        section 14402, is amended by striking ``subparagraph (B) or (C) 
        of section 951(a)(1)'' and inserting ``section 951(a)(1)(B)''.
            (11) Subsections (d)(3)(B) and (e)(2)(B)(ii) of section 
        1298, as redesignated by section 14402, are each amended by 
        striking ``or section 956A''.
    (c) Clerical Amendment.--The table of sections for subpart F of 
part III of subchapter N of chapter 1 is amended by striking the item 
relating to section 956A.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after 
September 30, 1995, and to taxable years of United States shareholders 
within which or with which such taxable years of foreign corporations 
end.

                       PART III--OTHER PROVISIONS

SEC. 14421. EXCHANGE RATE USED IN TRANSLATING FOREIGN TAXES.

    (a) Accrued Taxes Translated by Using Average Rate for Year to 
Which Taxes Relate.--
            (1) In general.--Subsection (a) of section 986 (relating to 
        translation of foreign taxes) is amended to read as follows:
    ``(a) Foreign Income Taxes.--
            ``(1) Translation of accrued taxes.--
                    ``(A) In general.--For purposes of determining the 
                amount of the foreign tax credit, in the case of a 
                taxpayer who takes foreign income taxes into account 
                when accrued, the amount of any foreign income taxes 
                (and any adjustment thereto) shall be translated into 
                dollars by using the average exchange rate for the 
                taxable year to which such taxes relate.
                    ``(B) Exception for taxes not paid within following 
                2 years.--
                            ``(i) Subparagraph (A) shall not apply to 
                        any foreign income taxes paid after the date 2 
                        years after the close of the taxable year to 
                        which such taxes relate.
                            ``(ii) Subparagraph (A) shall not apply to 
                        taxes paid before the beginning of the taxable 
                        year to which such taxes relate.
                    ``(C) Exception for inflationary currencies.--
                Subparagraph (A) shall not apply to any foreign income 
                taxes the liability for which is denominated in any 
                currency determined to be an inflationary currency 
                under regulations prescribed by the Secretary.
                    ``(D) Cross reference.--

                                ``For adjustments where tax is not paid 
within 2 years, see section 905(c).
            ``(2) Translation of taxes to which paragraph (1) does not 
        apply.--For purposes of determining the amount of the foreign 
        tax credit, in the case of any foreign income taxes to which 
        subparagraph (A) of paragraph (1) does not apply--
                    ``(A) such taxes shall be translated into dollars 
                using the exchange rates as of the time such taxes were 
                paid to the foreign country or possession of the United 
                States, and
                    ``(B) any adjustment to the amount of such taxes 
                shall be translated into dollars using--
                            ``(i) except as provided in clause (ii), 
                        the exchange rate as of the time when such 
                        adjustment is paid to the foreign country or 
                        possession, or
                            ``(ii) in the case of any refund or credit 
                        of foreign income taxes, using the exchange 
                        rate as of the time of the original payment of 
                        such foreign income taxes.
            ``(3) Foreign income taxes.--For purposes of this 
        subsection, the term `foreign income taxes' means any income, 
        war profits, or excess profits taxes paid or accrued to any 
        foreign country or to any possession of the United States.''
            (2) Adjustment when not paid within 2 years after year to 
        which taxes relate.--Subsection (c) of section 905 is amended 
        to read as follows:
    ``(c) Adjustments to Accrued Taxes.--
            ``(1) In general.--If--
                    ``(A) accrued taxes when paid differ from the 
                amounts claimed as credits by the taxpayer,
                    ``(B) accrued taxes are not paid before the date 2 
                years after the close of the taxable year to which such 
                taxes relate, or
                    ``(C) any tax paid is refunded in whole or in part,
        the taxpayer shall notify the Secretary, who shall redetermine 
        the amount of the tax for the year or years affected.
            ``(2) Special rule for taxes not paid within 2 years.--In 
        making the redetermination under paragraph (1), no credit shall 
        be allowed for accrued taxes not paid before the date referred 
        to in subparagraph (B) of paragraph (1). Any such taxes if 
        subsequently paid shall be taken into account for the taxable 
        year in which paid and no redetermination under this section 
        shall be made on account of such payment.
            ``(3) Adjustments.--The amount of tax due on any 
        redetermination under paragraph (1) (if any) shall be paid by 
        the taxpayer on notice and demand by the Secretary, and the 
        amount of tax overpaid (if any) shall be credited or refunded 
        to the taxpayer in accordance with subchapter B of chapter 66 
        (section 6511 et seq.).
            ``(4) Bond requirements.--In the case of any tax accrued 
        but not paid, the Secretary, as a condition precedent to the 
        allowance of the credit provided in this subpart, may require 
        the taxpayer to give a bond, with sureties satisfactory to and 
        approved by the Secretary, in such sum as the Secretary may 
        require, conditioned on the payment by the taxpayer of any 
        amount of tax found due on any such redetermination. Any such 
        bond shall contain such further conditions as the Secretary may 
        require.
            ``(5) Other special rules.--In any redetermination under 
        paragraph (1) by the Secretary of the amount of tax due from 
        the taxpayer for the year or years affected by a refund, the 
        amount of the taxes refunded for which credit has been allowed 
        under this section shall be reduced by the amount of any tax 
        described in section 901 imposed by the foreign country or 
        possession of the United States with respect to such refund; 
        but no credit under this subpart, or deduction under section 
        164, shall be allowed for any taxable year with respect to any 
        such tax imposed on the refund. No interest shall be assessed 
        or collected on any amount of tax due on any redetermination by 
        the Secretary, resulting from a refund to the taxpayer, for any 
        period before the receipt of such refund, except to the extent 
        interest was paid by the foreign country or possession of the 
        United States on such refund for such period.''
    (b) Authority To Use Average Rates.--
            (1) In general.--Subsection (a) of section 986 (as amended 
        by subsection (a)) is amended by redesignating paragraph (3) as 
        paragraph (4) and inserting after paragraph (2) the following 
        new paragraph:
            ``(3) Authority to permit use of average rates.--To the 
        extent prescribed in regulations, the average exchange rate for 
        the period (specified in such regulations) during which the 
        taxes or adjustment is paid may be used instead of the exchange 
        rate as of the time of such payment.''
            (2) Determination of average rates.--Subsection (c) of 
        section 989 is amended by striking ``and'' at the end of 
        paragraph (4), by striking the period at the end of paragraph 
        (5) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(6) setting forth procedures for determining the average 
        exchange rate for any period.''
            (3) Conforming amendments.--Subsection (b) of section 989 
        is amended by striking ``weighted'' each place it appears.
    (c) Effective Dates.--
            (1) In general.--The amendments made by subsections (a)(1) 
        and (b) shall apply to taxes paid or accrued in taxable years 
        beginning after December 31, 1995.
            (2) Subsection (a)(2).--The amendment made by subsection 
        (a)(2) shall apply to taxes which relate to taxable years 
        beginning after December 31, 1995.

SEC. 14422. ELECTION TO USE SIMPLIFIED SECTION 904 LIMITATION FOR 
              ALTERNATIVE MINIMUM TAX.

    (a) General Rule.--Subsection (a) of section 59 (relating to 
alternative minimum tax foreign tax credit) is amended by adding at the 
end the following new paragraph:
            ``(3) Election to use simplified section 904 limitation.--
                    ``(A) In general.--In determining the alternative 
                minimum tax foreign tax credit for any taxable year to 
                which an election under this paragraph applies--
                            ``(i) subparagraph (B) of paragraph (1) 
                        shall not apply, and
                            ``(ii) the limitation of section 904 shall 
                        be based on the proportion which--
                                    ``(I) the taxpayer's taxable income 
                                (as determined for purposes of the 
                                regular tax) from sources without the 
                                United States (but not in excess of the 
                                taxpayer's entire alternative minimum 
                                taxable income), bears to
                                    ``(II) the taxpayer's entire 
                                alternative minimum taxable income for 
                                the taxable year.
                    ``(B) Election.--
                            ``(i) In general.--An election under this 
                        paragraph may be made only for the taxpayer's 
                        first taxable year which begins after December 
                        31, 1995, and for which the taxpayer claims an 
                        alternative minimum tax foreign tax credit.
                            ``(ii) Election revocable only with 
                        consent.--An election under this paragraph, 
                        once made, shall apply to the taxable year for 
                        which made and all subsequent taxable years 
                        unless revoked with the consent of the 
                        Secretary.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14423. MODIFICATION OF SECTION 1491.

    (a) General Rule.--So much of chapter 5 (relating to tax on 
transfers to avoid income tax) as precedes section 1492 is amended to 
read as follows:

        ``CHAPTER 5--TREATMENT OF TRANSFERS TO AVOID INCOME TAX

                              ``Sec. 1491. Recognition of gain.
                              ``Sec. 1492. Exceptions.

``SEC. 1491. RECOGNITION OF GAIN.

    ``In the case of any transfer of property by a United States person 
to a foreign corporation as paid-in surplus or as a contribution to 
capital, to a foreign estate or trust, or to a foreign partnership, for 
purposes of this subtitle (other than for purposes of section 679), 
such transfer shall be treated as a sale or exchange for an amount 
equal to the fair market value of the property transferred, and the 
transferor shall recognize as gain the excess of--
            ``(1) the fair market value of the property so transferred, 
        over
            ``(2) the adjusted basis (for purposes of determining gain) 
        of such property in the hands of the transferor.''
    (b) Conforming Amendments.--
            (1) Section 1057 is hereby repealed.
            (2) Section 1492 is amended to read as follows:

``SEC. 1492. EXCEPTIONS.

    ``The provisions of section 1491 shall not apply--
            ``(1) If the transferee is an organization exempt from 
        income tax under part I of subchapter F of chapter 1 (other 
        than an organization described in section 401(a)),
            ``(2) To a transfer described in section 367, or
            ``(3) To any other transfer, to the extent provided in 
        regulations in accordance with principles similar to the 
        principles of section 367 or otherwise consistent with the 
        purpose of section 1491.''
            (3) Section 1494 is hereby repealed.
            (4) Paragraph (8) of section 6501(c) is amended by 
        inserting ``or on any transfer by reason of section 1491'' 
        after ``section 367''.
            (5) Subsection (a) of section 6038B is amended by striking 
        ``or'' at the end of paragraph (1), by adding ``or'' at the end 
        of paragraph (2), and by inserting after paragraph (2) the 
        following new paragraph:
            ``(3) makes any transfer described in section 1491,''.
            (6) The table of sections for part IV of subchapter O of 
        chapter 1 is amended by striking the item relating to section 
        1057.
            (7) The table of chapters for subtitle A is amended by 
        striking ``Tax on'' in the item relating to chapter 5 and 
        inserting ``Treatment of''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transfers after December 31, 1995.

SEC. 14424. MODIFICATION OF SECTION 367(b).

    (a) General Rule.--Paragraph (1) of section 367(b) is amended to 
read as follows:
            ``(1) In general.--In the case of any transaction described 
        in section 332, 351, 354, 355, 356, or 361 in which the status 
        of a foreign corporation as a corporation is a general 
        condition for nonrecognition by 1 or more of the parties to the 
        transaction, income shall be required to be recognized to the 
        extent provided in regulations prescribed by the Secretary 
        which are necessary or appropriate to prevent the avoidance of 
        Federal income taxes. This subsection shall not apply to a 
        transaction in which the foreign corporation is not treated as 
        a corporation under subsection (a)(1).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to transfers after December 31, 1995.

SEC. 14425. INCREASE IN FILING THRESHOLDS FOR RETURNS AS TO 
              ORGANIZATION OF FOREIGN CORPORATIONS AND ACQUISITIONS OF 
              STOCK IN SUCH CORPORATIONS.

    (a) In General.--Subsection (a) of section 6046 (relating to 
returns as to organization or reorganization of foreign corporations 
and as to acquisitions of their stock) is amended to read as follows:
    ``(a) Requirement of return.--
            ``(1) In general.--A return complying with the requirements 
        of subsection (b) shall be made by--
                    ``(A) each United States citizen or resident who 
                becomes an officer or director of a foreign corporation 
                if a United States person (as defined in section 
                7701(a)(30)) meets the stock ownership requirements of 
                paragraph (2) with respect to such corporation,
                    ``(B) each United States person--
                            ``(i) who acquires stock which, when added 
                        to any stock owned on the date of such 
                        acquisition, meets the stock ownership 
                        requirements of paragraph (2) with respect to a 
                        foreign corporation, or
                            ``(ii) who acquires stock which, without 
                        regard to stock owned on the date of such 
                        acquisition, meets the stock ownership 
                        requirements of paragraph (2) with respect to a 
                        foreign corporation,
                    ``(C) each person (not described in subparagraph 
                (B)) who is treated as a United States shareholder 
                under section 953(c) with respect to a foreign 
                corporation, and
                    ``(D) each person who becomes a United States 
                person while meeting the stock ownership requirements 
                of paragraph (2) with respect to stock of a foreign 
                corporation.
        In the case of a foreign corporation with respect to which any 
        person is treated as a United States shareholder under section 
        953(c), subparagraph (A) shall be treated as including a 
        reference to each United States person who is an officer or 
        director of such corporation.
            ``(2) Stock ownership requirements.--A person meets the 
        stock ownership requirements of this paragraph with respect to 
        any corporation if such person owns 10 percent or more of--
                    ``(A) the total combined voting power of all 
                classes of stock of such corporation entitled to vote, 
                or
                    ``(B) the total value of the stock of such 
                corporation.''
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 1996.

SEC. 14426. APPLICATION OF UNIFORM CAPITALIZATION RULES TO FOREIGN 
              PERSONS.

    (a) In General.--Section 263A(c) (relating to exceptions) is 
amended by adding at the end the following new paragraph:
            ``(7) Foreign persons.--This section shall apply to any 
        taxpayer who is not a United States person only for purposes 
        of--
                    ``(A) tax liability with respect to income which is 
                effectively connected with the conduct of a trade or 
                business in the United States, and
                    ``(B) tax liability of a United States shareholder 
                (as defined in section 951(b)) with respect to amounts 
                includible in gross income under section 951(a).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1995. Section 481 
of the Internal Revenue Code of 1986 shall not apply to any change in a 
method of accounting by reason of such amendment.

SEC. 14427. CERTAIN PRIZES AND AWARDS.

    (a) In General.--Section 863 (relating to special rules for 
determining source) is amended by adding at the end the following new 
subsection:
    ``(f) Certain Prizes and Awards Associated With Amateur Sports 
Competitions.--
            ``(1) In general.--A prize or award received by a 
        nonresident alien by reason of participating in an amateur 
        sports competition in the United States shall not be treated as 
        derived from sources within the United States if such alien 
        performs no services for such prize or award.
            ``(2) Amateur sports competition.--For purposes of 
        paragraph (1), the term `amateur sports competition' means any 
        competition in which the only prizes awarded by the sponsors of 
        the competition are of nominal value.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to prizes and awards granted after the date of the enactment of 
this Act.

SEC. 14428. TREATMENT FOR ESTATE TAX PURPOSES OF SHORT-TERM OBLIGATIONS 
              HELD BY NONRESIDENT ALIENS.

    (a) In General.--Subsection (b) of section 2105 is amended by 
striking ``and'' at the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ``, and'', and by inserting 
after paragraph (3) the following new paragraph:
            ``(4) obligations which would be original issue discount 
        obligations as defined in section 871(g)(1) but for 
        subparagraph (B)(i) thereof, if any interest thereon (were such 
        interest received by the decedent at the time of his death) 
        would not be effectively connected with the conduct of a trade 
        or business within the United States.''
    (b) Effective Date.--The amendment made by this section shall apply 
to estates of decedents dying after the date of the enactment of this 
Act.

                Subtitle E--Other Income Tax Provisions

             PART I--PROVISIONS RELATING TO S CORPORATIONS

SEC. 14501. S CORPORATIONS PERMITTED TO HAVE 75 SHAREHOLDERS.

    Subparagraph (A) of section 1361(b)(1) (defining small business 
corporation) is amended by striking ``35 shareholders'' and inserting 
``75 shareholders''.

SEC. 14502. ELECTING SMALL BUSINESS TRUSTS.

    (a) General Rule.--Subparagraph (A) of section 1361(c)(2) (relating 
to certain trusts permitted as shareholders) is amended by inserting 
after clause (iv) the following new clause:
                            ``(v) An electing small business trust.''
    (b) Current Beneficiaries Treated as Shareholders.--Subparagraph 
(B) of section 1361(c)(2) is amended by adding at the end the following 
new clause:
                            ``(v) In the case of a trust described in 
                        clause (v) of subparagraph (A), each potential 
                        current beneficiary of such trust shall be 
                        treated as a shareholder; except that, if for 
                        any period there is no potential current 
                        beneficiary of such trust, such trust shall be 
                        treated as the shareholder during such 
                        period.''
    (c) Electing Small Business Trust Defined.--Section 1361 (defining 
S corporation) is amended by adding at the end the following new 
subsection:
    ``(e) Electing Small Business Trust Defined.--
            ``(1) Electing small business trust.--For purposes of this 
        section--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `electing small business 
                trust' means any trust if--
                            ``(i) such trust does not have as a 
                        beneficiary any person other than (I) an 
                        individual, (II) an estate, or (III) an 
                        organization described in paragraph (2), (3), 
                        (4), or (5) of section 170(c) which holds a 
                        contingent interest and is not a potential 
                        current beneficiary,
                            ``(ii) no interest in such trust was 
                        acquired by purchase, and
                            ``(iii) an election under this subsection 
                        applies to such trust.
                    ``(B) Certain trusts not eligible.--The term 
                `electing small business trust' shall not include--
                            ``(i) any qualified subchapter S trust (as 
                        defined in subsection (d)(3)) if an election 
                        under subsection (d)(2) applies to any 
                        corporation the stock of which is held by such 
                        trust, and
                            ``(ii) any trust exempt from tax under this 
                        subtitle.
                    ``(C) Purchase.--For purposes of subparagraph (A), 
                the term `purchase' means any acquisition if the basis 
                of the property acquired is determined under section 
                1012.
            ``(2) Potential current beneficiary.--For purposes of this 
        section, the term `potential current beneficiary' means, with 
        respect to any period, any person who at any time during such 
        period is entitled to, or at the discretion of any person may 
        receive, a distribution from the principal or income of the 
        trust. If a trust disposes of all of the stock which it holds 
        in an S corporation, then, with respect to such corporation, 
        the term `potential current beneficiary' does not include any 
        person who first met the requirements of the preceding sentence 
        during the 60-day period ending on the date of such 
        disposition.
            ``(3) Election.--An election under this subsection shall be 
        made by the trustee. Any such election shall apply to the 
        taxable year of the trust for which made and all subsequent 
        taxable years of such trust unless revoked with the consent of 
        the Secretary.
            ``(4) Cross reference.--

                                ``For special treatment of electing 
small business trusts, see section 641(d).''
    (d) Taxation of Electing Small Business Trusts.--Section 641 
(relating to imposition of tax on trusts) is amended by adding at the 
end the following new subsection:
    ``(d) Special Rules for Taxation of Electing Small Business 
Trusts.--
            ``(1) In general.--For purposes of this chapter--
                    ``(A) the portion of any electing small business 
                trust which consists of stock in 1 or more S 
                corporations shall be treated as a separate trust, and
                    ``(B) the amount of the tax imposed by this chapter 
                on such separate trust shall be determined with the 
                modifications of paragraph (2).
            ``(2) Modifications.--For purposes of paragraph (1), the 
        modifications of this paragraph are the following:
                    ``(A) Except as provided in section 1(h), the 
                amount of the tax imposed by section 1(e) shall be 
                determined by using the highest rate of tax set forth 
                in section 1(e).
                    ``(B) The exemption amount under section 55(d) 
                shall be zero.
                    ``(C) The only items of income, loss, deduction, or 
                credit to be taken into account are the following:
                            ``(i) The items required to be taken into 
                        account under section 1366.
                            ``(ii) Any gain or loss from the 
                        disposition of stock in an S corporation.
                            ``(iii) To the extent provided in 
                        regulations, State or local income taxes or 
                        administrative expenses to the extent allocable 
                        to items described in clauses (i) and (ii).
                No deduction or credit shall be allowed for any amount 
                not described in this paragraph, and no item described 
                in this paragraph shall be apportioned to any 
                beneficiary.
                    ``(D) No amount shall be allowed under paragraph 
                (1) or (2) of section 1211(b).
            ``(3) Treatment of remainder of trust and distributions.--
        For purposes of determining--
                    ``(A) the amount of the tax imposed by this chapter 
                on the portion of any electing small business trust not 
                treated as a separate trust under paragraph (1), and
                    ``(B) the distributable net income of the entire 
                trust,
        the items referred to in paragraph (2)(C) shall be excluded. 
        Except as provided in the preceding sentence, this subsection 
        shall not affect the taxation of any distribution from the 
        trust.
            ``(4) Treatment of unused deductions where termination of 
        separate trust.--If a portion of an electing small business 
        trust ceases to be treated as a separate trust under paragraph 
        (1), any carryover or excess deduction of the separate trust 
        which is referred to in section 642(h) shall be taken into 
        account by the entire trust.
            ``(5) Electing small business trust.--For purposes of this 
        subsection, the term `electing small business trust' has the 
        meaning given such term by section 1361(e)(1).''
    (e) Technical Amendment.--Paragraph (1) of section 1366(a) is 
amended by inserting ``, or of a trust or estate which terminates,'' 
after ``who dies''.

SEC. 14503. EXPANSION OF POST-DEATH QUALIFICATION FOR CERTAIN TRUSTS.

    Subparagraph (A) of section 1361(c)(2) (relating to certain trusts 
permitted as shareholders) is amended--
            (1) by striking ``60-day period'' each place it appears in 
        clauses (ii) and (iii) and inserting ``2-year period'', and
            (2) by striking the last sentence in clause (ii).

SEC. 14504. FINANCIAL INSTITUTIONS PERMITTED TO HOLD SAFE HARBOR DEBT.

    Clause (iii) of section 1361(c)(5)(B) (defining straight debt) is 
amended by striking ``or a trust described in paragraph (2)'' and 
inserting ``a trust described in paragraph (2), or a person which is 
actively and regularly engaged in the business of lending money.''

SEC. 14505. RULES RELATING TO INADVERTENT TERMINATIONS AND INVALID 
              ELECTIONS.

    (a) General Rule.--Subsection (f) of section 1362 (relating to 
inadvertent terminations) is amended to read as follows:
    ``(f) Inadvertent Invalid Elections or Terminations.--If--
            ``(1) an election under subsection (a) by any corporation--
                    ``(A) was not effective for the taxable year for 
                which made (determined without regard to subsection 
                (b)(2)) by reason of a failure to meet the requirements 
                of section 1361(b) or to obtain shareholder consents, 
                or
                    ``(B) was terminated under paragraph (2) of 
                subsection (d),
            ``(2) the Secretary determines that the circumstances 
        resulting in such ineffectiveness or termination were 
        inadvertent,
            ``(3) no later than a reasonable period of time after 
        discovery of the circumstances resulting in such 
        ineffectiveness or termination, steps were taken--
                    ``(A) so that the corporation is a small business 
                corporation, or
                    ``(B) to acquire the required shareholder consents, 
                and
            ``(4) the corporation, and each person who was a 
        shareholder in the corporation at any time during the period 
        specified pursuant to this subsection, agrees to make such 
        adjustments (consistent with the treatment of the corporation 
        as an S corporation) as may be required by the Secretary with 
        respect to such period,
then, notwithstanding the circumstances resulting in such 
ineffectiveness or termination, such corporation shall be treated as an 
S corporation during the period specified by the Secretary.''
    (b) Late Elections.--Subsection (b) of section 1362 is amended by 
adding at the end the following new paragraph:
            ``(5) Authority to treat late elections as timely.--If--
                    ``(A) an election under subsection (a) is made for 
                any taxable year (determined without regard to 
                paragraph (3)) after the date prescribed by this 
                subsection for making such election for such taxable 
                year, and
                    ``(B) the Secretary determines that there was 
                reasonable cause for the failure to timely make such 
                election,
        the Secretary may treat such election as timely made for such 
        taxable year (and paragraph (3) shall not apply).''
    (c) Effective Date.--The amendments made by subsection (a) and (b) 
shall apply with respect to elections for taxable years beginning after 
December 31, 1982.

SEC. 14506. AGREEMENT TO TERMINATE YEAR.

    Paragraph (2) of section 1377(a) (relating to pro rata share) is 
amended to read as follows:
            ``(2) Election to terminate year.--
                    ``(A) In general.--Under regulations prescribed by 
                the Secretary, if any shareholder terminates the 
                shareholder's interest in the corporation during the 
                taxable year and all affected shareholders and the 
                corporation agree to the application of this paragraph, 
                paragraph (1) shall be applied to the affected 
                shareholders as if the taxable year consisted of 2 
                taxable years the first of which ends on the date of 
                the termination.
                    ``(B) Affected shareholders.--For purposes of 
                subparagraph (A), the term `affected shareholders' 
                means the shareholder whose interest is terminated and 
                all shareholders to whom such shareholder has 
                transferred shares during the taxable year. If such 
                shareholder has transferred shares to the corporation, 
                the term `affected shareholders' shall include all 
                persons who are shareholders during the taxable year.''

SEC. 14507. EXPANSION OF POST-TERMINATION TRANSITION PERIOD.

    (a) In General.--Paragraph (1) of section 1377(b) (relating to 
post-termination transition period) is amended by striking ``and'' at 
the end of subparagraph (A), by redesignating subparagraph (B) as 
subparagraph (C), and by inserting after subparagraph (A) the following 
new subparagraph:
                    ``(B) the 120-day period beginning on the date of 
                any determination pursuant to an audit of the taxpayer 
                which follows the termination of the corporation's 
                election and which adjusts a subchapter S item of 
                income, loss, or deduction of the corporation arising 
                during the S period (as defined in section 1368(e)(2)), 
                and''.
    (b) Determination Defined.--Paragraph (2) of section 1377(b) is 
amended by striking subparagraphs (A) and (B), by redesignating 
subparagraph (C) as subparagraph (B), and by inserting before 
subparagraph (B) (as so redesignated) the following new subparagraph:
                    ``(A) a determination as defined in section 
                1313(a), or''.
    (c) Repeal of Special Audit Provisions for Subchapter S Items.--
            (1) General rule.--Subchapter D of chapter 63 (relating to 
        tax treatment of subchapter S items) is hereby repealed.
            (2) Consistent treatment required.--Section 6037 (relating 
        to return of S corporation) is amended by adding at the end the 
        following new subsection:
    ``(c) Shareholder's Return Must Be Consistent With Corporate Return 
or Secretary Notified of Inconsistency.--
            ``(1) In general.--A shareholder of an S corporation shall, 
        on such shareholder's return, treat a subchapter S item in a 
        manner which is consistent with the treatment of such item on 
        the corporate return.
            ``(2) Notification of inconsistent treatment.--
                    ``(A) In general.--In the case of any subchapter S 
                item, if--
                            ``(i)(I) the corporation has filed a return 
                        but the shareholder's treatment on his return 
                        is (or may be) inconsistent with the treatment 
                        of the item on the corporate return, or
                            ``(II) the corporation has not filed a 
                        return, and
                            ``(ii) the shareholder files with the 
                        Secretary a statement identifying the 
                        inconsistency,
                paragraph (1) shall not apply to such item.
                    ``(B) Shareholder receiving incorrect 
                information.--A shareholder shall be treated as having 
                complied with clause (ii) of subparagraph (A) with 
                respect to a subchapter S item if the shareholder--
                            ``(i) demonstrates to the satisfaction of 
                        the Secretary that the treatment of the 
                        subchapter S item on the shareholder's return 
                        is consistent with the treatment of the item on 
                        the schedule furnished to the shareholder by 
                        the corporation, and
                            ``(ii) elects to have this paragraph apply 
                        with respect to that item.
            ``(3) Effect of failure to notify.--In any case--
                    ``(A) described in subparagraph (A)(i)(I) of 
                paragraph (2), and
                    ``(B) in which the shareholder does not comply with 
                subparagraph (A)(ii) of paragraph (2),
        any adjustment required to make the treatment of the items by 
        such shareholder consistent with the treatment of the items on 
        the corporate return shall be treated as arising out of 
        mathematical or clerical errors and assessed according to 
        section 6213(b)(1). Paragraph (2) of section 6213(b) shall not 
        apply to any assessment referred to in the preceding sentence.
            ``(4) Subchapter s item.--For purposes of this subsection, 
        the term `subchapter S item' means any item of an S corporation 
        to the extent that regulations prescribed by the Secretary 
        provide that, for purposes of this subtitle, such item is more 
        appropriately determined at the corporation level than at the 
        shareholder level.
            ``(5) Addition to tax for failure to comply with section.--

                                ``For addition to tax in the case of a 
shareholder's negligence in connection with, or disregard of, the 
requirements of this section, see part II of subchapter A of chapter 
68.''
            (3) Conforming amendments.--
                    (A) Section 1366 is amended by striking subsection 
                (g).
                    (B) Subsection (b) of section 6233 is amended to 
                read as follows:
    ``(b) Similar Rules in Certain Cases.--If a partnership return is 
filed for any taxable year but it is determined that there is no entity 
for such taxable year, to the extent provided in regulations, rules 
similar to the rules of subsection (a) shall apply.''
                    (C) The table of subchapters for chapter 63 is 
                amended by striking the item relating to subchapter D.

SEC. 14508. S CORPORATIONS PERMITTED TO HOLD SUBSIDIARIES.

    (a) In General.--Paragraph (2) of section 1361(b) (defining 
ineligible corporation) is amended by striking subparagraph (A) and by 
redesignating subparagraphs (B), (C), (D), and (E) as subparagraphs 
(A), (B), (C), and (D), respectively.
    (b) Treatment of Certain Wholly Owned S Corporation Subsidiaries.--
Section 1361(b) (defining small business corporation) is amended by 
adding at the end the following new paragraph:
            ``(3) Treatment of certain wholly owned subsidiaries.--
                    ``(A) In general.--For purposes of this title--
                            ``(i) a corporation which is a qualified 
                        subchapter S subsidiary shall not be treated as 
                        a separate corporation, and
                            ``(ii) all assets, liabilities, and items 
                        of income, deduction, and credit of a qualified 
                        subchapter S subsidiary shall be treated as 
                        assets, liabilities, and such items (as the 
                        case may be) of the S corporation.
                    ``(B) Qualified subchapter s subsidiary.--For 
                purposes of this paragraph, the term `qualified 
                subchapter S subsidiary' means any domestic corporation 
                which is not an ineligible corporation (as defined in 
                paragraph (2)), if--
                            ``(i) 100 percent of the stock of such 
                        corporation is held by the S corporation, and
                            ``(ii) the S corporation elects to treat 
                        such corporation as a qualified subchapter S 
                        subsidiary.
                    ``(C) Treatment of terminations of qualified 
                subchapter s subsidiary status.--For purposes of this 
                title, if any corporation which was a qualified 
                subchapter S subsidiary ceases to meet the requirements 
                of subparagraph (B), such corporation shall be treated 
                as a new corporation acquiring all of its assets (and 
                assuming all of its liabilities) immediately before 
                such cessation from the S corporation in exchange for 
                its stock.''
    (c) Certain Dividends Not Treated as Passive Investment Income.--
Paragraph (3) of section 1362(d) is amended by adding at the end the 
following new subparagraph:
                    ``(F) Treatment of certain dividends.--If an S 
                corporation holds stock in a C corporation meeting the 
                requirements of section 1504(a)(2), the term `passive 
                investment income' shall not include dividends from 
                such C corporation to the extent such dividends are 
                attributable to the earnings and profits of such C 
                corporation derived from the active conduct of a trade 
                or business.''
    (d) Conforming Amendments.--
            (1) Subsection (c) of section 1361 is amended by striking 
        paragraph (6).
            (2) Subsection (b) of section 1504 (defining includible 
        corporation) is amended by adding at the end the following new 
        paragraph:
            ``(8) An S corporation.''

SEC. 14509. TREATMENT OF DISTRIBUTIONS DURING LOSS YEARS.

    (a) Adjustments for Distributions Taken Into Account Before 
Losses.--
            (1) Subparagraph (A) of section 1366(d)(1) (relating to 
        losses and deductions cannot exceed shareholder's basis in 
        stock and debt) is amended by striking ``paragraph (1)'' and 
        inserting ``paragraphs (1) and (2)(A)''.
            (2) Subsection (d) of section 1368 (relating to certain 
        adjustments taken into account) is amended by adding at the end 
        the following new sentence:
``In the case of any distribution made during any taxable year, the 
adjusted basis of the stock shall be determined with regard to the 
adjustments provided in paragraph (1) of section 1367(a) for the 
taxable year.''
    (b) Accumulated Adjustments Account.--Paragraph (1) of section 
1368(e) (relating to accumulated adjustments account) is amended by 
adding at the end the following new subparagraph:
            ``(C) Net loss for year disregarded.--
                    ``(i) In general.--In applying this section to 
                distributions made during any taxable year, the amount 
                in the accumulated adjustments account as of the close 
                of such taxable year shall be determined without regard 
                to any net negative adjustment for such taxable year.
                    ``(ii) Net negative adjustment.--For purposes of 
                clause (i), the term `net negative adjustment' means, 
                with respect to any taxable year, the excess (if any) 
                of--
                            ``(I) the reductions in the account for the 
                        taxable year (other than for distributions), 
                        over
                            ``(II) the increases in such account for 
                        such taxable year.''
    (c) Conforming Amendments.--Subparagraph (A) of section 1368(e)(1) 
is amended--
            (1) by striking ``as provided in subparagraph (B)'' and 
        inserting ``as otherwise provided in this paragraph'', and
            (2) by striking ``section 1367(b)(2)(A)'' and inserting 
        ``section 1367(a)(2)''.

SEC. 14510. TREATMENT OF S CORPORATIONS UNDER SUBCHAPTER C.

    Subsection (a) of section 1371 (relating to application of 
subchapter C rules) is amended to read as follows:
    ``(a) Application of Subchapter C Rules.--Except as otherwise 
provided in this title, and except to the extent inconsistent with this 
subchapter, subchapter C shall apply to an S corporation and its 
shareholders.''

SEC. 14511. ELIMINATION OF CERTAIN EARNINGS AND PROFITS.

    (a) In General.--If--
            (1) a corporation was an electing small business 
        corporation under subchapter S of chapter 1 of the Internal 
        Revenue Code of 1986 for any taxable year beginning before 
        January 1, 1983, and
            (2) such corporation is an S corporation under subchapter S 
        of chapter 1 of such Code for its first taxable year beginning 
        after December 31, 1995,
the amount of such corporation's accumulated earnings and profits (as 
of the beginning of such first taxable year) shall be reduced by an 
amount equal to the portion (if any) of such accumulated earnings and 
profits which were accumulated in any taxable year beginning before 
January 1, 1983, for which such corporation was an electing small 
business corporation under such subchapter S.
    (b) Conforming Amendments.--
            (1) Paragraph (3) of section 1362(d) is amended--
                    (A) by striking ``Subchapter C'' in the paragraph 
                heading and inserting ``Accumulated'',
                    (B) by striking ``subchapter C'' in subparagraph 
                (A)(i)(I) and inserting ``accumulated'', and
                    (C) by striking subparagraph (B) and redesignating 
                the following subparagraphs accordingly.
            (2)(A) Subsection (a) of section 1375 is amended by 
        striking ``subchapter C'' in paragraph (1) and inserting 
        ``accumulated''.
            (B) Paragraph (3) of section 1375(b) is amended to read as 
        follows:
            ``(3) Passive investment income, etc.--The terms `passive 
        investment income' and `gross receipts' have the same 
        respective meanings as when used in paragraph (3) of section 
        1362(d).''
            (C) The section heading for section 1375 is amended by 
        striking ``subchapter c'' and inserting ``accumulated''.
            (D) The table of sections for part III of subchapter S of 
        chapter 1 is amended by striking ``subchapter C'' in the item 
        relating to section 1375 and inserting ``accumulated''.
            (3) Clause (i) of section 1042(c)(4)(A) is amended by 
        striking ``section 1362(d)(3)(D)'' and inserting ``section 
        1362(d)(3)(C)''.

SEC. 14512. CARRYOVER OF DISALLOWED LOSSES AND DEDUCTIONS UNDER AT-RISK 
              RULES ALLOWED.

    Paragraph (3) of section 1366(d) (relating to carryover of 
disallowed losses and deductions to post-termination transition period) 
is amended by adding at the end the following new subparagraph:
                    ``(D) At-risk limitations.--To the extent that any 
                increase in adjusted basis described in subparagraph 
                (B) would have increased the shareholder's amount at 
                risk under section 465 if such increase had occurred 
                on  the day preceding the commencement of the post-
termination transition period, rules similar to the rules described in 
subparagraphs (A) through (C) shall apply to any losses disallowed by 
reason of section 465(a).''

SEC. 14513. ADJUSTMENTS TO BASIS OF INHERITED S STOCK TO REFLECT 
              CERTAIN ITEMS OF INCOME.

    (a) In General.--Subsection (b) of section 1367 (relating to 
adjustments to basis of stock of shareholders, etc.) is amended by 
adding at the end the following new paragraph:
            ``(4) Adjustments in case of inherited stock.--
                    ``(A) In general.--If any person acquires stock in 
                an S corporation by reason of the death of a decedent 
                or by bequest, devise, or inheritance, section 691 
                shall be applied with respect to any item of income of 
                the S corporation in the same manner as if the decedent 
                had held directly his pro rata share of such item.
                    ``(B) Adjustments to basis.--The basis determined 
                under section 1014 of any stock in an S corporation 
                shall be reduced by the portion of the value of the 
                stock which is attributable to items constituting 
                income in respect of the decedent.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply in the case of decedents dying after the date of the enactment of 
this Act.

SEC. 14514. S CORPORATIONS ELIGIBLE FOR RULES APPLICABLE TO REAL 
              PROPERTY SUBDIVIDED FOR SALE BY NONCORPORATE TAXPAYERS.

    (a) In General.--Subsection (a) of section 1237 (relating to real 
property subdivided for sale) is amended by striking ``other than a 
corporation'' in the material preceding paragraph (1) and inserting 
``other than a C corporation''.
    (b) Conforming Amendment.--Subparagraph (A) of section 1237(a)(2) 
is amended by inserting ``an S corporation which included the taxpayer 
as a shareholder,'' after ``controlled by the taxpayer,''.

SEC. 14515. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this part, the 
amendments made by this part shall apply to taxable years beginning 
after December 31, 1995.
    (b) Treatment of Certain Elections Under Prior Law.--For purposes 
of section 1362(g) of the Internal Revenue Code of 1986 (relating to 
election after termination), any termination under section 1362(d) of 
such Code in a taxable year beginning before January 1, 1996, shall not 
be taken into account.

     PART II--PROVISIONS RELATING TO REGULATED INVESTMENT COMPANIES

SEC. 14521. REPEAL OF 30-PERCENT GROSS INCOME LIMITATION.

    (a) General Rule.--Subsection (b) of section 851 (relating to 
limitations) is amended by striking paragraph (3), by adding ``and'' at 
the end of paragraph (2), and by redesignating paragraph (4) as 
paragraph (3).
    (b) Technical Amendments.--
            (1) The material following paragraph (3) of section 851(b) 
        (as redesignated by subsection (a)) is amended--
                    (A) by striking out ``paragraphs (2) and (3)'' and 
                inserting ``paragraph (2)'', and
                    (B) by striking out the last sentence thereof.
            (2) Subsection (c) of section 851 is amended by striking 
        ``subsection (b)(4)'' each place it appears (including the 
        heading) and inserting ``subsection (b)(3)''.
            (3) Subsection (d) of section 851 is amended by striking 
        ``subsections (b)(4)'' and inserting ``subsections (b)(3)''.
            (4) Paragraph (1) of section 851(e) is amended by striking 
        ``subsection (b)(4)'' and inserting ``subsection (b)(3)''.
            (5) Paragraph (4) of section 851(e) is amended by striking 
        ``subsections (b)(4)'' and inserting ``subsections (b)(3)''.
            (6) Section 851 is amended by striking subsection (g) and 
        redesignating subsection (h) as subsection (g).
            (7) Subsection (g) of section 851 (as redesignated by 
        paragraph (6)) is amended by striking paragraph (3).
            (8) Section 817(h)(2) is amended--
                    (A) by striking ``851(b)(4)'' in subparagraph (A) 
                and inserting ``851(b)(3)'', and
                    (B) by striking ``851(b)(4)(A)(i)'' in subparagraph 
                (B) and inserting ``851(b)(3)(A)(i)''.
            (9) Section 1092(f)(2) is amended by striking ``Except for 
        purposes of section 851(b)(3), the'' and inserting ``The''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

     PART III--PROVISIONS RELATING TO REAL ESTATE INVESTMENT TRUSTS

SEC. 14531. CLARIFICATION OF LIMITATION ON MAXIMUM NUMBER OF 
              SHAREHOLDERS.

    (a) Rules Relating to Determination of Ownership.--
            (1) Failure to issue shareholder demand letter not to 
        disqualify reit.--Section 857(a) (relating to requirements 
        applicable to real estate investment trusts) is amended by 
        striking paragraph (2) and by redesignating paragraph (3) as 
        paragraph (2).
            (2) Shareholder demand letter requirement; penalty.--
        Section 857 (relating to taxation of real estate investment 
        trusts and their beneficiaries) is amended by redesignating 
        subsection (f) as subsection (g) and by inserting after 
        subsection (e) the following new subsection:
    ``(f) Real Estate Investment Trusts To Ascertain Ownership.--
            ``(1) In general.--Each real estate investment trust shall 
        each taxable year comply with regulations prescribed by the 
        Secretary for the purposes of ascertaining the actual ownership 
        of the outstanding shares, or certificates of beneficial 
        interest, of such trust.
            ``(2) Failure to comply.--
                    ``(A) In general.--If a real estate investment 
                trust fails to comply with the requirements of 
                paragraph (1) for a taxable year, such trust shall pay 
                (on notice and demand by the Secretary and in the same 
                manner as tax) a penalty of $25,000.
                    ``(B) Intentional disregard.--If any failure under 
                paragraph (1) is due to intentional disregard of the 
                requirement under paragraph (1), the penalty under 
                subparagraph (A) shall be $50,000.
                    ``(C) Failure to comply after notice.--The 
                Secretary may require a real estate investment trust to 
                take such actions as the Secretary determines 
                appropriate to ascertain actual ownership if the trust 
                fails to meet the requirements of paragraph (1). If the 
                trust fails to take such actions, the trust shall pay 
                (on notice and demand by the Secretary and in the same 
                manner as tax) an additional penalty equal to the 
                penalty determined under subparagraph (A) or (B), 
                whichever is applicable.
                    ``(D) Reasonable cause.--No penalty shall be 
                imposed under this paragraph with respect to any 
                failure if it is shown that such failure is due to 
                reasonable cause and not to willful neglect.''
    (b) Compliance With Closely Held Prohibition.--
            (1) In general.--Section 856 (defining real estate 
        investment trust) is amended by adding at the end the following 
        new subsection:
    ``(k) Requirement That Entity Not Be Closely Held Treated as Met in 
Certain Cases.--A corporation, trust, or association--
            ``(1) which for a taxable year meets the requirements of 
        section 857(f)(1), and
            ``(2) which does not know, or exercising reasonable 
        diligence would not have known, whether the entity failed to 
        meet the requirement of subsection (a)(6),
shall be treated as having met the requirement of subsection (a)(6) for 
the taxable year.''
            (2) Conforming amendment.--Paragraph (6) of section 856(a) 
        is amended by inserting ``subject to the provisions of 
        subsection (k),'' before ``which is not''.

SEC. 14532. DE MINIMIS RULE FOR TENANT SERVICES INCOME.

    (a) In General.--Paragraph (2) of section 856(d) (defining rents 
from real property) is amended by striking subparagraph (C) and the 
last sentence and inserting:
                    ``(C) any impermissible tenant service income (as 
                defined in paragraph (7)).''
    (b) Impermissible Tenant Service Income.--Section 856(d) is amended 
by adding at the end the following new paragraph:
            ``(7) Impermissible tenant service income.--For purposes of 
        paragraph (2)(C)--
                    ``(A) In general.--The term `impermissible tenant 
                service income' means, with respect to any real or 
                personal property, any amount received or accrued 
                directly or indirectly by the real estate investment 
                trust for--
                            ``(i) services furnished or rendered by the 
                        trust to the tenants of such property, or
                            ``(ii) managing or operating such property.
                    ``(B) Disqualification of all amounts where more 
                than de minimis amount.--If the amount described in 
                subparagraph (A) with respect to a property for any 
                taxable year exceeds 1 percent of all amounts received 
                or accrued during such taxable year directly or 
                indirectly by the real estate investment trust with 
                respect to such property, the impermissible tenant 
                service income of the trust with respect to the 
                property shall include all such amounts.
                    ``(C) Exceptions.--For purposes of subparagraph 
                (A)--
                            ``(i) services furnished or rendered, or 
                        management or operation provided, through an 
                        independent contractor from whom the trust 
                        itself does not derive or receive any income 
                        shall not be treated as furnished, rendered, or 
                        provided by the trust, and
                            ``(ii) there shall not be taken into 
                        account any amount which would be excluded from 
                        unrelated business taxable income under section 
                        512(b)(3) if received by an organization 
                        described in section 511(a)(2).
                    ``(D) Amount attributable to impermissible 
                services.--For purposes of subparagraph (A), the amount 
                treated as received for any service (or management or 
                operation) shall not be less than 150 percent of the 
                direct cost of the trust in furnishing or rendering the 
                service (or providing the management or operation).
                    ``(E) Coordination with limitations.--For purposes 
                of paragraphs (2) and (3) of subsection (c), amounts 
                described in subparagraph (A) shall be included in the 
                gross income of the corporation, trust, or 
                association.''

SEC. 14533. ATTRIBUTION RULES APPLICABLE TO TENANT OWNERSHIP.

    Section 856(d)(5) (relating to constructive ownership of stock) is 
amended by adding at the end the following: ``For purposes of paragraph 
(2)(B), section 318(a)(3)(A) shall be applied under the preceding 
sentence in the case of a partnership by taking into account only 
partners who own (directly or indirectly) 25 percent or more of the 
capital interest, or the profits interest, in the partnership.''

SEC. 14534. CREDIT FOR TAX PAID BY REIT ON RETAINED CAPITAL GAINS.

    (a) General Rule.--Paragraph (3) of section 857(b) (relating to 
capital gains) is amended by redesignating subparagraph (D) as 
subparagraph (E) and by inserting after subparagraph (C) the following 
new subparagraph:
                    ``(D) Treatment by shareholders of undistributed 
                capital gains.--
                            ``(i) Every shareholder of a real estate 
                        investment trust at the close of the trust's 
                        taxable year shall include, in computing his 
                        long-term capital gains in his return for his 
                        taxable year in which the last day of the 
                        trust's taxable year falls, such amount as the 
                        trust shall designate in respect of such shares 
                        in a written notice mailed to its shareholders 
                        at any time prior to the expiration of 60 days 
                        after the close of its taxable year (or mailed 
                        to its shareholders or holders of beneficial 
                        interests with its annual report for the 
                        taxable year), but the amount so includible by 
                        any shareholder shall not exceed that part of 
                        the amount subjected to tax in subparagraph 
                        (A)(ii) which he would have received if all of 
                        such amount had been distributed as capital 
                        gain dividends by the trust to the holders of 
                        such shares at the close of its taxable year.
                            ``(ii) For purposes of this title, every 
                        such shareholder shall be deemed to have paid, 
                        for his taxable year under clause (i), the tax 
                        imposed by subparagraph (A)(ii) on the amounts 
                        required by this subparagraph to be included in 
                        respect of such shares in computing his long-
                        term capital gains for that year; and such 
                        shareholders shall be allowed credit or refund 
                        as the case may be, for the tax so deemed to 
                        have been paid by him.
                            ``(iii) The adjusted basis of such shares 
                        in the hands of the holder shall be increased 
                        with respect to the amounts required by this 
                        subparagraph to be included in computing his 
                        long-term capital gains, by the difference 
                        between the amount of such includible gains and 
                        the tax deemed paid by such shareholder in 
                        respect of such shares under clause (ii).
                            ``(iv) In the event of such designation, 
                        the tax imposed by subparagraph (A)(ii) shall 
                        be paid by the real estate investment trust 
                        within 30 days after the close of its taxable 
                        year.
                            ``(v) The earnings and profits of such real 
                        estate investment trust, and the earnings and 
                        profits of any such shareholder which is a 
                        corporation, shall be appropriately adjusted in 
                        accordance with regulations prescribed by the 
                        Secretary.
                            ``(vi) As used in this subparagraph, the 
                        terms `shares' and `shareholders' shall include 
                        beneficial interests and holders of beneficial 
                        interests, respectively.''
    (b) Conforming Amendments.--
            (1) Clause (i) of section 857(b)(7)(A) is amended by 
        striking ``subparagraph (B)'' and inserting ``subparagraph (B) 
        or (D)''.
            (2) Clause (iii) of section 852(b)(3)(D) is amended by 
        striking ``by 65 percent'' and all that follows and inserting 
        ``by the difference between the amount of such includible gains 
        and the tax deemed paid by such shareholder in respect of such 
        shares under clause (ii).''

SEC. 14535. REPEAL OF 30-PERCENT GROSS INCOME REQUIREMENT.

    (a) General Rule.--Subsection (c) of section 856 (relating to 
limitations) is amended--
            (1) by adding ``and'' at the end of paragraph (3),
            (2) by striking paragraphs (4) and (8), and
            (3) by redesignating paragraphs (5), (6), and (7) as 
        paragraphs (4), (5), and (6), respectively.
    (b) Conforming Amendments.--
            (1) Subparagraph (G) of section 856(c)(5), as redesignated 
        by subsection (a), is amended by striking ``and such agreement 
        shall be treated as a security for purposes of paragraph 
        (4)(A)''.
            (2) Paragraph (5) of section 857(b) is amended by striking 
        ``section 856(c)(7)'' and inserting ``section 856(c)(6)''.
            (3) Subparagraph (C) of section 857(b)(6) is amended by 
        striking ``section 856(c)(6)(B)'' and inserting ``section 
        856(c)(5)(B)''.

SEC. 14536. MODIFICATION OF EARNINGS AND PROFITS RULES FOR DETERMINING 
              WHETHER REIT HAS EARNINGS AND PROFITS FROM NON-REIT YEAR.

    Subsection (d) of section 857 is amended by adding at the end the 
following new paragraph:
            ``(3) Distributions to meet requirements of subsection 
        (a)(2)(B).--Any distribution which is made in order to comply 
        with the requirements of subsection (a)(2)(B)--
                    ``(A) shall be treated for purposes of this 
                subsection and subsection (a)(2)(B) as made from the 
earliest accumulated earnings and profits (other than earnings and 
profits to which subsection (a)(2)(A) applies) rather than the most 
recently accumulated earnings and profits, and
                    ``(B) to the extent treated under subparagraph (A) 
                as made from accumulated earnings and profits, shall 
                not be treated as a distribution for purposes of 
                subsection (b)(2)(B).''

SEC. 14537. TREATMENT OF FORECLOSURE PROPERTY.

    (a) Grace Periods.--
            (1) Initial period.--Paragraph (2) of section 856(e) 
        (relating to special rules for foreclosure property) is amended 
        by striking ``on the date which is 2 years after the date the 
        trust acquired such property'' and inserting ``as of the close 
        of the 3d taxable year following the taxable year in which the 
        trust acquired such property''.
            (2) Extension.--Paragraph (3) of section 856(e) is 
        amended--
                    (A) by striking ``or more extensions'' and 
                inserting ``extension'', and
                    (B) by striking the last sentence and inserting: 
                ``Any such extension shall not extend the grace period 
                beyond the close of the 3d taxable year following the 
                last taxable year in the period under paragraph (2).''
    (b) Revocation of Election.--Paragraph (5) of section 856(e) is 
amended by striking the last sentence and inserting: ``A real estate 
investment trust may revoke any such election for a taxable year by 
filing the revocation (in the manner provided by the Secretary) on or 
before the due date (including any extension of time) for filing its 
return of tax under this chapter for the taxable year. If a trust 
revokes an election for any property, no election may be made by the 
trust under this paragraph with respect to the property for any 
subsequent taxable year.''
    (c) Certain Activities Not To Disqualify Property.--Paragraph (4) 
of section 856(e) is amended by adding at the end the following new 
flush sentence:
        ``For purposes of subparagraph (C), property shall not be 
        treated as used in a trade or business by reason of any 
        activities of the real estate investment trust with respect to 
        such property to the extent that such activities would not 
        result in amounts received or accrued, directly or indirectly, 
        with respect to such property being treated as other than rents 
        from real property.''

SEC. 14538. PAYMENTS UNDER HEDGING INSTRUMENTS.

    Section 856(c)(5)(G) (relating to treatment of certain interest 
rate agreements), as redesignated by section 14535, is amended to read 
as follows:
                    ``(G) Treatment of certain hedging instruments.--
                Except to the extent provided by regulations, any--
                            ``(i) payment to a real estate investment 
                        trust under an interest rate swap or cap 
                        agreement, option, futures contract, forward 
                        rate agreement, or any similar financial 
                        instrument, entered into by the trust in a 
                        transaction to reduce the interest rate risks 
                        with respect to any indebtedness incurred or to 
                        be incurred by the trust to acquire or carry 
                        real estate assets, and
                            ``(ii) gain from the sale or other 
                        disposition of any such investment,
                shall be treated as income qualifying under paragraph 
                (2).''

SEC. 14539. EXCESS NONCASH INCOME.

    Section 857(e)(2) (relating to determination of amount of excess 
noncash income) is amended--
            (1) by striking subparagraph (B),
            (2) by striking the period at the end of subparagraph (C) 
        and inserting a comma,
            (3) by redesignating subparagraph (C) (as amended by 
        paragraph (2)) as subparagraph (B), and
            (4) by adding at the end the following new subparagraphs:
                    ``(C) the amount (if any) by which--
                            ``(i) the amounts includible in gross 
                        income with respect to instruments to which 
                        section 860E(a) or 1272 applies, exceed
                            ``(ii) the amount of money and the fair 
                        market value of other property received during 
                        the taxable year under such instruments, and
                    ``(D) amounts includible in income by reason of 
                cancellation of indebtedness.''

SEC. 14540. PROHIBITED TRANSACTION SAFE HARBOR.

    Clause (iii) of section 857(b)(6)(C) (relating to certain sales not 
to constitute prohibited transactions) is amended by striking ``(other 
than foreclosure property)'' in subclauses (I) and (II) and inserting 
``(other than sales of foreclosure property or sales to which section 
1033 applies)''.

SEC. 14541. SHARED APPRECIATION MORTGAGES.

    (a) Bankruptcy Safe Harbor.--Section 856(j) (relating to treatment 
of shared appreciation mortgages) is amended by redesignating paragraph 
(4) as paragraph (5) and by inserting after paragraph (3) the following 
new paragraph:
            ``(4) Coordination with 4-year holding period.--
                    ``(A) In general.--For purposes of section 
                857(b)(6)(C), if a real estate investment trust is 
                treated as having sold secured property under paragraph 
                (3)(A), the trust shall be treated as having held such 
                property for at least 4 years if--
                            ``(i) the secured property is sold or 
                        otherwise disposed of pursuant to a case under 
                        title 11 of the United States Code,
                            ``(ii) the seller is under the jurisdiction 
                        of the court in such case, and
                            ``(iii) the disposition is required by the 
                        court or is pursuant to a plan approved by the 
                        court.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                if--
                            ``(i) the secured property was acquired by 
                        the trust with the intent to evict or 
                        foreclose, or
                            ``(ii) the trust knew or had reason to know 
                        that default on the obligation described in 
                        paragraph (5)(A) would occur.''
    (b) Clarification of Definition of Shared Appreciation Provision.--
Clause (ii) of section 856(j)(5)(A) is amended by inserting before the 
period ``or appreciation in value as of any specified date''.

SEC. 14542. WHOLLY OWNED SUBSIDIARIES.

    Section 856(i)(2) (defining qualified REIT subsidiary) is amended 
by striking ``at all times during the period such corporation was in 
existence''.

SEC. 14543. EFFECTIVE DATE.

    The amendments made by this part shall apply to taxable years 
beginning after the date of the enactment of this Act.

                     PART IV--ACCOUNTING PROVISIONS

SEC. 14551. MODIFICATIONS TO LOOK-BACK METHOD FOR LONG-TERM CONTRACTS.

    (a) Look-Back Method Not To Apply in Certain Cases.--Subsection (b) 
of section 460 (relating to percentage of completion method) is amended 
by adding at the end the following new paragraph:
            ``(6) Election to have look-back method not apply in de 
        minimis cases.--
                    ``(A) Amounts taken into account after completion 
                of contract.--Paragraph (1)(B) shall not apply with 
                respect to any taxable year (beginning after the 
                taxable year in which the contract is completed) if--
                            ``(i) the cumulative taxable income (or 
                        loss) under the contract as of the close of 
                        such taxable year, is within
                            ``(ii) 10 percent of the cumulative look-
                        back taxable income (or loss) under the 
                        contract as of the close of the most recent 
                        taxable year to which paragraph (1)(B) applied 
                        (or would have applied but for subparagraph 
                        (B)).
                    ``(B) De minimis discrepancies.--Paragraph (1)(B) 
                shall not apply in any case to which it would otherwise 
                apply if--
                            ``(i) the cumulative taxable income (or 
                        loss) under the contract as of the close of 
                        each prior contract year, is within
                            ``(ii) 10 percent of the cumulative look-
                        back income (or loss) under the contract as of 
                        the close of such prior contract year.
                    ``(C) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Contract year.--The term `contract 
                        year' means any taxable year for which income 
                        is taken into account under the contract.
                            ``(ii) Look-back income or loss.--The look-
                        back income (or loss) is the amount which would 
                        be the taxable income (or loss) under the 
                        contract if the allocation method set forth in 
                        paragraph (2)(A) were used in determining 
                        taxable income.
                            ``(iii) Discounting not applicable.--The 
                        amounts taken into account after the completion 
                        of the contract shall be determined without 
                        regard to any discounting under the 2nd 
                        sentence of paragraph (2).
                    ``(D) Contracts to which paragraph applies.--This 
                paragraph shall only apply if the taxpayer makes an 
                election under this subparagraph. Unless revoked with 
                the consent of the Secretary, such an election shall 
                apply to all long-term contracts completed during the 
                taxable year for which election is made or during any 
                subsequent taxable year.''
    (b) Modification of Interest Rate.--
            (1) In general.--Subparagraph (C) of section 460(b)(2) is 
        amended by striking ``the overpayment rate established by 
        section 6621'' and inserting ``the adjusted overpayment rate 
        (as defined in paragraph (7))''.
            (2) Adjusted overpayment rate.--Subsection (b) of section 
        460 is amended by adding at the end the following new 
        paragraph:
            ``(7) Adjusted overpayment rate.--
                    ``(A) In general.--The adjusted overpayment rate 
                for any interest accrual period is the overpayment rate 
                in effect under section 6621 for the calendar quarter 
                in which such interest accrual period begins.
                    ``(B) Interest accrual period.--For purposes of 
                subparagraph (A), the term `interest accrual period' 
                means the period--
                            ``(i) beginning on the day after the return 
                        due date for any taxable year of the taxpayer, 
                        and
                            ``(ii) ending on the return due date for 
                        the following taxable year.
                For purposes of the preceding sentence, the term 
                `return due date' means the date prescribed for filing 
                the return of the tax imposed by this chapter 
                (determined without regard to extensions).''
    (c) Effective Date.--The amendments made by this section shall 
apply to contracts completed in taxable years ending after the date of 
the enactment of this Act.

SEC. 14552. APPLICATION OF MARK TO MARKET ACCOUNTING METHOD TO TRADERS 
              IN SECURITIES.

    (a) In General.--Section 475 (relating to mark to market accounting 
method for dealers in securities) is amended by redesignating 
subsection (e) as subsection (f) and by inserting after subsection (d) 
the following new subsection:
    ``(e) Authority To Extend Method to Traders in Securities.--
            ``(1) In general.--A trader in securities may elect to have 
        the provisions of this section (other than subsection (d)(3)) 
        apply to securities held by the trader. Such election may be 
        made only with the consent of the Secretary.
            ``(2) Trader in securities.--For purposes of this 
        subsection, the term `trader in securities' means a taxpayer 
        who is regularly engaged in trading securities.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending on and after December 31, 1995.

SEC. 14553. MODIFICATION OF RULING AMOUNTS FOR NUCLEAR DECOMMISSIONING 
              COSTS.

    (a) In General.--Section 468A(d) (relating to ruling amount) is 
amended by adding at the end the following new paragraph:
                    ``(4) Nonsubstantial modifications.--A taxpayer may 
                modify a schedule of ruling amounts under paragraph (1) 
                without a review under paragraph (3) if such 
                modification does not substantially modify the ruling 
                amount. The taxpayer shall notify the Secretary of any 
                such modification.''
    (b) Effective Date.--The amendment made by this section shall apply 
to modifications after the date of the enactment of this Act.

SEC. 14554. ELECTION OF ALTERNATIVE TAXABLE YEARS BY PARTNERSHIPS AND S 
              CORPORATIONS.

    (a) Repeal of Limitation on What Taxable Year May Be Elected.--
            (1) In general.--Section 444(b) (relating to limitations on 
        taxable years which may be elected) is amended by adding at the 
        end the following new paragraph:
            ``(5) Limitations not to apply to certain partnerships and 
        s corporations.--
                    ``(A) In general.--In the case of a partnership or 
                an S corporation, this subsection shall not apply to an 
                election under subsection (a) for a taxable year 
                beginning after December 31, 1996.
                    ``(B) Special rule for existing elections.--
                            ``(i) In general.--If a partnership or S 
                        corporation has an election in effect for its 
                        last taxable year beginning before January 1, 
                        1997, the partnership or S corporation may 
                        elect to have this paragraph apply beginning 
                        with any taxable year beginning after December 
                        31, 1996. Such an election may be made without 
                        the consent of the Secretary and shall not be 
                        treated as a termination of an election for 
                        purposes of subsection (d).
                            ``(ii) Treatment of required payments.--A 
                        partnership or S corporation making an election 
                        under clause (i) may elect to have its net 
                        required payment balance (within the meaning of 
                        section 7519(e)(4))--
                                    ``(I) credited against its first 
                                estimated tax payment under section 
                                6654A for its first full taxable year 
                                for which such section applies, or
                                    ``(II) refunded to it at the time 
                                provided in section 7519(c)(3).''
            (2) Effect of election.--Paragraph (1) of section 444(c) 
        (relating to effect of election) is amended to read as follows:
            ``(1) in the case of a partnership or S corporation, such 
        entity shall--
                    ``(A) make the payments required by section 7519, 
                or
                    ``(B) if subsection (b)(5) applies to the election, 
                make the estimated tax payments described in section 
                6654A, and''.
    (b) Estimated Tax for Partnerships and S Corporations Making 
Taxable Year Elections.--Part I of subchapter A of chapter 68 (relating 
to additions to tax and additional amounts) is amended by inserting 
after section 6654 the following new section:

``SEC. 6654A. FAILURE BY ELECTING PARTNERSHIP OR S CORPORATION TO PAY 
              ESTIMATED TAX.

    ``(a) Penalty.--Except as otherwise provided in this section, in 
the case of a partnership or S corporation with respect to which an 
election to which section 444(b)(5) applies is in effect (hereafter 
referred to as `the entity'), there is hereby imposed a penalty for 
each quarter for which there is an underpayment in an amount determined 
by applying--
            ``(1) the underpayment rate established under section 6621,
            ``(2) to the amount of the underpayment,
            ``(3) for the period of the underpayment.
    ``(b) Amount of Underpayment; Period of Underpayment.--For purposes 
of subsection (a)--
            ``(1) Amount.--The amount of the underpayment shall be the 
        excess of--
                    ``(A) the required installment, over
                    ``(B) the amount (if any) of the installment paid 
                on or before the due date for the installment.
            ``(2) Period of underpayment.--The period of the 
        underpayment shall run from the due date for the installment to 
        the earlier of--
                    ``(A) the first April 15 more than 3 months after 
                the close of the taxable year, or
                    ``(B) with respect to any portion of the 
                underpayment, the date on which such portion is paid.
            ``(3) Order of crediting payments.--For purposes of 
        paragraph (2)(B), a payment of estimated tax shall be credited 
        against unpaid required installments in the order in which the 
        installments are required to be paid.
    ``(c) Required Installments.--For purposes of this section--
            ``(1) Number and dates.--An entity shall make 4 required 
        installments which shall be due on the 15th day of the 3d, 5th, 
        8th, and 12th months of the taxable year.
            ``(2) No required payments where entity's liability is less 
        than $5,000.--An entity shall not be required to make estimated 
        payments under this section for any taxable year for which (but 
        for this paragraph) its aggregate liability under this section 
        would be less than $5,000.
            ``(3) Amount.--The amount of each required installment 
        shall be 25 percent of the product of--
                    ``(A) the entity's applicable income determined 
                under its applicable method for the quarter for which 
                the installment is being made, and
                    ``(B) the applicable rate.
            ``(4) Applicable rate.--
                    ``(A) In general.--The term `applicable rate' means 
                34 percent (39.6 percent in the case of an entity 
                described in subparagraph (B)).
                    ``(B) High average income entity.--
                            ``(i) In general.--An entity is described 
                        in this subparagraph if--
                                    ``(I) the average applicable income 
                                of 2-percent owners of the entity for 
                                its base year is $250,000 or more, or
                                    ``(II) in the case of a 
                                partnership, its applicable income for 
                                the base year is $10,000,000 or more.
                        An entity shall not be treated as so described 
                        if it has no base year.
                            ``(ii) 2-percent owner.--The term `2-
                        percent owner' means--
                                    ``(I) in the case of a partnership, 
                                any person who owns (or is considered 
                                as owning within the meaning of section 
                                318) on any day during the base year 
                                more than 2 percent of the capital 
                                interests of the partnerships, and
                                    ``(II) in the case of an S 
                                corporation, a 2-percent shareholder 
                                (as defined in section 1372(b)).
            ``(5) Adjustments under annualized income method.--An 
        entity using the annualized income method shall adjust its 
        required installment for any quarter to reflect any change in 
        its required installment for any prior quarter in the taxable 
        year which would have been required if the annualized 
        applicable income for the current quarter had been used for the 
        prior quarter.
    ``(d) Applicable Method.--For purposes of this section--
            ``(1) In general.--An entity shall determine its applicable 
        income on the basis of the 100-percent method.
            ``(2) Exceptions.--
                    ``(A) Elections.--An entity may determine its 
                applicable income--
                            ``(i) for all quarters in a taxable year on 
                        the basis of the 110-percent method if it 
                        elects such method on or before the due date 
                        for the first quarterly installment, or
                            ``(ii) for any quarter in a taxable year on 
                        the basis of the annualized income method if it 
                        elects such method on or before the due date 
                        for the quarterly installment for such quarter.
                An election under clause (ii) shall apply for the 
                quarter for which made and all subsequent quarters 
                during the taxable year.
                    ``(B) Large increase in income.--If an entity's 
                applicable income for the taxable year exceeds its 
                applicable income for the base year by more than 
                $750,000, the entity may not use the 110-percent method 
                for the taxable year.
            ``(3) Methods.--
                    ``(A) 100-percent method.--Under the 100-percent 
                method, an entity's applicable income shall be its 
                applicable income for the taxable year.
                    ``(B) 110-percent method.--Under the 110-percent 
                method, an entity's applicable income shall be 110 
                percent of its applicable income for the base year.
                    ``(C) Annualized income method.--Under the 
                annualized income method, the entity's applicable 
                income for purposes of determining the required 
                installment for any quarter shall be an amount equal to 
                the product of--
                            ``(i) its applicable income for the period 
                        consisting of the months in the taxable year 
                        ending before the due date for the quarter, and
                            ``(ii) a percentage equal to 12 divided by 
                        the number of such months.
    ``(e) Applicable Income.--
            ``(1) In general.--For purposes of this section, the 
        applicable income for any taxable year shall be the net amount 
        (not less than zero) determined--
                    ``(A) by taking into account the entity's items in 
                the manner and with the exceptions provided in section 
                703(a) or 1363(b), as the case may be, and
                    ``(B) by making the further adjustments provided in 
                paragraphs (2), (3), (4), and (5) of this subsection.
            ``(2) Certain deductions allowed.--In determining 
        applicable income, the following amounts shall be allowed as 
        deductions:
                    ``(A) The deduction allowable under section 170 for 
                charitable contributions of the entity.
                    ``(B) The deduction allowable under section 901 for 
                taxes described in section 901(c) paid or accrued to 
                foreign countries or possessions of the United States.
            ``(3) Certain limitations disregarded.--For purposes of 
        paragraphs (1) and (2), any limitation on the amount of any 
        item which may be taken into account for purposes of computing 
        the taxable income of a partner or shareholder shall be 
        disregarded.
            ``(4) Guaranteed payments to partners not deducted.--In 
        determining applicable income, a guaranteed payment to a 
        partner shall not be treated as an item of deduction.
            ``(5) Disproportionate applicable payments during deferral 
        period.--
                    ``(A) Deduction not allowed.--In determining 
                applicable income, no deduction shall be allowed for 
                disproportionate deferral period applicable payments.
                    ``(B) Disproportionate deferral period applicable 
                payments.--For purposes of subparagraph (A), the term 
                `disproportionate deferral period applicable payments' 
                means the excess (if any) of--
                            ``(i) the product of the deferral ratio and 
                        the aggregate applicable payments made to 
                        owners during the entity's entire taxable year, 
                        over
                            ``(ii) the aggregate applicable payments 
                        made to owners during the deferral period.
                    ``(C) Definitions.--For purposes of this 
                paragraph--
                            ``(i) the term `applicable payments' has 
                        the meaning given to such term by section 
                        7519(d)(3), except that in the case of an S 
                        corporation only payments to 2-percent 
                        shareholders (as defined in section 1372(b)) 
                        shall be taken into account,
                            ``(ii) the term `deferral period' means the 
                        months in the period beginning with the first 
                        day of the entity's taxable year and ending on 
                        December 31, and
                            ``(iii) the term `deferral ratio' means the 
                        ratio which the number of months in the 
                        deferral period bears to the total number of 
                        months in the taxable year.
            ``(6) Special rule where c corporation for base year.--In 
        applying the 110-percent method, if an S corporation was a C 
        corporation for the base year, the S corporation's applicable 
        income shall be the taxable income of the C corporation for the 
        base year.
    ``(f) Coordination Between Entity and Owners.--
            ``(1) Treatment of payments of required installments.--
                    ``(A) In general.--For purposes of this title, an 
                owner in an entity shall be treated as having paid, for 
                the owner's first taxable year ending with or after the 
                close of the entity's taxable year, an amount of tax 
                imposed by section 1 equal to the owner's allocable 
                share of the entity's payments of required installments 
                under this section (determined without regard to excess 
                payments described in subparagraph (C)(ii)(II) or 
                amounts the entity is treated as paying under paragraph 
                (2)).
                    ``(B) Coordination with owner's estimated tax.--For 
                purposes of section 6654, an individual shall be 
                treated as having paid on the due date for the 
                estimated tax installment for each quarter of the 
                individual's taxable year described in subparagraph 
                (A)--
                            ``(i) except as provided in clause (ii), 25 
                        percent of the tax deemed paid under 
                        subparagraph (A), or
                            ``(ii) if the annualized income method was 
                        used by the entity for any quarter of the 
                        entity's taxable year described in subparagraph 
                        (A), an amount for the corresponding quarter in 
                        the individual's taxable year equal to the 
                        portion of such tax attributable to the 
                        individual's allocable share of the entity's 
                        applicable income for the entity's quarter.
                In no event shall the aggregate estimated tax payments 
                treated as paid under this subparagraph exceed the 
                amount of tax determined under subparagraph (A).
                    ``(C) Amounts determined on basis of return.--
                            ``(i) In general.--The determination of the 
                        amount of tax payments under subparagraph (A) 
                        shall be made on the basis of amounts shown on 
                        the entity's return for the taxable year.
                            ``(ii) Reconciliation of differences.--If, 
                        as of the first April 15 more than 3 months 
                        after the close of the entity's taxable year, 
                        the aggregate amounts paid as required 
                        installments under this section are less or 
                        more than the aggregate amounts described in 
                        clause (i) shown on the entity's return of tax 
                        for the taxable year, then--
                                    ``(I) subject to paragraph (2), 
                                there is hereby imposed on the entity 
                                under chapter 1 an additional tax equal 
                                to the amount of the shortfall, the due 
                                date for which is such April 15, or
                                    ``(II) the entity shall be treated 
                                as having made a payment of tax under 
                                chapter 1 on such April 15 in an amount 
                                equal to the excess.
            ``(2) Treatment of payments by owners.--For purposes of 
        subsection (b)(2)(B) and paragraph (1)(C), an entity shall be 
        treated as paying any portion of an underpayment attributable 
        to an owner's allocable share of applicable income at the time 
        the tax imposed by chapter 1 on the owner with respect to such 
        income is paid.
            ``(3) Allocable share.--For purposes of this subsection--
                    ``(A) In general.--An owner's allocable share of an 
                item for a taxable year shall be an amount which bears 
                the same ratio to the amount of such item as the 
                owner's applicable income for the taxable year bears to 
                the sum of the applicable incomes of all owners. For 
                purposes of this subparagraph, applicable income of an 
                owner shall be determined in the same manner as 
                subsection (e).
                    ``(B) Application other than on taxable year 
                basis.--If--
                            ``(i) the entity elects the annualized 
                        income method for any quarter, subparagraph (A) 
                        shall be applied on a quarter-by-quarter basis, 
                        or
                            ``(ii) there is an interim closing of the 
                        books of an entity under this title, 
                        subparagraph (A) shall be applied separately 
                        for the periods before and after the closing.
    ``(g) Special Rules for Short Year Created by Election.--
            ``(1) Additional required installment.--If, by reason of an 
        election under this section, an entity has a taxable year of 
        less than 12 months, the entity shall make a required 
        installment under this section for such taxable year--
                    ``(A) which shall be in an amount equal to the 
                applicable rate multiplied by the lesser of--
                            ``(i) the entity's applicable income for 
                        such taxable year as determined under 
                        subsection (e), or
                            ``(ii) 110 percent of the entity's 
                        applicable income for the base year (as so 
                        determined but ratably reduced to reflect the 
                        period of such taxable year), and
                    ``(B) the due date for which shall be the last day 
                for which an election under this section could be made 
                for the taxable year.
            ``(2) Treatment of losses.--Any net operating loss arising 
        in the taxable year described in paragraph (1) shall be treated 
        as arising one-third in such taxable year and each of the 2 
        following taxable years. This paragraph shall not apply to an 
        entity not in existence before such taxable year unless more 
        than one-half of the equity interests in the entity are held by 
        persons who owned another entity carrying on the same business 
        before such taxable year.
    ``(h) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Base year.--The term `base year' means the most 
        recent preceding taxable year containing 12 months.
            ``(2) Equity interest.--The term `equity interest' means--
                    ``(A) in the case of a partnership, the capital 
                interests, and
                    ``(B) in the case of an S corporation, the shares 
                of stock in the corporation (whether voting or 
                nonvoting).
            ``(3) Owner.--The term `owner' means a partner in a 
        partnership or a shareholder in an S corporation, whichever is 
        applicable.
            ``(4) Common control.--
                    ``(A) In general.--For purposes of subsections 
                (c)(2), (c)(4)(B), and (d)(2)(B), entities under common 
                control shall be treated as 1 entity.
                    ``(B) Common control.--Entities shall be treated as 
                under common control under subparagraph (A) if they are 
                treated as a single employee under subsection (a) or 
                (b) of section 52.
            ``(5) Waiver.--No penalty shall be imposed under subsection 
        (a) with respect to any underpayment to the extent the 
        Secretary determines that by reason of casualty, disaster, or 
        other unusual circumstances the imposition of the penalty would 
        be against equity and good conscience.''
    (c) Modification of Elections.--
            (1) Time for making.--Paragraph (1) of section 444(d) is 
        amended by adding at the end the following new sentence: ``Such 
        election may be made at any time on or before the 15th day of 
        the 3d month of the first taxable year of 12 months under the 
        election.''
            (2) Terminations.--Paragraph (2) of section 444(d) is 
        amended by striking subparagraph (B) and inserting:
                    ``(B) Terminations.--
                            ``(i) Revocation.--An election under 
                        subsection (a) may be terminated by revocation 
                        but only if owners of more than one-half of the 
                        equity interests in the entity on the date of 
                        the revocation consent to it.
                            ``(ii) Entity terminations.--In the case of 
                        a partnership or S corporation, an election 
                        under subsection (a) terminates when the 
                        partnership terminates under section 708(b)(1) 
                        or the corporation ceases to be an S 
                        corporation.
                    ``(C) Subsequent elections.--If an election under 
                subsection (a) has been terminated, no such election 
                may be made with respect to such entity or any 
                successor entity for any taxable year before its 5th 
                taxable year beginning after the 1st taxable year for 
                which the termination was effective, unless the 
                Secretary consents to the election.''
    (d) Conforming Amendments.--
            (1) Section 6665(b) is amended--
                    (A) by inserting ``6654A,'' after ``6654,'', and
                    (B) by striking ``6654 or'' and inserting ``6654, 
                6654A, or''.
            (2) The table of sections for part I of subchapter A of 
        chapter 68 is amended by inserting after the item relating to 
        section 6654 the following new item:

                              ``Sec. 6654A. Failure by electing 
                                        partnership or S corporation to 
                                        pay estimated tax.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 14555. SPECIAL RULE FOR CROP INSURANCE PROCEEDS AND DISASTER 
              PAYMENTS.

    (a) In General.--Section 451(d) of the Internal Revenue Code of 
1986 (relating to special rule for crop insurance proceeds and disaster 
payments) is amended to read as follows:
    ``(d) Special Rule for Crop Insurance Proceeds and Disaster 
Payments.--
            ``(1) General rule.--In the case of any payment described 
        in paragraph (2), a taxpayer reporting on the cash receipts and 
        disbursements method of accounting--
                    ``(A) may elect to treat any such payment received 
                in the taxable year of destruction or damage of crops 
                as having been received in the following taxable year 
                if the taxpayer establishes that, under the taxpayer's 
                practice, income from such crops involved would have 
                been reported in a following taxable year, or
                    ``(B) may elect to treat any such payment received 
                in a taxable year following the taxable year of the 
                destruction or damage of crops as having been received 
                in the taxable year of destruction or damage, if the 
                taxpayer establishes that, under the taxpayer's 
                practice, income from such crops involved would have 
                been reported in the taxable year of destruction or 
                damage.
            ``(2) Payments described.--For purposes of this subsection, 
        a payment is described in this paragraph if such payment--
                    ``(A) is insurance proceeds received on account of 
                destruction or damage to crops, or
                    ``(B) is disaster assistance received under any 
                Federal law as a result of--
                            ``(i) destruction or damage to crops caused 
                        by drought, flood, or other natural disaster, 
                        or
                            ``(ii) inability to plant crops because of 
                        such a disaster.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to payments received after December 31, 1995, as a result of 
destruction or damage occurring after such date.

                   PART V--TAX-EXEMPT BOND PROVISIONS

SEC. 14561. REPEAL OF $100,000 LIMITATION ON UNSPENT PROCEEDS UNDER 1-
              YEAR EXCEPTION FROM REBATE.

    Subclause (I) of section 148(f)(4)(B)(ii) (relating to additional 
period for certain bonds) is amended by striking ``the lesser of 5 
percent of the proceeds of the issue or $100,000'' and inserting ``5 
percent of the proceeds of the issue''.

SEC. 14562. EXCEPTION FROM REBATE FOR EARNINGS ON BONA FIDE DEBT 
              SERVICE FUND UNDER CONSTRUCTION BOND RULES.

    Subparagraph (C) of section 148(f)(4) is amended by adding at the 
end the following new clause:
                            ``(xvii) Treatment of bona fide debt 
                        service funds.--If the spending requirements of 
                        clause (ii) are met with respect to the 
                        available construction proceeds of a 
                        construction issue, then paragraph (2) shall 
                        not apply to earnings on a bona fide debt 
                        service fund for such issue.''

SEC. 14563. REPEAL OF DEBT SERVICE-BASED LIMITATION ON INVESTMENT IN 
              CERTAIN NONPURPOSE INVESTMENTS.

    Subsection (d) of section 148 (relating to special rules for 
reasonably required reserve or replacement fund) is amended by striking 
paragraph (3).

SEC. 14564. REPEAL OF EXPIRED PROVISIONS.

    (a) Paragraph (2) of section 148(c) is amended by striking 
subparagraph (B) and by redesignating subparagraphs (C), (D), and (E) 
as subparagraphs (B), (C), and (D), respectively.
    (b) Paragraph (4) of section 148(f) is amended by striking 
subparagraph (E).

SEC. 14565. EFFECTIVE DATES.

    The amendments made by this part shall apply to bonds issued after 
the date of the enactment of this Act.

                     PART VI--INSURANCE PROVISIONS

SEC. 14571. TREATMENT OF CERTAIN INSURANCE CONTRACTS ON RETIRED LIVES.

    (a) General Rule.--
            (1) Paragraph (2) of section 817(d) (defining variable 
        contract) is amended by striking ``or'' at the end of 
        subparagraph (A), by striking ``and'' at the end of 
        subparagraph (B) and inserting ``or'', and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) provides for funding of insurance on retired 
                lives as described in section 807(c)(6), and''.
            (2) Paragraph (3) of section 817(d) is amended by striking 
        ``or'' at the end of subparagraph (A), by striking the period 
        at the end of subparagraph (B) and inserting ``, or'', and by 
        inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) in the case of funds held under a contract 
                described in paragraph (2)(C), the amounts paid in, or 
                the amounts paid out, reflect the investment return and 
                the market value of the segregated asset account.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14572. TREATMENT OF MODIFIED GUARANTEED CONTRACTS.

    (a) General Rule.--Subpart E of part I of subchapter L of chapter 1 
(relating to definitions and special rules) is amended by inserting 
after section 817 the following new section:

``SEC. 817A. SPECIAL RULES FOR MODIFIED GUARANTEED CONTRACTS.

    ``(a) Computation of Reserves.--In the case of a modified 
guaranteed contract, clause (ii) of section 807(e)(1)(A) shall not 
apply.
    ``(b) Segregated Assets Under Modified Guaranteed Contracts Marked 
to Market.--
            ``(1) In general.--In the case of any life insurance 
        company, for purposes of this subtitle--
                    ``(A) Any gain or loss with respect to a segregated 
                asset shall be treated as ordinary income or loss, as 
                the case may be.
                    ``(B) If any segregated asset is held by such 
                company as of the close of any taxable year--
                            ``(i) such company shall recognize gain or 
                        loss as if such asset were sold for its fair 
                        market value on the last business day of such 
                        taxable year, and
                            ``(ii) any such gain or loss shall be taken 
                        into account for such taxable year.
                Proper adjustment shall be made in the amount of any 
                gain or loss subsequently realized for gain or loss 
                taken into account under the preceding sentence. The 
                Secretary may provide by regulations for the 
                application of this subparagraph at times other than 
                the times provided in this subparagraph.
            ``(2) Segregated asset.--For purposes of paragraph (1), the 
        term `segregated asset' means any asset held as part of a 
        segregated account referred to in subsection (d)(1) under a 
        modified guaranteed contract.
    ``(c) Special Rule in Computing Life Insurance Reserves.--For 
purposes of applying section 816(b)(1)(A) to any modified guaranteed 
contract, an assumed rate of interest shall include a rate of interest 
determined, from time to time, with reference to a market rate of 
interest.
    ``(d) Modified Guaranteed Contract Defined.--For purposes of this 
section, the term `modified guaranteed contract' means a contract not 
described in section 817--
            ``(1) all or part of the amounts received under which are 
        allocated to an account which, pursuant to State law or 
        regulation, is segregated from the general asset accounts of 
        the company and is valued from time to time with reference to 
        market values,
            ``(2) which--
                    ``(A) provides for the payment of annuities,
                    ``(B) is a life insurance contract, or
                    ``(C) is a pension plan contract which is not a 
                life, accident, or health, property, casualty, or 
                liability contract,
            ``(3) for which reserves are valued at market for annual 
        statement purposes, and
            ``(4) which provides for a net surrender value or a 
        policyholder's fund (as defined in section 807(e)(1)).
If only a portion of a contract is not described in section 817, such 
portion shall be treated for purposes of this section as a separate 
contract.
    ``(e) Regulations.--The Secretary may prescribe regulations--
            ``(1) to provide for the treatment of market value 
        adjustments under sections 72, 7702, 7702A, and 807(e)(1)(B),
            ``(2) to determine the interest rates applicable under 
        sections 807(c)(3), 807(d)(2)(B), and 812 with respect to a 
        modified guaranteed contract annually, in a manner appropriate 
        for modified guaranteed contracts and, to the extent 
        appropriate for such a contract, to modify or waive the 
        applicability of section 811(d),
            ``(3) to provide rules to limit ordinary gain or loss 
        treatment to assets constituting reserves for modified 
        guaranteed contracts (and not other assets) of the company,
            ``(4) to provide appropriate treatment of transfers of 
        assets to and from the segregated account, and
            ``(5) as may be necessary or appropriate to carry out the 
        purposes of this section.''
    (b) Clerical Amendment.--The table of sections for subpart E of 
part I of subchapter L of chapter 1 is amended by inserting after the 
item relating to section 817 the following new item:

                              ``Sec. 817A. Special rules for modified 
                                        guaranteed contracts.''
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 1995.
            (2) Treatment of net adjustments.--In the case of any 
        taxpayer required by the amendments made by this section to 
        change its calculation of reserves to take into account market 
        value adjustments and to mark segregated assets to market for 
        any taxable year--
                    (A) such changes shall be treated as a change in 
                method of accounting initiated by the taxpayer,
                    (B) such changes shall be treated as made with the 
                consent of the Secretary, and
                    (C) the adjustments required by reason of section 
                481 of the Internal Revenue Code of 1986 shall be taken 
                into account as ordinary income or loss by the taxpayer 
                for the taxpayer's first taxable year beginning after 
                December 31, 1995.

SEC. 14573. MINIMUM TAX TREATMENT OF CERTAIN PROPERTY AND CASUALTY 
              INSURANCE COMPANIES.

    (a) In General.--Clause (i) of section 56(g)(4)(B) (relating to 
inclusion of items included for purposes of computing earnings and 
profits) is amended by adding at the end the following new sentence: 
``In the case of any insurance company taxable under section 831(b), 
this clause shall not apply to any amount not described in section 
834(b).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1995.

                       PART VII--OTHER PROVISIONS

SEC. 14581. CLOSING OF PARTNERSHIP TAXABLE YEAR WITH RESPECT TO 
              DECEASED PARTNER, ETC.

    (a) General Rule.--Subparagraph (A) of section 706(c)(2) (relating 
to disposition of entire interest) is amended to read as follows:
                    ``(A) Disposition of entire interest.--The taxable 
                year of a partnership shall close with respect to a 
                partner whose entire interest in the partnership 
                terminates (whether by reason of death, liquidation, or 
                otherwise).''
    (b) Clerical Amendment.--The paragraph heading for paragraph (2) of 
section 706(c) is amended to read as follows:
            ``(2) Treatment of dispositions.--''.
    (c) Effective Date.--The amendments made by this section shall 
apply to partnership taxable years beginning after December 31, 1995.

SEC. 14582. CREDIT FOR SOCIAL SECURITY TAXES PAID WITH RESPECT TO 
              EMPLOYEE CASH TIPS.

    (a) Reporting Requirement Not Considered.--Subparagraph (A) of 
section 45B(b)(1) (relating to excess employer social security tax) is 
amended by inserting ``(without regard to whether such tips are 
reported under section 6053)'' after ``section 3121(q)''.
    (b) Taxes paid.--Subsection (d) of section 13443 of the Revenue 
Reconciliation Act of 1993 is amended by inserting ``, with respect to 
services performed before, on, or after such date'' after ``1993''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by, and the provisions of, 
section 13443 of the Revenue Reconciliation Act of 1993.

SEC. 14583. DUE DATE FOR FIRST QUARTER ESTIMATED TAX PAYMENTS BY 
              PRIVATE FOUNDATIONS.

    (a) In General.--Paragraph (3) of section 6655(g) is amended by 
inserting after subparagraph (C) the following new subparagraph:
                    ``(D) In the case of any private foundation, 
                subsection (c)(2) shall be applied by substituting `May 
                15' for `April 15' ''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1995.

SEC. 14584. TREATMENT OF DUES PAID TO AGRICULTURAL OR HORTICULTURAL 
              ORGANIZATIONS.

    (a) General Rule.--Section 512 (defining unrelated business taxable 
income) is amended by adding at the end thereof the following new 
subsection:
    ``(d) Treatment of Dues of Agricultural or Horticultural 
Organizations.--
            ``(1) In general.--If--
                    ``(A) an agricultural or horticultural organization 
                described in section 501(c)(5) requires annual dues to 
                be paid in order to be a member of such organization, 
                and
                    ``(B) the amount of such required annual dues does 
                not exceed $100,
        in no event shall any portion of such dues be treated as 
        derived by such organization from an unrelated trade or 
        business by reason of any benefits or privileges to which 
        members of such organization are entitled.
            ``(2) Indexation of $100 amount.--In the case of any 
        taxable year beginning in a calendar year after 1995, the $100 
        amount in paragraph (1) shall be increased by an amount equal 
        to--
                    ``(A) $100, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                1994' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(3) Dues.--For purposes of this subsection, the term 
        `dues' includes any payment required to be made in order to be 
        recognized by the organization as a member of the 
        organization.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1994.

                     Subtitle F--Estates and Trusts

                     PART I--INCOME TAX PROVISIONS

SEC. 14601. CERTAIN REVOCABLE TRUSTS TREATED AS PART OF ESTATE.

    (a) In General.--Subpart A of part I of subchapter J (relating to 
estates, trusts, beneficiaries, and decedents) is amended by adding at 
the end the following new section:

``SEC. 646. CERTAIN REVOCABLE TRUSTS TREATED AS PART OF ESTATE.

    ``(a) General Rule.--For purposes of this subtitle, if both the 
executor of an estate and the trustee of a qualified revocable trust 
elect the treatment provided in this section, such trust shall be 
treated and taxed as part of such estate (and not as a separate trust) 
for all taxable years of the estate ending after the date of the 
decedent's death and before the applicable date.
    ``(b) Definitions.--For purposes of subsection (a)--
            ``(1) Qualified revocable trust.--The term `qualified 
        revocable trust' means any trust all of which was treated under 
        section 676 as owned by the decedent of the estate referred to 
        in subsection (a).
            ``(2) Applicable date.--The term `applicable date' means--
                    ``(A) if no return of tax imposed by chapter 11 is 
                required to be filed, the date which is 2 years after 
                the date of the decedent's death, and
                    ``(B) if such a return is required to be filed, the 
                date which is 6 months after the date of the final 
                determination of the liability for tax imposed by 
                chapter 11.
    ``(c) Election.--The election under subsection (a) shall be made 
not later than the time prescribed for filing the return of tax imposed 
by this chapter for the first taxable year of the estate (determined 
with regard to extensions) and, once made, shall be irrevocable.''
    (b) Comparable Treatment Under Generation-Skipping Tax.--Paragraph 
(1) of section 2652(b) is amended by adding at the end the following 
new sentence: ``Such term shall not include any trust during any period 
the trust is treated as part of an estate under section 646.''
    (c) Clerical Amendment.--The table of sections for such subpart A 
is amended by adding at the end the following new item:

                              ``Sec. 646. Certain revocable trusts 
                                        treated as part of estate.''
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to estates of decedents dying after the date of the 
enactment of this Act.

SEC. 14602. DISTRIBUTIONS DURING FIRST 65 DAYS OF TAXABLE YEAR OF 
              ESTATE.

    (a) In General.--Subsection (b) of section 663 (relating to 
distributions in first 65 days of taxable year) is amended by inserting 
``an estate or'' before ``a trust'' each place it appears.
    (b) Conforming Amendment.--Paragraph (2) of section 663(b) is 
amended by striking ``the fiduciary of such trust'' and inserting ``the 
executor of such estate or the fiduciary of such trust (as the case may 
be)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 14603. SEPARATE SHARE RULES AVAILABLE TO ESTATES.

    (a) In General.--Subsection (c) of section 663 (relating to 
separate shares treated as separate trusts) is amended--
            (1) by inserting before the last sentence the following new 
        sentence: ``Rules similar to the rules of the preceding 
        provisions of this subsection shall apply to treat 
        substantially separate and independent shares of different 
        beneficiaries in an estate having more than 1 beneficiary as 
        separate estates.'', and
            (2) by inserting ``or estates'' after ``trusts'' in the 
        last sentence.
    (b) Conforming Amendment.--The subsection heading of section 663(c) 
is amended by inserting ``Estates or'' before ``Trusts''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.

SEC. 14604. EXECUTOR OF ESTATE AND BENEFICIARIES TREATED AS RELATED 
              PERSONS FOR DISALLOWANCE OF LOSSES, ETC.

    (a) Disallowance of Losses.--Subsection (b) of section 267 
(relating to losses, expenses, and interest with respect to 
transactions between related taxpayers) is amended by striking ``or'' 
at the end of paragraph (11), by striking the period at the end of 
paragraph (12) and inserting ``; or'', and by adding at the end the 
following new paragraph:
            ``(13) Except in the case of a sale or exchange in 
        satisfaction of a pecuniary bequest, an executor of an estate 
        and a beneficiary of such estate.''
    (b) Ordinary Income From Gain From Sale of Depreciable Property.--
Subsection (b) of section 1239 is amended by striking the period at the 
end of paragraph (2) and inserting ``, and'' and by adding at the end 
the following new paragraph:
            ``(3) except in the case of a sale or exchange in 
        satisfaction of a pecuniary bequest, an executor of an estate 
        and a beneficiary of such estate.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 14605. LIMITATION ON TAXABLE YEAR OF ESTATES.

    (a) In General.--Section 645 (relating to taxable year of trusts) 
is amended to read as follows:

``SEC. 645. TAXABLE YEAR OF ESTATES AND TRUSTS.

    ``(a) Estates.--For purposes of this subtitle, the taxable year of 
an estate shall be a year ending on October 31, November 30, or 
December 31.
    ``(b) Trusts.--
            ``(1) In general.--For purposes of this subtitle, the 
        taxable year of any trust shall be the calendar year.
            ``(2) Exception for trusts exempt from tax and charitable 
        trusts.--Paragraph (1) shall not apply to a trust exempt from 
        taxation under section 501(a) or to a trust described in 
        section 4947(a)(1).''
    (b) Clerical Amendment.--The table of sections for subpart A of 
part I of subchapter J of chapter 1 is amended by striking the item 
relating to section 645 and inserting the following new item:

                              ``Sec. 645. Taxable year of estates and 
                                        trusts.''
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.

SEC. 14606. REPEAL OF CERTAIN THROWBACK RULES APPLICABLE TO DOMESTIC 
              TRUSTS.

    (a) Accumulation Distributions.--
            (1) In general.--Section 665 is amended by adding at the 
        end the following new subsection:
    ``(f) Accumulation Distributions After 1995.--For purposes of this 
subpart, in the case of a trust other than a foreign trust, any 
distribution in any taxable year beginning after December 31, 1995, 
shall be computed without regard to any undistributed net income.''
            (2) Conforming amendment.--Subsection (b) of section 665 is 
        amended by inserting ``except as provided in subsection (f),'' 
        after ``subpart,''
    (b) Property Transferred to Trusts.--Subsection (e) of section 644 
is amended by striking ``or'' at the end of paragraph (3), by striking 
the period at the end of paragraph (4) and inserting ``, or '', and by 
adding at the end the following new paragraph:
            ``(5) in the case of a trust other than a foreign trust, 
        any sale or exchange of property after December 31, 1995.''
    (c) Effective Dates.--
            (1) Accumulation distribution.--The amendments made by 
        subsection (a) shall apply to distributions in taxable years 
        beginning after December 31, 1995.
            (2) Transferred property.--The amendments made by 
        subsection (b) shall apply to sales or exchanges after December 
        31, 1995.

SEC. 14607. TREATMENT OF FUNERAL TRUSTS.

    (a) In General.--Subpart F of part I of subchapter J of chapter 1 
is amended by adding at the end the following new section:

``SEC. 684. TREATMENT OF FUNERAL TRUSTS.

    ``(a) In General.--In the case of a qualified funeral trust--
            ``(1) subparts B, C, D, and E shall not apply, and
            ``(2) no deduction shall be allowed by section 642(b).
    ``(b) Qualified Funeral Trust.--For purposes of this subsection, 
the term `qualified funeral trust' means any trust (other than a 
foreign trust) if--
            ``(1) the trust arises as a result of a contract with a 
        person engaged in the trade or business of providing funeral or 
        burial services or property necessary to provide such services,
            ``(2) the sole purpose of the trust is to hold, invest, and 
        reinvest funds in the trust and to use such funds solely to 
        make payments for such services or property for the benefit of 
        the beneficiaries of the trust,
            ``(3) the only beneficiaries of such trust are individuals 
        who have entered into contracts described in paragraph (1) to 
        have such services or property provided at their death,
            ``(4) the only contributions to the trust are contributions 
        by or for the benefit of such beneficiaries,
            ``(5) the trustee elects the application of this 
        subsection, and
            ``(6) the trust would (but for the election described in 
        paragraph (5)) be treated as owned by the beneficiaries under 
        subpart E.
    ``(c) Dollar Limitation on Contributions.--
            ``(1) In general.--The term `qualified funeral trust' shall 
        not include any trust which accepts contributions by or for the 
        benefit of an individual in excess of $5,000.
            ``(2) Related trusts.--For purposes of paragraph (1), all 
        trusts having trustees which are related persons shall be 
        treated as 1 trust. For purposes of the preceding sentence, 
        persons are related if--
                    ``(A) the relationship between such persons would 
                result in the disallowance of losses under section 267 
                or 707(b),
                    ``(B) such persons are treated as a single employer 
                under subsection (a) or (b) of section 52, or
                    ``(C) the Secretary determines that treating such 
                persons as related is necessary to prevent avoidance of 
                the purposes of this section.
            ``(3) Inflation adjustment.--In the case of any contract 
        referred to in subsection (b)(1) which is entered into during 
        any calendar year after 1996, the dollar amount referred to 
        paragraph (1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year, by 
                substituting `calendar year 1995' for `calendar year 
                1992' in subparagraph (B) thereof.
        If any dollar amount after being increased under the preceding 
        sentence is not a multiple of $100, such dollar amount shall be 
        rounded to the nearest multiple of $100.
    ``(d) Application of Rate Schedule.--Section 1(e) shall be applied 
to each qualified funeral trust by treating each beneficiary's interest 
in each such trust as a separate trust.
    ``(e) Treatment of Amounts Refunded to Beneficiary on 
Cancellation.--No gain or loss shall be recognized to a beneficiary 
described in subsection (b)(3) of any qualified funeral trust by reason 
of any payment from such trust to such beneficiary by reason of 
cancellation of a contract referred to in subsection (b)(1). If any 
payment referred to in the preceding sentence consists of property 
other than money, the basis of such property in the hands of such 
beneficiary shall be the same as the trust's basis in such property 
immediately before the payment.
    ``(f) Simplified Reporting.--The Secretary may prescribe rules for 
simplified reporting of all trusts having a single trustee.''
    (b) Clerical Amendment.--The table of sections for subpart F of 
part I of subchapter J of chapter 1 is amended by adding at the end the 
following new item:

                              ``Sec. 684. Treatment of funeral 
                                        trusts.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                PART II--ESTATE AND GIFT TAX PROVISIONS

SEC. 14611. CLARIFICATION OF WAIVER OF CERTAIN RIGHTS OF RECOVERY.

    (a) Amendment to Section 2207A.--Paragraph (2) of section 2207A(a) 
(relating to right of recovery in the case of certain marital deduction 
property) is amended to read as follows:
            ``(2) Decedent may otherwise direct.--Paragraph (1) shall 
        not apply with respect to any property to the extent that the 
        decedent in his will (or a revocable trust) specifically 
        indicates an intent to waive any right of recovery under this 
        subchapter with respect to such property.''
    (b) Amendment to Section 2207B.--Paragraph (2) of section 2207B(a) 
(relating to right of recovery where decedent retained interest) is 
amended to read as follows:
            ``(2) Decedent may otherwise direct.--Paragraph (1) shall 
        not apply with respect to any property to the extent that the 
        decedent in his will (or a revocable trust) specifically 
        indicates an intent to waive any right of recovery under this 
        subchapter with respect to such property.''
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to the estates of decedents dying after the date of 
the enactment of this Act.

SEC. 14612. ADJUSTMENTS FOR GIFTS WITHIN 3 YEARS OF DECEDENT'S DEATH.

    (a) General Rule.--Section 2035 is amended to read as follows:

``SEC. 2035. ADJUSTMENTS FOR CERTAIN GIFTS MADE WITHIN 3 YEARS OF 
              DECEDENT'S DEATH.

    ``(a) Inclusion of Certain Property in Gross Estate.--If--
            ``(1) the decedent made a transfer (by trust or otherwise) 
        of an interest in any property, or relinquished a power with 
        respect to any property, during the 3-year period ending on the 
        date of the decedent's death, and
            ``(2) the value of such property (or an interest therein) 
        would have been included in the decedent's gross estate under 
        section 2036, 2037, 2038, or 2042 if such transferred interest 
        or relinquished power had been retained by the decedent on the 
        date of his death,
the value of the gross estate shall include the value of any property 
(or interest therein) which would have been so included.
    ``(b) Inclusion of Gift Tax on Gifts Made During 3 Years Before 
Decedent's Death.--The amount of the gross estate (determined without 
regard to this subsection) shall be increased by the amount of any tax 
paid under chapter 12 by the decedent or his estate on any gift made by 
the decedent or his spouse during the 3-year period ending on the date 
of the decedent's death.
    ``(c) Other Rules Relating to Transfers Within 3 Years of Death.--
            ``(1) In general.--For purposes of--
                    ``(A) section 303(b) (relating to distributions in 
                redemption of stock to pay death taxes),
                    ``(B) section 2032A (relating to special valuation 
                of certain farms, etc., real property), and
                    ``(C) subchapter C of chapter 64 (relating to lien 
                for taxes),
        the value of the gross estate shall include the value of all 
        property to the extent of any interest therein of which the 
        decedent has at any time made a transfer, by trust or 
        otherwise, during the 3-year period ending on the date of the 
        decedent's death.
            ``(2) Coordination with section 6166.--An estate shall be 
        treated as meeting the 35 percent of adjusted gross estate 
        requirement of section 6166(a)(1) only if the estate meets such 
        requirement both with and without the application of paragraph 
        (1).
            ``(3) Marital and small transfers.--Paragraph (1) shall not 
        apply to any transfer (other than a transfer with respect to a 
        life insurance policy) made during a calendar year to any donee 
        if the decedent was not required by section 6019 (other than by 
        reason of section 6019(2)) to file any gift tax return for such 
        year with respect to transfers to such donee.
    ``(d) Exception.--Subsection (a) shall not apply to any bona fide 
sale for an adequate and full consideration in money or money's worth.
    ``(e) Treatment of Certain Transfers From Revocable Trusts.--For 
purposes of this section and section 2038, any transfer from any 
portion of a trust during any period that such portion was treated 
under section 676 as owned by the decedent shall be treated as a 
transfer made directly by the decedent.''
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter A of chapter 11 is amended by striking ``gifts'' in the item 
relating to section 2035 and inserting ``certain gifts''.
    (c) Effective Date.--The amendments made by this section shall 
apply to the estates of decedents dying after the date of the enactment 
of this Act.

SEC. 14613. CLARIFICATION OF QUALIFIED TERMINABLE INTEREST RULES.

    (a) General Rule.--
            (1) Estate tax.--Subparagraph (B) of section 2056(b)(7) 
        (defining qualified terminable interest property) is amended by 
        adding at the end the following new clause:
                            ``(vi) Treatment of certain income 
                        distributions.--An income interest shall not 
                        fail to qualify as a qualified income interest 
                        for life solely because income for the period 
                        after the last distribution date and on or 
                        before the date of the surviving spouse's death 
                        is not required to be distributed to the 
                        surviving spouse or to the estate of the 
                        surviving spouse.''
            (2) Gift tax.--Paragraph (3) of section 2523(f) is amended 
        by striking ``and (iv)'' and inserting ``(iv), and (vi)''.
    (b) Clarification of Subsequent Inclusions.--Section 2044 is 
amended by adding at the end the following new subsection:
    ``(d) Clarification of Inclusion of Certain Income.--The amount 
included in the gross estate under subsection (a) shall include the 
amount of any income from the property to which this section applies 
for the period after the last distribution date and on or before the 
date of the decedent's death if such income is not otherwise included 
in the decedent's gross estate.''
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply with respect to the estates of decedents dying, and gifts 
        made, after the date of the enactment of this Act.
            (2) Application of section 2044 to transfers before date of 
        enactment.--In the case of the estate of any decedent dying 
        after the date of the enactment of this Act, if there was a 
        transfer of property on or before such date--
                    (A) such property shall not be included in the 
                gross estate of the decedent under section 2044 of the 
                Internal Revenue Code of 1986 if no prior marital 
                deduction was allowed with respect to such a transfer 
                of such property to the decedent, but
                    (B) such property shall be so included if such a 
                deduction was allowed.

SEC. 14614. TRANSITIONAL RULE UNDER SECTION 2056A.

    (a) General Rule.--In the case of any trust created under an 
instrument executed before the date of the enactment of the Revenue 
Reconciliation Act of 1990, such trust shall be treated as meeting the 
requirements of paragraph (1) of section 2056A(a) of the Internal 
Revenue Code of 1986 if the trust instrument requires that all trustees 
of the trust be individual citizens of the United States or domestic 
corporations.
    (b) Effective Date.--The provisions of subsection (a) shall take 
effect as if included in the provisions of section 11702(g) of the 
Revenue Reconciliation Act of 1990.

SEC. 14615. OPPORTUNITY TO CORRECT CERTAIN FAILURES UNDER SECTION 
              2032A.

    (a) General Rule.--Paragraph (3) of section 2032A(d) (relating to 
modification of election and agreement to be permitted) is amended to 
read as follows:
            ``(3) Modification of election and agreement to be 
        permitted.--The Secretary shall prescribe procedures which 
        provide that in any case in which the executor makes an 
        election under paragraph (1) (and submits the agreement 
        referred to in paragraph (2)) within the time prescribed 
        therefor, but--
                    ``(A) the notice of election, as filed, does not 
                contain all required information, or
                    ``(B) signatures of 1 or more persons required to 
                enter into the agreement described in paragraph (2) are 
                not included on the agreement as filed, or the 
                agreement does not contain all required information,
        the executor will have a reasonable period of time (not 
        exceeding 90 days) after notification of such failures to 
        provide such information or signatures.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to the estates of decedents dying after the date of the enactment 
of this Act.

SEC. 14616. UNIFIED CREDIT OF DECEDENT INCREASED BY UNIFIED CREDIT OF 
              SPOUSE USED ON SPLIT GIFT INCLUDED IN DECEDENT'S GROSS 
              ESTATE.

    (a) In General.--Section 2010 (relating to unified credit against 
estate tax) is amended by adding at the end the following new 
subsection:
    ``(d) Treatment of Unified Credit Used By Spouse on Split-Gift 
Included in Decedent's Gross Estate.--If--
            ``(1) the decedent was the donor of any gift one-half of 
        which was considered under section 2513 as made by the 
        decedent's spouse, and
            ``(2) the amount of such gift is includible in the gross 
        estate of the decedent by reason of section 2035, 2036, 2037, 
        or 2038,
the amount of the credit allowable by subsection (a) to the estate of 
the decedent shall be increased by the amount of the unified credit 
allowed against the tax imposed by section 2501 on the amount of such 
gift considered under section 2513 as made by such spouse.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to gifts made after the date of the enactment of this Act.

SEC. 14617. REFORMATION OF DEFECTIVE BEQUESTS, ETC. TO SPOUSE OF 
              DECEDENT.

    (a) In General.--Subsection (b) of section 2056 (relating to 
bequests, etc., to surviving spouse) is amended by adding at the end 
the following new paragraph:
            ``(11) Reformations permitted.--
                    ``(A) In general.--In the case of any interest in 
                property with respect to which a deduction would be 
                allowable under subsection (a) but for a provision of 
                this subsection, if--
                            ``(i) the surviving spouse is entitled to 
                        all of the income from the property for life,
                            ``(ii) no person other than such spouse is 
                        entitled to any distribution of such property 
                        during such spouse's life, and
                            ``(iii) there is a change of a governing 
                        instrument (by reformation, amendment, 
                        construction, or otherwise) as of the 
                        applicable date which results in the 
                        satisfaction of the requirements of such 
                        provision as of the date of the decedent's 
                        death,
                the determination of whether such deduction is 
                allowable shall be made as of the applicable date.
                    ``(B) Special rule where timely commencement of 
                reformation.--Clauses (i) and (ii) of subparagraph (A) 
                shall not apply to any interest if, not later than the 
                date described in subparagraph (C)(i), a judicial 
                proceeding is commenced to change such interest into an 
                interest which satisfies the requirements of the 
                provision by reason of which (but for this paragraph) a 
                deduction would not be allowable under subsection (a) 
                for such interest.
                    ``(C) Applicable date.--For purposes of 
                subparagraph (A), the term `applicable date' means--
                            ``(i) the last date (including extensions) 
                        for filing the return of tax imposed by this 
                        chapter, or
                            ``(ii) if a judicial proceeding is 
                        commenced to comply with such provision, the 
                        time when the changes pursuant to such 
                        proceeding are made.
                    ``(D) Special rule.--If the change referred to in 
                subparagraph (A)(iii) is to qualify the passage of the 
                interest under paragraph (7), subparagraph (A) shall 
                apply only if the election under subparagraph (B) 
                thereof is made.
                    ``(E) Statute of limitations.--If a judicial 
                proceeding described in subparagraph (C)(ii) is 
                commenced with respect to any interest, the period for 
                assessing any deficiency of tax attributable to such 
                interest shall not expire before the date 1 year after 
                the date on which the Secretary is notified that such 
                provision has been complied with or that such 
                proceeding has been terminated.''
    (b) Comparable Rule for Gift Tax.--Section 2523 (relating to gift 
to spouse) is amended by adding at the end the following new 
subsection:
    ``(j) Reformations Permitted.--Rules similar to the rules of 
section 2056(b)(11) shall apply for purposes of this section.''
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying, and gifts made, after the date of 
the enactment of this Act.

SEC. 14618. GIFTS MAY NOT BE REVALUED FOR ESTATE TAX PURPOSES AFTER 
              EXPIRATION OF STATUTE OF LIMITATIONS.

    (a) In General.--Section 2001 (relating to imposition and rate of 
estate tax) is amended by adding at the end the following new 
subsection:
    ``(f) Valuation of Gifts.--If--
            ``(1) the time has expired within which a tax may be 
        assessed under chapter 12 (or under corresponding provisions of 
        prior laws) on the transfer of property by gift made during a 
        preceding calendar period (as defined in section 2502(b)), and
            ``(2) the value of such gift is shown on the return for 
        such preceding calendar period or is disclosed in such return, 
        or in a statement attached to the return, in a manner adequate 
        to apprise the Secretary of the nature of such gift,
the value of such gift shall, for purposes of computing the tax under 
this chapter, be the value of such gift as finally determined for 
purposes of chapter 12.''
    (b) Modification of Application of Statute of Limitations.--
Paragraph (9) of section 6501(c) is amended to read as follows:
            ``(9) Gift tax on certain gifts not shown on return.--If 
        any gift of property the value of which (or any increase in 
        taxable gifts required under section 2701(d)) is required to be 
        shown on a return of tax imposed by chapter 12 (without regard 
        to section 2503(b)), and is not shown on such return, any tax 
        imposed by chapter 12 on such gift may be assessed, or a 
        proceeding in court for the collection of such tax may be begun 
        without assessment, at any time. The preceding sentence shall 
        not apply to any item which is disclosed in such return, or in 
        a statement attached to the return, in a manner adequate to 
        apprise the Secretary of the nature of such item. The value of 
        any item which is so disclosed may not be redetermined by the 
        Secretary after the expiration of the period under subsection 
        (a).''
    (c) Declaratory Judgment Procedure for Determining Value of Gift.--
            (1) In general.--Part IV of subchapter C of chapter 76 is 
        amended by inserting after section 7476 the following new 
        section:

``SEC. 7477. DECLARATORY JUDGMENTS RELATING TO VALUE OF CERTAIN GIFTS.

    ``(a) Creation of Remedy.--In a case of an actual controversy 
involving a determination by the Secretary of the value of any gift 
shown on the return of tax imposed by chapter 12 or disclosed on such 
return or in any statement attached to such return, upon the filing of 
an appropriate pleading, the Tax Court may make a declaration of the 
value of such gift. Any such declaration shall have the force and 
effect of a decision of the Tax Court and shall be reviewable as such.
    ``(b) Limitations.--
            ``(1) Petitioner.--A pleading may be filed under this 
        section only by the donor.
            ``(2) Exhaustion of administrative remedies.--The court 
        shall not issue a declaratory judgment or decree under this 
        section in any proceeding unless it determines that the 
        petitioner has exhausted all available administrative remedies 
        within the Internal Revenue Service.
            ``(3) Time for bringing action.--If the Secretary sends by 
        certified or registered mail notice of his determination as 
        described in subsection (a) to the petitioner, no proceeding 
        may be initiated under this section unless the pleading is 
        filed before the 91st day after the date of such mailing.''
            (2) Clerical amendment.--The table of sections for such 
        part IV is amended by inserting after the item relating to 
        section 7476 the following new item:

                              ``Sec. 7477. Declaratory judgments 
                                        relating to value of certain 
                                        gifts.''
    (d) Conforming Amendment.--Subsection (c) of section 2504 is 
amended by striking ``, and if a tax under this chapter or under 
corresponding provisions of prior laws has been assessed or paid for 
such preceding calendar period''.
    (e) Effective Dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (c) shall apply to gifts made after the date of the enactment 
        of this Act.
            (2) Subsection (b).--The amendment made by subsection (b) 
        shall apply to gifts made in calendar years ending after the 
        date of the enactment of this Act.

SEC. 14619. CLARIFICATIONS RELATING TO DISCLAIMERS.

    (a) Partial Transfer-Type Disclaimers Permitted.--Paragraph (3) of 
section 2518(c) (relating to certain transfers treated as disclaimers) 
is amended by inserting ``(or an undivided portion of such interest)'' 
after ``entire interest in the property''.
    (b) Retention of Interest by Decedent's Spouse Permitted in 
Transfer-Type Disclaimers.--Paragraph (3) of section 2518(c) is amended 
by adding at the end the following new flush sentence:
        ``For purposes of the preceding sentence, a written transfer by 
        the spouse of the decedent of property to a trust shall not 
        fail to be treated as a transfer of such spouse's interest in 
        such property by reason of such spouse having an interest in 
        such trust.''
    (c) Disclaimers Are Effective For Income Tax Purposes.--Subsection 
(a) of section 2518 is amended by inserting ``and subtitle A'' after 
``this subtitle'' each place it appears.
    (d) Effective Date.--The amendments made by this section shall 
apply to transfers creating an interest in the person disclaiming, and 
disclaimers, made after the date of the enactment of this Act.

SEC. 14620. CLARIFICATION OF TREATMENT OF SURVIVOR ANNUITIES UNDER 
              QUALIFIED TERMINABLE INTEREST RULES.

    (a) In General.--Subparagraph (C) of section 2056(b)(7) is amended 
by inserting ``(or, in the case of an interest in an annuity arising 
under the community property laws of a State, included in the gross 
estate of the decedent under section 2033)'' after ``section 2039''.
    (b) Effective Date.--The amendment made by this section shall apply 
to estates of decedents dying after the date of the enactment of this 
Act.

SEC. 14621. TREATMENT UNDER QUALIFIED DOMESTIC TRUST RULES OF FORMS OF 
              OWNERSHIP WHICH ARE NOT TRUSTS.

    (a) In General.--Subsection (c) of section 2056A (defining 
qualified domestic trust) is amended by adding at the end the following 
new paragraph:
            ``(3) Trust.--To the extent provided in regulations 
        prescribed by the Secretary, the term `trust' includes other 
        arrangements which have substantially the same effect as a 
        trust.''
    (b) Effective Date.--The amendment made by this section shall apply 
to estates of decedents dying after the date of the enactment of this 
Act.

SEC. 14622. AUTHORITY TO WAIVE REQUIREMENT OF UNITED STATES TRUSTEE FOR 
              QUALIFIED DOMESTIC TRUSTS.

    (a) In General.--Subparagraph (A) of section 2056A(a)(1) is amended 
by inserting ``except as provided in regulations prescribed by the 
Secretary,'' before ``requires''.
    (b) Effective Date.--The amendment made by this section shall apply 
to estates of decedents dying after the date of the enactment of this 
Act.

              PART III--GENERATION-SKIPPING TAX PROVISIONS

SEC. 14631. SEVERING OF TRUSTS HOLDING PROPERTY HAVING AN INCLUSION 
              RATIO OF GREATER THAN ZERO.

    (a) In General.--Subsection (a) of section 2642 (relating to 
inclusion ratio) is amended by adding at the end the following new 
paragraph:
            ``(3) Severing of trusts holding property having an 
        inclusion ratio of greater than zero.--
                    ``(A) In general.--If a trust holding property 
                having an inclusion ratio of greater than zero is 
                severed in a qualified severance, at the election of 
                the trustee of such trust, the trusts resulting from 
                such severance shall be treated as separate trusts for 
                purposes of this chapter.
                    ``(B) Qualified severance.--For purposes of 
                subparagraph (A), the term `qualified severance' means 
                the creation of 2 trusts from a single trust if each 
                property held by the single trust was divided between 
                the 2 created trusts such that one trust received an 
                interest in each such property equal to the applicable 
                fraction of the single trust. Such term includes any 
                other severance permitted under regulations prescribed 
                by the Secretary.
                    ``(C) Election.--The election under this paragraph 
                shall be made at the time prescribed by the Secretary. 
                Such an election, once made, shall be irrevocable.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to severances after the date of the enactment of this Act.

SEC. 14632. CLARIFICATION OF WHO IS TRANSFEROR WHERE SUBSEQUENT GIFT BY 
              REASON OF POWER OF APPOINTMENT.

    (a) In General.--Paragraph (1) of section 2652(a) (defining 
transferor) is amended by adding at the end the following new sentence: 
``A transferor described in subparagraph (A) shall not be treated as 
the transferor of any property if another individual is treated as the 
transferor of such property under subparagraph (B) by reason of the 
exercise, release, or lapse of a general power of appointment with 
respect to such property.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to the exercise, release, or lapse of a general power of 
appointment after the date of the enactment of this Act.

SEC. 14633. TAXABLE TERMINATION NOT TO INCLUDE DIRECT SKIPS.

    (a) In General.--Paragraph (1) of section 2612(a) (defining taxable 
termination) is amended by adding at the end the following new flush 
sentence:
        ``Such term shall not include a direct skip.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to generation-skipping transfers (as defined in section 2611 of 
the Internal Revenue Code of 1986) after the date of the enactment of 
this Act.

SEC. 14634. EXPANSION OF EXCEPTION FROM GENERATION-SKIPPING TRANSFER 
              TAX FOR TRANSFERS TO INDIVIDUALS WITH DECEASED PARENTS.

    (a) In General.--Section 2651 (relating to generation assignment) 
is amended by redesignating subsection (e) as subsection (f), and by 
inserting after subsection (d) the following new subsection:
    ``(e) Special Rule for Persons With a Deceased Parent.--
            ``(1) In general.--For purposes of determining whether any 
        transfer is a generation-skipping transfer, if--
                    ``(A) an individual is a descendant of a parent of 
                the transferor (or the transferor's spouse or former 
                spouse), and
                    ``(B) such individual's parent who is a lineal 
                descendant of the parent of the transferor (or the 
                transferor's spouse or former spouse) is dead at the 
                time the transfer (from which an interest of such 
                individual is established or derived) is subject to a 
                tax imposed by chapter 11 or 12 upon the transferor 
                (and if there shall be more than 1 such time, then at 
                the earliest such time),
        such individual shall be treated as if such individual were a 
        member of the generation which is 1 generation below the lower 
        of the transferor's generation or the generation assignment of 
        the youngest living ancestor of such individual who is also a 
        descendant of the parent of the transferor (or the transferor's 
        spouse or former spouse), and the generation assignment of any 
        descendant of such individual shall be adjusted accordingly.
            ``(2) Limited application of subsection to collateral 
        heirs.--This subsection shall not apply with respect to a 
        transfer to any individual who is not a lineal descendant of 
        the transferor (or the transferor's spouse or former spouse) 
        if, at the time of the transfer, such transferor has any living 
        lineal descendant.''
    (b) Conforming Amendments.--
            (1) Section 2612(c) (defining direct skip) is amended by 
        striking paragraph (2) and by redesignating paragraph (3) as 
        paragraph (2).
            (2) Section 2612(c)(2) (as so redesignated) is amended by 
        striking ``section 2651(e)(2)'' and inserting ``section 
        2651(f)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to terminations, distributions, and transfers occurring after the 
date of the enactment of this Act.

                 Subtitle G--Excise Tax Simplification

    PART I--PROVISIONS RELATED TO DISTILLED SPIRITS, WINES, AND BEER

SEC. 14701. CREDIT OR REFUND FOR IMPORTED BOTTLED DISTILLED SPIRITS 
              RETURNED TO DISTILLED SPIRITS PLANT.

    (a) In General.--Paragraph (1) of section 5008(c) (relating to 
distilled spirits returned to bonded premises) is amended by striking 
``withdrawn from bonded premises on payment or determination of tax'' 
and inserting ``on which tax has been determined or paid''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14702. AUTHORITY TO CANCEL OR CREDIT EXPORT BONDS WITHOUT 
              SUBMISSION OF RECORDS.

    (a) In General.--Subsection (c) of section 5175 (relating to export 
bonds) is amended by striking ``on the submission of'' and all that 
follows and inserting ``if there is such proof of exportation as the 
Secretary may by regulations require.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14703. REPEAL OF REQUIRED MAINTENANCE OF RECORDS ON PREMISES OF 
              DISTILLED SPIRITS PLANT.

    (a) In General.--Subsection (c) of section 5207 (relating to 
records and reports) is amended by striking ``shall be kept on the 
premises where the operations covered by the record are carried on 
and''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14704. FERMENTED MATERIAL FROM ANY BREWERY MAY BE RECEIVED AT A 
              DISTILLED SPIRITS PLANT.

    (a) In General.--Paragraph (2) of section 5222(b) (relating to 
production, receipt, removal, and use of distilling materials) is 
amended to read as follows:
            ``(2) beer conveyed without payment of tax from brewery 
        premises, beer which has been lawfully removed from brewery 
        premises upon determination of tax, or''.
    (b) Clarification of Authority To Permit Removal of Beer Without 
Payment of Tax for Use as Distilling Material.--Section 5053 (relating 
to exemptions) is amended by redesignating subsection (f) as subsection 
(i) and by inserting after subsection (e) the following new subsection:
    ``(f) Removal for Use as Distilling Material.--Subject to such 
regulations as the Secretary may prescribe, beer may be removed from a 
brewery without payment of tax to any distilled spirits plant for use 
as distilling material.''
    (c) Clarification of Refund and Credit of Tax.--Section 5056 
(relating to refund and credit of tax, or relief from liability) is 
amended--
            (1) by redesignating subsection (c) as subsection (d) and 
        by inserting after subsection (b) the following new subsection:
    ``(c) Beer Received at a Distilled Spirits Plant.--Any tax paid by 
any brewer on beer produced in the United States may be refunded or 
credited to the brewer, without interest, or if the tax has not been 
paid, the brewer may be relieved of liability therefor, under 
regulations as the Secretary may prescribe, if such beer is received on 
the bonded premises of a distilled spirits plant pursuant to the 
provisions of section 5222(b)(2), for use in the production of 
distilled spirits.'', and
            (2) by striking ``or rendering unmerchantable'' in 
        subsection (d) (as so redesignated) and inserting ``rendering 
        unmerchantable, or receipt on the bonded premises of a 
        distilled spirits plant''.
    (d) Effective Date.--The amendments made by this section shall take 
effect at the beginning of the first calendar quarter beginning more 
than 180 days after the date of the enactment of this Act.

SEC. 14705. REPEAL OF REQUIREMENT FOR WHOLESALE DEALERS IN LIQUORS TO 
              POST SIGN.

    (a) In General.--Section 5115 (relating to sign required on 
premises) is hereby repealed.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 5681 is amended by striking 
        ``, and every wholesale dealer in liquors,'' and by striking 
        ``section 5115(a) or''.
            (2) Subsection (c) of section 5681 is amended--
                    (A) by striking ``or wholesale liquor 
                establishment, on which no sign required by section 
                5115(a) or'' and inserting ``on which no sign required 
                by'', and
                    (B) by striking ``or wholesale liquor 
                establishment, or who'' and inserting ``or who''.
            (3) The table of sections for subpart D of part II of 
        subchapter A of chapter 51 is amended by striking the item 
        relating to section 5115.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 14706. REFUND OF TAX ON WINE RETURNED TO BOND NOT LIMITED TO 
              UNMERCHANTABLE WINE.

    (a) In General.--Subsection (a) of section 5044 (relating to refund 
of tax on unmerchantable wine) is amended by striking ``as 
unmerchantable''.
    (b) Conforming Amendments.--
            (1) Section 5361 is amended by striking ``unmerchantable''.
            (2) The section heading for section 5044 is amended by 
        striking ``unmerchantable''.
            (3) The item relating to section 5044 in the table of 
        sections for subpart C of part I of subchapter A of chapter 51 
        is amended by striking ``unmerchantable''.
    (c) Effective Date.--The amendments made by this section shall take 
effect at the beginning of the first calendar quarter beginning more 
than 180 days after the date of the enactment of this Act.

SEC. 14707. USE OF ADDITIONAL AMELIORATING MATERIAL IN CERTAIN WINES.

    (a) In General.--Subparagraph (D) of section 5384(b)(2) (relating 
to ameliorated fruit and berry wines) is amended by striking 
``loganberries, currants, or gooseberries,'' and inserting ``any fruit 
or berry with a natural fixed acid of 20 parts per thousand or more 
(before any correction of such fruit or berry)''.
    (b) Effective Date.--The amendment made by this section shall take 
effect at the beginning of the first calendar quarter beginning more 
than 180 days after the date of the enactment of this Act.

SEC. 14708. DOMESTICALLY PRODUCED BEER MAY BE WITHDRAWN FREE OF TAX FOR 
              USE OF FOREIGN EMBASSIES, LEGATIONS, ETC.

    (a) In General.--Section 5053 (relating to exemptions) is amended 
by inserting after subsection (f) the following new subsection:
    ``(g) Removals for Use of Foreign Embassies, Legations, Etc.--
            ``(1) In general.--Subject to such regulations as the 
        Secretary may prescribe--
                    ``(A) beer may be withdrawn from the brewery 
                without payment of tax for transfer to any customs 
                bonded warehouse for entry pending withdrawal therefrom 
                as provided in subparagraph (B), and
                    ``(B) beer entered into any customs bonded 
                warehouse under subparagraph (A) may be withdrawn for 
                consumption in the United States by, and for the 
                official and family use of, such foreign governments, 
                organizations, and individuals as are entitled to 
                withdraw imported beer from such warehouses free of 
                tax.
        Beer transferred to any customs bonded warehouse under 
        subparagraph (A) shall be entered, stored, and accounted for in 
        such warehouse under such regulations and bonds as the 
        Secretary may prescribe, and may be withdrawn therefrom by such 
        governments, organizations, and individuals free of tax under 
        the same conditions and procedures as imported beer.
            ``(2) Other rules to apply.--Rules similar to the rules of 
        paragraphs (2) and (3) of section 5362(e) of such section shall 
        apply for purposes of this subsection.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14709. BEER MAY BE WITHDRAWN FREE OF TAX FOR DESTRUCTION.

    (a) In General.--Section 5053 is amended by inserting after 
subsection (g) the following new subsection:
    ``(h) Removals for Destruction.--Subject to such regulations as the 
Secretary may prescribe, beer may be removed from the brewery without 
payment of tax for destruction.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14710. AUTHORITY TO ALLOW DRAWBACK ON EXPORTED BEER WITHOUT 
              SUBMISSION OF RECORDS.

    (a) In General.--The first sentence of section 5055 (relating to 
drawback of tax on beer) is amended by striking ``found to have been 
paid'' and all that follows and inserting ``paid on such beer if there 
is such proof of exportation as the Secretary may by regulations 
require.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the beginning of the first calendar quarter beginning 
more than 180 days after the date of the enactment of this Act.

SEC. 14711. TRANSFER TO BREWERY OF BEER IMPORTED IN BULK WITHOUT 
              PAYMENT OF TAX.

    (a) In General.--Part II of subchapter G of chapter 51 is amended 
by adding at the end the following new section:

``SEC. 5418. BEER IMPORTED IN BULK.

    ``Beer imported or brought into the United States in bulk 
containers may, under such regulations as the Secretary may prescribe, 
be withdrawn from customs custody and transferred in such bulk 
containers to the premises of a brewery without payment of the internal 
revenue tax imposed on such beer. The proprietor of a brewery to which 
such beer is transferred shall become liable for the tax on the beer 
withdrawn from customs custody under this section upon release of the 
beer from customs custody, and the importer, or the person bringing 
such beer into the United States, shall thereupon be relieved of the 
liability for such tax.''
    (b) Clerical Amendment.--The table of sections for such part II is 
amended by adding at the end the following new item:

                              ``Sec. 5418. Beer imported in bulk.''
    (c) Effective Date.--The amendments made by this section shall take 
effect at the beginning of the first calendar quarter beginning more 
than 180 days after the date of the enactment of this Act.

          PART II--CONSOLIDATION OF TAXES ON AVIATION GASOLINE

SEC. 14721. CONSOLIDATION OF TAXES ON AVIATION GASOLINE.

    (a) In General.--Subparagraph (A) of section 4081(a)(2) (relating 
to imposition of tax on gasoline and diesel fuel) is amended by 
redesignating clause (ii) as clause (iii) and by striking clause (i) 
and inserting the following:
                            ``(i) in the case of gasoline other than 
                        aviation gasoline, 18.3 cents per gallon,
                            ``(ii) in the case of aviation gasoline, 
                        19.3 cents per gallon, and''.
    (b) Termination.--Subsection (d) of section 4081 is amended by 
redesignating paragraph (2) as paragraph (3) and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) Aviation gasoline.--On and after January 1, 1996, the 
        rate specified in subsection (a)(2)(A)(ii) shall be 4.3 cents 
        per gallon.''
    (c) Repeal of Retail Level Tax.--
            (1) Subsection (c) of section 4041 is amended by striking 
        paragraphs (2) and (3) and by redesignating paragraphs (4) and 
        (5) as paragraphs (2) and (3), respectively.
            (2) Paragraph (3) of section 4041(c), as redesignated by 
        paragraph (1), is amended by striking ``paragraphs (1) and 
        (2)'' and inserting ``paragraph (1)''.
    (d) Conforming Amendments.--
            (1) Paragraph (1) of section 4041(k) is amended by adding 
        ``and'' at the end of subparagraph (A), by striking ``, and'' 
        at the end of subparagraph (B) and inserting a period, and by 
        striking subparagraph (C).
            (2) Paragraph (1) of section 4081(d) is amended by striking 
        ``each rate of tax specified in subsection (a)(2)(A)'' and 
        inserting ``the rates of tax specified in clauses (i) and (iii) 
        of subsection (a)(2)(A)''.
            (3) Sections 6421(f)(2)(A) and 9502(f)(1)(A) are each 
        amended by striking ``section 4041(c)(4)'' and inserting 
        ``section 4041(c)(2)''.
            (4) Paragraph (2) of section 9502(b) is amended by striking 
        ``14 cents'' and inserting ``15 cents''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1996.
    (f) Floor Stocks Tax.--
            (1) Imposition of tax.--In the case of aviation gasoline on 
        which tax was imposed under section 4081 of the Internal 
        Revenue Code of 1986 before January 1, 1996, and which is held 
        on such date by any person, there is hereby imposed a floor 
        stocks tax of 1 cent per gallon of such gasoline.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding aviation 
                gasoline on January 1, 1996, to which the tax imposed 
                by paragraph (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before June 30, 1996.
            (3) Definitions.--For purposes of this subsection:
                    (A) Held by a person.--Gasoline shall be considered 
                as ``held by a person'' if title thereto has passed to 
                such person (whether or not delivery to the person has 
                been made).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or his delegate.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to gasoline held by any person 
        exclusively for any use to the extent a credit or refund of the 
        tax imposed by section 4081 of such Code is allowable for such 
        use.
            (5) Exception for fuel held in aircraft tank.--No tax shall 
        be imposed by paragraph (1) on aviation gasoline held in the 
        tank of an aircraft.
            (6) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1) on aviation gasoline held on January 1, 
                1996, by any person if the aggregate amount of aviation 
                gasoline held by such person on such date does not 
                exceed 6,000 gallons. The preceding sentence shall 
                apply only if such person submits to the Secretary (at 
                the time and in the manner required by the Secretary) 
                such information as the Secretary shall require for 
                purposes of this paragraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4) or (5).
                    (C) Controlled groups.--
                            (i) Corporations.--In the case of a 
                        controlled group, the 6,000 gallon amount in 
                        subparagraph (A) shall be apportioned among the 
                        component members of such group in such manner 
                        as the Secretary shall by regulations 
                        prescribe. For purposes of the preceding 
                        sentence, the term ``controlled group'' has the 
                        meaning given to such term by subsection (a) of 
                        section 1563 of such Code; except that for such 
                        purposes the phrase ``more than 50 percent'' 
                        shall be substituted for the phrase ``at least 
                        80 percent'' each place it appears in such 
                        subsection.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group under 
                        common control where 1 or more of the members 
                        is not a corporation.
            (7) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4081 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply with respect to the floor stock taxes imposed 
        by paragraph (1) to the same extent as if such taxes were 
        imposed by such section 4081.

                 PART III--OTHER EXCISE TAX PROVISIONS

SEC. 14731. AUTHORITY TO GRANT EXEMPTIONS FROM REGISTRATION 
              REQUIREMENTS.

    (a) In General.--The first sentence of section 4222 (relating to 
registration) is amended to read as follows: ``Except as provided in 
subsection (b), section 4221 shall not apply with respect to the sale 
of any article by or to any person who is required by the Secretary to 
be registered under this section and who is not so registered.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to sales after the 180th day after the date of the enactment of 
this Act.

SEC. 14732. CERTAIN COMBINATIONS NOT TREATED AS MANUFACTURE UNDER 
              RETAIL SALES TAX ON HEAVY TRUCKS.

    (a) In General.--Paragraph (2) of section 4052(c) (relating to 
certain combinations not treated as manufacture) is amended by striking 
``or wood or metal floor'' and inserting ``wood or metal floor, or a 
power take-off and dump body''.
    (b) Removal of Fifth Wheel.--Paragraph (1) of section 4052(c) is 
amended by inserting before the period ``or the removal of any coupling 
device (including any fifth wheel)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 14733. EXEMPTION FROM DIESEL FUEL DYEING REQUIREMENTS WITH RESPECT 
              TO CERTAIN STATES.

    (a) In General.--Section 4082 (relating to exemptions for diesel 
fuel) is amended by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively, and by inserting after 
subsection (b) the following new subsection:
    ``(c) Exception to Dyeing Requirements.--Paragraph (2) of 
subsection (a) shall not apply with respect to any diesel fuel--
            ``(1) removed, entered, or sold in a State for ultimate 
        sale or use in an area of such State which is exempted from the 
        fuel dyeing requirements under subsection (i) of section 211 of 
        the Clean Air Act (as in effect on the date of the enactment of 
        this subsection) by the Administrator of the Environmental 
        Protection Agency under paragraph (4) of such subsection, and
            ``(2) the use of which is certified pursuant to regulations 
        issued by the Secretary.''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the first day of the first calendar quarter beginning after 
the date of the enactment of this Act.

SEC. 14734. REPEAL OF EXPIRED PROVISIONS.

    (a) Piggy-Back Trailers.--Section 4051 is amended by striking 
subsection (d) and by redesignating subsection (e) as subsection (d).
    (b) Deep Seabed Mining.--
            (1) Subchapter F of chapter 36 (relating to tax on removal 
        of hard mineral resources from deep seabed) is hereby repealed.
            (2) The table of subchapters for chapter 36 is amended by 
        striking the item relating to subchapter F.

                 Subtitle H--Administrative Provisions

                       PART I--GENERAL PROVISIONS

SEC. 14801. REPEAL OF AUTHORITY TO DISCLOSE WHETHER PROSPECTIVE JUROR 
              HAS BEEN AUDITED.

    (a) In General.--Subsection (h) of section 6103 (relating to 
disclosure to certain Federal officers and employees for purposes of 
tax administration, etc.) is amended by striking paragraph (5) and by 
redesignating paragraph (6) as paragraph (5).
    (b) Conforming Amendment.--Paragraph (4) of section 6103(p) is 
amended by striking ``(h)(6)'' each place it appears and inserting 
``(h)(5)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to judicial proceedings pending on, or commenced after, the date 
of the enactment of this Act.

SEC. 14802. CLARIFICATION OF STATUTE OF LIMITATIONS.

    (a) In General.--Subsection (a) of section 6501 (relating to 
limitations on assessment and collection) is amended by adding at the 
end the following new sentence: ``For purposes of this chapter, the 
term `return' means the return required to be filed by the taxpayer 
(and does not include a return of any person from whom the taxpayer has 
received an item of income, gain, loss, deduction, or credit).''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 14803. CERTAIN NOTICES DISREGARDED UNDER PROVISION INCREASING 
              INTEREST RATE ON LARGE CORPORATE UNDERPAYMENTS.

    (a) General Rule.--Subparagraph (B) of section 6621(c)(2) (defining 
applicable date) is amended by adding at the end the following new 
clause:
                            ``(iii) Exception for letters or notices 
                        involving small amounts.--For purposes of this 
                        paragraph, any letter or notice shall be 
                        disregarded if the amount of the deficiency or 
                        proposed deficiency (or the assessment or 
                        proposed assessment) set forth in such letter 
                        or notice is not greater than $100,000 
                        (determined by not taking into account any 
                        interest, penalties, or additions to tax).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply for purposes of determining interest for periods after December 
31, 1995.

SEC. 14804. CLARIFICATION OF AUTHORITY TO WITHHOLD PUERTO RICO INCOME 
              TAXES FROM SALARIES OF FEDERAL EMPLOYEES.

    (a) In General.--Subsection (c) of section 5517 of title 5, United 
States Code, is amended by striking ``or territory or possession'' and 
inserting ``, territory, possession, or commonwealth''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

                     PART II--TAX COURT PROCEDURES

SEC. 14811. OVERPAYMENT DETERMINATIONS OF TAX COURT.

    (a) Appeal of Order.--Paragraph (2) of section 6512(b) (relating to 
jurisdiction to enforce) is amended by adding at the end the following 
new sentence: ``An order of the Tax Court disposing of a motion under 
this paragraph shall be reviewable in the same manner as a decision of 
the Tax Court, but only with respect to the matters determined in such 
order.''
    (b) Denial of Jurisdiction Regarding Certain Credits and 
Reductions.--Subsection (b) of section 6512 (relating to overpayment 
determined by Tax Court) is amended by adding at the end the following 
new paragraph:
            ``(4) Denial of jurisdiction regarding certain credits and 
        reductions.--The Tax Court shall have no jurisdiction under 
        this subsection to restrain or review any credit or reduction 
        made by the Secretary under section 6402.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 14812. AWARDING OF ADMINISTRATIVE COSTS.

    (a) Right To Appeal Tax Court Decision.--Subsection (f) of section 
7430 (relating to right of appeal) is amended by adding at the end the 
following new paragraph:
            ``(3) Appeal of tax court decision.--An order of the Tax 
        Court disposing of a petition under paragraph (2) shall be 
        reviewable in the same manner as a decision of the Tax Court, 
        but only with respect to the matters determined in such 
        order.''
    (b) Period for Applying to IRS for Costs.--Subsection (b) of 
section 7430 (relating to limitations) is amended by adding at the end 
the following new paragraph:
            ``(5) Period for applying to irs for administrative 
        costs.--An award may be made under subsection (a) by the 
        Internal Revenue Service for reasonable administrative costs 
        only if the prevailing party files an application with the 
        Internal Revenue Service for such costs before the 91st day 
        after the date on which the final decision of the Internal 
        Revenue Service as to the determination of the tax, interest, 
        or penalty is mailed to such party.''
    (c) Period for Petitioning of Tax Court for Review of Denial of 
Costs.--Paragraph (2) of section 7430(f) (relating to right of appeal) 
is amended--
            (1) by striking ``appeal to'' and inserting ``the filing of 
        a petition for review with'', and
            (2) by adding at the end the following new sentence: ``If 
        the Secretary sends by certified or registered mail a notice of 
        such decision to the petitioner, no proceeding in the Tax Court 
        may be initiated under this paragraph unless such petition is 
        filed before the 91st day after the date of such mailing.''
    (d) Effective Date.--The amendments made by this section shall 
apply to civil actions or proceedings commenced after the date of the 
enactment of this Act.

SEC. 14813. REDETERMINATION OF INTEREST PURSUANT TO MOTION.

    (a) In General.--Paragraph (3) of section 7481(c) (relating to 
jurisdiction over interest determinations) is amended by striking 
``petition'' and inserting ``motion''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 14814. APPLICATION OF NET WORTH REQUIREMENT FOR AWARDS OF 
              LITIGATION COSTS.

    (a) In General.--Paragraph (4) of section 7430(c) (defining 
prevailing party) is amended by adding at the end the following new 
subparagraph:
                    ``(C) Special rules for applying net worth 
                requirement.--In applying the requirements of section 
                2412(d)(2)(B) of title 28, United States Code, for 
                purposes of subparagraph (A)(iii) of this paragraph--
                            ``(i) the net worth limitation in clause 
                        (i) of such section shall apply to--
                                    ``(I) an estate but shall be 
                                determined as of the date of the 
                                decedent's death, and
                                    ``(II) a trust but shall be 
                                determined as of the last day of the 
                                taxable year involved in the 
                                proceeding, and
                            ``(ii) individuals filing a joint return 
                        shall be treated as 1 individual for purposes 
                        of clause (i) of such section, except in the 
                        case of a spouse relieved of liability under 
                        section 6013(e).''
    (b) Effective Date.--The amendment made by this section shall apply 
to proceedings commenced after the date of the enactment of this Act.

         PART III--AUTHORITY FOR CERTAIN COOPERATIVE AGREEMENTS

SEC. 14821. COOPERATIVE AGREEMENTS WITH STATE TAX AUTHORITIES.

    (a) General Rule.--Chapter 77 (relating to miscellaneous 
provisions) is amended by adding at the end the following new section:

``SEC. 7524. COOPERATIVE AGREEMENTS WITH STATE TAX AUTHORITIES.

    ``(a) Authorization of Agreements.--The Secretary is hereby 
authorized to enter into cooperative agreements with State tax 
authorities for purposes of enhancing joint tax administration. Such 
agreements may provide for--
            ``(1) joint filing of Federal and State income tax returns,
            ``(2) single processing of such returns,
            ``(3) joint collection of taxes (other than Federal income 
        taxes), and
            ``(4) such other provisions as may enhance joint tax 
        administration.
    ``(b) Services on Reimbursable Basis.--Any agreement under 
subsection (a) may require reimbursement for services provided by 
either party to the agreement.
    ``(c) Availability of Funds.--Any funds appropriated for purposes 
of the administration of this title shall be available for purposes of 
carrying out the Secretary's responsibility under an agreement entered 
into under subsection (a). Any reimbursement received pursuant to such 
an agreement shall be credited to the amount so appropriated.
    ``(d) State Tax Authority.--For purposes of this section, the term 
`State tax authority' means agency, body, or commission referred to in 
section 6103(d)(1).''
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

                              ``Sec. 7524. Cooperative agreements with 
                                        State tax authorities.''

                           TITLE XV--MEDICARE

    [Text to be supplied.]

           TITLE XVI--TRANSFORMATION OF THE MEDICAID PROGRAM

SEC. 16000. SHORT TITLE.

    This title may be cited as the ``Medicaid Transformation Act of 
1995''.

SEC. 16001. TRANSFORMATION OF MEDICAID PROGRAM.

    The Social Security Act is amended by adding at the end the 
following new title:

 ``TITLE XXI--MEDIGRANT PROGRAM FOR LOW-INCOME INDIVIDUALS AND FAMILIES

                      ``table of contents of title
``Sec. 2100. Purpose; State MediGrant plans.
     ``Part A--Objectives, Goals, and Performance Under State Plans

``Sec. 2101. Description of strategic objectives and performance goals.
``Sec. 2102. Annual reports.
``Sec. 2103. Periodic, independent evaluations.
``Sec. 2104. Description of process for MediGrant plan development.
``Sec. 2105. Consultation in MediGrant plan development.
``Sec. 2106. MediGrant Task Force.
            ``Part B--Eligibility, Benefits, and Set-asides

``Sec. 2111. General description of eligibility and benefits.
``Sec. 2112. Set-asides of funds for population groups.
``Sec. 2113. Premiums and cost-sharing.
``Sec. 2114. Description of process for developing capitation payment 
                            rates.
``Sec. 2115. Construction.
``Sec. 2116. Limitations on causes of action.
                      ``Part C--Payments to States

``Sec. 2121. Allotment of funds among States.
``Sec. 2122. Payments to States.
``Sec. 2123. Limitation on use of funds; disallowance.
                ``Part D--Program Integrity and Quality

``Sec. 2131. Use of audits to achieve fiscal integrity.
``Sec. 2132. Fraud prevention program.
``Sec. 2133. Information concerning sanctions taken by State licensing 
                            authorities against health care 
                            practitioners and providers.
``Sec. 2134. State MediGrant fraud control units.
``Sec. 2135. Recoveries from third parties and others.
``Sec. 2136. Assignment of rights of payment.
``Sec. 2137. Quality assurance standards for nursing facilities.
``Sec. 2138. Other provisions promoting program integrity.
     ``Part E--Establishment and Amendment of State MediGrant Plans

``Sec. 2151. Submittal and approval of MediGrant plans.
``Sec. 2152. Submittal and approval of plan amendments.
``Sec. 2153. Process for State withdrawal from program.
``Sec. 2154. Sanctions for substantial noncompliance.
``Sec. 2155. Secretarial authority.
                      ``Part F--General Provisions

``Sec. 2171. Definitions.
``Sec. 2172. Treatment of territories.
``Sec. 2173. Description of treatment of Indian Health Service 
                            facilities.
``Sec. 2174. Application of certain general provisions.
``Sec. 2175. MediGrant master drug rebate agreements.

``SEC. 2100. PURPOSE; STATE MEDIGRANT PLANS.

    ``(a) Purpose.--The purpose of this title is to provide block 
grants to States to enable them to provide medical assistance to low-
income individuals and families in a more effective, efficient, and 
responsive manner.
    ``(b) State Plan Required.--A State is not eligible for payment 
under section 2122 of this title unless the State has submitted to the 
Secretary under part E a plan (in this title referred to as a 
`MediGrant plan') that--
            ``(1) sets forth how the State intends to use the funds 
        provided under this title to provide medical assistance to 
        needy individuals and families consistent with the provisions 
        of this title, and
            ``(2) is approved under such part.
    ``(c) Continued Approval.--An approved MediGrant plan shall 
continue in effect unless and until--
            ``(1) the State amends the plan under section 2152,
            ``(2) the State terminates participation under this title 
        under section 2153, or
            ``(3) the Secretary finds substantial noncompliance of the 
        plan with the requirements of this title under section 2154.
    ``(d) State Entitlement.--This title constitutes budget authority 
in advance of appropriations Acts, and represents the obligation of the 
Federal Government to provide for the payment to States of amounts 
provided under part C.

     ``Part A--Objectives, Goals, and Performance Under State Plans

``SEC. 2101. DESCRIPTION OF STRATEGIC OBJECTIVES AND PERFORMANCE GOALS.

    ``(a) Description.--A MediGrant plan shall include a description of 
the strategic objectives and performance goals the State has 
established for providing health care services to low-income 
populations under this title, including a general description of the 
manner in which the plan is designed to meet these objectives and 
goals.
    ``(b) Certain Objectives and Goals Required.--A MediGrant plan 
shall include strategic objectives and performance goals relating to 
rates of childhood immunizations and reductions in infant mortality and 
morbidity.
    ``(c) Considerations.--In specifying these objectives and goals the 
State may consider factors such as the following:
            ``(1) The State's priorities with respect to such areas as 
        providing assistance to low-income populations.
            ``(2) The State's priorities with respect to the general 
        public health and the health status of individuals eligible for 
        assistance under the MediGrant plan.
            ``(3) The State's financial resources, the particular 
        economic conditions in the State, and relative adequacy of the 
        health care infrastructure in different regions of the State.
    ``(d) Performance Measures.--To the extent practicable--
            ``(1) one or more performance goals shall be established by 
        the State for each strategic objective identified in the 
        MediGrant plan; and
            ``(2) the MediGrant plan shall describe, how program 
        performance will be--
                    ``(A) measured through objective, independently 
                verifiable means, and
                    ``(B) compared against performance goals, in order 
                to determine the State's performance under this title.
    ``(e) Period Covered.--
            ``(1) Strategic objectives.--The strategic objectives shall 
        cover a period of not less than 5 years and shall be updated 
        and revised at least every 3 years.
            ``(2) Performance goals.--The performance goals shall be 
        established for dates that are not more than 3 years apart.

``SEC. 2102. ANNUAL REPORTS.

    ``(a) In General.--In the case of a State with a MediGrant plan 
that is in effect for part or all of a fiscal year, no later than March 
31 following such fiscal year (or March 31, 1998, in the case of fiscal 
year 1996) the State shall prepare and submit to the Secretary and the 
Congress a report on program activities and performance under this 
title for such fiscal year.
    ``(b) Contents.--Each annual report under this section for a fiscal 
year shall include the following:
            ``(1) Expenditure and beneficiary summary.--
                    ``(A) Initial summary.--For the report for fiscal 
                year 1997 (and, if applicable, fiscal year 1996), a 
                summary of all expenditures under the MediGrant plan 
                during the fiscal year (and during any portions of 
                fiscal year 1996 during which the MediGrant plan was in 
                effect under this title) as follows:
                            ``(i) Aggregate medical assistance 
                        expenditures, disaggregated to the extent 
                        required to determine compliance with the set-
                        aside requirements of subsections (a) through 
                        (c) section 2112 and to compute the case mix 
                        index under section 2121(d)(3).
                            ``(ii) For each general category of 
                        eligible individuals (specified in subsection 
                        (c)(1), aggregate medical assistance 
                        expenditures and the total and average number 
                        of eligible individuals under the MediGrant 
                        plan.
                            ``(iii) By each general category of 
                        eligible individuals, total expenditures for 
                        each of the categories of health care items and 
                        services (specified in subsection (c)(2)) which 
                        are covered under the MediGrant plan and 
                        provided on a fee-for-service basis.
                            ``(iv) By each general category of eligible 
                        individuals, total expenditures for payments to 
                        capitated health care organizations (as defined 
                        in section 2114(c)(1)).
                            ``(v) Total administrative expenditures.
                    ``(B) Subsequent summaries.--For reports for each 
                succeeding fiscal year, a summary of--
                            ``(i) all expenditures under the MediGrant 
                        plan consistent with the reporting format 
                        specified by the MediGrant Task Force under 
                        section 2106(d)(1), and
                            ``(ii) the total and average number of 
                        eligible individuals under the MediGrant plan 
                        for each general category of eligible 
                        individuals..
            ``(2) Utilization summary.--
                    ``(A) Initial summary.--For the report for fiscal 
                year 1997 (and, if applicable, fiscal year 1996), 
                summary statistics on the utilization of health care 
                services under the MediGrant plan during the year (and 
                during any portions of fiscal year 1996 during which 
                the MediGrant plan was in effect under this title) as 
                follows:
                            ``(i) For each general category of eligible 
                        individuals and for each of the categories of 
                        health care items and services which are 
                        covered under the MediGrant plan and provided 
                        on a fee-for-service basis, the number and 
                        percentage of persons who received such a type 
                        of service or item during the period covered by 
                        the report.
                            ``(ii) Summary of health care utilization 
                        data reported to the State by capitated health 
                        care organizations.
                    ``(B) Subsequent summaries.--For reports for each 
                succeeding fiscal year, summary statistics on the 
                utilization of health care services under the MediGrant 
                plan consistent with the reporting format specified by 
                the MediGrant Task Force under section 2106(d)(1).
            ``(3) Achievement of performance goals.--With respect to 
        each performance goal established under section 2101 and 
        applicable to the year involved--
                    ``(A) a brief description of the goal;
                    ``(B) data on the actual performance with respect 
                to the goal;
                    ``(C) a review of the extent to which the goal was 
                achieved, based on such data; and
                    ``(D) where a performance goal has not been met--
                            ``(i) why the goal was not met, and
                            ``(ii) actions to be taken in response to 
                        such performance (including adjustments in 
                        performance goals or program activities for 
                        subsequent years).
            ``(4) Program evaluations.--A summary of the findings of 
        evaluations under section 2103 completed during the fiscal year 
        covered by the report.
            ``(5) Fraud and abuse and quality control activities.--A 
        general description of the State's activities under part D to 
        detect and deter fraud and abuse and to assure quality of 
        services provided under the program.
            ``(6) Plan administration.--
                    ``(A) A description of the administrative roles and 
                responsibilities of entities in the State responsible 
                for administration of this title.
                    ``(B) Organizational charts for each entity in the 
                State primarily responsible for activities under this 
                title.
                    ``(C) A brief description of each interstate 
                compact (if any) the State has entered into with other 
                States with respect to activities under this title.
                    ``(D) General citations to the State statutes and 
                administrative rules governing the State's activities 
                under this title.
            ``(7) Inpatient hospital payments.--With respect to 
        inpatient hospital services provided under the MediGrant plan 
        on a fee-for-service basis, a description of the average amount 
        paid per discharge in the fiscal year compared either to the 
        average charge for such services or to the State's estimate of 
        the average amount paid per discharge by commercial health 
        insurers in the State.
    ``(c) Definitions.--In this section:
            ``(1) Each of the following is a general category of 
        eligible individuals:
                    ``(A) Children.
                    ``(B) Blind or disabled adults under 65 years of 
                age.
                    ``(C) Persons 65 years of age or older.
                    ``(D) Other adults.
            ``(2) The health care items and services described in each 
        subparagraph of section 2171(a)(1) shall be considered a 
        separate category of health care items and services.

``SEC. 2103. PERIODIC, INDEPENDENT EVALUATIONS.

    ``(a) In General.--During fiscal year 1998 and every third fiscal 
year thereafter, each State shall provide for an evaluation of the 
operation of its MediGrant plan under this title.
    ``(b) Independent.--Each such evaluation with respect to an 
activity under the MediGrant plan shall be conducted by an entity that 
is neither responsible under State law for the submission of the State 
plan (or part thereof) nor responsible for administering (or 
supervising the administration of) the activity. If consistent with the 
previous sentence, such an entity may be a college or university, a 
State agency, a legislative branch agency in a State, or an independent 
contractor.
    ``(c) Research Design.--Each such evaluation shall be conducted in 
accordance with a research design that is based on generally accepted 
models of survey design and sampling and statistical analysis.

``SEC. 2104. DESCRIPTION OF PROCESS FOR MEDIGRANT PLAN DEVELOPMENT.

    ``Each MediGrant plan shall include a description of the process 
under which the plan shall be developed and implemented in the State 
(consistent with section 2105).

``SEC. 2105. CONSULTATION IN MEDIGRANT PLAN DEVELOPMENT.

    ``(a) Public Notice Process.--
            ``(1) In general.--Before submitting a MediGrant plan or a 
        plan amendment described in paragraph (3) to the Secretary 
        under part E, a State shall provide--
                    ``(A) public notice respecting the submittal of the 
                proposed plan or amendment, including a general 
                description of the plan or amendment;
                    ``(B) a means for the public to inspect or obtain a 
                copy (at reasonable charge) of the proposed plan or 
                amendment; and
                    ``(C) an opportunity for submittal and 
                consideration of public comments on the proposed plan 
                or amendment.
        The previous sentence shall not apply to a revision of a 
        MediGrant plan (or revision of an amendment to a plan) made by 
        a State under section 2154(c)(1) or to a plan amendment 
        withdrawal described in section 2152(c)(4).
            ``(2) Contents of notice.--A notice under paragraph (1)(A) 
        for a proposed plan or amendment shall include a description 
        of--
                    ``(A) the general purpose of the proposed plan or 
                amendment (including applicable effective dates),
                    ``(B) where the public may inspect the proposed 
                plan or amendment,
                    ``(C) how the public may obtain a copy of the 
                proposed plan or amendment and the applicable charge 
                (if any) for the copy, and
                    ``(D) how the public may submit comments on the 
                proposed plan or amendment, including any deadlines 
                applicable to consideration of such comments.
            ``(3) Amendments described.--An amendment to a MediGrant 
        plan described in this paragraph is an amendment which makes a 
        material and substantial change in eligibility under the 
        MediGrant plan or the benefits provided under the plan.
            ``(4) Publication.--Notices under this subsection may be 
        published (as selected by the State) in one or more daily 
        newspapers of general circulation in the State or in any 
        publication used by the State to publish State statutes or 
        rules.
            ``(5) Comparable process.--A separate notice, or notices, 
        shall not be required under this subsection for a State if 
        notice of the MediGrant plan or an amendment to the plan will 
        be provided under a process specified in State law that is 
        substantially equivalent to the notice process specified in 
        this subsection.
    ``(b) Advisory Committee.--
            ``(1) In general.--Each State with a MediGrant plan shall 
        establish and maintain an advisory committee.
            ``(2) Consultation.--The State shall periodically consult 
        with the advisory committee in the development, revision, and 
        monitoring the performance of the MediGrant plan, including--
                    ``(A) the development of strategic objectives and 
                performance goals under section 2101,
                    ``(B) the annual report under section 2102, and
                    ``(C) the research design under section 2103(c).
            ``(3) Geographic diversity.--The composition of the 
        advisory committee shall be chosen in a manner that assures 
        some representation on the advisory committee of the different 
        general geographic regions of the State. Nothing in the 
        previous sentence shall be construed as requiring proportional 
        representation of geographic areas in a State.
            ``(4) Construction.--Nothing in this title shall be 
        construed as preventing a State from establishing more than one 
        advisory committee, including specialized advisory committees 
        that represent the interests of specific population groups, 
        provider groups, or geographic areas.

``SEC. 2106. MEDIGRANT TASK FORCE.

    ``(a) In General.--The Secretary shall provide for the 
establishment of a MediGrant Task Force (in this section referred to as 
the `Task Force').
    ``(b) Composition.--The Task Force shall consist of 6 members 
appointed by the chair of the National Governors Association and 6 
members appointed by the vice chair of the National Governors 
Association.
    ``(c) Advisory Group for Task Force.--The Secretary shall provide 
for the establishment of an advisory group to assist the Task Force in 
carrying out its duties under this section, consisting of one 
representative appointed by each of the following associations:
            ``(1) National Committee for Quality Assurance.
            ``(2) Joint Commission for the Accreditation of Healthcare 
        Organizations.
            ``(3) Group Health Association of America.
            ``(4) American Managed Care and Review Association.
            ``(5) Association of State and Territorial Health Officers.
            ``(6) American Medical Association.
            ``(7) American Hospital Association.
            ``(8) American Dental Association.
            ``(9) American College of Gerontology.
            ``(10) American Health Care Association.
            ``(11) An association identified by the Secretary as 
        representing the interests of disabled individuals.
            ``(12) An association identified by the Secretary as 
        representing the interests of children.
            ``(13) An association identified by the Secretary as 
        representing the interests of the elderly.
            ``(14) An association identified by the Secretary as 
        representing the interests of mentally ill individuals.
Any reference in this subsection to a particular group shall be deemed 
a reference to any successor to such group.
    ``(d) Duties.--
            ``(1) Format for expenditure and utilization summaries.--
        The Task Force shall specify, by not later than December 31, 
        1996, the format of expenditure summaries and utilization 
        summaries required under section 2102. Such format may provide 
        for the reporting of different information from that required 
        under section 2102(a), but shall include the reporting of at 
        least the information described in section 2102(b)(1)(A)(i).
            ``(2) Models and suggestions.--The Task Force shall study 
        and report to Congress and the States, by not later than April 
        1, 1997, recommendations on the following:
                    ``(A) Recommended models for strategic objectives 
                and performance goals for consideration by States in 
                the development of such objectives and goals under 
                section 2102, including alternative models for each of 
                the objectives and goals described in section 2101(b).
                    ``(B) For each suggested model for a strategic 
                objective or performance goal suggested methodologies 
                for States to consider in measuring and verifying the 
                objective or goal.
                    ``(C) An assessment of the potential usefulness to 
                States of quality assurance safeguards, utilization 
                data sets, and accreditation programs that are used or 
                under development in the private sector.
                    ``(D) Recommended designs and evaluation 
                methodologies for consideration by States in providing 
                for independent evaluations under section 2103.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed as requiring a State to adopt any of the strategic 
        objectives or performance goals suggested under paragraph (2).
    ``(e) Administrative Assistance.--Administrative support for the 
Task Force shall be provided by the Agency for Health Care Policy and 
Research (or, in the absence of such Agency, the Secretary).

            ``Part B--Eligibility, Benefits, and Set-asides

``SEC. 2111. GENERAL DESCRIPTION OF ELIGIBILITY AND BENEFITS.

    ``(a) In General.--Each MediGrant plan shall include a description 
(consistent with this title) of the following:
            ``(1) Eligible population.--The population eligible for 
        medical assistance under the plan, including--
                    ``(A) any limitations on categories of such 
                individuals;
                    ``(B) any limitations as to the duration of 
                eligibility;
                    ``(C) any eligibility standards relating to age, 
                income (including any standards relating to 
                spenddowns), residency, resources, disability status, 
                immigration status, or employment status of 
                individuals;
                    ``(D) methods of establishing (and continuing) 
                eligibility and enrollment (including the methodology 
                for computing family income);
                    ``(E) the eligibility standards in the plan that 
                protect the income and resources of a married 
                individual who is living in the community and whose 
                spouse is residing in an institution in order to 
                prevent the impoverishment of the community spouse; and
                    ``(F) any other standards relating to eligibility 
                for medical assistance under the plan.
            ``(2) Scope of assistance.--The amount, duration, and scope 
        of health care services and items covered under the plan, 
        including differences among different eligible population 
        groups.
            ``(3) Delivery method.--The State's approach to delivery of 
        medical assistance, including a general description of--
                    ``(A) the use (or intended use) of vouchers, fee-
                for-service, or managed care arrangements (such as 
                capitated health care plans, case management, and case 
                coordination), and
                    ``(B) utilization control systems.
            ``(4) Fee-for-service benefits.--To the extent that medical 
        assistance is furnished on a fee-for-service basis--
                    ``(A) how the State determines the qualifications 
                of health care providers eligible to provide such 
                assistance, and
                    ``(B) how the State determines rates of 
                reimbursement for providing such assistance.
            ``(5) Cost-sharing.--Beneficiary cost-sharing (if any), 
        including variations in such cost-sharing by population group 
        or type of service and financial responsibilities of parents of 
        recipients under 21 years of age and the spouses of recipients.
            ``(6) Utilization incentives.--Incentives or requirements 
        (if any) to encourage the appropriate utilization of services.
            ``(7) Treatment of health centers.--
                    ``(A) In general.--In the case of a State in which 
                one or more health centers is located, the MediGrant 
                plan shall include a description of--
                            ``(i) what provision (if any) has been made 
                        for payment for items and services furnished by 
                        health centers, and
                            ``(ii) the manner in which medical 
                        assistance for low-income eligible individuals 
                        who received health care services at health 
                        centers on or before the date of the enactment 
                        of this title may be provided, as determined by 
                        the State in consultation with the health 
                        centers in the State.
                    ``(B) Health center defined.--For purposes of 
                subparagraph (A), the term `health center' means an 
                entity that--
                            ``(i) is receiving a grant under section 
                        329, 330, 340, or 340A of the Public Health 
                        Service Act; or
                            ``(ii) based on the recommendation of the 
                        Health Resources and Services Administration 
                        within the Public Health Service, was 
                        determined by the Secretary to meet the 
                        requirements to receive such a grant.
            ``(8) Support for certain hospitals.--
                    ``(A) In general.--With respect to hospitals 
                described in subparagraph (B) located in the State, the 
                MediGrant plan shall includes a description--
                            ``(i) of the extent to which provisions 
                        have been made for expenditures for items and 
                        services furnished by such hospitals and 
                        covered under the plan, and
                            ``(ii) for individuals who (I) are enrolled 
                        for benefits for covered services under the 
                        MediGrant plan and (II) were previously 
                        receiving benefits for such services under the 
                        medicaid program by or through such hospitals, 
                        where or how they will receive benefits for 
                        such services under the MediGrant plan if the 
                        MediGrant plan does not permit such individuals 
                        to obtain benefits for those services by or 
                        through such hospitals.
                    ``(B) Hospitals described.--For purposes of 
                subparagraph (A), a hospital described in this 
                subparagraph is a subsection (d) hospital (as defined 
                in section 1886(d)(1)(B)) that is described in clauses 
                (i) and (ii) of section 340B(a)(4)(L) of the Public 
                Health Service Act.
    ``(b) Immunizations for Children.--The MediGrant plan shall provide 
medical assistance for immunizations for children eligible for any 
medical assistance under the MediGrant plan, in accordance with a 
schedule for immunizations established by the Health Department of the 
State in consultation with the individuals and entities in the State 
responsible for the administration of the plan.
    ``(c) Equal Payment Rates for Rural Providers.--A State with a 
MediGrant plan shall establish payment rates for all services of rural 
providers that are comparable to the payment rates established for like 
services of such type of providers not in rural areas; except that a 
State may provide for incentive payments to attract and retain 
providers to medically underserved areas.
    ``(d) Preexisting Condition Exclusions.--Notwithstanding any other 
provision of this title--
            ``(1) a MediGrant plan may not deny or exclude coverage of 
        any item or service for an eligible individual for benefits 
        under the MediGrant plan for such item or service on the basis 
        of a preexisting condition; and
            ``(2) if a State contracts or makes other arrangements 
        (through the eligible individual or through another entity) 
        with a capitated health care organization, insurer, or other 
        entity, for the provision of items or services to eligible 
        individuals under the MediGrant plan and the State permits such 
        organization, insurer, or other entity to exclude coverage of a 
        covered item or service on the basis of a preexisting 
        condition, the State shall provide, through its MediGrant plan, 
        for such coverage (through direct payment or otherwise) for any 
        such covered item or service denied or excluded on the basis of 
        a preexisting condition.

``SEC. 2112. SET-ASIDES OF FUNDS FOR POPULATION GROUPS.

    ``(a) For Targeted Low-Income Families.--
            ``(1) In general.--Subject to subsection (e), a MediGrant 
        plan shall provide that the amount of funds expended under the 
        plan for medical assistance for targeted low-income families 
        (as defined in paragraph (3)) for a fiscal year shall be not 
        less than the minimum low-income-family percentage specified in 
        paragraph (2) of the total funds expended under the plan for 
        all medical assistance for the fiscal year.
            ``(2) Minimum low-income-family percentage.--The minimum 
        low-income-family percentage specified in this paragraph for a 
        State is equal to 85 percent of the average percentage of the 
        expenditures under title XIX for medical assistance in the 
        State during Federal fiscal years 1992 through 1994 which were 
        attributable to expenditures for medical assistance for 
        mandated benefits (as defined in subsection (h)) furnished to 
        individuals--
                    ``(A) who (at the time of furnishing the 
                assistance) were under 65 years of age,
                    ``(B) whose coverage (at such time) under a State 
                plan under title XIX was required under Federal law, 
                and
                    ``(C) whose eligibility for such coverage (at such 
                time) was not on a basis directly related to disability 
                status (including being blind).
            ``(3) Targeted low-income family defined.--In this 
        subsection, the term `targeted low-income family' means a 
        family (which may be an individual)--
                    ``(A) which includes a child or a pregnant woman, 
                and
                    ``(B) the income of which does not exceed 185 
                percent of the poverty line applicable to a family of 
                the size involved.
    ``(b) For Low-Income Elderly.--
            ``(1) Set-asides.--Subject to subsection (e)--
                    ``(A) General set-aside.--A MediGrant plan shall 
                provide that the amount of funds expended under the 
                plan for medical assistance for eligible low-income 
                individuals 65 years of age or older for a fiscal year 
                shall be not less than the minimum low-income-elderly 
                percentage specified in paragraph (2)(A) of the total 
                funds expended under the plan for all medical 
                assistance for the fiscal year.
                    ``(B) Set-aside for medicare premium assistance.--A 
                MediGrant plan shall provide that the amount of funds 
                expended under the plan for medical assistance for 
                medicare cost-sharing described in section 2171(c)(1) 
                for a fiscal year shall be not less than the minimum 
                medicare premium assistance percentage specified in 
                paragraph (2)(B) of the total funds expended under the 
                plan for all medical assistance for the fiscal year.
            ``(2) Minimum percentages.--
                    ``(A) For general set-aside.--The minimum low-
                income-elderly percentage specified in this 
                subparagraph for a State is equal to 85 percent of the 
                average percentage of the expenditures under title XIX 
                for medical assistance in the State during Federal 
                fiscal years 1992 through 1994 which was attributable 
                to expenditures for medical assistance for mandated 
                benefits furnished to individuals--
                            ``(i) whose eligibility for such assistance 
                        was based on their being 65 years of age or 
                        older; and
                            ``(ii)(I) whose coverage (at such time) 
                        under a State plan under title XIX was required 
                        under Federal law, or (II) who (at such time) 
                        were residents of a nursing facility.
                    ``(B) For set-aside for medicare premium 
                assistance.--The minimum medicare premium assistance 
                percentage specified in this subparagraph for a State 
                is equal to 85 percent of the average percentage of the 
                expenditures under title XIX for medical assistance in 
                the State during Federal fiscal years 1992 through 1994 
                which was attributable to expenditures for medical 
                assistance for medicare premiums described in section 
                1905(p)(3)(A) for individuals whose coverage (at such 
                time) for such assistance for such premiums under a 
                State plan under title XIX was required under Federal 
                law.
    ``(c) For Low-Income Disabled Persons.--
            ``(1) In general.--Subject to subsection (e), a MediGrant 
        plan shall provide that the percentage of funds expended under 
        the plan for medical assistance for eligible low-income 
        individuals who are under 65 years of age and are eligible for 
        such assistance on the basis of a disability (including being 
        blind) for a fiscal year is not less than the minimum low-
        income-disabled percentage specified in paragraph (2) of the 
        total funds expended under the plan for medical assistance for 
        the fiscal year.
            ``(2) Minimum low-income-disabled percentage.--The minimum 
        low-income-disabled percentage specified in this paragraph for 
        a State is equal to 85 percent of the average percentage of the 
        expenditures under title XIX for medical assistance in the 
        State during Federal fiscal years 1992 through 1994 which was 
        attributable to expenditures for medical assistance for 
        mandated benefits furnished to individuals--
                    ``(A) whose coverage (at such time) under a State 
                plan under title XIX was required under Federal law, 
                and
                    ``(B) whose coverage (at such time) was on a basis 
                directly related to disability status (including being 
                blind).
    ``(d) Use of Residual Funds.--
            ``(1) In general.--Subject to limitations on payment under 
        section 2123, any funds not required to be expended under the 
        set-asides under the previous subsections may be expended under 
        the MediGrant plan for any of the following:
                    ``(A) Additional medical assistance.--Medical 
                assistance for eligible low-income individuals (as 
                defined in section 2171(b)), in addition to any medical 
                assistance made available under a previous subsection.
                    ``(B) Medically-related services.--Payment for 
                medically-related services (as defined in paragraph 
                (2)).
                    ``(C) Administration.--Payment for the 
                administration of the MediGrant plan.
            ``(2) Medically-related services defined.--In this title, 
        the term `medically-related services' means services reasonably 
        related to, or in direct support of, the State's attainment of 
        one or more of the strategic objectives and performance goals 
        established under section 2101, but does not include items and 
        services included on the list under section 2171(a)(1) 
        (relating to the definition of medical assistance).
    ``(e) Exceptions to Minimum Set-Asides.--
            ``(1) Alternative minimum set-asides.--
                    ``(A) In general.--A State may provide in its 
                MediGrant plan (through an amendment to the plan) for a 
lower dollar amount of expenditures than the minimum amounts specified 
in any (or all) of paragraphs (2) of subsections (a), (b), and (c) if 
State determines (and certifies to the Secretary) that--
                            ``(i) the health care needs of the low-
                        income populations described in paragraph (1) 
                        of the respective subsection who are eligible 
                        for medical assistance under the plan during 
                        the previous fiscal year (or medicare premium 
                        assistance needs described in subsection 
                        (b)(1)(B)) can be reasonably met without the 
                        expenditure of the amounts otherwise required 
                        to be expended, and
                            ``(ii) the performance goals established 
                        under section 2101 relating to the respective 
                        population can reasonably be met with such 
                        lower amount of funds expended.
                    ``(B) Period of application.--The determination and 
                certification under subparagraph (A) shall be made for 
                such period as a State may request, but may not be made 
                for a period of more than 3 consecutive Federal fiscal 
                years (beginning with the first fiscal year for which 
                the lower amount is sought). A new determination and 
                certification must be made under such paragraph for any 
                subsequent period.
                    ``(C) No exception permitted before fiscal year 
                1998.--This paragraph may not apply with respect to a 
                State for a fiscal year before fiscal year 1998.
            ``(2) Independent certification of compliance with goals.--
                    ``(A) In general.--For purposes of section 2151(c), 
                a MediGrant plan shall not be considered to be in 
                substantial violation of the requirements of this 
                section if the amount of actual State expenditures 
                specified in any (or all) of paragraphs (1) of 
                subsections (a), (b), and (c) is lower than the minimum 
                amounts specified in any (or all) of paragraphs (2) of 
                subsections (a), (b), and (c) if an independent actuary 
                determines and certifies to the State that the 
                MediGrant plan is reasonably designed to result in a 
                level of expenditures which is consistent with the 
                requirements of such subsections.
                    ``(B) Limit on variation.--Subparagraph (A) shall 
                not apply in the case of a MediGrant plan for which the 
                actual State expenditures described in any (or all) of 
                paragraphs (1) of subsections (a), (b), and (c) are 
                less than 95 percent of the expenditures which would be 
                made if the amount of State expenditures specified in 
                any (or all) of such paragraphs was equal to the 
                applicable minimum amount specified in any (or all) of 
                paragraphs (2) of subsections (a), (b), and (c).
            ``(3) Treatment of states with no optional benefits.--In 
        the case of a State for which all expenditures under title XIX 
        for medical assistance in the State during Federal fiscal years 
        1992 through 1994 were expenditures for medical assistance for 
        mandated benefits, `75 percent' shall be substituted for `85 
        percent' each place it appears in paragraphs (2) of subsections 
        (a), (b), and (c).
    ``(f) Computations.--
            ``(1) Minimum percentages.--States shall calculate the 
        minimum percentages under subsections (a)(2), (b)(2), and 
        (c)(2) in a reasonable manner consistent with reports submitted 
        to the Secretary for the fiscal years involved.
            ``(2) Exclusion of payments for certain aliens.--For 
        purposes of this section, medical assistance attributable to 
        the exception provided under section 1903(v)(2) shall not be 
        considered to be expenditures for medical assistance.
    ``(g) Benefits Included for Purposes of Computing Set Asides.--In 
this section, the term `mandated benefits'--
            ``(1) means medical assistance for items and services 
        described in section 1905(a) to the extent such assistance with 
        respect to such items and services was required to be provided 
        under title XIX,
            ``(2) includes medical assistance for medicare cost-sharing 
        only to the extent such assistance was required to be provided 
        under section 1902(a)(10)(E), and
            ``(3) does not include medical assistance attributable to 
        disproportionate share payment adjustments described in section 
        1923.

``SEC. 2113. PREMIUMS AND COST-SHARING.

    ``(a) In General.--Subject to subsection (b), if any charges are 
imposed under the MediGrant plan for cost-sharing (as defined in 
subsection (d)), such cost-sharing shall be pursuant to a public cost-
sharing schedule.
    ``(b) Limitation on Premium and Certain Cost-Sharing for Low-Income 
Families Including Children or Pregnant Women.--
            ``(1) In general.--In the case of a family described in 
        paragraph (2)--
                    ``(A) the plan shall not impose any premium, and
                    ``(B) the plan shall not (except as provided in 
                subsection (c)(1)) impose any cost-sharing with respect 
                to primary and preventive care services (as defined by 
                the State) covered under the MediGrant plan for 
                children or pregnant women unless such cost-sharing is 
                nominal in nature.
            ``(2) Family described.--A family described in this 
        paragraph is a family (which may be an individual) which--
                    ``(A) includes a child or a pregnant woman,
                    ``(B) is made eligible for medical assistance under 
                the MediGrant plan, and
                    ``(C) the income of which does not exceed 100 
                percent of the poverty line applicable to a family of 
                the size involved.
    ``(c) Certain Cost-Sharing Permitted.--Nothing in this section 
shall be construed as preventing a MediGrant plan (consistent with 
subsection (b))--
            ``(1) from imposing cost-sharing to discourage the 
        inappropriate use of emergency medical services (delivered 
        through a hospital emergency room, a medical transportation 
        provider, or otherwise);
            ``(2) from imposing premiums and cost-sharing 
        differentially in order to encourage the use of primary and 
        preventive care and discourage unnecessary or less economical 
        care;
            ``(3) from scaling cost-sharing in a manner that reflects 
        economic factors, employment status, and family size;
            ``(4) from scaling cost-sharing based on the availability 
        to the individual or family of other health insurance coverage; 
        or
            ``(5) from scaling cost-sharing based on participation in 
        employment training program, drug or alcohol abuse treatment, 
        counseling programs, or other programs promoting personal 
        responsibility.
    ``(d) Cost-Sharing Defined.--In this section, the term `cost-
sharing' includes copayments, deductibles, coinsurance, and other 
charges for the provision of health care services.

``SEC. 2114. DESCRIPTION OF PROCESS FOR DEVELOPING CAPITATION PAYMENT 
              RATES.

    ``(a) In General.--If a State contracts (or intends to contract) 
with a capitated health care organization (as defined in subsection 
(c)(1)) under which the State makes a capitation payment (as defined in 
subsection (c)(2)) to the organization for providing or arranging for 
the provision of medical assistance under the MediGrant plan for a 
group of services (including at least inpatient hospital services and 
physicians' services), the plan shall include a description of the 
following:
            ``(1) Use of actuarial science.--The extent and manner in 
        which the State uses actuarial science--
                    ``(A) to analyze and project health care 
                expenditures and utilization for individuals enrolled 
                (or to be enrolled) in such an organization under the 
                MediGrant plan, and
                    ``(B) to develop capitation payment rates, 
                including a brief description of the general 
                methodologies used by actuaries.
            ``(2) Qualifications of organizations.--The general 
        qualifications (including any accreditation, State licensure or 
        certification, or provider network standards) required by the 
        State for participation of capitated health care organizations 
        under the MediGrant plan.
            ``(3) Dissemination process.--The process used by the State 
        under subsection (b) and otherwise to disseminate, before 
        entering into contracts with capitated health care 
        organizations, actuarial information to such organizations on 
        the historical fee-for-service costs (or, if not available, 
        other recent financial data associated with providing covered 
        services) and utilization associated with individuals described 
        in paragraph (1)(A).
    ``(b) Public Notice and Comment.--Under the MediGrant plan the 
State shall provide a process for providing, before the beginning of 
each contract year--
            ``(1) public notice of--
                    ``(A) the amounts of the capitation payments (if 
                any) made under the plan for the contract year 
                preceding the public notice, and
                    ``(B)(i) the information described under subsection 
                (a)(1) with respect to capitation payments for the 
                contract year involved or (ii) the amounts of the 
                capitation payments the State expects to make for the 
                contract year involved,
        unless such information is designated as proprietary and not 
        subject to public disclosure under State law; and
            ``(2) an opportunity for receiving public comment on the 
        amounts and information for which notice is provided under 
        paragraph (1).
    ``(c) Definitions.--In this title:
            ``(1) Capitated health care organization.--The term 
        `capitated health care organization' means a health maintenance 
        organization or any other entity (including a health insuring 
        organization, managed care organization, prepaid health plan, 
        integrated service network, or similar entity) which under 
        State law is permitted to accept capitation payments for 
        providing (or arranging for the provision of) a group of items 
        and services including at least inpatient hospital services and 
        physicians' services.
            ``(2) Capitation payment.--The term `capitation payment' 
        means, with respect to payment, payment on a prepaid capitation 
        basis or any other risk basis to an entity for the entity's 
        provision (or arranging for the provision) of a group of items 
        and services (including at least inpatient hospital services 
        and physicians' services).

``SEC. 2115. CONSTRUCTION.

    ``(a) No Federal Entitlement.--Nothing in this title (including 
section 2112) shall be construed as creating an entitlement under 
Federal law in any individual or category of individuals for medical 
assistance under a MediGrant plan.
    ``(b) State Flexibility in Benefits, Provider Payments, 
Geographical Coverage Area, and Selection of Providers.--Nothing in 
this title (other than section 2111(b)) shall be construed as requiring 
a State--
            ``(1) to provide medical assistance for any particular 
        items or services;
            ``(2) subject to section 2111(c), to provide for any 
        payments with respect to any specific health care providers or 
        any level of payments for any services;
            ``(3) to provide for the same medical assistance in all 
        geographical areas or political subdivisions of the State;
            ``(4) to provide that the medical assistance made available 
        to any individual eligible for medical assistance must not be 
        less in amount, duration, or scope than the medical assistance 
        made available to any other such individual; or
            ``(5) to provide that any individual eligible for medical 
        assistance with respect to an item or service may choose to 
        obtain such assistance from any institution, agency, or person 
        qualified to provide the item or service.
    ``(c) State Flexibility With Respect to Managed Care.--Nothing in 
this title shall be construed--
            ``(1) to limit a State's ability to contract with, on a 
        capitated basis or otherwise, health care plans or individual 
        health care providers for the provision or arrangement of 
        medical assistance;
            ``(2) to limit a State's ability to contract with health 
        care plans or other entities for case management services or 
        for coordination of medical assistance; or
            ``(3) to restrict a State from establishing capitation 
        rates on the basis of competition among health care plans or 
        negotiations between the State and one or more health care 
        plans.

``SEC. 2116. LIMITATIONS ON CAUSES OF ACTION.

    ``(a) In General.--Notwithstanding any other provision of this Act 
(including section 1130A), no person (including an applicant, 
beneficiary, provider, or health plan) shall have a cause of action 
under Federal law against a State in relation to a State's compliance 
(or failure to comply) with the provisions of this title or of a 
MediGrant plan.
    ``(b) No Effect on State Law.--Nothing in subsection (a) may be 
construed as affecting any actions brought under State law.

                      ``Part C--Payments to States

``SEC. 2121. ALLOTMENT OF FUNDS AMONG STATES.

    ``(a) Allotments.--
            ``(1) Computation.--The Secretary shall provide for the 
        computation of State obligation and outlay allotments in 
        accordance with this section for each fiscal year beginning 
        with fiscal year 1996.
            ``(2) Limitation on obligations.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall not enter into obligations with any 
                State under this title for a fiscal year in excess of 
                the obligation allotment for that State for the fiscal 
                year under paragraph (4). The sum of such obligation 
                allotments for all States in any fiscal year (excluding 
                amounts carried over under subparagraph (B) and 
                excluding changes in allotments effected under 
                paragraph (4)(D)) shall not exceed the aggregate limit 
                on new obligation authority specified in paragraph (3) 
                for that fiscal year.
                    ``(B) Adjustments.--
                            ``(i) Carryover of allotment permitted.--If 
                        the amount of obligations entered into under 
                        this part with a State for quarters in a fiscal 
                        year is less than the amount of the obligation 
                        allotment under this section to the State for 
                        the fiscal year, the amount of the difference 
                        shall be added to the amount of the State 
                        obligation allotment otherwise provided under 
                        this section for the succeeding fiscal year.
                            ``(ii) Reduction for post-enactment new 
                        obligations under title xix in fiscal year 
                        1996.--The amount of the obligation allotment 
                        otherwise provided under this section for 
                        fiscal year 1996 for a State shall be reduced 
                        by the amount of the obligations entered into 
                        with respect to the State under section 1903(a) 
                        after the date of the enactment of this Act.
            ``(3) Aggregate limit on new obligation authority.--
                    ``(A) In general.--For purposes of this subsection, 
                subject to subparagraph (C), the `aggregate limit on 
                new obligation authority', for a fiscal year, is the 
                pool amount under subsection (b) for the fiscal year, 
                divided by the payout adjustment factor (described in 
                subparagraph (B)) for the fiscal year.
                    ``(B) Payout adjustment factor.--For purposes of 
                this subsection, the `payout adjustment factor'--
                            ``(i) for fiscal year 1996 is .950,
                            ``(ii) for fiscal year 1997 is .986, and
                            ``(iii) for a subsequent fiscal year is 
                        .998.
                    ``(C) Transitional adjustment for pre-enactment-
                obligation outlays.--In order to account for pre-
                enactment-obligation outlays described in paragraph 
                (4)(C)(iv), in determining the aggregate limit on new 
                obligation authority under subparagraph (A) for fiscal 
                year 1996, the pool amount for such fiscal year is 
                equal to--
                            ``(i) the pool amount for such year, 
                        reduced by
                            ``(ii) $24.624 billion.
            ``(4) Obligation allotments.--
                    ``(A) General rule for 50 states and the district 
                of columbia.--Except as provided in this paragraph, the 
                `obligation allotment' for any of the 50 States or the 
                District of Columbia for a fiscal year (beginning with 
                fiscal year 1997) is an amount that bears the same 
                ratio to the outlay allotment under subsection (c)(2) 
                for such State or District (not taking into account any 
                adjustment due to an election under paragraph (4)) for 
                the fiscal year as the ratio of--
                            ``(i) the aggregate limit on new obligation 
                        authority (less the total of the obligation 
                        allotments under subparagraph (B)) for the 
                        fiscal year, to
                            ``(ii) the pool amount (less the sum of the 
                        outlay allotments for the territories) for such 
                        fiscal year.
                    ``(B) Territories.--The obligation allotment for 
                each of the Commonwealths and territories for a fiscal 
                year is the outlay allotment for such Commonwealth or 
                territory (as determined under subsection (c)(5)) for 
                the fiscal year divided by the payout adjustment factor 
                for the fiscal year (as defined in paragraph (3)(B)).
                    ``(C) Transitional rule for fiscal year 1996.--
                            ``(i) In general.--The obligation amount 
                        for fiscal year 1996 for any State (including 
                        the District, a Commonwealth, or territory) is 
                        determined according to the formula: A=(B-C)/D, 
                        where--
                                    ``(I) `A' is the obligation amount 
                                for such State;
                                    ``(II) `B' is the outlay allotment 
                                of such State for fiscal year 1996, as 
                                determined under subsection (c);
                                    ``(III) `C' is the amount of the 
                                pre-enactment-obligation outlays (as 
                                established for such State under clause 
                                (ii)); and
                                    ``(IV) `D' is the payout adjustment 
                                factor for such fiscal year (as defined 
                                in paragraph (3)(B)).
                            ``(ii) Pre-enactment-obligation outlay 
                        amounts.--Within 30 days after the date of the 
                        enactment of this title, the Secretary shall 
                        estimate (based on the best data available) and 
                        publish in the Federal Register the amount of 
                        the pre-enactment-obligation outlays (as 
                        defined in clause (iv)) for each State 
                        (including the District, Commonwealths, and 
                        territories). The total of such amounts shall 
                        equal the dollar amount specified in paragraph 
                        (3)(C)(ii).
                            ``(iii) Agreement.--The submission of a 
                        MediGrant plan by a State under this title is 
                        deemed to constitute the State's acceptance of 
                        the obligation allotment limitations under this 
                        subsection (including the formula for computing 
                        the amount of such obligation allotment).
                            ``(iv) Pre-enactment-obligation outlays 
                        defined.--In this subsection, the term `pre-
                        enactment-obligation outlays' means, for a 
                        State, the outlays of the Federal Government 
                        that result from obligations that have been 
                        incurred under title XIX with respect to the 
                        State before the date of the enactment of this 
                        title, but for which payments to States have 
                        not been made as of such date of enactment.
                    ``(D) Adjustment to reflect adoption of alternative 
                growth formula.--Any State that has elected an 
                alternative growth formula under subsection (c)(4) 
                which increases or decreases the dollar amount of an 
                outlay allotment for a fiscal year is deemed to have 
                increased or decreased, respectively, its obligation 
                amount for such fiscal year by the amount of such 
                increase or decrease.
    ``(b) Pool of Available Funds.--
            ``(1) In general.--For purposes of this section, the `pool 
        amount' under this subsection for--
                    ``(A) fiscal year 1996 is $95.673 billion;
                    ``(B) fiscal year 1997 is $102.135 billion;
                    ``(C) fiscal year 1998 is $106.221 billion;
                    ``(D) fiscal year 1999 is $110.469 billion;
                    ``(E) fiscal year 2000 is $114.888 billion;
                    ``(F) fiscal year 2001 is $119.483 billion;
                    ``(G) fiscal year 2002 is $124.263 billion; and
                    ``(H) each subsequent fiscal year is the pool 
                amount under this paragraph for the previous fiscal 
                year increased by the lesser of 4 percent or the annual 
                percentage increase in the consumer price index for all 
                urban consumers (U.S. city average) for the 12-month 
                period ending in June before the beginning of that 
                subsequent fiscal year.
            ``(2) National medigrant growth percentage.--For purposes 
        of this section for a fiscal year (beginning with fiscal year 
        1997), the `national MediGrant growth percentage' is the 
        percentage by which--
                    ``(A) the pool amount under paragraph (1) for the 
                fiscal year, exceeds
                    ``(B) such pool amount for the previous fiscal 
                year.
    ``(c) State Outlay Allotments.--
            ``(1) Fiscal year 1996.--
                    ``(A) In general.--For each of the 50 States and 
                the District of Columbia, the amount of the State 
                outlay allotment under this subsection for fiscal year 
                1996 is, subject to paragraph (4), equal to--
                            ``(i) the total amount of Federal 
                        expenditures made to the State under title XIX 
                        for the 4 quarters in fiscal year 1994, 
                        increased by
                            ``(ii) the percentage by which (I) 
                        $95,529,490,500 (which represents the total 
                        amount of outlay allotments for such States and 
                        District for fiscal year 1996), exceeds (II) 
                        $83,213,431,458 (which represents Federal 
                        medicaid expenditures for such States and 
                        District for fiscal year 1994).
                    ``(B) Computation of expenditures.--The amount of 
                Federal expenditures described in subparagraph (A)(i) 
                shall be computed, using data reported on the HCFA Form 
                64 as of September 1, 1995, based on--
                            ``(i) the amount reported on line 11, or
                            ``(ii) on the amount reported on line 6 
                        multiplied by the ratio of (I) the sum of the 
                        amounts so reported on line 11 of such Form for 
                        fiscal year 1994 for the 50 States and the 
                        District of Columbia, to (II) the sum of the 
                        amounts so reported on line 6 of such Form for 
                        fiscal year 1994 for such States and District,
                whichever is greater.
                    ``(C) Limitation on adjustment.--The amount 
                computed under subparagraph (B) shall not be subject to 
                adjustment (based on any subsequent disallowances or 
                otherwise).
            ``(2) Computation of state outlay allotments.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the amount of the State 
                outlay allotment under this subsection for one of the 
                50 States and the District of Columbia for a fiscal 
                year (beginning with fiscal year 1997) is equal to the 
                product of--
                            ``(i) the needs-based amount determined 
                        under subparagraph (B) for the State for the 
                        fiscal year, and
                            ``(ii) the scalar factor described in 
                        subparagraph (C) for the fiscal year.
                    ``(B) Needs-based amount.--The needs-based amount 
                under this subparagraph for a State for a fiscal year 
                is equal to the product of--
                            ``(i) the State's aggregate expenditure 
                        need for the fiscal year (as determined under 
                        subsection (d)), and
                            ``(ii) the State's old Federal medical 
                        assistance percentage (as defined in section 
                        2122(d)) for the previous fiscal year (or, in 
                        the case of fiscal year 1997, the Federal 
                        medical assistance percentage determined under 
                        section 1905(b) for fiscal year 1996).
                    ``(C) Scalar factor.--The scalar factor under this 
                subparagraph for a fiscal year is such proportion so 
                that, when it is applied under subparagraph (A)(ii) for 
                the fiscal year (taking into account the floors and 
                ceilings under paragraph (3)), the total of the outlay 
                allotments under this subsection for all the 50 States 
                and the District of Columbia for the fiscal year (not 
                taking into account any increase in an outlay allotment 
                for a fiscal year attributable to the election of an 
                alternative growth formula under paragraph (4)) is 
                equal to the amount by which (i) the pool amount for 
                the fiscal year (as determined under subsection (b)), 
                exceeds (ii) the sum of the outlay allotments provided 
                under paragraph (5) for the Commonwealths and 
                territories for the fiscal year.
            ``(3) Floors and ceilings.--
                    ``(A) Floors.--In no case shall the amount of the 
                State outlay allotment under paragraph (2) for a fiscal 
                year be less than the following:
                            ``(i) Floor based on previous year's outlay 
                        allotment.--102 percent of the amount of the 
                        State outlay allotment under this subsection 
                        for the previous fiscal year.
                            ``(ii) Floor based on outlay allotment 
                        growth rate in first year.--Beginning with 
                        fiscal year 1998, in the case of a State for 
                        which the outlay allotment under this 
                        subsection for fiscal year 1997 exceeded its 
                        outlay allotment under this subsection for the 
                        previous fiscal year by--
                                    ``(I) more than 125 percent of the 
                                national MediGrant growth percentage 
                                for fiscal year 1997, 104 percent of 
                                the amount of the State outlay 
                                allotment under this subsection for the 
                                previous fiscal year; or
                                    ``(II) less than 125 percent (but 
                                more than 75 percent) of the national 
                                MediGrant growth percentage for fiscal 
                                year 1997, 103 percent of the amount of 
                                the State outlay allotment under this 
                                subsection for the previous fiscal 
                                year.
                    ``(B) Ceiling.--
                            ``(i) In general.--Subject to clause (ii), 
                        in no case shall the amount of the State outlay 
                        allotment under paragraph (2) for a fiscal year 
                        be greater than the product of--
                                    ``(I) the State outlay allotment 
                                under this subsection for the State for 
                                the preceding fiscal year, and
                                    ``(II) 133 percent of the national 
                                MediGrant growth percentage (as 
                                determined under subsection (b)(2)) for 
                                the fiscal year involved.
                            ``(ii) Special rule.--For a fiscal year 
                        after fiscal year 1997, in the case of a State 
                        (among the 50 States and the District of 
                        Columbia) that is one of the 10 States with the 
                        lowest Federal MediGrant spending per resident-
                        in-poverty rates (as determined under clause 
                        (iii)) for the fiscal year, the reference in 
                        clause (i)(II) to `133 percent' is deemed a 
                        reference to `150 percent'.
                            ``(iii) Determination of federal medigrant 
                        spending per resident-in-poverty rate.--For 
                        purposes of clause (ii), the `Federal MediGrant 
                        spending per resident-in-poverty rate' for a 
                        State for a fiscal year is equal to--
                                    ``(I) the State's outlay allotment 
                                under this subsection for the previous 
                                fiscal year (determined without regard 
                                to paragraph (4)), divided by
                                    ``(II) the average annual number of 
                                residents of the State in poverty (as 
                                defined in subsection (d)(2)) with 
                                respect to the fiscal year.
            ``(4) Election of alternative growth formula.--
                    ``(A) Election.--In order to reduce variations in 
                increases in outlay allotments over time, any of the 50 
                States or the District of Columbia may elect (by notice 
                provided to the Secretary by not later than April 1, 
                1996) to adopt an alternative growth rate formula under 
                this paragraph for the determination of the State's 
                outlay allotment in fiscal year 1996 and for the 
                increase in the amount of such allotment in subsequent 
                fiscal years.
                    ``(B) Formula.--The alternative growth formula 
                under this paragraph may be any formula under which a 
                portion of the State outlay allotment for fiscal year 
                1996 under paragraph (1) is deferred and applied to 
                increase the amount of its outlay allotment for one or 
                more subsequent fiscal years, so long as the total 
                amount of such increases for all such subsequent fiscal 
                years does not exceed the amount of the outlay 
                allotment deferred from fiscal year 1996.
            ``(5) Commonwealths and territories.--The outlay allotment 
        for each of the Commonwealths and territories for a fiscal year 
        is the maximum amount that could have been certified under 
        section 1108(c) with respect to the Commonwealth or territory 
        for the fiscal year with respect to title XIX, if the national 
        MediGrant growth percentage (as determined under subsection 
        (b)(2)) for the fiscal year had been substituted (beginning 
        with fiscal year 1997) for the percentage increase referred to 
        in section 1108(c)(1)(B).
    ``(d) State Aggregate Expenditure Need Determined.--
            ``(1) In general.--For purposes of subsection (c), the 
        `State aggregate expenditure need' for a State for a fiscal 
        year is equal to the product of the following 4 factors:
                    ``(A) Residents in poverty.--The average annual 
                number of residents in poverty of the State with 
                respect to the fiscal year (as determined under 
                paragraph (2)).
                    ``(B) Case mix index.--The average of the case mix 
                indexes for the State (as determined under paragraph 
                (3)) for the 3 most recent fiscal years for which data 
                are available, but in no case less than .9 or greater 
                than 1.15.
                    ``(C) Input cost index.--The average of the input 
                cost indexes for the State (as determined under 
                paragraph (4)) for the 3 most recent fiscal years for 
                which data are available.
                    ``(D) National average spending per resident in 
                poverty.--The national average spending per resident in 
                poverty (as determined under paragraph (5)).
            ``(2) Residents in poverty.--In this section--
                    ``(A) In general.--The term `average annual number 
                of residents in poverty' means, with respect to a State 
                and a fiscal year, the average annual number of 
                residents in poverty (as defined in subparagraph (B)) 
                in the State (based on data made generally available by 
                the Bureau of the Census from the Current Population 
                Survey) for the most recent 3-calendar-year period 
                (ending before the fiscal year) for which such data are 
                available.
                    ``(B) Resident in poverty defined.--The term 
                `resident in poverty' means an individual whose family 
                income does not exceed the poverty threshold (as such 
                terms are defined by the Office of Management and 
                Budget and are generally interpreted and applied by the 
                Bureau of the Census for the year involved).
            ``(3) Case mix index.--
                    ``(A) In general.--In this subsection, the `case 
                mix index' for a State for a fiscal year is equal to--
                            ``(i) the sum of--
                                    ``(I) the projected per recipient 
                                expenditures with respect to elderly 
                                individuals in the State for the 
fiscal year (determined under subparagraph (B)),
                                    ``(II) the projected per recipient 
                                expenditures with respect to the blind 
                                and disabled individuals in the State 
                                for the fiscal year (determined under 
                                subparagraph (C)), and
                                    ``(III) the projected per recipient 
                                expenditures with respect to other 
                                individuals in the State (determined 
                                under subparagraph (D));
                divided by--
                            ``(ii) the national average spending per 
                        recipient determined under subparagraph (E) for 
                        the fiscal year involved.
                    ``(B) Projected per recipient expenditures for the 
                elderly.--For purposes of subparagraph (A)(I)(i), the 
                `projected per recipient expenditures with respect to 
                elderly individuals' in a State for a fiscal year is 
                equal to the product of--
                            ``(i) the national average per recipient 
                        expenditures under this title in the 50 States 
                        and the District of Columbia for the most 
                        recent fiscal year for which data are available 
                        for individuals who are 65 years of age or 
                        older, and
                            ``(ii) the proportion, of all individuals 
                        who received medical assistance under this 
                        title in the State in the most recent fiscal 
                        year referred to in clause (i), that were 
                        individuals described in such clause.
                    ``(C) Projected per recipient expenditures for the 
                blind and disabled.--For purposes of subparagraph 
                (A)(i)(II), the `projected per recipient expenditures 
                with respect to blind and disabled individuals' in a 
                State for a fiscal year is equal to the product of--
                            ``(i) the national average per recipient 
                        expenditures under this title in the 50 States 
                        and the District of Columbia for the most 
                        recent fiscal year for which data are available 
                        for individuals who are eligible for medical 
                        assistance because they are blind or disabled 
                        and under 65 years of age, and
                            ``(ii) the proportion, of all individuals 
                        who received medical assistance under this 
                        title in the State in the most recent fiscal 
                        year referred to in clause (i), that were 
                        individuals described in such clause.
                    ``(D) Projected per recipient expenditures for 
                other individuals.--For purposes of subparagraph 
                (A)(i)(III), the `projected per recipient expenditures 
                with respect to other individuals' in a State for a 
                fiscal year is equal to the product of--
                            ``(i) the national average per recipient 
                        expenditures under this title in the 50 States 
                        and the District of Columbia for the most 
                        recent fiscal year for which data are available 
                        for individuals who are not described in 
                        subparagraph (B)(i) or (C)(i), and
                            ``(ii) the proportion, of all individuals 
                        who received medical assistance under this 
                        title in the State in the most recent fiscal 
                        year referred to in clause (i), that were 
                        individuals described in such clause.
                    ``(E) National average spending per recipient.--For 
                purposes of this paragraph, the `national average 
                expenditures per recipient' for a fiscal year is equal 
                to the sum of--
                            ``(i) the product of (I) the national 
                        average described in subparagraph (B)(i), and 
                        (II) the proportion, of all individuals who 
                        received medical assistance under this title in 
                        any of the 50 States or the District of 
                        Columbia in the fiscal year referred to in such 
                        subparagraph, who are described in such 
                        subparagraph;
                            ``(ii) the product of (I) the national 
                        average described in subparagraph (C)(i), and 
                        (II) the proportion, of all individuals who 
                        received medical assistance under this title in 
                        any of the 50 States or the District of 
                        Columbia in the fiscal year referred to in such 
                        subparagraph, who are described in such 
                        subparagraph; and
                            ``(iii) the product of (I) the national 
                        average described in subparagraph (D)(i), and 
                        (II) the proportion, of all individuals who 
                        received medical assistance under this title in 
                        any of the 50 States or the District of 
                        Columbia in the fiscal year referred to in such 
                        subparagraph, who are described in such 
                        subparagraph.
                    ``(F) Determination of national averages and 
                proportions.--
                            ``(i) In general.--The national averages 
                        per recipient and the proportions referred to 
                        in clauses (i) and (ii), respectively, of 
                        subparagraphs (B), (C), and (D) and 
                        subparagraph (E) shall be determined by the 
                        Secretary using the most recent data available.
                            ``(ii) Use of medicaid data.--If for a 
                        fiscal year there is inadequate data to compute 
                        such averages and proportions based on 
                        expenditures and numbers of individuals 
                        receiving medical assistance under this title, 
                        the Secretary may compute such averages based 
                        on expenditures and numbers of such individuals 
                        under title XIX for the most recent fiscal year 
                        for which data are available and, for this 
                        purpose--
                                    ``(I) any reference in subparagraph 
                                (B)(i) to `individuals 65 years of age 
                                or older' is deemed a reference to 
                                `individuals whose eligibility for 
                                medical assistance is based on being 65 
                                years of age or older',
                                    ``(II) the reference in 
                                subparagraph (C)(i) to `and under 65 
                                years of age' shall be considered to be 
                                deleted, and
                                    ``(III) individuals whose basis for 
                                eligibility for medical assistance was 
                                reported as unknown shall not be 
                                counted as individuals under 
                                subparagraph (D)(i).
            ``(4) Input cost index.--
                    ``(A) In general.--In this section, the `input cost 
                index' for a State for a fiscal year is the sum of--
                            ``(i) 0.15, and
                            ``(ii) 0.85 multiplied by the ratio of (I) 
                        the annual average wages for hospital employees 
                        in the State for the fiscal year (as determined 
                        under subparagraph (B)), to (II) the annual 
                        average wages for hospital employees in the 50 
                        States and the District of Columbia for such 
                        year (as determined under such subparagraph).
                    ``(B) Determination of annual average wages of 
                hospital employees.--The Secretary shall provide for 
                the determination of annual average wages for hospital 
                employees in a State and, collectively, in the 50 
                States and the District of Columbia for a fiscal year 
                based on the area wage index applicable to hospitals 
                under 1886(d)(2)(E) (or, if such index no longer 
                exists, a comparable index of hospital wages) for 
                discharges occurring during the fiscal year involved.
            ``(5) National average spending per resident in poverty.--
        For purposes of this subsection, the `national average spending 
        per resident in poverty'--
                    ``(A) for fiscal year 1997 is equal to--
                            ``(i) the sum (for each of the 50 States 
                        and the District of Columbia) of the total of 
                        the Federal and State expenditures under title 
                        XIX for calendar quarters in fiscal year 1994, 
                        increased by the percentage specified in 
                        subsection (c)(1)(A)(ii), divided by
                            ``(ii) the sum of the number of residents 
                        in poverty (as defined in paragraph (2)(A)) for 
                        all of the 50 States and the District of 
                        Columbia for fiscal year 1994;
                    ``(B) for a succeeding fiscal year is equal to the 
                national average spending per resident in poverty under 
                this paragraph for the preceding fiscal year increased 
                by the national MediGrant growth percentage (as defined 
                in subsection (b)(2)) for the fiscal year involved.
    ``(e) Publication of Obligation and Outlay Allotments.--
            ``(1) Notice of preliminary allotments.--Not later than 
        April 1 before the beginning of each fiscal year (beginning 
        with fiscal year 1997), the Secretary shall initially compute, 
        after consultation with the Comptroller General, and publish in 
        the Federal Register notice of the proposed obligation and 
        outlay allotments for each State under this section (not taking 
        into account subsection (a)(2)(B)) for the fiscal year. The 
        Secretary shall include in the notice a description of the 
        methodology and data used in deriving such allotments for the 
        year.
            ``(2) Review by gao.--The Comptroller General shall submit 
        to Congress by not later than May 15 of each such fiscal year, 
        a report analyzing such allotments and the extent to which they 
        comply with the precise requirements of this section.
            ``(3) Notice of final allotments.--Not later than July 1 
        before the beginning of each such fiscal year, the Secretary, 
        taking into consideration the analysis contained in the report 
        of the Comptroller General under paragraph (2), shall compute 
        and publish in the Federal Register notice of the final 
        allotments under this section (both taking into account and not 
        taking into account subsection (a)(2)(B)) for the fiscal year. 
        The Secretary shall include in the notice a description of any 
        changes in such allotments from the initial allotments 
        published under paragraph (1) for the fiscal year and the 
        reasons for such changes. Once published under this paragraph, 
        the Secretary is not authorized to change such allotments.
            ``(4) GAO report on final allotments.--The Comptroller 
        General shall submit to Congress by not later than August 1 of 
        each such fiscal year, a report analyzing the final allotments 
        under paragraph (3) and the extent to which they comply with 
        the precise requirements of this section.

``SEC. 2122. PAYMENTS TO STATES.

    ``(a) Amount of Payment.--From the allotment of a State under 
section 2121 for a fiscal year, subject to the succeeding provisions of 
this title, the Secretary shall pay to each State which has a MediGrant 
plan approved under part E, for each quarter in the fiscal year--
            ``(1) an amount equal to the applicable Federal medical 
        assistance percentage (as defined in subsection (c)) of the 
        total amount expended during such quarter as medical assistance 
        under the plan; plus
            ``(2) an amount equal to the applicable Federal medical 
        assistance percentage of the total amount expended during such 
        quarter for medically-related services (as defined in section 
        2112(e)(2)); plus
            ``(3) subject to section 2123(c)--
                    ``(A) an amount equal to 90 percent of the amounts 
                expended during such quarter for the design, 
                development, and installation of information systems 
                and for providing incentives to promote the enforcement 
                of medical support orders, plus
                    ``(B) an amount equal to 75 percent of the amounts 
                expended during such quarter for medical personnel, 
                administrative support of medical personnel, operation 
                and maintenance of information systems, modification of 
                information systems, quality assurance activities, 
                utilization review, medical and peer review, anti-fraud 
                activities, independent evaluations, coordination of 
                benefits, and meeting reporting requirements under this 
                title, plus
                    ``(C) an amount equal to 50 percent of so much of 
                the remainder of the amounts expended during such 
                quarter as are expended by the State in the 
                administration of the State plan.
    ``(b) Payment Process.--
            ``(1) Quarterly estimates.--Prior to the beginning of each 
        quarter, the Secretary shall estimate the amount to which a 
        State will be entitled under subsection (a) for such quarter, 
        such estimates to be based on (A) a report filed by the State 
        containing its estimate of the total sum to be expended in such 
        quarter in accordance with the provisions of such subsections, 
        and stating the amount appropriated or made available by the 
        State and its political subdivisions for such expenditures in 
        such quarter, and if such amount is less than the State's 
        proportionate share of the total sum of such estimated 
        expenditures, the source or sources from which the difference 
        is expected to be derived, and (B) such other investigation as 
        the Secretary may find necessary.
            ``(2) Payment.--
                    ``(A) In general.--The Secretary shall then pay to 
                the State, in such installments as the Secretary may 
                determine and in accordance with section 6503(a) of 
                title 31, United States Code, the amount so estimated, 
                reduced or increased to the extent of any overpayment 
                or underpayment which the Secretary determines was made 
                under this section (or section 1903) to such State for 
                any prior quarter and with respect to which adjustment 
                has not already been made under this subsection (or 
                under section 1903(d)).
                    ``(B) Treatment as overpayments.--Expenditures for 
                which payments were made to the State under subsection 
                (a) shall be treated as an overpayment to the extent 
                that the State or local agency administering such plan 
                has been reimbursed for such expenditures by a third 
                party pursuant to the provisions of its plan in 
                compliance with section 2135.
                    ``(C) Recovery of overpayments.--For purposes of 
                this subsection, when an overpayment is discovered, 
                which was made by a State to a person or other entity, 
                the State shall have a period of 60 days in which to 
                recover or attempt to recover such overpayment before 
                adjustment is made in the Federal payment to such State 
                on account of such overpayment. Except as otherwise 
                provided in subparagraph (D), the adjustment in the 
                Federal payment shall be made at the end of the 60 
                days, whether or not recovery was made.
                    ``(D) No adjustment for uncollectables.--In any 
                case where the State is unable to recover a debt which 
                represents an overpayment (or any portion thereof) made 
                to a person or other entity on account of such debt 
                having been discharged in bankruptcy or otherwise being 
                uncollectable, no adjustment shall be made in the 
                Federal payment to such State on account of such 
                overpayment (or portion thereof).
            ``(3) Federal share of recoveries.--The pro rata share to 
        which the United States is equitably entitled, as determined by 
        the Secretary, of the net amount recovered during any quarter 
        by the State or any political subdivision thereof with respect 
        to medical assistance furnished under the State plan shall be 
        considered an overpayment to be adjusted under this subsection.
            ``(4) Timing of obligation of funds.--Upon the making of 
        any estimate by the Secretary under this subsection, any 
        appropriations available for payments under this section shall 
        be deemed obligated.
            ``(5) Disallowances.--In any case in which the Secretary 
        estimates that there has been an overpayment under this section 
        to a State on the basis of a claim by such State that has been 
        disallowed by the Secretary under section 1116(d), and such 
        State disputes such disallowance, the amount of the Federal 
        payment in controversy shall, at the option of the State, be 
        retained by such State or recovered by the Secretary pending a 
        final determination with respect to such payment amount. If 
        such final determination is to the effect that any amount was 
        properly disallowed, and the State chose to retain payment of 
        the amount in controversy, the Secretary shall offset, from any 
        subsequent payments made to such State under this title, an 
        amount equal to the proper amount of the disallowance plus 
        interest on such amount disallowed for the period beginning 
on the date such amount was disallowed and ending on the date of such 
final determination at a rate (determined by the Secretary) based on 
the average of the bond equivalent of the weekly 90-day treasury bill 
auction rates during such period.
    ``(c) Applicable Federal Medical Assistance Percentage Defined.--In 
this section, except as provided in subsection (f), the term 
`applicable Federal medical assistance percentage' means, with respect 
to one of the 50 States or the District of Columbia, at the State's or 
District's option--
            ``(1) the old Federal medical assistance percentage (as 
        determined in subsection (d)), or
            ``(2) the new Federal medical assistance percentage (as 
        determined under subsection (e)) or, if less, the old Federal 
        medical assistance percentage plus 10 percentage points.
    ``(d) Old Federal Medical Assistance Percentage.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        subsection (f), the term `old Federal medical assistance 
        percentage' for any State is 100 percent less the State 
        percentage; and the State percentage is that percentage which 
        bears the same ratio to 45 percent as the square of the per 
        capita income of such State bears to the square of the per 
        capita income of the continental United States (including 
        Alaska) and Hawaii.
            ``(2) Limitation on range.--In no case shall the old 
        Federal medical assistance percentage be less than 50 percent 
        or more than 83 percent.
            ``(3) Promulgation.--The old Federal medical assistance 
        percentage for any State shall be determined and promulgated in 
        accordance with the provisions of section 1101(a)(8)(B).
    ``(e) New Federal Medical Assistance Percentage Defined.--
            ``(1) In general.--
                    ``(A) Term defined.--Except as provided in 
                paragraph (3) and subsection (f), the term `new Federal 
                medical assistance percentage' means, for each of the 
                50 States and the District of Columbia, 100 percent 
                reduced by the product 0.39 and the ratio of--
                            ``(i)(I) for each of the 50 States, the 
                        total taxable resources (TTR) ratio of the 
                        State specified in subparagraph (B), or
                            ``(II) for the District of Columbia, the 
                        per capita income ratio specified in 
                        subparagraph (C),
                to--
                            ``(ii) the aggregate expenditure need ratio 
                        of the State or District, as described in 
                        subparagraph (D).
                    ``(B) Total taxable resources (ttr) ratio.--For 
                purposes of subparagraph (A)(i)(I), the total taxable 
                resources (TTR) ratio for each of the 50 States is--
                            ``(i) an amount equal to the most recent 3-
                        year average of the total taxable resources 
                        (TTR) of the State, as determined by the 
                        Secretary of the Treasury, divided by
                            ``(ii) an amount equal to the sum of the 3-
                        year averages determined under clause (i) for 
                        each of the 50 States.
                    ``(C) Per capita income ratio.--For purposes of 
                subparagraph (A)(i)(II), the per capita income ratio of 
                the District of Columbia is--
                            ``(i) an amount equal to the most recent 3-
                        year average of the total personal income of 
                        the District of Columbia, as determined in 
                        accordance with the provisions of section 
                        1101(a)(8)(B), divided by
                            ``(ii) an amount equal to the total 
                        personal income of the continental United 
                        States (including Alaska) and Hawaii, as 
                        determined under section 1101(a)(8)(B).
                    ``(D) Aggregate expenditure need ratio.--For 
                purposes of subparagraph (A), with respect to each of 
                the 50 States and the District of Columbia for a fiscal 
                year, the aggregate expenditure need ratio is--
                            ``(i) the State aggregate expenditure need 
                        (as defined in section 2121(d)) for the State 
                        for the fiscal year, divided by
                            ``(ii) the such of such State aggregate 
                        expenditure needs for the 50 States and the 
                        District of Columbia for the fiscal year.
            ``(2) Limitation on range.--Except as provided in 
        subsection (f), the new Federal medical assistance percentage 
        shall in no case be less than 40 percent or greater than 83 
        percent.
            ``(3) Promulgation.--The new Federal medical assistance 
        percentage for any State shall be promulgated in a timely 
        manner consistent with the promulgation of the old Federal 
        medical assistance percentage under section 1101(a)(8)(B).
    ``(f) Special Rules.--For purposes of this title--
            ``(1) Commonwealths and territories.--In the case of Puerto 
        Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
        and American Samoa, the old and new Federal medical assistance 
        percentages are 50 percent.
            ``(2) Indian health service facilities.--
                    ``(A) In general.--The old and new Federal medical 
                assistance percentages shall be 100 percent with 
                respect to the amounts expended as medical assistance 
                for services which are received through a facility 
                described in subparagraph (B) of an Indian tribe or 
                tribal organization or through an Indian Health Service 
                facility whether operated by the Indian Health Service 
                or by an Indian tribe or tribal organization (as 
                defined in section 4 of the Indian Health Care 
                Improvement Act).
                    ``(B) Facility described.--For purposes of 
                subparagraph (A), a facility described in this 
                subparagraph is a facility of an Indian tribe if--
                            ``(i) the facility is located in a State 
                        which, as of the date of the enactment of this 
                        title, was not operating its State plan under 
                        title XIX pursuant to a Statewide waiver 
                        approved under section 1115,
                            ``(ii) the facility is not an Indian Health 
                        Service facility,
                            ``(iii) the tribe owns at least 2 such 
                        facilities, and
                            ``(iv) the tribe has at least 50,000 
                        members (as of the date of the enactment of 
                        this title).
            ``(3) No state matching required for certain 
        expenditures.--In applying subsection (a)(1) with respect to 
        medical assistance provided to unlawful aliens pursuant to the 
        exception specified in section 2123(e)(2), payment shall be 
        made for the amount of such assistance without regard to any 
        need for a State match.

``SEC. 2123. LIMITATION ON USE OF FUNDS; DISALLOWANCE.

    ``(a) In General.--Funds provided to a State under this title shall 
only be used to carry out the purposes of this title.
    ``(b) Disallowances for Excluded Providers.--
            ``(1) In general.--Payment shall not be made to a State 
        under this part for expenditures for items and services 
        furnished--
                    ``(A) by a provider who was excluded from 
                participation under title V, XVIII, or XX or under this 
                title pursuant to section 1128, 1128A, 1156, or 
                1842(j)(2), or
                    ``(B) under the medical direction or on the 
                prescription of a physician who was so excluded, if the 
                provider of the services knew or had reason to know of 
                the exclusion.
            ``(2) Exception for emergency services.--Paragraph (1) 
        shall not apply to emergency items or services, not including 
        hospital emergency room services.
    ``(c) Limitations.--
            ``(1) In general.--No Federal financial assistance is 
        available for expenditures under the MediGrant plan for--
                    ``(A) medically-related services for a quarter to 
                the extent such expenditures exceed 5 percent of the 
                total expenditures under the plan for the quarter; or
                    ``(B) total administrative expenses (other than 
                expenses described in paragraph (2) during the first 8 
                quarters in which the plan is in effect under this 
                title) for quarters in a fiscal year to the extent such 
                expenditures exceed the sum of $20,000,000 plus 10 
                percent of the total expenditures under the plan for 
                the year.
            ``(2) Administrative expenses not subject to limitation.--
        The administrative expenses referred to in this paragraph are 
        expenditures under the MediGrant plan for the following 
        activities:
                    ``(A) Quality assurance.
                    ``(B) The development and operation of the 
                certification program for nursing facilities and 
                intermediate care facilities for the mentally retarded 
                under section 2137(a)(2).
                    ``(C) Utilization review activities, including 
                medical activities and activities of peer review 
                organizations.
                    ``(D) Inspection and oversight of providers and 
                capitated health care organizations.
                    ``(E) Anti-fraud activities.
                    ``(F) Independent evaluations.
                    ``(G) Activities required to meet reporting 
                requirements under this title.
    ``(d) Treatment of Third Party Liability.--No payment shall be made 
to a State under this part for expenditures for medical assistance 
provided for an individual under its MediGrant plan to the extent that 
a private insurer (as defined by the Secretary by regulation and 
including a group health plan (as defined in section 607(1) of the 
Employee Retirement Income Security Act of 1974), a service benefit 
plan, and a health maintenance organization) would have been obligated 
to provide such assistance but for a provision of its insurance 
contract which has the effect of limiting or excluding such obligation 
because the individual is eligible for or is provided medical 
assistance under the plan.
    ``(e) Limitation on Payments to Emergency Services for Nonlawful 
Aliens.--
            ``(1) In general.--Notwithstanding the preceding provisions 
        of this section, except as provided in paragraph (2), no 
        payment may be made to a State under this part for medical 
        assistance furnished to an alien who is not lawfully admitted 
        for permanent residence or otherwise permanently residing in 
        the United States under color of law.
            ``(2) Exception for emergency services.--Payment may be 
        made under this section for care and services that are 
        furnished to an alien described in paragraph (1) only if--
                    ``(A) such care and services are necessary for the 
                treatment of an emergency medical condition of the 
                alien,
                    ``(B) such alien otherwise meets the eligibility 
                requirements for medical assistance under the MediGrant 
                plan (other than a requirement of the receipt of aid or 
                assistance under title IV, supplemental security income 
                benefits under title XVI, or a State supplementary 
                payment), and
                    ``(C) such care and services are not related to an 
                organ transplant procedure.
            ``(3) Emergency medical condition defined.--For purposes of 
        this subsection, the term `emergency medical condition' means a 
        medical condition (including emergency labor and delivery) 
        manifesting itself by acute symptoms of sufficient severity 
        (including severe pain) such that the absence of immediate 
        medical attention could reasonably be expected to result in--
                    ``(A) placing the patient's health in serious 
                jeopardy,
                    ``(B) serious impairment to bodily functions, or
                    ``(C) serious dysfunction of any bodily organ or 
                part.
    ``(f) Limitation on Payment for Certain Outpatient Prescription 
Drugs.--
            ``(1) In General.--No payment may be made to a State under 
        this part for medical assistance for covered outpatient drugs 
        (as defined in section 2175(i)(2)) of a manufacturer provided 
        under the MediGrant plan unless the manufacturer (as defined in 
        section 2175(i)(4)) of the drug--
                    ``(A) has entered into a MediGrant master rebate 
                agreement with the Secretary under section 2175; and
                    ``(B) is complying with the provisions of section 
                8126 of title 38, United States Code, including the 
                requirement of entering into a master agreement with 
                the Secretary of Veterans Affairs under such section.
            ``(2) Construction.--Nothing in this subsection shall be 
        construed as requiring a State to participate in the MediGrant 
        master rebate agreement under section 2175.
            ``(3) Effect of subsequent amendments.--For purposes of 
        paragraph (1)(B), in determining whether a manufacturer is in 
        compliance with the requirements of section 8126 of title 38, 
        United States Code--
                    ``(A) the Secretary shall not take into account any 
                amendments to such section that are enacted after the 
                enactment of title VI of the Veterans Health Care Act 
                of 1992; and
                    ``(B) a manufacturer is deemed to meet such 
                requirements if the manufacturer establishes to the 
                satisfaction of the Secretary that the manufacturer 
                would comply (and has offered to comply) with the 
                provisions of section 8126 of title 38, United States 
                Code (as in effect immediately after the enactment of 
                the Veterans Health Care Act of 1992) and would have 
                entered into an agreement under such section (as such 
                section was in effect at such time), but for a 
                legislative change in such section after the date of 
                the enactment of the Veterans Health Care Act of 1992.
    ``(g) Limitation on Payment for Abortions.--
            ``(1) In general.--Payment shall not be made to a State 
        under this part for any amount expended under the MediGrant 
        plan to pay for any abortion or to assist in the purchase, in 
        whole or in part, of health benefit coverage that includes 
        coverage of abortion.
            ``(2) Exception.--Paragraph (1) shall not apply to an 
        abortion--
                    ``(A) if the pregnancy is the result of an act of 
                rape or incest, or
                    ``(B) in the case where a woman suffers from a 
                physical disorder, illness, or injury that would, as 
                certified by a physician, place the woman in danger of 
                death unless an abortion is performed.
    ``(h) Limitation on Payment for Assisting Deaths.--Payment shall 
not be made to a State under this part for amounts expended under the 
MediGrant plan to pay for, or to assist in the purchase, in whole or in 
part, of health benefit coverage that includes payment for any drug, 
biological product, or service which was furnished for the purpose of 
causing, or assisting in causing, the death, suicide, euthanasia, or 
mercy killing of a person.

                ``Part D--Program Integrity and Quality

``SEC. 2131. USE OF AUDITS TO ACHIEVE FISCAL INTEGRITY.

    ``(a) Financial Audits of Program.--
            ``(1) In general.--Each MediGrant plan shall provide for an 
        annual audit of the State's expenditures from amounts received 
        under this title, in compliance with chapter 75 of title 31, 
        United States Code.
            ``(2) Verification audits.--If, after consultation with the 
        State and the Comptroller General and after a fair hearing, the 
        Secretary determines that a State's audit under paragraph (1) 
        was performed in substantial violation of chapter 75 of title 
        31, United States Code, the Secretary may--
                    ``(A) require that the State provide for a 
                verification audit in compliance with such chapter, or
                    ``(B) conduct such a verification audit.
            ``(3) Availability of audit reports.--Within 30 days after 
        completion of each audit or verification audit under this 
        subsection, the State shall--
                    ``(A) provide the Secretary with a copy of the 
                audit report, including the State's response to any 
                recommendations of the auditor, and
                    ``(B) make the audit report available for public 
                inspection in the same manner as proposed MediGrant 
                plan amendments are made available under section 2105.
    ``(b) Fiscal Controls.--
            ``(1) In general.--With respect to the accounting and 
        expenditure of funds under this title, each State shall adopt 
        and maintain such fiscal controls, accounting procedures, and 
        data processing safeguards as the State deems reasonably 
        necessary to assure the fiscal integrity of the State's 
        activities under this title.
            ``(2) Consistency with generally accepted accounting 
        principles.--Such controls and procedures shall be generally 
        consistent with generally accepted accounting principles as 
        recognized by the Governmental Accounting Standards Board or 
        the Comptroller General.
    ``(c) Audits of Providers.--Each MediGrant plan shall provide that 
the records of any entity providing items or services for which payment 
may be made under the plan may be audited as necessary to ensure that 
proper payments are made under the plan.

``SEC. 2132. FRAUD PREVENTION PROGRAM.

    ``(a) Establishment.--Each MediGrant plan shall provide for the 
establishment and maintenance of an effective program for the detection 
and prevention of fraud and abuse by beneficiaries, providers, and 
others in connection with the operation of the program.
    ``(b) Program Requirements.--The program established pursuant to 
subsection (a) shall include at least the following requirements:
            ``(1) Disclosure of information.--Any disclosing entity (as 
        defined in section 1124(a)) receiving payments under the 
        MediGrant plan shall comply with the requirements of section 
        1124.
            ``(2) Supply of information.--An entity (other than an 
        individual practitioner or a group of practitioners) that 
        furnishes, or arranges for the furnishing of, an item or 
        service under the MediGrant plan shall supply upon request 
        specifically addressed to the entity by the Secretary or the 
        State agency the information described in section 1128(b)(9).
            ``(3) Exclusion.--
                    ``(A) In general.--The MediGrant plan shall exclude 
                any specified individual or entity from participation 
                in the plan for the period specified by the Secretary 
                when required by the Secretary to do so pursuant to 
                section 1128 or section 1128A, and provide that no 
                payment may be made under the plan with respect to any 
                item or service furnished by such individual or entity 
                during such period.
                    ``(B) Authority.--In addition to any other 
                authority, a State may exclude any individual or entity 
                for purposes of participating under the MediGrant plan 
                for any reason for which the Secretary could exclude 
                the individual or entity from participation in a 
                program under title XVIII or under section 1128, 1128A, 
                or 1866(b)(2).
            ``(4) Notice.--The MediGrant plan shall provide that 
        whenever a provider of services or any other person is 
        terminated, suspended, or otherwise sanctioned or prohibited 
        from participating under the plan, the State agency responsible 
        for administering the plan shall promptly notify the Secretary 
        and, in the case of a physician, the State medical licensing 
        board of such action.
            ``(5) Access to information.--The MediGrant plan shall 
        provide that the State will provide information and access to 
        certain information respecting sanctions taken against health 
        care practitioners and providers by State licensing authorities 
        in accordance with section 2133.

``SEC. 2133. INFORMATION CONCERNING SANCTIONS TAKEN BY STATE LICENSING 
              AUTHORITIES AGAINST HEALTH CARE PRACTITIONERS AND 
              PROVIDERS.

    ``(a) Information Reporting Requirement.--The requirement referred 
to in section 2132(b)(5) is that the State must provide for the 
following:
            ``(1) Information reporting system.--The State must have in 
        effect a system of reporting the following information with 
        respect to formal proceedings (as defined by the Secretary in 
        regulations) concluded against a health care practitioner or 
        entity by any authority of the State (or of a political 
        subdivision thereof) responsible for the licensing of health 
        care practitioners (or any peer review organization or private 
        accreditation entity reviewing the services provided by health 
        care practitioners) or entities:
                    ``(A) Any adverse action taken by such licensing 
                authority as a result of the proceeding, including any 
                revocation or suspension of a license (and the length 
                of any such suspension), reprimand, censure, or 
                probation.
                    ``(B) Any dismissal or closure of the proceedings 
                by reason of the practitioner or entity surrendering 
                the license or leaving the State or jurisdiction.
                    ``(C) Any other loss of the license of the 
                practitioner or entity, whether by operation of law, 
                voluntary surrender, or otherwise.
                    ``(D) Any negative action or finding by such 
                authority, organization, or entity regarding the 
                practitioner or entity.
            ``(2) Access to documents.--The State must provide the 
        Secretary (or an entity designated by the Secretary) with 
        access to such documents of the authority described in 
        paragraph (1) as may be necessary for the Secretary to 
        determine the facts and circumstances concerning the actions 
        and determinations described in such paragraph for the purpose 
        of carrying out this Act.
    ``(b) Form of Information.--The information described in subsection 
(a)(1) shall be provided to the Secretary (or to an appropriate private 
or public agency, under suitable arrangements made by the Secretary 
with respect to receipt, storage, protection of confidentiality, and 
dissemination of information) in such a form and manner as the 
Secretary determines to be appropriate in order to provide for 
activities of the Secretary under this Act and in order to provide, 
directly or through suitable arrangements made by the Secretary, 
information--
            ``(1) to agencies administering Federal health care 
        programs, including private entities administering such 
        programs under contract,
            ``(2) to licensing authorities described in subsection 
        (a)(1),
            ``(3) to State agencies administering or supervising the 
        administration of State health care programs (as defined in 
        section 1128(h)),
            ``(4) to utilization and quality control peer review 
        organizations described in part B of title XI and to 
        appropriate entities with contracts under section 1154(a)(4)(C) 
        with respect to eligible organizations reviewed under the 
        contracts,
            ``(5) to State MediGrant fraud control units (as defined in 
        section 2134),
            ``(6) to hospitals and other health care entities (as 
        defined in section 431 of the Health Care Quality Improvement 
        Act of 1986), with respect to physicians or other licensed 
        health care practitioners that have entered (or may be 
        entering) into an employment or affiliation relationship with, 
        or have applied for clinical privileges or appointments to the 
        medical staff of, such hospitals or other health care entities 
        (and such information shall be deemed to be disclosed pursuant 
        to section 427 of, and be subject to the provisions of, that 
        Act),
            ``(7) to the Attorney General and such other law 
        enforcement officials as the Secretary deems appropriate, and
            ``(8) upon request, to the Comptroller General,
        in order for such authorities to determine the fitness of 
        individuals to provide health care services, to protect the 
        health and safety of individuals receiving health care through 
        such programs, and to protect the fiscal integrity of such 
        programs.
    ``(c) Confidentiality of Information Provided.--The Secretary shall 
provide for suitable safeguards for the confidentiality of the 
information furnished under subsection (a). Nothing in this subsection 
shall prevent the disclosure of such information by a party which is 
otherwise authorized, under applicable State law, to make such 
disclosure.
    ``(d) Appropriate Coordination.--The Secretary shall provide for 
the maximum appropriate coordination in the implementation of 
subsection (a) of this section and section 422 of the Health Care 
Quality Improvement Act of 1986.

``SEC. 2134. STATE MEDIGRANT FRAUD CONTROL UNITS.

    ``(a) In General.--Each MediGrant plan shall provide for a State 
MediGrant fraud control unit described in subsection (b) that 
effectively carries out the functions and requirements described in 
such subsection, unless the State demonstrates to the satisfaction of 
the Secretary that the effective operation of such a unit in the State 
would not be cost-effective because minimal fraud exists in connection 
with the provision of covered services to eligible individuals under 
the plan, and that beneficiaries under the plan will be protected from 
abuse and neglect in connection with the provision of medical 
assistance under the plan without the existence of such a unit
    ``(b) Units Described.--For purposes of this subsection, the term 
`State MediGrant fraud control unit' means a single identifiable entity 
of the State government which meets the following requirements:
            ``(1) Organization.--The entity--
                    ``(A) is a unit of the office of the State Attorney 
                General or of another department of State government 
                which possesses statewide authority to prosecute 
                individuals for criminal violations;
                    ``(B) is in a State the constitution of which does 
                not provide for the criminal prosecution of individuals 
                by a statewide authority and has formal procedures 
                that--
                            ``(i) assure its referral of suspected 
                        criminal violations relating to the program 
                        under this title to the appropriate authority 
                        or authorities in the State for prosecution, 
                        and
                            ``(ii) assure its assistance of, and 
                        coordination with, such authority or 
                        authorities in such prosecutions; or
                    ``(C) has a formal working relationship with the 
                office of the State Attorney General and has formal 
                procedures (including procedures for its referral of 
                suspected criminal violations to such office) which 
                provide effective coordination of activities between 
                the entity and such office with respect to the 
                detection, investigation, and prosecution of suspected 
                criminal violations relating to the program under this 
                title.
            ``(2) Independence.--The entity is separate and distinct 
        from any State agency that has principal responsibilities for 
        administering or supervising the administration of the 
        MediGrant plan.
            ``(3) Function.--The entity's function is conducting a 
        statewide program for the investigation and prosecution of 
        violations of all applicable State laws regarding any and all 
        aspects of fraud in connection with any aspect of the provision 
        of medical assistance and the activities of providers of such 
        assistance under the MediGrant plan.
            ``(4) Review of complaints.--The entity has procedures for 
        reviewing complaints of the abuse and neglect of patients of 
        health care facilities which receive payments under the 
        MediGrant plan under this title, and, where appropriate, for 
        acting upon such complaints under the criminal laws of the 
        State or for referring them to other State agencies for action.
            ``(5) Overpayments.--The entity provides for the 
        collection, or referral for collection to a single State 
        agency, of overpayments that are made under the MediGrant plan 
        to health care providers and that are discovered by the entity 
        in carrying out its activities.
            ``(6) Personnel.--The entity employs such auditors, 
        attorneys, investigators, and other necessary personnel and is 
        organized in such a manner as is necessary to promote the 
        effective and efficient conduct of the entity's activities.

``SEC. 2135. RECOVERIES FROM THIRD PARTIES AND OTHERS.

    ``(a) Third Party Liability.--Each MediGrant plan shall provide for 
reasonable steps--
            ``(1) to ascertain the legal liability of third parties to 
        pay for care and services available under the plan, including 
        the collection of sufficient information to enable States to 
        pursue claims against third parties; and
            ``(2) to seek reimbursement for medical assistance provided 
        to the extent legal liability is established where the amount 
        expected to be recovered exceeds the costs of the recovery.
    ``(b) Beneficiary Protection.--
            ``(1) In general.--Each MediGrant plan shall provide that 
        in the case of a person furnishing services under the plan for 
        which a third party may be liable for payment--
                    ``(A) the person may not seek to collect from the 
                individual (or financially responsible relative) 
                payment of an amount for the service more than could be 
                collected under the plan in the absence of such third 
                party liability, and
                    ``(B) may not refuse to furnish services to such an 
                individual because of a third party's potential 
                liability for payment for the service.
            ``(2) Penalty.--A MediGrant plan may provide for a 
        reduction of any payment amount otherwise due with respect to a 
        person who furnishes services under the plan in an amount equal 
        to up to three times the amount of any payment sought to be 
        collected by that person in violation of paragraph (1)(A).
    ``(c) General Liability.--The State shall prohibit any health 
insurer (including a group health plan as defined in section 607 of the 
Employee Retirement Income Security Act of 1974, a service benefit 
plan, or a health maintenance organization), in enrolling an individual 
or in making any payments for benefits to the individual or on the 
individual's behalf, from taking into account that the individual is 
eligible for or is provided medical assistance under a MediGrant plan 
for any State.
    ``(d) Acquisition of Rights of Beneficiaries.--To the extent that 
payment has been made under a MediGrant plan in any case where a third 
party has a legal liability to make payment for such assistance, the 
State shall have in effect laws under which, to the extent that payment 
has been made under the plan for health care items or services 
furnished to an individual, the State is considered to have acquired 
the rights of such individual to payment by any other party for such 
health care items or services.
    ``(e) Assignment of Medical Support Rights.--The MediGrant plan 
shall provide for mandatory assignment of rights of payment for medical 
support and other medical care owed to recipients in accordance with 
section 2136.
    ``(f) Required Laws Relating to Medical Child Support.--
            ``(1) In general.-- Each State with a MediGrant plan shall 
        have in effect the following laws:
                    ``(A) A law that prohibits an insurer from denying 
                enrollment of a child under the health coverage of the 
                child's parent on the ground that--
                            ``(i) the child was born out of wedlock,
                            ``(ii) the child is not claimed as a 
                        dependent on the parent's Federal income tax 
                        return, or
                            ``(iii) the child does not reside with the 
                        parent or in the insurer's service area.
                    ``(B) In any case in which a parent is required by 
                a court or administrative order to provide health 
                coverage for a child and the parent is eligible for 
                family health coverage through an insurer, a law that 
                requires such insurer--
                            ``(i) to permit such parent to enroll under 
                        such family coverage any such child who is 
                        otherwise eligible for such coverage (without 
                        regard to any enrollment season restrictions);
                            ``(ii) if such a parent is enrolled but 
                        fails to make application to obtain coverage of 
                        such child, to enroll such child under such 
                        family coverage upon application by the child's 
                        other parent or by the State agency 
                        administering the program under this title or 
                        part D of title IV; and
                            ``(iii) not to disenroll (or eliminate 
                        coverage of) such a child unless the insurer is 
                        provided satisfactory written evidence that--
                                    ``(I) such court or administrative 
                                order is no longer in effect, or
                                    ``(II) the child is or will be 
                                enrolled in comparable health coverage 
                                through another insurer which will take 
                                effect not later than the effective 
                                date of such disenrollment.
                    ``(C) In any case in which a parent is required by 
                a court or administrative order to provide health 
                coverage for a child and the parent is eligible for 
                family health coverage through an employer doing 
                business in the State, a law that requires such 
                employer--
                            ``(i) to permit such parent to enroll under 
                        such family coverage any such child who is 
                        otherwise eligible for such coverage (without 
                        regard to any enrollment season restrictions);
                            ``(ii) if such a parent is enrolled but 
                        fails to make application to obtain coverage of 
                        such child, to enroll such child under such 
                        family coverage upon application by the child's 
                        other parent or by the State agency 
                        administering the program under this title or 
                        part D of title IV; and
                            ``(iii) not to disenroll (or eliminate 
                        coverage of) any such child unless--
                                    ``(I) the employer is provided 
                                satisfactory written evidence that such 
                                court or administrative order is no 
                                longer in effect, or the child is or 
                                will be enrolled in comparable health 
                                coverage which will take effect not 
                                later than the effective date of such 
                                disenrollment, or
                                    ``(II) the employer has eliminated 
                                family health coverage for all of its 
                                employees; and
                            ``(iv) to withhold from such employee's 
                        compensation the employee's share (if any) of 
                        premiums for health coverage (except that the 
                        amount so withheld may not exceed the maximum 
                        amount permitted to be withheld under section 
                        303(b) of the Consumer Credit Protection Act), 
                        and to pay such share of premiums to the 
                        insurer, except that the Secretary may provide 
                        by regulation for appropriate circumstances 
                        under which an employer may withhold less than 
                        such employee's share of such premiums.
                    ``(D) A law that prohibits an insurer from imposing 
                requirements on a State agency, which has been assigned 
                the rights of an individual eligible for medical 
                assistance under this title and covered for health 
                benefits from the insurer, that are different from 
                requirements applicable to an agent or assignee of any 
                other individual so covered.
                    ``(E) A law that requires an insurer, in any case 
                in which a child has health coverage through the 
                insurer of a noncustodial parent--
                            ``(i) to provide such information to the 
                        custodial parent as may be necessary for the 
                        child to obtain benefits through such coverage;
                            ``(ii) to permit the custodial parent (or 
                        provider, with the custodial parent's approval) 
                        to submit claims for covered services without 
                        the approval of the noncustodial parent; and
                            ``(iii) to make payment on claims submitted 
                        in accordance with clause (ii) directly to such 
                        custodial parent, the provider, or the State 
                        agency.
                    ``(F) A law that permits the State agency under 
                this title to garnish the wages, salary, or other 
                employment income of, and requires withholding amounts 
                from State tax refunds to, any person who--
                            ``(i) is required by court or 
                        administrative order to provide coverage of the 
                        costs of health services to a child who is 
                        eligible for medical assistance under this 
                        title,
                            ``(ii) has received payment from a third 
                        party for the costs of such services to such 
                        child, but
                            ``(iii) has not used such payments to 
                        reimburse, as appropriate, either the other 
                        parent or guardian of such child or the 
                        provider of such services,
                to the extent necessary to reimburse the State agency 
                for expenditures for such costs under its plan under 
                this title, but any claims for current or past-due 
                child support shall take priority over any such claims 
                for the costs of such services.
            ``(2) Definition.--For purposes of this subsection, the 
        term `insurer' includes a group health plan, as defined in 
section 607(1) of the Employee Retirement Income Security Act of 1974, 
a health maintenance organization, and an entity offering a service 
benefit plan.
    ``(g) Estate Recoveries and Liens Permitted.--A State may take such 
actions as it considers appropriate to adjust or recover from the 
individual or the individual's estate any amounts paid as medical 
assistance to or on behalf of the individual under the MediGrant plan, 
including through the imposition of liens against the property or 
estate of the individual.

``SEC. 2136. ASSIGNMENT OF RIGHTS OF PAYMENT.

    ``(a) In General.--For the purpose of assisting in the collection 
of medical support payments and other payments for medical care owed to 
recipients of medical assistance under the MediGrant plan, each 
MediGrant plan shall--
            ``(1) provide that, as a condition of eligibility for 
        medical assistance under the plan to an individual who has the 
        legal capacity to execute an assignment for himself, the 
        individual is required--
                    ``(A) to assign the State any rights, of the 
                individual or of any other person who is eligible for 
                medical assistance under the plan and on whose behalf 
                the individual has the legal authority to execute an 
                assignment of such rights, to support (specified as 
                support for the purpose of medical care by a court or 
                administrative order) and to payment for medical care 
                from any third party,
                    ``(B) to cooperate with the State (i) in 
                establishing the paternity of such person (referred to 
                in subparagraph (A)) if the person is a child born out 
                of wedlock, and (ii) in obtaining support and payments 
                (described in subparagraph (A)) for himself and for 
                such person, unless (in either case) the individual is 
                pregnant woman or the individual is found to have good 
                cause for refusing to cooperate as determined by the 
                State, and
                    ``(C) to cooperate with the State in identifying, 
                and providing information to assist the State in 
                pursuing, any third party who may be liable to pay for 
                care and services available under the plan, unless such 
                individual has good cause for refusing to cooperate as 
                determined by the State; and
            ``(2) provide for entering into cooperative arrangements 
        (including financial arrangements), with any appropriate agency 
        of any State (including, with respect to the enforcement and 
        collection of rights of payment for medical care by or through 
        a parent, with a State's agency established or designated under 
        section 454(3)) and with appropriate courts and law enforcement 
        officials, to assist the agency or agencies administering the 
        plan with respect to--
                    ``(A) the enforcement and collection of rights to 
                support or payment assigned under this section, and
                    ``(B) any other matters of common concern.
    ``(b) Use of Amounts Collected.--Such part of any amount collected 
by the State under an assignment made under the provisions of this 
section shall be retained by the State as is necessary to reimburse it 
for medical assistance payments made on behalf of an individual with 
respect to whom such assignment was executed (with appropriate 
reimbursement of the Federal Government to the extent of its 
participation in the financing of such medical assistance), and the 
remainder of such amount collected shall be paid to such individual.

``SEC. 2137. QUALITY ASSURANCE STANDARDS FOR NURSING FACILITIES.

    ``(a) Standards for and Certification of Certain Facilities.--
            ``(1) Standards for facilities.--
                    ``(A) In general.--Each MediGrant plan shall 
                provide for the establishment and maintenance of 
                standards consistent with the contents described in 
                subparagraph (B) for nursing facilities which furnish 
                services under the plan.
                    ``(B) Contents of standards.--The standards 
                established for facilities under this paragraph shall 
                contain provisions relating to the following items:
                            ``(i) The treatment of resident medical 
                        records.
                            ``(ii) Policies, procedures, and bylaws for 
                        operation.
                            ``(iii) Quality assurance systems.
                            ``(iv) Resident assessment procedures, 
                        including care planning and outcome evaluation.
                            ``(v) The assurance of a safe and adequate 
                        physical plant for the facility.
                            ``(vi) Qualifications for staff sufficient 
                        to provide adequate care, as defined by the 
                        State.
                            ``(vii) Utilization review.
                            ``(viii) The protection and enforcement of 
                        resident rights described in subparagraph (C).
                    ``(C) Resident rights described.--The resident 
                rights described in this subparagraph are the rights of 
                residents to the following:
                            ``(i) To exercise the individual's rights 
                        as a resident of the facility and as a citizen 
                        or resident of the United States.
                            ``(ii) To receive notice of rights and 
                        services.
                            ``(iii) To be protected against the misuse 
                        of resident funds.
                            ``(iv) To be provided privacy and 
                        confidentiality.
                            ``(v) To voice grievances.
                            ``(vi) To examine the results of State 
                        certification program inspections.
                            ``(vii) To refuse to perform services for 
                        the facility.
                            ``(viii) To be provided privacy in 
                        communications and to receive mail.
                            ``(ix) To have the facility provide 
                        immediate access to any resident by any 
                        representative of the certification program, 
                        the resident's individual physician, the State 
                        long term care ombudsman, and any person the 
                        resident has designated as a visitor.
                            ``(x) To retain and use personal property.
                            ``(xi) To be free from abuse, including 
                        verbal, sexual, physical and mental abuse, 
                        corporal punishment, and involuntary seclusion.
                            ``(xii) To be provided with prior written 
                        notice of a pending transfer or discharge.
                    ``(D) Process for establishment.--The standards 
                established by the State for facilities under this 
                paragraph shall be promulgated either through the 
                State's legislative, regulatory, or other process, and 
                may only take effect after the State has provided the 
                public with notice and an opportunity for comment.
            ``(2) Certification program.--
                    ``(A) In general.--Each MediGrant plan shall 
                provide for the establishment and operation of a 
                program consistent with the requirements of 
                subparagraph (B) for the certification of nursing 
                facilities which meet the standards established under 
                paragraph (1) and the decertification of facilities 
                which fail to meet such standards.
                    ``(B) Requirements for program.--In addition to any 
                other requirements the State may impose, in 
                establishing and operating the certification program 
                under subparagraph (A), the State shall ensure the 
                following:
                            ``(i) The State shall ensure public access 
                        (as defined by the State) to the certification 
                        program's evaluations of participating 
                        facilities, including compliance records and 
                        enforcement actions and other reports by the 
                        State regarding the ownership, compliance 
                        histories, and services provided by certified 
                        facilities.
                            ``(ii) Not less often than every 4 years, 
                        the State shall audit its expenditures under 
                        the program, through an entity designated by 
                        the State which is not affiliated with the 
                        program, as designated by the State.
    ``(b) Intermediate Sanction Authority.--
            ``(1) Authority.--In addition to any other authority under 
        State law, where a State determines that a nursing facility 
        which is certified for participation under the MediGrant plan 
        no longer substantially meets the requirements for such a 
        facility under this title and further determines that the 
        facility's deficiencies--
                    ``(A) immediately jeopardize the health and safety 
                of its residents, the State shall at least provide for 
                the termination of the facility's certification for 
                participation under the plan, or
                    ``(B) do not immediately jeopardize the health and 
                safety of its residents, the State may, in lieu of 
                providing for terminating the facility's certification 
                for participation under the plan, provide lesser 
                sanctions including one that provides that no payment 
                will be made under the plan with respect to any 
                individual admitted to such facility after a date 
                specified by the State.
            ``(2) Notice.--The State shall not make such a decision 
        with respect to a facility until the facility has had a 
        reasonable opportunity, following the initial determination 
        that it no longer substantially meets the requirements for such 
        a facility under the plan, to correct its deficiencies, and, 
        following this period, has been given reasonable notice and 
        opportunity for a hearing.
            ``(3) Effectiveness.--The State's decision to deny payment 
        may be made effective only after such notice to the public and 
        to the facility as may be provided for by the State, and its 
        effectiveness shall terminate (A) when the State finds that the 
        facility is in substantial compliance (or is making good faith 
        efforts to achieve substantial compliance) with the 
        requirements for such a facility under this title, or (B) in 
        the case described in paragraph (1)(B), with the end of the 
        eleventh month following the month such decision is made 
        effective, whichever occurs first. If a facility to which 
        clause (B) of the previous sentence applies still fails to 
        substantially meet the provisions of the respective section on 
        the date specified in such clause, the State shall terminate 
        such facility's certification for participation under the 
        MediGrant plan effective with the first day of the first month 
        following the month specified in such clause.

``SEC. 2138. OTHER PROVISIONS PROMOTING PROGRAM INTEGRITY.

    ``(a) Public Access to Survey Results.--Each MediGrant plan shall 
provide that upon completion of a survey of any health care facility or 
organization by a State agency to carry out the plan, the agency shall 
make public in readily available form and place the pertinent findings 
of the survey relating to the compliance of the facility or 
organization with requirements of law.
    ``(b) Record keeping.--Each MediGrant plan shall provide for 
agreements with persons or institutions providing services under the 
plan under which the person or institution agrees--
            ``(1) to keep such records (including ledgers, books, and 
        original evidence of costs) as are necessary to fully disclose 
        the extent of the services provided to individuals receiving 
        assistance under the plan; and
            ``(2) to furnish the State agency with such information 
        regarding any payments claimed by such person or institution 
        for providing services under the plan, as the State agency may 
        from time to time request.

        ``Part E--Establishment and Amendment of MediGrant Plans

``SEC. 2151. SUBMITTAL AND APPROVAL OF MEDIGRANT PLANS.

    ``(a) Submittal.--As a condition of receiving funding under part C, 
each State shall submit to the Secretary a MediGrant plan that meets 
the applicable requirements of this title.
    ``(b) Approval.--Except as the Secretary may provide under section 
2154, a MediGrant plan submitted under subsection (a)--
            ``(1) shall be approved for purposes of this title, and
            ``(2) shall be effective beginning with a calendar quarter 
        that is specified in the plan, but in no case earlier than the 
        first calendar quarter that begins at least 60 days after the 
        date the plan is submitted.
    ``(c) Approval of Legislature for Submittal.--In the case of a 
State which has a State allotment under section 2121(c)(1) for fiscal 
year 1996 of more than $10 billion, the State may not submit a 
MediGrant plan under this section unless the State legislature, by law, 
has specifically authorized such submittal.

``SEC. 2152. SUBMITTAL AND APPROVAL OF PLAN AMENDMENTS.

    ``(a) Submittal of Amendments.--A State may amend, in whole or in 
part, its MediGrant plan at any time through transmittal of a plan 
amendment under this section.
    ``(b) Approval.--Except as the Secretary may provide under section 
2154, an amendment to a MediGrant plan submitted under subsection (a)--
            ``(1) shall be approved for purposes of this title, and
            ``(2) shall be effective as provided in subsection (c).
    ``(c) Effective Dates for Amendments.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, an amendment to MediGrant plan shall take 
        effect on one or more effective dates specified in the 
        amendment.
            ``(2) Amendments relating to eligibility or benefits.--
        Except as provided in paragraph (4)--
                    ``(A) Notice requirement.--Any plan amendment that 
                eliminates or restricts eligibility or benefits under 
                the plan may not take effect unless the State certifies 
                that it has provided prior or contemporaneous public 
                notice of the change, in a form and manner provided 
                under applicable State law.
                    ``(B) Timely transmittal.--Any plan amendment that 
                eliminates or restricts eligibility or benefits under 
                the plan shall not be effective for longer than a 60 
                day period unless the amendment has been transmitted to 
                the Secretary before the end of such period.
            ``(3) Other amendments.--Subject to paragraph (4), any plan 
        amendment that is not described in paragraph (2) becomes 
        effective in a State fiscal year may not remain in effect after 
        the end of such fiscal year (or, if later, the end of the 90-
        day period on which it becomes effective) unless the amendment 
        has been transmitted to the Secretary.
            ``(4) Exception.--The requirements of paragraphs (2) and 
        (3) shall not apply to a plan amendment that is submitted on a 
        timely basis pursuant to a court order or an order of the 
        Secretary.

``SEC. 2153. PROCESS FOR STATE WITHDRAWAL FROM PROGRAM.

    ``(a) In General.--A State may rescind its MediGrant plan and 
discontinue participation in the program under this title at any time 
after providing--
            ``(1) the public with 90 days prior notice in a publication 
        in one or more daily newspapers of general circulation in the 
        State or in any publication used by the State to publish State 
        statutes or rules, and
            ``(2) the Secretary with 90 days prior written notice.
    ``(b) Effective Date.--Such discontinuation shall not apply to 
payments under part C for expenditures made for items and services 
furnished under the MediGrant plan before the effective date of the 
discontinuation.
    ``(c) Proration of Allotments.--In the case of any withdrawal under 
this section other than at the end of a Federal fiscal year, 
notwithstanding any provision of section 2121 to the contrary, the 
Secretary shall provide for such appropriate proration of the 
application of allotments under section 2121 as is appropriate.

``SEC. 2154. SANCTIONS FOR SUBSTANTIAL NONCOMPLIANCE.

    ``(a) Prompt Review of Plan Submittals.--The Secretary shall 
promptly review MediGrant plans and plan amendments submitted under 
this part to determine if they substantially comply with the 
requirements of this title.
    ``(b) Determinations of Substantial Noncompliance.--
            ``(1) At time of plan or amendment submittal.--
                    ``(A) In general.--If the Secretary, during the 30-
                day period beginning on the date of submittal of a 
                MediGrant plan or plan amendment--
                            ``(i) determines that the plan or amendment 
                        substantially violates (within the meaning of 
                        subsection (c)) a requirement of this title, 
                        and
                            ``(ii) provides written notice of such 
                        determination to the State,
                the Secretary shall issue an order specifying that the 
                plan or amendment, insofar as it is in substantial 
                violation of such a requirement, shall not be 
                effective, except as provided in subsection (c), 
                beginning at the end of a period of not less than 30 
                days, or 120 days in the case of the initial submission 
                of the MediGrant plan) specified in the order beginning 
                on the date of the notice of the determination.
                    ``(B) Extension of time periods.--The time periods 
                specified in subparagraph (A) may be extended by 
                written agreement of the Secretary and the State 
                involved.
            ``(2) Violations in administration of plan.--
                    ``(A) In general.--If the Secretary determines, 
                after reasonable notice and opportunity for a hearing 
                for the State, that in the administration of a 
                MediGrant plan there is a substantial violation of a 
                requirement of this title, the Secretary shall provide 
                the State with written notice of the determination and 
                with an order to remedy such violation. Such an order 
                shall become effective prospectively, as specified in 
                the order, after the date of receipt of such written 
                notice. Such an order may include the withholding of 
                funds, consistent with subsection (f), for parts of the 
                MediGrant plan affected by such violation, until the 
                Secretary is satisfied that the violation has been 
                corrected.
                    ``(B) Effectiveness.--If the Secretary issues an 
                order under paragraph (1), the order shall become 
                effective, except as provided in subsection (c), 
                beginning at the end of a period (of not less than 30 
                days) specified in the order beginning on the date of 
                the notice of the determination to the State.
                    ``(C) Timeliness of determinations relating to 
                report-based compliance.--The Secretary shall make 
                determinations under this paragraph respecting 
                violations relating to information contained in an 
                annual report under section 2102, an independent 
                evaluation under section 2103, or an audit report under 
                section 2131 not later than 30 days after the date of 
                transmittal of the report or evaluation to the 
                Secretary.
            ``(3) Consultation with state.--Before making a 
        determination adverse to a State under this section, the 
        Secretary shall (within any time periods provided under this 
        section)--
                    ``(A) reasonably consult with the State involved,
                    ``(B) offer the State a reasonable opportunity to 
                clarify the submission and submit further information 
                to substantiate compliance with the requirements of 
                this title, and
                    ``(C) reasonably consider any such clarifications 
                and information submitted.
            ``(4) Justification of any inconsistencies in 
        determinations.--If the Secretary makes a determination under 
        this section that is, in whole or in part, inconsistent with 
        any previous determination issued by the Secretary under this 
        title, the Secretary shall include in the determination a 
        detailed explanation and justification for any such difference.
            ``(5) Substantial violation defined.--For purposes of this 
        title, a MediGrant plan (or amendment to such a plan) or the 
        administration of the MediGrant plan is considered to 
        `substantially violate' a requirement of this title if a 
        provision of the plan or amendment (or an omission from the 
        plan or amendment) or the administration of the plan--
                    ``(A) is material and substantial in nature and 
                effect, and
                    ``(B) is inconsistent with an express requirement 
                of this title.
        A failure to meet a strategic objective or performance goal (as 
        described in section 2101) shall not be considered to 
        substantially violate a requirement of this title.
    ``(c) State Response to Orders.--
            ``(1) State response by revising plan.--
                    ``(A) In general.--Insofar as an order under 
                subsection (b)(1) relates to a substantial violation by 
                a MediGrant plan or plan amendment, a State may respond 
                (before the date the order becomes effective) to such 
                an order by submitting a written revision of the plan 
                or plan amendment to substantially comply with the 
                requirements of this part.
                    ``(B) Review of revision.--In the case of 
                submission of such a revision, the Secretary shall 
                promptly review the submission and shall withhold any 
                action on the order during the period of such review.
                    ``(C) Secretarial response.--The revision shall be 
                considered to have corrected the deficiency (and the 
                order rescinded insofar as it relates to such 
                deficiency) unless the Secretary determines and 
                notifies the State in writing, within 15 days after the 
                date the Secretary receives the revision, that the plan 
                or amendment, as proposed to be revised, still 
                substantially violates a requirement of this title. In 
                such case the State may respond by seeking 
                reconsideration or a hearing under paragraph (2).
                    ``(D) Revision retroactive.--If the revision 
                provides for substantial compliance, the revision may 
                be treated, at the option of the State, as being 
                effective either as of the effective date of the 
                provision to which it relates or such later date as the 
                State and Secretary may agree.
            ``(2) State response by seeking reconsideration or an 
        administrative hearing.--A State may respond to an order under 
        subsection (b) by filing a request with the Secretary for--
                    ``(A) a reconsideration of the determination, 
                pursuant to subsection (d)(1), or
                    ``(B) a review of the determination through an 
                administrative hearing, pursuant to subsection (d)(2).
        In such case, the order shall not take effect before the 
        completion of the reconsideration or hearing.
            ``(3) State response by corrective action plan.--
                    ``(A) In general.--In the case of an order 
                described in subsection (b)(2) that relates to a 
                substantial violation in the administration of the 
                MediGrant plan, a State may respond to such an order by 
                submitting a corrective action plan with the Secretary 
                to correct deficiencies in the administration of the 
                plan which are the subject of the order.
                    ``(B) Review of corrective action plan.--In such 
                case, the Secretary shall withhold any action on the 
                order for a period (not to exceed 30 days) during which 
                the Secretary reviews the corrective action plan.
                    ``(C) Secretarial response.--The corrective action 
                plan shall be considered to have corrected the 
                deficiency (and the order rescinded insofar as it 
                relates to such deficiency) unless the Secretary 
                determines and notifies the State in writing, within 15 
                days after the date the Secretary receives the 
                corrective action plan, that the State's administration 
                of the MediGrant plan, as proposed to be corrected in 
                the plan, will still substantially violate a 
                requirement of this title. In such case the State may 
                respond by seeking reconsideration or a hearing under 
                paragraph (2).
            ``(4) State response by withdrawal of plan amendment; 
        failure to respond.--Insofar as an order relates to a 
        substantial violation in a plan amendment submitted, a State 
        may respond to such an order by withdrawing the plan amendment 
        and the MediGrant plan shall be treated as though the amendment 
        had not been made.
    ``(d) Administrative Review and Hearing.--
            ``(1) Reconsideration.--Within 30 days after the date of 
        receipt of a request under subsection (b)(2)(A), the Secretary 
        shall notify the State of the time and place at which a hearing 
        will be held for the purpose of reconsidering the Secretary's 
        determination. The hearing shall be held not less than 20 days 
        nor more than 60 days after the date notice of the hearing is 
        furnished to the State, unless the Secretary and the State 
        agree in writing to holding the hearing at another time. The 
        Secretary shall affirm, modify, or reverse the original 
        determination within 60 days of the conclusion of the hearing.
            ``(2) Administrative hearing.--Within 30 days after the 
        date of receipt of a request under subsection (b)(2)(B), an 
        administrative law judge shall schedule a hearing for the 
        purpose of reviewing the Secretary's determination. The hearing 
        shall be held not less than 20 days nor more than 60 days after 
        the date notice of the hearing is furnished to the State, 
        unless the Secretary and the State agree in writing to holding 
        the hearing at another time. The administrative law judge shall 
        affirm, modify, or reverse the determination within 60 days of 
        the conclusion of the hearing.
    ``(e) Judicial Review.--
            ``(1) In general.--A State which is dissatisfied with a 
        final determination made by the Secretary under subsection 
        (d)(1) or a final determination of an administrative law judge 
        under subsection (d)(2) may, within 60 days after it has been 
        notified of such determination, file with the United States 
        court of appeals for the circuit in which the State is located 
        a petition for review of such determination. A copy of the 
        petition shall be forthwith transmitted by the clerk of the 
        court to the Secretary and, in the case of a determination 
        under subsection (d)(2), to the administrative law judge 
        involved. The Secretary (or judge involved) thereupon shall 
        file in the court the record of the proceedings on which the 
        final determination was based, as provided in section 2112 of 
        title 28, United States Code.
            ``(2) Standard for review.--The findings of fact by the 
        Secretary or administrative law judge, if supported by 
        substantial evidence, shall be conclusive, but the court, for 
        good cause shown, may remand the case to the Secretary or judge 
        to take further evidence, and the Secretary or judge may 
        thereupon make new or modified findings of fact and may modify 
        a previous determination, and shall certify to the court the 
        transcript and record of the further proceedings. Such new or 
        modified findings of fact shall likewise be conclusive if 
        supported by substantial evidence.
            ``(3) Jurisdiction of appellate court.--The court shall 
        have jurisdiction to affirm the action of the Secretary or 
        judge or to set it aside, in whole or in part. The judgment of 
        the court shall be subject to review by the Supreme Court of 
        the United States upon certiorari or certification as provided 
        in section 1254 of title 28, United States Code.
    ``(f) Withholding of Funds.--
            ``(1) In general.--Any order under this section relating to 
        the withholding of funds shall be effective not earlier than 
        the effective date of the order and shall only relate to the 
        portions of a MediGrant plan or administration thereof which 
        substantially violate a requirement of this title. In the case 
        of a failure to meet a set-aside requirement under section 
        2112, any withholding shall only apply to the extent of such 
        failure.
            ``(2) Suspension of withholding.--The Secretary may suspend 
        withholding of funds under paragraph (1) during the period 
        reconsideration or administrative and judicial review is 
        pending under subsection (d) or (e).
            ``(3) Restoration of funds.--Any funds withheld under this 
        subsection under an order shall be immediately restored to a 
        State--
                    ``(A) to the extent and at the time the order is--
                            ``(i) modified or withdrawn by the 
                        Secretary upon reconsideration,
                            ``(ii) modified or reversed by an 
                        administrative law judge, or
                            ``(iii) set aside (in whole or in part) by 
                        an appellate court; or
                    ``(B) when the Secretary determines that the 
                deficiency which was the basis for the order is 
                corrected;
                    ``(C) when the Secretary determines that violation 
                which was the basis for the order is resolved or the 
                amendment which was the basis for the order is 
                withdrawn; or
                    ``(D) at any time upon the initiative of the 
                Secretary.

``SEC. 2155. SECRETARIAL AUTHORITY.

    ``(a) Negotiated Agreement and Dispute Resolution.--
            ``(1) Negotiations.--Nothing in this part shall be 
        construed as preventing the Secretary and a State from at any 
        time negotiating a satisfactory resolution to any dispute 
        concerning the approval of a MediGrant plan (or amendments to a 
        MediGrant plan) or the compliance of a MediGrant plan 
        (including its administration) with requirements of this title.
            ``(2) Cooperation.--The Secretary shall act in a 
        cooperative manner with the States in carrying out this title. 
        In the event of a dispute between a State and the Secretary, 
        the Secretary shall, whenever practicable, engage in informal 
        dispute resolution activities in lieu of formal enforcement or 
        sanctions under section 2154.
    ``(b) Limitations on Delegation of Decision-making Authority.--The 
Secretary may not delegate (other than to the Administrator of the 
Health Care Financing Administration) the authority to make 
determinations or reconsiderations respecting the approval of MediGrant 
plans (or amendments to such plans) or the compliance of a MediGrant 
plan (including its administration) with requirements of this title. 
Such Administrator may not further delegate such authority to any 
individual, including any regional official of such Administration.
    ``(c) Requiring Formal Rulemaking for Changes in Secretarial 
Administration.--The Secretary shall carry out the administration of 
the program under this title only through a prospective formal 
rulemaking process, including issuing notices of proposed rule making, 
publishing proposed rules or modifications to rules in the Federal 
Register, and soliciting public comment.

                      ``Part F--General Provisions

``SEC. 2171. DEFINITIONS.

    ``(a) Medical Assistance.--
            ``(1) In general.--For purposes of this title, except as 
        provided in paragraph (2), the term `medical assistance' means 
        payment of part or all the cost of any of the following for 
        eligible low-income individuals (as defined in subsection (b)) 
        as specified under the MediGrant plan:
                    ``(A) Inpatient hospital services.
                    ``(B) Outpatient hospital services.
                    ``(C) Physician services.
                    ``(D) Surgical services.
                    ``(E) Clinic services and other ambulatory health 
                care services.
                    ``(F) Nursing facility services.
                    ``(G) Intermediate care facility services for the 
                mentally retarded.
                    ``(H) Prescription drugs and biologicals.
                    ``(I) Over-the-counter medications.
                    ``(J) Laboratory and radiological services.
                    ``(K) Family planning services and supplies.
                    ``(L) Inpatient mental health services, including 
                services furnished in a State-operated mental hospital 
                and including residential or other 24-hour 
                therapeutically planned structured services in the case 
                of a child.
                    ``(M) Outpatient mental health services, including 
                services furnished in a State-operated mental hospital 
                and including community-based services in the case of a 
                child.
                    ``(N) Durable medical equipment and other 
                medically-related or remedial devices (such as 
                prosthetic devices, implants, eyeglasses, hearing aids, 
                dental devices, and adaptive devices).
                    ``(O) Disposable medical supplies.
                    ``(P) Home and community-based health care services 
                and related supportive services (such as home health 
                nursing services, home health aide services, personal 
care, assistance with activities of daily living, chore services, day 
care services, respite care services, and training for family members).
                    ``(Q) Community supported living arrangements.
                    ``(R) Nursing care services (such as private duty 
                nursing care, nurse midwife services, respiratory care 
                services, pediatric nurse services, and advanced 
                practice nurse services) in a home, school, or other 
                setting.
                    ``(S) Dental services.
                    ``(T) Inpatient substance abuse treatment services 
                and residential substance abuse treatment services.
                    ``(U) Outpatient substance abuse treatment 
                services.
                    ``(V) Case management services.
                    ``(W) Care coordination services.
                    ``(X) Physical therapy, occupational therapy, and 
                services for individuals with speech, hearing, and 
                language disorders.
                    ``(Y) Hospice care.
                    ``(Z) Any other medical, diagnostic, screening, 
                preventive, restorative, remedial, therapeutic, or 
                rehabilitative services (whether in a facility, home, 
                school, or other setting) if recognized by State law 
                and if the service is--
                            ``(i) prescribed by or furnished by a 
                        physician or other licensed or registered 
                        practitioner within the scope of practice as 
                        defined by State law,
                            ``(ii) performed under the general 
                        supervision or at the direction of a physician, 
                        or
                            ``(iii) furnished by a health care facility 
                        that is operated by a State or local government 
                        or is licensed under State law and operating 
                        within the scope of the license.
                    ``(AA) Premiums for private health care insurance 
                coverage, including private long-term care insurance 
                coverage.
                    ``(BB) Medical transportation.
                    ``(CC) Medicare cost-sharing (as defined in 
                subsection (c)).
                    ``(DD) Enabling services (such as transportation, 
                translation, and outreach services) designed to 
                increase the accessibility of primary and preventive 
                health care services for eligible low-income 
                individuals.
                    ``(EE) Any other health care services or items 
                specified by the Secretary.
            ``(2) Exclusion of certain payments.--Such term does not 
        include the payment with respect to care or services for--
                    ``(A) any individual who is an inmate of a public 
                institution (except as a patient in a State psychiatric 
                hospital); and
                    ``(B) any individual who is not an eligible low-
                income individual.
    ``(b) Eligible Low-Income Individual.--The term `eligible low-
income individual' means an individual who has been determined eligible 
by the State for medical assistance under the MediGrant plan and whose 
family income (as determined under the plan) does not exceed a 
percentage (specified in the MediGrant plan and not to exceed 300 
percent) of the poverty line for a family of the size involved. In 
determining the amount of income under the previous sentence, a State 
may exclude costs incurred for medical care or other types of remedial 
care recognized by the State.
    ``(c) Medicare Cost-Sharing.--For purposes of this title, the term 
`medicare cost-sharing' means any of the following:
            ``(1)(A) Premiums under section 1839.
            ``(B) Premiums under section 1818 or 1818A.
            ``(2) Coinsurance under title XVIII (including coinsurance 
        described in section 1813).
            ``(3) Deductibles established under title XVIII (including 
        those described in section 1813 and section 1833(b)).
            ``(4) The difference between the amount that is paid under 
        section 1833(a) and the amount that would be paid under such 
        section if any reference to `80 percent' therein were deemed a 
        reference to `100 percent'.
            ``(5) Premiums for enrollment of an individual with an 
        eligible organization under section 1876 or with a MedicarePlus 
        organization under part C of title XVIII.
    ``(d) Additional Definitions.--For purposes of this title:
            ``(1) Child.--The term `child' means an individual under 19 
        years of age.
            ``(2) Poverty line defined.--The term `poverty line' means 
        the income official poverty line (as defined by the Office of 
        Management and Budget and revised annually in accordance with 
        section 673(2) of the Omnibus Budget Reconciliation Act of 
        1981).
            ``(3) Pregnant woman.--The term `pregnant woman' includes a 
        woman during the 60-day period beginning on the last day of the 
        pregnancy.

``SEC. 2172. TREATMENT OF TERRITORIES.

    ``Notwithstanding any other requirement of this title, the 
Secretary may waive or modify any requirement of this title with 
respect to the medical assistance program a State other than the 50 
States and the District of Columbia, other than a waiver of--
            ``(1) the applicable Federal medical assistance percentage,
            ``(2) the limitation on total payments in a fiscal year to 
        the amount of the allotment under section 2121(c), or
            ``(3) the requirement that payment may be made for medical 
        assistance only with respect to amounts expended by the State 
        for care and services described in paragraph (1) of section 
        2171(a) and medically-related services (as defined in section 
        2112(e)(2)).

``SEC. 2173. DESCRIPTION OF TREATMENT OF INDIAN HEALTH SERVICE 
              FACILITIES.

    ``In the case of a State in which one or more facilities of the 
Indian Health Service are located, the MediGrant plan shall include a 
description of--
            ``(1) what provision (if any) has been made for payment for 
        items and services furnished by such facilities, and
            ``(2) the manner in which medical assistance for low-income 
        eligible individuals who are Indians will be provided, as 
        determined by the State in consultation with the appropriate 
        Indian tribes and tribal organizations.

``SEC. 2174. APPLICATION OF CERTAIN GENERAL PROVISIONS.

    ``The following sections in part A of title XI shall apply to 
States under this title in the same manner as they applied to a State 
under title XIX:
            ``(1) Section 1101(a)(1) (relating to definition of State).
            ``(2) Section 1116 (relating to administrative and judicial 
        review), but only insofar as consistent with the provisions of 
        part C.
            ``(3) Section 1124 (relating to disclosure of ownership and 
        related information).
            ``(4) Section 1126 (relating to disclosure of information 
        about certain convicted individuals).
            ``(5) Section 1132 (relating to periods within which claims 
        must be filed).

``SEC. 2175. MEDIGRANT MASTER DRUG REBATE AGREEMENTS.

    ``(a) Requirement for Manufacturer to Enter Into Agreement.--
            ``(1) In general.--Pursuant to section 2123(f), in order 
        for payment to be made to a State under part C for medical 
        assistance for covered outpatient drugs of a manufacturer, the 
        manufacturer shall enter into and have in effect an MediGrant 
        master rebate agreement described in subsection (b) with the 
        Secretary on behalf of States electing to participate in the 
        agreement.
            ``(2) State participation in master agreement optional.--
        Nothing in this section shall be construed to--
                    ``(A) require a State to participate in an 
                MediGrant master rebate agreement under this section; 
                or
                    ``(B) prohibit a State from entering into an 
                agreement with a manufacturer of covered outpatient 
                drugs (under such terms as the State and manufacturer 
                may agree upon) regarding the amount of payment for 
                such drugs under the MediGrant plan.
            ``(3) Coverage of drugs not covered under rebate 
        agreements.--Nothing in this section shall be construed to 
        prohibit a State in its discretion from providing coverage 
        under its MediGrant plan of a covered outpatient drug for which 
        no rebate agreement is in effect under this section.
            ``(4) Effect on existing agreements.--If a State has a 
        rebate agreement in effect with a manufacturer on the date of 
        the enactment of this section which provides for a minimum 
        aggregate rebate equal to or greater than the minimum aggregate 
        rebate which would otherwise be paid under the MediGrant master 
        agreement under this section, at the option of the State--
                    ``(A) such agreement shall be considered to meet 
                the requirements of the MediGrant master rebate 
                agreement; and
                    ``(B) the State shall be considered to have elected 
                to participate in the MediGrant master rebate 
                agreement.
    ``(b) Terms of Rebate Agreement.--
            ``(1) Periodic rebates.--The MediGrant master rebate 
        agreement under this section shall require the manufacturer to 
        provide, to the MediGrant plan of each State participating in 
        the agreement, a rebate for a rebate period in an amount 
        specified in subsection (c) for covered outpatient drugs of the 
        manufacturer dispensed after the effective date of the 
        agreement, for which payment was made under the plan for such 
        period. Such rebate shall be paid by the manufacturer not later 
        than 30 days after the date of receipt of the information 
        described in paragraph (2) for the period involved.
            ``(2) State provision of information.--
                    ``(A) State responsibility.--Each State 
                participating in the MediGrant master rebate agreement 
                shall report to each manufacturer not later than 60 
                days after the end of each rebate period and in a form 
                consistent with a standard reporting format established 
                by the Secretary, information on the total number of 
                units of each dosage form and strength and package size 
                of each covered outpatient drug, for which payment was 
                made under the MediGrant plan for the period, and shall 
                promptly transmit a copy of such report to the 
                Secretary.
                    ``(B) Audits.--A manufacturer may audit the 
                information provided (or required to be provided) under 
                subparagraph (A). Adjustments to rebates shall be made 
                to the extent that information indicates that 
                utilization was greater or less than the amount 
                previously specified.
            ``(3) Manufacturer provision of price information.--
                    ``(A) In general.--Each manufacturer which is 
                subject to the MediGrant master rebate agreement under 
                this section shall report to the Secretary--
                            ``(i) not later than 30 days after the last 
                        day of each rebate period under the agreement 
                        (beginning on or after January 1, 1991), on the 
                        average manufacturer price (as defined in 
                        subsection (i)(1)) and, for single source drugs 
                        and innovator multiple source drugs, the 
                        manufacturer's best price (as defined in 
                        subsection (c)(1)(C)) for each covered 
                        outpatient drug for the rebate period under the 
                        agreement, and
                            ``(ii) not later than 30 days after the 
                        date of entering into an agreement under this 
                        section, on the average manufacturer price (as 
                        defined in subsection (i)(1)) as of October 1, 
                        1990, for each of the manufacturer's covered 
                        outpatient drugs.
                    ``(B) Verification surveys of average manufacturer 
                price.--The Secretary may survey wholesalers and 
                manufacturers that directly distribute their covered 
                outpatient drugs, when necessary, to verify 
                manufacturer prices reported under subparagraph (A). 
                The Secretary may impose a civil monetary penalty in an 
                amount not to exceed $10,000 on a wholesaler, 
                manufacturer, or direct seller, if the wholesaler, 
                manufacturer, or direct seller of a covered outpatient 
                drug refuses a request for information by the Secretary 
                in connection with a survey under this subparagraph. 
                The provisions of section 1128A (other than subsections 
                (a) (with respect to amounts of penalties or additional 
                assessments) and (b)) shall apply to a civil money 
                penalty under this subparagraph in the same manner as 
                such provisions apply to a penalty or proceeding under 
                section 1128A(a).
                    ``(C) Penalties.--
                            ``(i) Failure to provide timely 
                        information.--In the case of a manufacturer 
                        which is subject to the MediGrant master rebate 
                        agreement that fails to provide information 
                        required under subparagraph (A) on a timely 
                        basis, the amount of the penalty shall be 
                        $10,000 for each day in which such information 
                        has not been provided and such amount shall be 
                        paid to the Treasury. If such information is 
                        not reported within 90 days of the deadline 
                        imposed, the agreement shall be suspended for 
                        services furnished after the end of such 90-day 
                        period and until the date such information is 
                        reported (but in no case shall such suspension 
                        be for a period of less than 30 days).
                            ``(ii) False information.--Any manufacturer 
                        which is subject to the MediGrant master rebate 
                        agreement, or a wholesaler or direct seller, 
                        that knowingly provides false information under 
                        subparagraph (A) or (B) is subject to a civil 
                        money penalty in an amount not to exceed 
                        $100,000 for each item of false information. 
                        Any such civil money penalty shall be in 
                        addition to other penalties as may be 
                        prescribed by law. The provisions of section 
                        1128A (other than subsections (a) and (b)) 
                        shall apply to a civil money penalty under this 
                        subparagraph in the same manner as such 
                        provisions apply to a penalty or proceeding 
                        under section 1128A(a).
                    ``(D) Confidentiality of information.--
                Notwithstanding any other provision of law, information 
                disclosed by manufacturers or wholesalers under this 
                paragraph or under an agreement with the Secretary of 
                Veterans Affairs described in section 2123(f) is 
                confidential and shall not be disclosed by the 
                Secretary or the Secretary of Veterans Affairs or a 
                State agency (or contractor therewith) in a form which 
                discloses the identity of a specific manufacturer or 
                wholesaler or the prices charged for drugs by such 
                manufacturer or wholesaler, except--
                            ``(i) as the Secretary determines to be 
                        necessary to carry out this section,
                            ``(ii) to permit the Comptroller General to 
                        review the information provided, and
                            ``(iii) to permit the Director of the 
                        Congressional Budget Office to review the 
                        information provided.
            ``(4) Length of agreement.--
                    ``(A) In general.--The MediGrant master rebate 
                agreement under this section shall be effective for an 
                initial period of not less than 1 year and shall be 
                automatically renewed for a period of not less than one 
                year unless terminated under subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By the secretary.--The Secretary may 
                        provide for termination of the MediGrant master 
                        rebate agreement with respect to a manufacturer 
                        for violation of the requirements of the 
                        agreement or other good cause shown. Such 
                        termination shall not be effective earlier than 
                        60 days after the date of notice of such 
                        termination. The Secretary shall provide, upon 
                        request, a manufacturer with a hearing 
                        concerning such a termination, but such hearing 
                        shall not delay the effective date of the 
                        termination. Failure of a State to provide any 
                        advance notice of such a termination as 
                        required by regulation shall not affect the 
                        State's right to terminate coverage of the 
                        drugs affected by such termination as of the 
                        effective date of such termination.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate its participation in the 
                        MediGrant master rebate agreement under this 
                        section for any reason. Any such termination 
                        shall not be effective until the calendar 
                        quarter beginning at least 60 days after the 
                        date the manufacturer provides notice to the 
                        Secretary.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect rebates due under the agreement before 
                        the effective date of its termination.
                            ``(iv) Notice to states.--In the case of a 
                        termination under this subparagraph, the 
                        Secretary shall provide notice of such 
                        termination to the States within not less than 
                        30 days before the effective date of such 
                        termination.
                            ``(v) Application to terminations of other 
                        agreements.--The provisions of this 
                        subparagraph shall apply to the terminations of 
                        master agreements described in section 8126(a) 
                        of title 38, United States Code.
                    ``(C) Delay before reentry.--In the case of any 
                rebate agreement with a manufacturer under this section 
                which is terminated, another such agreement with the 
                manufacturer (or a successor manufacturer) may not be 
                entered into until a period of 1 calendar quarter has 
                elapsed since the date of the termination, unless the 
                Secretary finds good cause for an earlier reinstatement 
                of such an agreement.
    ``(c) Determination of Amount of Rebate.--
            ``(1) Basic rebate for single source drugs and innovator 
        multiple source drugs.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), the amount of the rebate specified in this 
                subsection with respect to a State participating in the 
                MediGrant master rebate agreement for a rebate period 
                (as defined in subsection (i)(8)) with respect to each 
                dosage form and strength of a single source drug or an 
                innovator multiple source drug shall be equal to the 
                product of--
                            ``(i) the total number of units of each 
                        dosage form and strength paid for under the 
                        State plan in the rebate period (as reported by 
                        the State); and
                            ``(ii) the greater of--
                                    ``(I) the difference between the 
                                average manufacturer price and the best 
                                price (as defined in subparagraph (C)) 
                                for the dosage form and strength of the 
                                drug, or
                                    ``(II) the minimum rebate 
                                percentage (specified in subparagraph 
                                (B)) of such average manufacturer 
                                price,
                        for the rebate period.
                    ``(B) Minimum rebate percentage.--For purposes of 
                subparagraph (A)(ii)(II), the `minimum rebate 
                percentage' is 15.1 percent.
                    ``(C) Best price defined.--For purposes of this 
                section--
                            ``(i) In general.--The term `best price' 
                        means, with respect to a single source drug or 
                        innovator multiple source drug of a 
                        manufacturer, the lowest price available from 
                        the manufacturer during the rebate period to 
                        any wholesaler, retailer, provider, health 
                        maintenance organization, nonprofit entity, or 
                        governmental entity within the United States, 
                        excluding--
                                    ``(I) any prices charged on or 
                                after October 1, 1992, to the Indian 
                                Health Service, the Department of 
                                Veterans Affairs, a State home 
                                receiving funds under section 1741 of 
                                title 38, United States Code, the 
                                Department of Defense, the Public 
                                Health Service, or a covered entity 
                                described in section 340B(a)(4) of the 
                                Public Health Service Act;
                                    ``(II) any prices charged under the 
                                Federal Supply Schedule of the General 
                                Services Administration;
                                    ``(III) any prices used under a 
                                State pharmaceutical assistance 
                                program; and
                                    ``(IV) any depot prices and single 
                                award contract prices, as defined by 
                                the Secretary, of any agency of the 
                                Federal Government.
                            ``(ii) Special rules.--The term `best 
                        price'--
                                    ``(I) shall be inclusive of cash 
                                discounts, free goods that are 
                                contingent on any purchase requirement, 
                                volume discounts, and rebates (other 
                                than rebates under this section);
                                    ``(II) shall be determined without 
                                regard to special packaging, labeling, 
                                or identifiers on the dosage form or 
                                product or package;
                                    ``(III) shall not take into account 
                                prices that are merely nominal in 
                                amount; and
                                    ``(IV) shall exclude rebates paid 
                                under this section or any other rebates 
                                paid to a State participating in the 
                                MediGrant master rebate agreement.
            ``(2) Additional rebate for single source and innovator 
        multiple source drugs.--
                    ``(A) In general.--The amount of the rebate 
                specified in this subsection with respect to a State 
                participating in the MediGrant master rebate agreement 
                for a rebate period, with respect to each dosage form 
                and strength of a single source drug or an innovator 
                multiple source drug, shall be increased by an amount 
                equal to the product of--
                            ``(i) the total number of units of such 
                        dosage form and strength dispensed after 
                        December 31, 1990, for which payment was made 
                        under the MediGrant plan for the rebate period; 
                        and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the average manufacturer 
                                price for the dosage form and strength 
                                of the drug for the period, exceeds
                                    ``(II) the average manufacturer 
                                price for such dosage form and strength 
                                for the calendar quarter beginning July 
                                1, 1990 (without regard to whether or 
                                not the drug has been sold or 
                                transferred to an entity, including a 
                                division or subsidiary of the 
                                manufacturer, after the first day of 
                                such quarter), increased by the 
                                percentage by which the consumer price 
                                index for all urban consumers (United 
                                States city average) for the month 
                                before the month in which the rebate 
                                period begins exceeds such index for 
                                September 1990.
                    ``(B) Treatment of subsequently approved drugs.--In 
                the case of a covered outpatient drug approved by the 
                Food and Drug Administration after October 1, 1990, 
                clause (ii)(II) of subparagraph (A) shall be applied by 
                substituting `the first full calendar quarter after the 
                day on which the drug was first marketed' for `the 
                calendar quarter beginning July 1, 1990' and `the month 
                prior to the first month of the first full calendar 
                quarter after the day on which the drug was first 
                marketed' for `September 1990'.
            ``(3) Rebate for other drugs.--
                    ``(A) In general.--The amount of the rebate paid to 
                a State participating in the MediGrant master rebate 
                agreement for a rebate period with respect to each 
                dosage form and strength of covered outpatient drugs 
                (other than single source drugs and innovator multiple 
                source drugs) shall be equal to the product of--
                            ``(i) the applicable percentage (as 
                        described in subparagraph (B)) of the average 
                        manufacturer price for the dosage form and 
                        strength for the rebate period, and
                            ``(ii) the total number of units of such 
                        dosage form and strength dispensed after 
                        December 31, 1990, for which payment was made 
                        under the MediGrant plan for the rebate period.
                    ``(B) Applicable percentage defined.--For purposes 
                of subparagraph (A)(i), the `applicable percentage' is 
                11 percent.
            ``(4) Limitation on amount of rebate to amounts paid for 
        certain drugs.--Upon request of a manufacturer of a covered 
        outpatient drug for which a majority of the estimated number of 
        units of such dosage form and strength that are subject to 
        rebates under this section were dispensed to inpatients of 
        nursing facilities (including drugs which are exempt from the 
        requirements of the MediGrant master rebate agreement under 
        this section under subsection (h)(1)(B)), the Secretary shall 
        limit the amount of the rebate under this subsection with 
        respect to a dosage form and strength of the drug for a rebate 
        period to the amount paid under the MediGrant plan with respect 
        to such dosage form and strength of the drug in the rebate 
        period (without consideration of any dispensing fees paid).
    ``(d) Limitations on Coverage of Drugs by States Participating in 
Master Agreement.--
            ``(1) Permissible restrictions.--A State participating in 
        the MediGrant master rebate agreement under this section may--
                    ``(A) subject to prior authorization under its 
                MediGrant plan any covered outpatient drug so long as 
                any such prior authorization program complies with the 
                requirements of paragraph (5); and
                    ``(B) exclude or otherwise restrict coverage under 
                its plan of a covered outpatient drug if--
                            ``(i) the prescribed use is not for a 
                        medically accepted indication (as defined in 
                        subsection (i)(5));
                            ``(ii) the drug is contained in the list 
                        referred to in paragraph (2);
                            ``(iii) the drug is subject to such 
                        restrictions pursuant to the MediGrant master 
                        rebate agreement or any agreement described in 
                        subsection (a)(4); or
                            ``(iv) the State has excluded coverage of 
                        the drug from its formulary established in 
                        accordance with paragraph (4).
            ``(2) List of drugs subject to restriction.--The following 
        drugs or classes of drugs, or their medical uses, may be 
        excluded from coverage or otherwise restricted by a State 
        participating in the MediGrant master rebate agreement:
                    ``(A) Agents when used for anorexia, weight loss, 
                or weight gain.
                    ``(B) Agents when used to promote fertility.
                    ``(C) Agents when used for cosmetic purposes or 
                hair growth.
                    ``(D) Agents when used for the symptomatic relief 
                of cough and colds.
                    ``(E) Agents when used to promote smoking 
                cessation.
                    ``(F) Prescription vitamins and mineral products, 
                except prenatal vitamins and fluoride preparations.
                    ``(G) Nonprescription drugs.
                    ``(H) Covered outpatient drugs which the 
                manufacturer seeks to require as a condition of sale 
                that associated tests or monitoring services be 
                purchased exclusively from the manufacturer or its 
                designee.
                    ``(I) Barbiturates.
                    ``(J) Benzodiazepines.
            ``(3) Additions to drug listings.--The Secretary shall, by 
        regulation, periodically update the list of drugs or classes of 
        drugs described in paragraph (2), or their medical uses, which 
        the Secretary has determined to be subject to clinical abuse or 
        inappropriate use.
            ``(4) Requirements for formularies.--A State participating 
        in the MediGrant master rebate agreement may establish a 
        formulary if the formulary meets the following requirements:
                    ``(A) The formulary is developed by a committee 
                consisting of physicians, pharmacists, and other 
                appropriate individuals appointed by the Governor of 
                the State.
                    ``(B) Except as provided in subparagraph (C), the 
                formulary includes the covered outpatient drugs of any 
                manufacturer which has entered into and complies with 
                the agreement under subsection (a) (other than any drug 
                excluded from coverage or otherwise restricted under 
                paragraph (2)).
                    ``(C) A covered outpatient drug may be excluded 
                with respect to the treatment of a specific disease or 
                condition for an identified population (if any) only 
                if, based on the drug's labeling (or, in the case of a 
                drug the prescribed use of which is not approved under 
                the Federal Food, Drug, and Cosmetic Act but is a 
                medically accepted indication, based on information 
                from the appropriate compendia described in subsection 
                (i)(5)), the excluded drug does not have a significant, 
                clinically meaningful therapeutic advantage in terms of 
                safety, effectiveness, or clinical outcome of such 
                treatment for such population over other drugs included 
                in the formulary and there is a written explanation 
                (available to the public) of the basis for the 
                exclusion.
                    ``(D) The State plan permits coverage of a drug 
                excluded from the formulary (other than any drug 
                excluded from coverage or otherwise restricted under 
                paragraph (2)) pursuant to a prior authorization 
                program that is consistent with paragraph (5).
                    ``(E) The formulary meets such other requirements 
                as the Secretary may impose in order to achieve program 
                savings consistent with protecting the health of 
                program beneficiaries.
        A prior authorization program established by a State under 
        paragraph (5) is not a formulary subject to the requirements of 
        this paragraph.
            ``(5) Requirements of prior authorization programs.--The 
        MediGrant plan of a State participating in the MediGrant master 
        rebate agreement may require, as a condition of coverage or 
        payment for a covered outpatient drug for which Federal 
        financial participation is available in accordance with this 
        section the approval of the drug before its dispensing for any 
        medically accepted indication (as defined in subsection (i)(5)) 
        only if the system providing for such approval--
                    ``(A) provides response by telephone or other 
                telecommunication device within 24 hours of a request 
                for prior authorization; and
                    ``(B) except with respect to the drugs on the list 
                referred to in paragraph (2), provides for the 
                dispensing of at least 72-hour supply of a covered 
                outpatient prescription drug in an emergency situation 
                (as defined by the Secretary).
            ``(6) Other permissible restrictions.--A State 
        participating in the MediGrant master rebate agreement may 
        impose limitations, with respect to all such drugs in a 
        therapeutic class, on the minimum or maximum quantities per 
        prescription or on the number of refills, if such limitations 
        are necessary to discourage waste, and may address instances of 
        fraud or abuse by individuals in any manner authorized under 
        this Act.
    ``(e) Drug Use Review.--
            ``(1) In general.--A State participating in the MediGrant 
        master rebate agreement may provide for a drug use review 
        program to educate physicians and pharmacists to identify and 
        reduce the frequency of patterns of fraud, abuse, gross 
        overuse, or inappropriate or medically unnecessary care, among 
        physicians, pharmacists, and patients, or associated with 
        specific drugs or groups of drugs, as well as potential and 
        actual severe adverse reactions to drugs.
            ``(2) Application of state standards.--A State with a drug 
        use review program under this subsection shall establish and 
        operate the program under such standards as it may establish.
    ``(f) Electronic Claims Management.--In accordance with chapter 35 
of title 44, United States Code (relating to coordination of Federal 
information policy), the Secretary shall encourage each State to 
establish, as its principal means of processing claims for covered 
outpatient drugs under its MediGrant plan, a point-of-sale electronic 
claims management system, for the purpose of performing on-line, real 
time eligibility verifications, claims data capture, adjudication of 
claims, and assisting pharmacists (and other authorized persons) in 
applying for and receiving payment.
    ``(g) Annual Report.--
            ``(1) In general.--Not later than May 1 of each year, the 
        Secretary shall transmit to the Committee on Finance of the 
        Senate, the Committee on Commerce of the House of 
        Representatives, and the Committee on Aging of the Senate a 
        report on the operation of this section in the preceding fiscal 
        year.
            ``(2) Details.--Each report shall include information on--
                    ``(A) ingredient costs paid under this title for 
                single source drugs, multiple source drugs, and 
                nonprescription covered outpatient drugs;
                    ``(B) the total value of rebates received and 
                number of manufacturers providing such rebates;
                    ``(C) the effect of inflation on the value of 
                rebates required under this section;
                    ``(D) trends in prices paid under this title for 
                covered outpatient drugs; and
                    ``(E) Federal and State administrative costs 
                associated with compliance with the provisions of this 
                title.
    ``(h) Exemption for Capitated Health Care Organizations, Hospitals, 
and Nursing Facilities.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        requirements of the MediGrant master rebate agreement under 
        this section shall not apply with respect to covered outpatient 
        drugs dispensed by or through--
                    ``(A) a capitated health care organization (as 
                defined in section 2114(c)(1)); or
                    ``(B) a hospital or nursing facility that dispenses 
                covered outpatient drugs using a drug formulary system 
                and bills the State no more than the hospital's 
                purchasing costs for covered outpatient drugs.
            ``(2) Construction in determining best price.--Nothing in 
        paragraph (1) shall be construed as excluding amounts paid by 
        the entities described in such paragraph for covered outpatient 
        drugs from the determination of the best price (as defined in 
        subsection (c)(1)(C)) for such drugs.
    ``(i) Definitions.--In the section--
            ``(1) Average manufacturer price.--The term `average 
        manufacturer price' means, with respect to a covered outpatient 
        drug of a manufacturer for a rebate period, the average price 
        paid to the manufacturer for the drug in the United States by 
        wholesalers for drugs distributed to the retail pharmacy class 
        of trade, after deducting customary prompt pay discounts.
            ``(2) Covered outpatient drug.--Subject to the exceptions 
        in subparagraph (D), the term `covered outpatient drug' means--
                    ``(A) of those drugs which are treated as 
                prescribed drugs for purposes of section 2171(a)(1)(H), 
                a drug which may be dispensed only upon prescription 
                (except as provided in paragraph (7)), and--
                            ``(i) which is approved as a prescription 
                        drug under section 505 or 507 of the Federal 
                        Food, Drug, and Cosmetic Act;
                            ``(ii)(I) which was commercially used or 
                        sold in the United States before the date of 
                        the enactment of the Drug Amendments of 1962 or 
                        which is identical, similar, or related (within 
                        the meaning of section 310.6(b)(1) of title 21 
                        of the Code of Federal Regulations) to such a 
                        drug, and (II) which has not been the subject 
                        of a final determination by the Secretary that 
                        it is a `new drug' (within the meaning of 
                        section 201(p) of the Federal Food, Drug, and 
                        Cosmetic Act) or an action brought by the 
                        Secretary under section 301, 302(a), or 304(a) 
                        of such Act to enforce section 502(f) or 505(a) 
                        of such Act; or
                            ``(iii)(I) which is described in section 
                        107(c)(3) of the Drug Amendments of 1962 and 
                        for which the Secretary has determined there is 
                        a compelling justification for its medical 
                        need, or is identical, similar, or related 
                        (within the meaning of section 310.6(b)(1) of 
                        title 21 of the Code of Federal Regulations) to 
                        such a drug, and (II) for which the Secretary 
                        has not issued a notice of an opportunity for a 
                        hearing under section 505(e) of the Federal 
                        Food, Drug, and Cosmetic Act on a 
proposed order of the Secretary to withdraw approval of an application 
for such drug under such section because the Secretary has determined 
that the drug is less than effective for some or all conditions of use 
prescribed, recommended, or suggested in its labeling;
                    ``(B) a biological product, other than a vaccine 
                which--
                            ``(i) may only be dispensed upon 
                        prescription,
                            ``(ii) is licensed under section 351 of the 
                        Public Health Service Act, and
                            ``(iii) is produced at an establishment 
                        licensed under such section to produce such 
                        product;
                    ``(C) insulin certified under section 506 of the 
                Federal Food, Drug, and Cosmetic Act; and
                    ``(D) a drug which may be sold without a 
                prescription (commonly referred to as an `over-the-
                counter drug'), if the drug is prescribed by a 
                physician (or other person authorized to prescribe 
                under State law).
            ``(3) Limiting definition.--The term `covered outpatient 
        drug' does not include any drug, biological product, or insulin 
        provided as part of, or as incident to and in the same setting 
        as, any of the following (and for which payment may be made 
        under a MediGrant plan as part of payment for the following and 
        not as direct reimbursement for the drug):
                    ``(A) Inpatient hospital services.
                    ``(B) Hospice services.
                    ``(C) Dental services, except that drugs for which 
                the MediGrant plan authorizes direct reimbursement to 
                the dispensing dentist are covered outpatient drugs.
                    ``(D) Physicians' services.
                    ``(E) Outpatient hospital services.
                    ``(F) Nursing facility services and services 
                provided by an intermediate care facility for the 
                mentally retarded.
                    ``(G) Other laboratory and x-ray services.
                    ``(H) Renal dialysis services.
        Such term also does not include any such drug or product for 
        which a National Drug Code number is not required by the Food 
        and Drug Administration or a drug or biological used for a 
        medical indication which is not a medically accepted 
        indication. Any drug, biological product, or insulin excluded 
        from the definition of such term as a result of this paragraph 
        shall be treated as a covered outpatient drug for purposes of 
        determining the best price (as defined in subsection (c)(1)(C)) 
        for such drug, biological product, or insulin.
            ``(4) Manufacturer.--The term `manufacturer' means, with 
        respect to a covered outpatient drug, the entity holding legal 
        title to or possession of the National Drug Code number for 
        such drug.
            ``(5) Medically accepted indication.--The term `medically 
        accepted indication' means any use for a covered outpatient 
        drug which is approved under the Federal Food, Drug, and 
        Cosmetic Act, or the use of which is supported by one or more 
        citations included or approved for inclusion in any of the 
        following compendia:
                    ``(A) American Hospital Formulary Service Drug 
                Information.
                    ``(B) United States Pharmacopeia-Drug Information.
                    ``(C) American Medical Association Drug 
                Evaluations.
                    ``(D) The peer-reviewed medical literature.
            ``(6) Multiple source drug; innovator multiple source drug; 
        noninnovator multiple source drug; single source drug.--
                    ``(A) Defined.--
                            ``(i) Multiple source drug.--The term 
                        `multiple source drug' means, with respect to a 
                        rebate period, a covered outpatient drug (not 
                        including any drug described in paragraph 
                        (2)(D)) for which there are 2 or more drug 
                        products which--
                                    ``(I) are rated as therapeutically 
                                equivalent (under the Food and Drug 
                                Administration's most recent 
                                publication of `Approved Drug Products 
                                with Therapeutic Equivalence 
                                Evaluations'),
                                    ``(II) except as provided in 
                                subparagraph (B), are pharmaceutically 
                                equivalent and bioequivalent, as 
                                defined in subparagraph (C) and as 
                                determined by the Food and Drug 
                                Administration, and
                                    ``(III) are sold or marketed in the 
                                State during the period.
                            ``(ii) Innovator multiple source drug.--The 
                        term `innovator multiple source drug' means a 
                        multiple source drug that was originally 
                        marketed under an original new drug application 
                        or product licensing application approved by 
                        the Food and Drug Administration.
                            ``(iii) Noninnovator multiple source 
                        drug.--The term `noninnovator multiple source 
                        drug' means a multiple source drug that is not 
                        an innovator multiple source drug.
                            ``(iv) Single source drug.--The term 
                        `single source drug' means a covered outpatient 
                        drug which is produced or distributed under an 
                        original new drug application approved by the 
                        Food and Drug Administration, including a drug 
                        product marketed by any cross-licensed 
                        producers or distributors operating under the 
                        new drug application or product licensing 
                        application.
                    ``(B) Exception.--Subparagraph (A)(i)(II) shall not 
                apply if the Food and Drug Administration changes by 
                regulation the requirement that, for purposes of the 
                publication described in subparagraph (A)(i)(I), in 
                order for drug products to be rated as therapeutically 
                equivalent, they must be pharmaceutically equivalent 
and bioequivalent, as defined in subparagraph (C).
                    ``(C) Definitions.--For purposes of this 
                paragraph--
                            ``(i) drug products are pharmaceutically 
                        equivalent if the products contain identical 
                        amounts of the same active drug ingredient in 
                        the same dosage form and meet compendial or 
                        other applicable standards of strength, 
                        quality, purity, and identity;
                            ``(ii) drugs are bioequivalent if they do 
                        not present a known or potential bioequivalence 
                        problem, or, if they do present such a problem, 
                        they are shown to meet an appropriate standard 
                        of bioequivalence; and
                            ``(iii) a drug product is considered to be 
                        sold or marketed in a State if it appears in a 
                        published national listing of average wholesale 
                        prices selected by the Secretary, if the listed 
                        product is generally available to the public 
                        through retail pharmacies in that State.
            ``(7) Nonprescription drugs.--If the MediGrant plan of a 
        State participating in the MediGrant master rebate agreement 
        under this section includes coverage of prescribed drugs as 
        described in section 2171(a)(1)(H) and permits coverage of 
        drugs which may be sold without a prescription (commonly 
        referred to as `over-the-counter' drugs), if they are 
        prescribed by a physician (or other person authorized to 
        prescribe under State law), such a drug shall be regarded as a 
        covered outpatient drug for purposes of the State's 
        participation in the agreement.
            ``(8) Rebate period.--The term `rebate period' means, with 
        respect to an agreement under subsection (a), a calendar 
        quarter or other period specified by the Secretary with respect 
        to the payment of rebates under such agreement.''.

SEC. 16002. TERMINATION OF CURRENT PROGRAM AND TRANSITION.

    (a) Termination of Current Program; Limitation on Medicaid Payments 
in Fiscal Year 1996.--Title XIX of the Social Security Act is amended--
            (1) by redesignating section 1931 as section 1932; and
            (2) by inserting after section 1930 the following new 
        section:

    ``termination of medicaid program; limitation on new obligation 
                               authority

    ``Sec. 1931. (a) Elimination of Individual Entitlement.--Effective 
on the date of the enactment of this section--
            ``(1) except as provided in subsection (b), the Federal 
        Government has no obligation to provide payment with respect to 
        items and services provided under this title, and
            ``(2) this title shall not be construed as providing for an 
        entitlement, under Federal law in relation to the Federal 
        Government, in an individual or person (including any provider) 
        at the time of provision or receipt of services.
    ``(b) Limitation on Obligation Authority.--Notwithstanding any 
other provision of this title--
            ``(1) Post-enactment, pre-medigrant.--Subject to paragraph 
        (2), the Secretary is authorized to enter into obligations with 
        any State under this title for expenses incurred after the date 
        of the enactment of this Act and during fiscal year 1996, but 
        not in excess of the obligation allotment for that State for 
        fiscal year 1996 under section 2121(b)(4).
            ``(2) None after medigrant.--The Secretary is not 
        authorized to enter into any obligation with any State under 
        this title for expenses incurred on or after the earlier of--
                    ``(A) October 1, 1996; or
                    ``(B) the first day of the first quarter on which 
                the State plan under title XXI is first effective.
            ``(3) Agreement.--A State's submission of claims for 
        payment under section 1903 after the date of the enactment of 
        this title with respect to which the limitation described in 
        paragraph (1) applies is deemed to constitute the State's 
        acceptance of the obligation limitation under such paragraph 
        (including the formula for computing the amount of such 
        obligation limitation).
    ``(c) Requirement for Timely Submittal of Claims.--No payment shall 
be made to a State under this title with respect to an obligation 
incurred before the date of the enactment of this section, unless the 
State has submitted to the Secretary, by not later than June 30, 1996, 
a claim for Federal financial participation for expenses paid by the 
State with respect to such obligations. Nothing in subsection (a) or 
(b) shall be construed as affecting the obligation of the Federal 
Government to pay claims described in the previous sentence.''.
    (b) Medicaid Transition.--
            (1) Treatment of certain causes of action.--No cause of 
        action under title XIX of the Social Security Act which seeks 
        to require a State to establish or maintain minimum payment 
        rates under such title and which has not become final as of the 
        date of the enactment of this Act shall be brought or 
        continued.
            (2) Treatment of certain disallowances.--Notwithstanding 
        any provision of law, in the case where payment has been made 
        under section 1903(a) of the Social Security Act to a State 
        before October 1, 1995, and for which a disallowance has not 
        been taken as of such date (or, if so taken, has not been 
        completed by such date), the Secretary of Health and Human 
        Services shall discontinue the disallowance proceeding and, if 
        such disallowance has been taken as of the date of the 
        enactment of this Act, any payment reductions effected shall be 
        rescinded and the payments returned to the State.
            (3) Extension of moratorium.--Section 6408(a)(3) of the 
        Omnibus Budget Reconciliation Act of 1989, as amended by 
        section 13642 of the Omnibus Budget Reconciliation Act of 1993, 
        is amended by striking ``December 31, 1995'' and inserting 
        ``the first day of the first quarter on which the MediGrant 
        plan for the State of Michigan is first effective under title 
        XXI of such Act''.
    (c) No Application of Prior Medicaid Judgments to MediGrant 
Program.--No judicial or administrative decision rendered regarding 
requirements imposed under title XIX of the Social Security Act with 
respect to a State shall have any application to the MediGrant plan of 
the State title XXI of such Act. A State may, pursuant to the previous 
sentence, seek the abrogation or modification of any such decision 
after the date of termination of the State plan under title XIX of such 
Act.
    (d) Termination of Program for Distribution of Pediatric Vaccines
            (1) In general.--Subject to paragraph (2), section 1928 of 
        the Social Security Act (42 U.S.C. 1396s) is repealed, 
        effective on the date of the enactment of this Act.
            (2) Transition.--(A) Such repeal shall not affect the 
        distribution of vaccines purchased and delivered to the States 
        before the date of the enactment of this Act.
            (B) No vaccine may be purchased after such date by the 
        Federal Government or any State under any contract under 
        section 1928(d) of the Social Security Act.
    (e) Anti-Fraud Provisions.--
            (1) In general.--Section 1128(h)(1) of the Social Security 
        Act (42 U.S.C. 1320a-7(h)(1)) is amended by inserting ``or a 
        MediGrant plan under title XXI'' after ``title XIX''.
            (2) Continued role of inspector general.--The Inspector 
        General in the Department of Health and Human Services shall 
        have the same responsibilities and duties in relation to fraud 
        and abuse and related matters under the MediGrant program under 
        title XXI of the Social Security Act as such Inspector General 
        has had in relation to the medicaid program under title XIX of 
        such Act before the date of the enactment of this Act.

              TITLE XVII--DEPARTMENT OF COMMERCE ABOLITION

SEC. 17001. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Department of 
Commerce Dismantling Act''.
    (b) Table of Contents.--The table of contents for this title is as 
follows:

              TITLE XVII--DEPARTMENT OF COMMERCE ABOLITION

Sec. 17001. Short title; table of contents.
           Subtitle A--Abolishment of Department of Commerce

Sec. 17101. Reestablishment of Department as Commerce Programs 
                            Resolution Agency.
Sec. 17102. Functions.
Sec. 17103. Deputy Administrator.
Sec. 17104. Continuation of service of Department officers.
Sec. 17105. Reorganization.
Sec. 17106. Abolishment of Commerce Programs Resolution Agency.
Sec. 17107. GAO report.
Sec. 17108. Conforming amendments.
Sec. 17109. Effective date.
Subtitle B--Disposition Of Particular Programs, Functions, and Agencies 
                       of Department of Commerce

Sec. 17201. Economic development.
Sec. 17202. Technology Administration.
Sec. 17203. Terminated functions of NTIA.
Sec. 17204. Transfer of National Telecommunications and Information 
                            Administration.
Sec. 17205. National Oceanic and Atmospheric Administration.
Sec. 17206. Miscellaneous abolishments.
Sec. 17207. Privatization of travel functions.
Sec. 17208. Effective date.
Sec. 17209. Sense of Congress regarding user fees.
           Subtitle C--Consolidation of Statistical Functions

Sec. 17301. Short title.
Sec. 17302. Definitions.
         Chapter 1--Establishment of Federal Statistics Agency

Sec. 17311. Establishment.
Sec. 17312. Principal officers.
Sec. 17313. Transfers of functions and offices.
                  Chapter 2--Administrative Provisions

Sec. 17321. Personnel provisions.
Sec. 17322. General administrative provisions.
Sec. 17323. Contracts.
Sec. 17324. Regulations.
Sec. 17325. Seal.
Sec. 17326. Annual report.
      Chapter 3--Transitional, Savings, and Conforming Provisions

Sec. 17331. Transfer and allocation of appropriations and personnel.
Sec. 17332. Effect on personnel.
Sec. 17333. Incidental transfers.
Sec. 17334. Savings provisions.
Sec. 17335. References.
Sec. 17336. Conforming amendments.
Sec. 17337. Transition.
Sec. 17338. Interim appointments.
             Subtitle D--United States Trade Administration

                     Chapter 1--General Provisions

Sec. 17401. Findings.
Sec. 17402. Definitions.
             Chapter 2--United States Trade Administration

Sec. 17411. Establishment of the Administration.
Sec. 17412. Functions of the USTR.
Sec. 17413. Deputy Administrator of the United States Trade 
                            Administration.
Sec. 17414. Deputy United States Trade Representatives.
Sec. 17415. Assistant Administrators.
Sec. 17416. General Counsel.
Sec. 17417. Inspector General.
Sec. 17418. Chief Financial Officer.
               Chapter 3--Transfers to the Administration

Sec. 17431. Office of the United States Trade Representative.
Sec. 17432. Transfers from the Department of Commerce.
Sec. 17433. Trade and Development Agency.
Sec. 17434. Functions with respect to textile agreements.
Sec. 17435. Plan for consolidation of trade activities.
                  Chapter 4--Administrative Provisions

Sec. 17441. Personnel provisions.
Sec. 17442. Delegation and assignment.
Sec. 17443. Succession.
Sec. 17444. Reorganization.
Sec. 17445. Rules.
Sec. 17446. Funds transfer.
Sec. 17447. Contracts, grants, and cooperative agreements.
Sec. 17448. Use of facilities.
Sec. 17449. Gifts and bequests.
Sec. 17450. Working capital fund.
Sec. 17451. Service charges.
Sec. 17452. Seal of department.
                      Chapter 5--Related Agencies

Sec. 17461. Interagency trade organization.
Sec. 17462. National Security Council.
Sec. 17463. International Monetary Fund.
                    Chapter 6--Conforming Amendments

Sec. 17471. Amendments to general provisions.
Sec. 17472. Repeals.
Sec. 17473. Conforming amendments relating to Executive Schedule 
                            positions.
      Chapter 7--Transitional, Savings, and Conforming Provisions

Sec. 17481. Additional transfers.
Sec. 17482. Incidental transfers.
Sec. 17483. Effect on personnel.
Sec. 17484. Savings provisions.
Sec. 17485. Reference.
Sec. 17486. Transition.
                        Chapter 8--Miscellaneous

Sec. 17491. Effective date.
Sec. 17492. Interim appointments.
Sec. 17493. Funding reductions resulting from reorganization.
Sec. 17494. Authorization of appropriations.
          Subtitle E--Patent And Trademark Office Corporation

Sec. 17501. Short title.
                 Chapter 1--Patent and Trademark Office

Sec. 17511. Establishment of Patent and Trademark Office as a 
                            corporation.
Sec. 17512. Powers and duties.
Sec. 17513. Organization and management.
Sec. 17514. Management Advisory Board.
Sec. 17515. Independence from Department of Commerce.
Sec. 17516. Trademark Trial and Appeal Board.
Sec. 17517. Board of Patent Appeals and Interferences.
Sec. 17518. Suits by and against the Corporation.
Sec. 17519. Annual report of Commissioner.
Sec. 17520. Suspension or exclusion from practice.
Sec. 17521. Funding.
Sec. 17522. Audits.
Sec. 17523. Transfer.
            Chapter 2--Effective Date; Technical Amendments

Sec. 17531. Effective date.
Sec. 17532. Technical and conforming amendments.
                  Subtitle F--Miscellaneous Provisions

Sec. 17601. References.
Sec. 17602. Exercise of authorities.
Sec. 17603. Savings provisions.
Sec. 17604. Transfer of assets.
Sec. 17605. Delegation and assignment.
Sec. 17606. Authority of Administrator with respect to functions 
                            transferred.
Sec. 17607. Proposed changes in law.
Sec. 17608. Certain vesting of functions considered transfers.
Sec. 17609. Definitions.
Sec. 17610. Limitation on annual expenditures for continued functions.
Sec. 17611. User fees.
Sec. 17612. Unobligated balances returned to Treasury.
Sec. 17613. Annual GAO report.

           Subtitle A--Abolishment of Department of Commerce

SEC. 17101.  REESTABLISHMENT OF DEPARTMENT AS COMMERCE PROGRAMS 
              RESOLUTION AGENCY.

    (a) Reestablishment.--The Department of Commerce is hereby 
redesignated as the Commerce Programs Resolution Agency, which shall be 
a free-standing agency in the executive branch of the Government.
    (b) Administrator.--
            (1) In general.--There shall be at the head of the Agency 
        an Administrator of the Agency, who shall be appointed by the 
        President, by and with the advice and consent of the Senate. 
        The Agency shall be administered under the supervision and 
        direction of the Administrator. The Administrator shall receive 
        compensation at the rate prescribed for level II of the 
        Executive Schedule under section 5313 of title 5, United States 
        Code.
            (2) Initial appointment of administrator.--Notwithstanding 
        any other provision of this title or any other law, the 
President may, at any time after the date of the enactment of this 
title, appoint an individual to serve as Administrator of the Commerce 
Programs Resolution Agency (who may be the Secretary of Commerce), as 
such position is established under paragraph (1). An appointment under 
this paragraph may not be construed to affect the position of Secretary 
of Commerce or the authority of the Secretary before the effective date 
specified in section 17109(a).
    (c) Duties.--The Administrator shall be responsible for--
            (1) the administration and wind-up, during the wind-up 
        period, of all functions of the Administrator pursuant to 
        section 17102 and the other provisions of this title;
            (2) the administration and wind-up, during the wind-up 
        period, of any outstanding obligations of the Federal 
        Government under any programs terminated or repealed by this 
        title; and
            (3) taking such other actions as may be necessary, before 
        the termination date specified in section 17106(d), to wind up 
        any outstanding affairs of the Department of Commerce.

SEC. 17102. FUNCTIONS.

    Except to the extent a function is abolished or vested in another 
official or agency by this title, the Administrator shall perform all 
functions that, immediately before the effective date specified in 
section 17109(a), were functions of the Department of Commerce (or any 
office of the Department) or were authorized to be performed by the 
Secretary of Commerce or any other officer or employee of the 
Department in the capacity as such officer or employee.

SEC. 17103. DEPUTY ADMINISTRATOR.

    The Agency shall have a Deputy Administrator, who shall--
            (1) be appointed by and report to the Administrator; and
            (2) shall perform such functions as may be delegated by the 
        Administrator.

SEC. 17104. CONTINUATION OF SERVICE OF DEPARTMENT OFFICERS.

    (a) Continuation of Service of Secretary.--The individual serving 
on the effective date specified in section 17109(a) as the Secretary of 
Commerce may serve and act as Administrator until the date an 
individual is appointed under this title to the position of 
Administrator, or until the end of the 120-day period provided for in 
section 3348 of title 5, United States Code (relating to limitations on 
the period of time a vacancy may be filled temporarily), whichever is 
earlier.
    (b) Continuation of Service of Other Officers.--An individual 
serving on the effective date specified in section 17109(a) as an 
officer of the Department of Commerce other than the Secretary of 
Commerce may continue to serve and act in an equivalent capacity in the 
Agency until the date an individual is appointed under this title to 
the position of Administrator, or until the end of the 120-day period 
provided for in section 3348 of title 5, United States Code (relating 
to limitations on the period of time a vacancy may be filled 
temporarily) with respect to that appointment, whichever is earlier.
    (c) Compensation for Continued Service.--Any person--
            (1) who serves as the Administrator under subsection (a), 
        or
            (2) who serves under subsection (b),
after the effective date specified in section 17109(a) and before the 
first appointment of a person as Administrator shall continue to be 
compensated for so serving at the rate at which such person was 
compensated before such effective date.

SEC. 17105. REORGANIZATION.

    The Administrator may allocate or reallocate any function of the 
Agency pursuant to this title among the officers of the Agency, and may 
establish, consolidate, alter, or discontinue in the Commerce Programs 
Resolution Agency any organizational entities that were entities of the 
Department of Commerce, as the Administrator considers necessary or 
appropriate.

SEC. 17106. ABOLISHMENT OF COMMERCE PROGRAMS RESOLUTION AGENCY.

    (a) In General.--Effective on the termination date specified in 
subsection (d), the Commerce Programs Resolution Agency is abolished.
    (b) Abolition of Functions.--Except for functions transferred or 
otherwise continued by this title, all functions that, immediately 
before the termination date specified in subsection (d), were functions 
of the Commerce Programs Resolution Agency are abolished effective on 
that termination date.
    (c) Plan for Winding Up Affairs.--Not later than the effective date 
specified in section 17109(a), the President shall submit to the 
Congress a plan for winding up the affairs of the Agency in accordance 
with this title and by not later than the termination date specified in 
subsection (d).
    (d) Termination Date.--The termination date under this subsection 
is the date that is 3 years after the date of the enactment of this 
title.

SEC. 17107. GAO REPORT.

    Not later than 180 days after the date of enactment of this title, 
the Comptroller General of the United States shall submit to the 
Congress a report which shall include recommendations for the most 
efficient means of achieving, in accordance with this title--
            (1) the complete abolishment of the Department of Commerce; 
        and
            (2) the termination or transfer or other continuation of 
        the functions of the Department of Commerce.

SEC. 17108. CONFORMING AMENDMENTS.

    (a) Presidential Succession.--Section 19(d)(1) of title 3, United 
States Code, is amended by striking ``Secretary of Commerce,''.
    (b) Executive Departments.--Section 101 of title 5, United States 
Code, is amended by striking the following item:
            ``The Department of Commerce.''.
    (c) Secretary's Compensation.--Section 5312 of title 5, United 
States Code, is amended by striking the following item:
            ``Secretary of Commerce.''.
    (d) Compensation for Positions at Level III.--Section 5314 of title 
5, United States Code, is amended--
            (1) by striking the following item:
            ``Under Secretary of Commerce, Under Secretary of Commerce 
        for Economic Affairs, Under Secretary of Commerce for Export 
        Administration and Under Secretary of Commerce for Travel and 
        Tourism.'';
            (2) by striking the following item:
            ``Under Secretary of Commerce for Oceans and Atmosphere, 
        the incumbent of which also serves as Administrator of the 
        National Oceanic and Atmospheric Administration.''; and
            (3) by striking the following item:
            ``Under Secretary of Commerce for Technology.''.
    (e) Compensation for Positions at Level IV.--Section 5315 of title 
5, United States Code, is amended--
            (1) by striking the following item:
            ``Assistant Secretaries of Commerce (11).'';
            (2) by striking the following item:
            ``General Counsel of the Department of Commerce.'';
            (3) by striking the following item:
            ``Assistant Secretary of Commerce for Oceans and 
        Atmosphere, the incumbent of which also serves as Deputy 
        Administrator of the National Oceanic and Atmospheric 
        Administration.'';
            (4) by striking the following item:
            ``Director, National Institute of Standards and Technology, 
        Department of Commerce.'';
            (5) by striking the following item:
            ``Inspector General, Department of Commerce.'';
            (6) by striking the following item:
            ``Chief Financial Officer, Department of Commerce.''; and
            (7) by striking the following item:
            ``Director, Bureau of the Census, Department of 
        Commerce.''.
    (f) Compensation for Positions at Level V.--Section 5316 of title 
5, United States Code, is amended--
            (1) by striking the following item:
            ``Director, United States Travel Service, Department of 
        Commerce.''; and
            (2) by striking the following item:
            ``National Export Expansion Coordinator, Department of 
        Commerce.''.
    (g) Inspector General Act of 1978.--The Inspector General Act of 
1978 (5 U.S.C. App.) is amended--
            (1) in section 9(a)(1), by striking subparagraph (B);
            (2) in section 11(1), by striking ``Commerce,''; and
            (3) in section 11(2), by striking ``Commerce,'';

SEC. 17109. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this 
subtitle shall take effect on the date that is 6 months after the date 
of the enactment of this subtitle.
    (b) Provisions Effective on Date of Enactment.--The following 
provisions of this subtitle shall take effect on the date of the 
enactment of this subtitle:
            (1) Section 17101(b).
            (2) Section 17106(c).
            (3) Section 17107.

Subtitle B--Disposition of Particular Programs, Functions, and Agencies 
                       of Department of Commerce

SEC. 17201. ECONOMIC DEVELOPMENT.

    (a) Terminated Functions.--The Public Works and Economic 
Development Act of 1965 (42 U.S.C. 3121 et seq.) is repealed.
    (b) Transfer of Financial Obligations Owed to the Department.--
There are transferred to the Secretary of the Treasury the loans, 
notes, bonds, debentures, securities, and other financial obligations 
owned by the Department of Commerce under the Public Works and Economic 
Development Act of 1965, together with all assets or other rights 
(including security interests) incident thereto, and all liabilities 
related thereto. There are assigned to the Secretary of the Treasury 
the functions, powers, and abilities vested in or delegated to the 
Secretary of Commerce or the Department of Commerce to manage, service, 
collect, sell, dispose of, or otherwise realize proceeds on obligations 
owed to the Department of Commerce under authority of such Act with 
respect to any loans, obligations, or guarantees made or issued by the 
Department of Commerce pursuant to such Act.
    (c) Sale of Loans.--The Secretary of the Treasury shall take such 
actions as may be necessary to ensure that to the maximum extent 
practicable loans transferred to the Secretary under subsection (b) are 
sold to the public. The Secretary shall prescribe terms for the sale of 
such loans to ensure that such sale will bring the highest possible 
rate of return to the Federal Government.
    (d) Audit.--Not later than 18 months after the date of the 
enactment of this title, the Comptroller General shall conduct an audit 
of all grants made or issued by the Department of Commerce under the 
Public Works and Economic Development Act of 1965 in fiscal year 1995 
and all loans, obligations, and guarantees and shall transmit to 
Congress a report on the results of such audit.

SEC. 17202. TECHNOLOGY ADMINISTRATION.

    (a) Technology Administration.--
            (1) General rule.--Except as otherwise provided in this 
        section, the Technology Administration shall be terminated on 
        the effective date specified in section 17208(a).
            (2) Office of technology policy.--The Office of Technology 
        Policy is hereby terminated.
    (b) National Institute of Standards and Technology.--
            (1) General rule.--Except as otherwise provided in this 
        subsection, the National Institute of Standards and Technology 
        (in this subsection referred to as the ``Institute'') shall be 
        transferred to the United States Trade Administration.
            (2) Functions of director.--Except as otherwise provided in 
        this subsection, upon the transfer under paragraph (1), the 
        Director of the Institute shall perform all functions relating 
        to the Institute that, immediately before the effective date 
        specified in section 17208(a), were functions of the Secretary 
        of Commerce or the Under Secretary of Commerce for Technology, 
        including the administration of section 17 of the Stevenson-
        Wydler Technology Innovation Act of 1980.
            (3) Laboratories.--(A) The laboratories of the Institute 
        shall be transferred to the United States Trade Administration.
            (B) The United States Trade Administration shall attempt to 
        sell the property of the laboratories of the Institute, within 
        18 months after the effective date specified in section 
        17208(a), to a private sector entity intending to perform 
        substantially the same functions as were performed by the 
        laboratories of the Institute immediately before such effective 
        date.
            (C) If no offer to purchase property under subparagraph (B) 
        is received within the 18-month period described in such 
        subparagraph, the United States Trade Administration shall 
        submit a report to the Congress containing recommendations on 
        the appropriate disposition of the property and functions of 
        the laboratories of the Institute.
            (4) Provision of services by private sector.--The Director 
        of the Institute shall consider proposals from experienced and 
        qualified private-sector entities to provide services that, 
        immediately before the effective date specified in section 
        17208(a), were performed by the Technology Administration, 
        particularly foreign competitive technology assessments. The 
        Director shall require that proposals to provide a service that 
        are accepted under this paragraph satisfy user needs better 
        than, and provide such service at a lower cost than, the 
        service could be provided by the Federal Government.
    (c) National Technical Information Service.--
            (1) Sale of property.--The Commerce Programs Resolution 
        Agency shall attempt to sell the property of the National 
        Technical Information Service, within 18 months after the 
        effective date specified in section 17208(a), to a private 
        sector entity intending to perform substantially the same 
        functions as were performed by the National Technical 
        Information Service immediately before such effective date.
            (2) Recommendations.--If no offer to purchase property 
        under paragraph (1) is received within the 18-month period 
        described in such paragraph, the Commerce Programs Resolution 
        Agency shall submit a report to the Congress containing 
        recommendations on the appropriate disposition of the property 
        and functions of the National Technical Information Service.
            (3) Funding.--No Federal funds may be appropriated for the 
        National Technical Information Service for any fiscal year 
        after fiscal year 1995.
            (4) Electronic reporting.--Each Federal research report 
        that is required to be submitted to the National Technical 
        Information Service after the date of the enactment of this Act 
        shall be submitted in an electronic, standardized format in 
        order to facilitate the availability of Federal research 
        reports on the Internet and the World Wide Web.
    (d) Amendments.--
            (1) National institute of standards and technology act.--
        The National Institute of Standards and Technology Act (15 
        U.S.C. 271 et seq.) is amended--
                    (A) in section 2(b), by striking paragraph (1) and 
                redesignating paragraphs (2) through (11) as paragraphs 
                (1) through (10), respectively;
                    (B) in section 2(d), by striking ``, including the 
                programs established under sections 25, 26, and 28 of 
                this Act'';
                    (C) in section 10, by striking ``Advanced'' in both 
                the section heading and subsection (a), and inserting 
                in lieu thereof ``Standards and''; and
                    (D) by striking sections 24, 25, 26, and 28.
            (2) Stevenson-wydler technology innovation act of 1980.--
        (A) The Stevenson-Wydler Technology Innovation Act of 1980 (15 
        U.S.C. 3701 et seq.) is amended--
                    (i) in section 3, by striking paragraph (2) and 
                redesignating paragraphs (3) through (5) as paragraphs 
                (2) through (4), respectively;
                    (ii) in section 4, by striking paragraphs (1), (4), 
                and (13) and redesignating paragraphs (2), (3), (5), 
                (6), (7), (8), (9), (10), (11), and (12) as paragraphs 
                (1) through (10), respectively;
                    (iii) by striking sections 5, 6, 7, 8, 9, and 10; 
                and
                    (iv) in section 11--
                            (I) by striking ``, the Federal Laboratory 
                        Consortium for Technology Transfer,'' in 
                        subsection (c)(3);
                            (II) by striking ``and the Federal 
                        Laboratory Consortium for Technology Transfer'' 
                        in subsection (d)(2);
                            (III) by striking ``, and refer such 
                        requests'' and all that follows through 
                        ``available to the Service'' in subsection 
                        (d)(3); and
                            (IV) by striking subsection (e).
            (B) Section 17 of the Stevenson-Wydler Technology 
        Innovation Act of 1980 (15 U.S.C. 3711a, relating to the 
        Malcolm Baldrige National Quality Award) is repealed. It is the 
        sense of the Congress that a private-sector entity should 
        continue the national quality award program established by such 
        section.

SEC. 17203. TERMINATED FUNCTIONS OF NTIA.

    (a) Repeals.--The following provisions of law are repealed:
            (1) Subpart A of part IV of title III of the Communications 
        Act of 1934 (47 U.S.C. 390 et seq.), relating to assistance for 
        public telecommunications facilities.
            (2) Subpart B of part IV of title III of the Communications 
        Act of 1934 (47 U.S.C. 394 et seq.), relating to the Endowment 
        for Children's Educational Television.
            (3) Subpart C of part IV of title III of the Communications 
        Act of 1934 (47 U.S.C. 395 et seq.), relating to 
        Telecommunications Demonstration grants.
    (b) Disposal of NTIA Laboratories.--
            (1) Transfer to resolution agency.--The laboratories of the 
        National Telecommunications and Information Administration 
        shall be transferred to the Commerce Programs Resolution 
        Agency.
            (2) Sale of laboratories.--The Commerce Programs Resolution 
        Agency shall attempt to sell the property of such laboratories, 
        within 18 months after the effective date specified in section 
17208(a), to a private sector entity intending to perform substantially 
the same functions as were performed by such laboratories immediately 
before such effective date.
            (3) Report on disposition.--If no offer to purchase 
        property under subparagraph (B) is received within the 18-month 
        period described in such subparagraph, the Commerce Programs 
        Resolution Agency shall submit a report to the Congress 
        containing recommendations on the appropriate disposition of 
        the property and functions of such laboratories.

SEC. 17204. TRANSFER OF NATIONAL TELECOMMUNICATIONS AND INFORMATION 
              ADMINISTRATION.

    (a) Transfer to USTA.--The National Telecommunications and 
Information Administration shall be transferred to the United States 
Trade Administration.
    (b) Administrator.--The head of the National Telecommunications and 
Information Administration shall be an Administrator who shall be 
appointed by the President, by and with the advice and consent of the 
Senate. The functions of the National Telecommunications and 
Information Administration, and of the Secretary of Commerce and the 
Assistant Secretary for Communications and Information of the 
Department of Commerce with respect to the National Telecommunications 
and Information Administration, are transferred to the Administrator.
    (c) References.--References in any provision of law (including to 
the National Telecommunications and Information Administration 
Organization Act) to the Secretary of Commerce or the Assistant 
Secretary for Communications and Information of the Department of 
Commerce with respect to a function vested pursuant to this section in 
the Administrator of the National Telecommunications and Information 
Administration shall be deemed to refer to the Administrator of the 
National Telecommunications and Information Administration.

SEC. 17205. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION.

    (a) Transfer to Department of Agriculture.--The National Oceanic 
and Atmospheric Administration shall be transferred to the Department 
of Agriculture.
    (b) Definitions.--For the purposes of this section, the term--
            (1) ``Act of 1890'' means the Act entitled ``An Act to 
        increase the efficiency and reduce the expenses of the Signal 
        Corps of the Army, and to transfer the Weather Bureau to the 
        Department of Agriculture'', approved October 1, 1890 (26 Stat. 
        653);
            (2) ``Act of 1947'' means the Act entitled ``An Act to 
        define the functions and duties of the Coast and Geodetic 
        Survey, and for other purposes'', approved August 6, 1947 (33 
        U.S.C. 883a et seq.);
            (3) ``Act of 1970'' means the Act entitled ``An Act to 
        clarify the status and benefits of commissioned officers of the 
        National Oceanic and Atmospheric Administration, and for other 
        purposes'', approved December 31, 1970 (33 U.S.C. 857-1 et 
        seq.);
            (4) ``Administrator'' means the Administrator of the 
        National Oceanic and Atmospheric Administration; and
            (5) ``Secretary'' means the Secretary of Agriculture.
    (c) Leasing and Contracting.--
            (1) Contracting authority.--Notwithstanding any other 
        provision of law, the Secretary of Agriculture is authorized to 
        enter into contracts for data or days-at-sea to fulfill the 
        National Oceanic and Atmospheric Administration missions of 
        marine research, climate research, fisheries research, 
        hurricane tracking, and mapping and charting services.
            (2) UNOLS vessel agreements.--In fulfilling the National 
        Oceanic and Atmospheric Administration mission requirements 
        described in paragraph (1), the Secretary of Agriculture shall 
        use excess capacity of University National Oceanographic 
        Laboratory System vessels where appropriate, and may enter into 
        memoranda of agreement with operators of those vessels to carry 
        out those mission requirements.
    (d) Abolitions.--The National Ocean Service and the Office of 
Oceanic and Atmospheric Research are abolished.
    (e) Termination of the National Oceanic and Atmospheric 
Administration Corps of Commissioned Officers.--
            (1) Number of officers.--Notwithstanding section 8 of the 
        Act of June 3, 1948 (33 U.S.C. 853g), no commissioned officers 
        are authorized for the National Oceanic and Atmospheric 
        Administration for any fiscal year after fiscal year 1996.
            (2) Separation pay.--The Secretary of Agriculture may 
        separate commissioned officers from the active list of the 
        National Oceanic and Atmospheric Administration, and may do so 
        without providing separation pay.
            (3) Transfer.--(A) Subject to the approval of the Secretary 
        of Defense and under terms and conditions specified by the 
        Secretary, commissioned officers subject to paragraph (1) may 
        transfer to the armed services under section 716 of title 10, 
        United States Code.
            (B) Subject to the approval of the Secretary of 
        Transportation and under terms and conditions specified by the 
        Secretary, commissioned officers subject to paragraph (1) may 
        transfer to the United States Coast Guard under section 716 of 
        title 10, United States Code.
            (C) Subject to the approval of the Administrator and under 
        terms and conditions specified by the Administrator, 
        commissioned officers subject to paragraph (1) who on the date 
        of enactment of this section have been assigned for a period of 
        one year or more to the programs transferred to the 
        Administration by this Act (other than those associated with 
        the modernization of the National Oceanic and Atmospheric 
        Administration fleet or the operations of the National Oceanic 
        and Atmospheric Administration Corps of Commissioned Officers) 
        may transfer to the Administration as members of the civil 
service.
            (4) Repeals.--(A) The following provisions of law are 
        repealed:
                    (i) The Coast and Geodetic Survey Commissioned 
                Officers' Act of 1948 (33 U.S.C. 853a-853o, 853p-853u).
                    (ii) The Act of February 16, 1929 (Chapter 221, 
                section 5; 45 Stat. 1187; 33 U.S.C. 852a).
                    (iii) The Act of January 19, 1942 (Chapter 6; 56 
                Stat. 6).
                    (iv) Section 9 of Public Law 87-649 (76 Stat. 495).
                    (v) The Act of May 22, 1917 (Chapter 20, section 
                16; 40 Stat. 87; 33 U.S.C. 854 et seq.).
                    (vi) The Act of December 3, 1942 (Chapter 670; 56 
                Stat. 1038).
                    (vii) Sections 1 through 5 of Public Law 91-621 (84 
                Stat. 1863; 33 U.S.C. 857-1 et seq.).
                    (viii) The Act of August 10, 1956 (Chapter 1041, 
                section 3; 70A Stat. 619; 33 U.S.C. 857a).
                    (ix) The Act of May 18, 1920 (Chapter 190, section 
                11; 41 Stat. 603; 33 U.S.C. 864).
                    (x) The Act of July 22, 1947 (Chapter 286; 61 Stat. 
                400; 33 U.S.C. 873, 874).
                    (xi) The Act of August 3, 1956 (Chapter 932; 70 
                Stat. 988; 33 U.S.C. 875, 876).
                    (xii) All other Acts inconsistent with this 
                subsection.
            (B) The effective date of the repeals under subparagraph 
        (A) shall be September 30, 1997.
            (5) Unexpended balances.--Unexpended balances of 
        appropriations, allocations, and other funds available or made 
        available in connection with the National Oceanic and 
        Atmospheric Administration Corps of Commissioned officers may 
        be used by the Secretary for payments under section 8 of the 
        Act of June 3, 1948 (33 U.S.C. 853g).
            (6) Abolition.--The Office of the National Oceanic and 
        Atmospheric Administration Corps of Operations and the 
        Commissioned Personnel Center are abolished effective September 
        30, 1997.
    (f) Other Terminations.--The following programs of the National 
Oceanic and Atmospheric Administration are terminated:
            (1) The National Undersea Research Program.
            (2) The Fleet Modernization, Shipbuilding, and Construction 
        Account.
            (3) The Charleston, South Carolina, Special Management 
        Plan.
            (4) Chesapeake Bay Observation Buoys.
            (5) Federal/State Weather Modification Grants.
            (6) The Southeast Storm Research Account.
            (7) The Southeast United States Caribbean Fisheries 
        Oceanographic Coordinated Investigations Program.
            (8) National Institute for Environmental Renewal.
            (9) The Lake Champlain Study.
            (10) The Maine Marine Research Center.
            (11) The South Carolina Cooperative Geodetic Survey 
        Account.
            (12) Pacific Island Technical Assistance.
            (13) Sea Grant/Oyster Disease Account.
            (14) National Coastal Research and Development Institute 
        Account.
            (15) VENTS program.
            (16) National Weather Service non-Federal, non-wildfire 
        Fire Weather Service.
            (17) National Weather Service Regional Climate Centers.
            (18) National Weather Service Samoa Weather Forecast Office 
        Repair and Upgrade Account.
            (19) Dissemination of Weather Charts (Marine Facsimile 
        Service).
            (20) The global climate change program.
            (21) The Global Learning and Observations to Benefit the 
        Environment Program.
Any unobligated balances appropriated to carry out any program referred 
to in this subsection shall be transferred to the general fund of the 
Treasury.
    (g) Repeals.--The following provisions of law are repealed 
effective on the date of enactment of this Act:
            (1) The Ocean Thermal Conversion Act of 1980 (42 U.S.C. 
        9101 et seq.).
            (2) Title IV of the Marine Protection, Research, and 
        Sanctuaries Act of 1972 (16 U.S.C. 1447 et seq.).
            (3) Title V of the Marine Protection, Research, and 
        Sanctuaries Act of 1972 (33 U.S.C. 2801 et seq.).
            (4) Public Law 85-342 (72 Stat. 35; 16 U.S.C. 778 et seq.), 
        relating to fish research and experimentation.
            (5) The first section of the Act of August 8, 1956 (70 
        Stat. 1126; 16 U.S.C. 760d), relating to grants for commercial 
        fishing education.
            (6) Public Law 86-359 (16 U.S.C. 760e et seq.), relating to 
        the study of migratory marine gamefish.
            (7) The Act of August 15, 1914 (Chapter 253; 38 Stat. 692; 
        16 U.S.C. 781 et seq.), prohibiting the taking of sponges in 
        the Gulf of Mexico and the Straits of Florida.
    (h) Transfer of Fisheries Programs to MARAD.--
            (1) Operating differential subsidy program.--Section 
        607(k)(9) of the Merchant Marine Act, 1936 (46 App. U.S.C. 
        1177(k)(9)) is amended to read as follows:
    ``(9) The term `Secretary' means the Secretary of 
Transportation.''.
            (2) Ship mortgage insurance.--Section 1101(n) of the 
        Merchant Marine Act, 1936 (46 App. U.S.C. 1177(k)(9)) is 
        amended to read as follows:
    ``(n) The term `Secretary' means the Secretary of 
Transportation.''.
            (3) Outer continental shelf.--Section 401(8) of the Outer 
        Continental Shelf Lands Act Amendments of 1978 (43 U.S.C. 1841 
et seq.) is amended to read as follows:
            ``(8) `Secretary' means the Secretary of Transportation.''.
            (4) Fishermen's protective act of 1967.--Section 10(a) of 
        the Fishermen's Protective Act of 1967 (22 U.S.C 1980(a)) is 
        amended--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) The terms `fishery', `fishery conservation zone', 
        `fishing', `fishing vessel', and `vessel of the United States' 
        have the same meaning given to each of such terms in section 3 
        of the Magnuson Fishery Conservation and Management Act (16 
        U.S.C. 1802).''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) The term `Secretary' means the Secretary of 
        Transportation.''.
    (i) Transfer of Mapping, Charting, and Geodesy Functions to the 
United States Geological Survey.--There are hereby transferred to the 
Director of the United States Geological Survey the functions relating 
to mapping, charting, geodesy, observation, and prediction of tides and 
sea level authorized under the Act of August 7, 1947 (61 Stat. 787; 33 
U.S.C. 883a).
    (j) Report on Termination of Programs.--Not later than 60 days 
after the date of the enactment of this Act, the Secretary shall submit 
to the Committee on Science of the House of Representatives and the 
Committee on Commerce, Science, and Transportation of the Senate a 
report certifying that all the programs listed in subsection (f) will 
be terminated no later than September 30, 1995.
    (k) Competition With Private Sector.--The National Weather Service 
shall not compete, or assist other entities to compete, with the 
private sector when a service is currently provided or can be provided 
by commercial enterprise, unless--
            (1) the Secretary of Agriculture finds that the private 
        sector is unwilling or unable to provide the services; and
            (2) the service provides vital weather warnings and 
        forecasts for the protection of lives and property of the 
        general public.
    (l) Amendments.--The Act of 1890 is amended--
            (1) by striking section 3 (15 U.S.C. 313); and
            (2) in section 9 (15 U.S.C. 317), by striking all after 
        ``Department of Agriculture'' and inserting in lieu thereof a 
        period.
    (m) NWS Report.--Not later than 60 days after the date of the 
enactment of this Act, the Secretary of Agriculture shall submit to the 
Committee on Science of the House of Representatives and the Committee 
on Commerce, Science, and Transportation of the Senate a report 
detailing all National Weather Service activities which do not conform 
to the requirements of this section and outlining a timetable for their 
termination.
    (n) Prohibition of Lobbying Activities.--None of the funds 
authorized by this section shall be available for any activity whose 
purpose is to influence legislation pending before the Congress, 
provided that this shall not prevent officers or employees of the 
United States or of its departments or agencies from communicating to 
Members of Congress on the request of any Member or to Congress, 
through the proper channels, requests for legislation or appropriations 
which they deem necessary for the efficient conduct of the public 
business.
    (o) Report on Laboratories.--
            (1) In general.--No later than 120 days after the date of 
        the enactment of this Act, the Secretary of Agriculture shall 
        conduct a review of the laboratories operated by the National 
        Oceanic and Atmospheric Administration and submit a report to 
        the Committee on Science of the House of Representatives and 
        the Committee on Commerce, Science, and Transportation of the 
        Senate.
            (2) Requirements.--The report required by paragraph (1) 
        shall--
                    (A) address potential efficiencies and savings 
                which could be achieved through closing or 
                consolidating laboratory facilities; and
                    (B) review each laboratory's--
                            (i) mission and activities and their 
                        correlation to the mission priorities of the 
                        National Oceanic and Atmospheric 
                        Administration;
                            (ii) physical assets, equipment, condition, 
                        and personnel resources;
                            (iii) organization and program management; 
                        and
                            (iv) address other issues the Inspector 
                        General considers relevant.
    (p) Limitation on NOAA Annual Expenditures.--Notwithstanding 
section 17610, the amount expended by the United States each fiscal 
year for the National Oceanic and Atmospheric Administration may not 
exceed 75 percent of the total amount expended by the United States for 
the National Oceanic and Atmospheric Administration during fiscal year 
1994.

SEC. 17206. MISCELLANEOUS ABOLISHMENTS.

    (a) Abolishments.--The following agencies and programs of the 
Department of Commerce are abolished, and the functions of those 
agencies or programs are abolished except to the extent otherwise 
provided in this title:
            (1) The Economic Development Administration.
            (2) The Minority Business Development Administration.
            (3) The National Telecommunications and Information 
        Administration.
            (4) The Advanced Technology Program under section 28 of the 
        National Institute of Standards and Technology Act (15 U.S.C. 
        278n).
            (5) The Manufacturing Extension Programs under sections 25 
        and 26 of the National Institute of Standards and Technology 
        Act (15 U.S.C. 278k and 278l).
    (b) Sense of the Congress.--It is the sense of the Congress that 
the Congress should continue to explore the prospects for the private 
sector to assume responsibility for many of the functions and 
responsibilities of the Minority Business Development Administration.

SEC. 17207. PRIVATIZATION OF TRAVEL FUNCTIONS.

    The Administrator shall abolish the United States Travel and 
Tourism Administration effective August 1, 1996. Prior to this date the 
Administrator shall submit to the Congress a recommendation for the 
privatization of the functions of the United States Travel and Tourism 
Administration. In making such a recommendation the Administrator shall 
consider the results of the national review conducted by the White 
House Conference on Travel and Tourism, including the consideration of 
fees to support such functions.

SEC. 17208. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this 
subtitle shall take effect on the effective date specified in section 
17109(a).
    (b) Provisions Effective on Date of Enactment.--The following 
provisions of this subtitle shall take effect on the date of the 
enactment of this title:
            (1) section 17201.
            (2) section 17206.

SEC. 17209. SENSE OF CONGRESS REGARDING USER FEES.

    It is the sense of the Congress that the head of each agency that 
performs a function vested in the agency by this title should, wherever 
feasible, explore and implement user fees for the provision of services 
in the performance of that function, to offset operating costs.

           Subtitle C--Consolidation of Statistical Functions

SEC. 17301. SHORT TITLE.

    This subtitle may be cited as the ``Federal Statistics Agency 
Establishment Act''.

SEC. 17302. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``Agency'' means the Federal Statistics 
        Agency.
            (2) The term ``Administrator'' means the Administrator of 
        the Federal Statistics Agency.
            (3) The term ``Deputy Administrator'' means the Deputy 
        Administrator of the Federal Statistics Agency.
            (4) The term ``function'' includes any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program.
            (5) The term ``office'' includes any office, bureau, 
        institute, council, unit, or organizational entity, or any 
        component thereof.

         CHAPTER 1--ESTABLISHMENT OF FEDERAL STATISTICS AGENCY

SEC. 17311. ESTABLISHMENT.

    The Federal Statistics Agency is hereby established as a free-
standing establishment in the executive branch of the Government.

SEC. 17312. PRINCIPAL OFFICERS.

    (a) Administrator.--(1) There shall be at the head of the Agency an 
Administrator of the Agency, who shall be appointed by the President, 
by and with the advice and consent of the Senate.
    (2) The Agency, including all functions and offices transferred to 
it under this subtitle, shall be administered, in accordance with the 
provisions of this subtitle, under the supervision and direction of the 
Administrator.
    (3) The Administrator shall receive basic pay at the rate payable 
for level II of the Executive Schedule under section 5313 of title 5, 
United States Code.
    (b) Deputy Administrator.--(1) There shall be in the Agency a 
Deputy Administrator of the Agency who shall be appointed by the 
President, by and with the advice and consent of the Senate.
    (2) During the absence or disability of the Administrator, or in 
the event of a vacancy in the office of the Administrator, the Deputy 
Administrator shall act as Administrator. The Deputy Administrator 
shall perform such other duties and exercise such powers as the 
Administrator may from time to time prescribe.
    (3) The Deputy Administrator shall receive basic pay at the rate 
payable for level III of the Executive Schedule under section 5314 of 
title 5, United States Code.
    (c) Agency Directors.--(1) There shall be in the Agency--
            (A) a Director of the Census who shall, on the transfer of 
        functions and offices under section 17313, serve as the head of 
        the Bureau of the Census; and
            (B) a Director of the Bureau of Economic Analysis who 
        shall, on the transfer of functions and offices under section 
        17313, serve as the head of the Bureau of Economic Analysis.
    (2) Each of the Directors shall be appointed by the President, by 
and with the advice and consent of the Senate. The Director of the 
Census shall receive basic pay at the rate payable for level IV of the 
Executive Schedule under section 5315 of title 5, United States Code. 
The Director of the Bureau of Economic Analysis shall receive basic pay 
at the rate payable for level V of the Executive Schedule under section 
5316 of title 5, United States Code.
    (d) General Counsel.--There shall be in the Agency a General 
Counsel who shall administer the Office of General Counsel of the 
Agency. The General Counsel shall be appointed by the President, by and 
with the advice and consent of the Senate. The General Counsel shall 
receive basic pay at the rate payable for level V of the Executive 
Schedule under section 5316 of title 5, United States Code.

SEC. 17313. TRANSFERS OF FUNCTIONS AND OFFICES.

    (a) Transfer of the Bureau of the Census.--There is transferred to 
the Agency the Bureau of the Census of the Department of Commerce, 
along with all of its functions and offices.
    (b) Transfer of the Bureau of Economic Analysis.--There is 
transferred to the Agency the Bureau of Economic Analysis of the 
Department of Commerce, along with all of its functions and offices.
    (c) Transfer of Statistical Management Functions of OMB.--There are 
transferred to the Administrator the functions of the Director of the 
Office of Management and Budget relating to statistical policy and 
coordination under chapter 35 of title 44, United States Code (as in 
effect immediately before such transfer), including such functions 
under sections 3504(a) and (d) and 3514(a)(10) of such chapter.
    (d) Transfer Date.--The transfers of functions and offices under 
this section shall be effective 90 days after the date of the enactment 
of this Act.

                  CHAPTER 2--ADMINISTRATIVE PROVISIONS

SEC. 17321. PERSONNEL PROVISIONS.

    (a) Officers and Employees.--The Administrator may appoint and fix 
the compensation of such officers and employees as may be necessary to 
carry out the functions of the Administrator and the Agency. Except as 
otherwise provided by law, such officers and employees shall be 
appointed in accordance with the civil service laws and their 
compensation shall be fixed in accordance with title 5, United States 
Code.
    (b) Experts and Consultants.--The Administrator may as provided in 
appropriation Acts obtain the services of experts and consultants in 
accordance with section 3109 of title 5, United States Code, and may 
compensate such experts and consultants at rates not to exceed the 
daily rate prescribed for level V of the Executive Schedule under 
section 5316 of title 5, United States Code.
    (c) Acceptance of Voluntary Services.--(1) Notwithstanding section 
1342 of title 31, United States Code, the Administrator may accept, 
subject to regulations issued by the Office of Personnel Management, 
voluntary services if the services--
            (A) are to be uncompensated; and
            (B) will not be used to displace any employee.
    (2) Any individual who provides voluntary services under this 
subsection shall not be considered a Federal employee for any purpose 
other than for purposes of chapter 81 of title 5, United States Code 
(relating to compensation for injury) and sections 2671 through 2680 of 
title 28, United States Code (relating to tort claims).

SEC. 17322. GENERAL ADMINISTRATIVE PROVISIONS.

    (a) General Authority.--In carrying out any function transferred by 
this subtitle, the Administrator, or any officer or employee of the 
Agency, may exercise any authority available by law with respect to 
such function to the official or agency from which such function is 
transferred, and the actions of the Administrator in exercising such 
authority shall have the same force and effect as when exercised by 
such official or agency.
    (b) Delegation.--Except as otherwise provided in this subtitle, the 
Administrator may delegate any function to such officers and employees 
of the Agency as the Administrator may designate, and may authorize 
such successive redelegations of such functions within the Agency as 
may be necessary or appropriate. No delegation of functions by the 
Administrator under this section or under any other provision of this 
Act shall relieve the Administrator of responsibility for the 
administration of such functions.
    (c) Reorganization.--(1) Except as provided in paragraph (2), the 
Administrator may allocate or reallocate functions among the officers 
of the Agency, and may establish, consolidate, alter, or abolish such 
offices or positions within the Agency as may be necessary or 
appropriate.
    (2) The Administrator may not--
            (A) abolish any office or position transferred to the 
        Agency and established by statute, or any function vested by 
        statute in such an office or an officer of such an office;
            (B) abolish any office or position established by this 
        subtitle; or
            (C) alter the delegation of functions to any specific 
        office or position required by this subtitle.

SEC. 17323. CONTRACTS.

    (a) In General.--Subject to the Federal Property and Administrative 
Services Act of 1949 and other applicable Federal law, the 
Administrator may make, enter into, and perform such contracts, grants, 
leases, cooperative agreements, and other similar transactions with 
Federal or other public agencies (including State and local 
governments) and private organizations and persons, and to make such 
payments, by way of advance or reimbursement, as the Administrator may 
determine necessary or appropriate to carry out functions of the 
Administrator or the Agency.
    (b) Appropriation Authority Required.--No authority to enter into 
contracts or to make payments under this subtitle shall be effective 
except to such extent or in such amounts as are provided in advance 
under appropriation Acts.

SEC. 17324. REGULATIONS.

    The Administrator may prescribe such rules and regulations as the 
Administrator considers necessary or appropriate to administer and 
manage the functions of the Administrator or the Agency, in accordance 
with chapter 5 of title 5, United States Code.

SEC. 17325. SEAL.

    The Administrator shall cause a seal of office to be made for the 
Agency of such design as the Administrator shall approve. Judicial 
notice shall be taken of such seal.

SEC. 17326. ANNUAL REPORT.

    The Administrator shall, as soon as practicable after the close of 
each fiscal year, make a single, comprehensive report to the President 
for transmission to the Congress on the activities of the Agency during 
such fiscal year.

      CHAPTER 3--TRANSITIONAL, SAVINGS, AND CONFORMING PROVISIONS

SEC. 17331. TRANSFER AND ALLOCATION OF APPROPRIATIONS AND PERSONNEL.

    Except as otherwise provided in this subtitle, the personnel 
employed in connection with, and the assets, liabilities, contracts, 
property, records, and unexpended balance of appropriations, 
authorizations, allocations, and other funds employed, held, used, 
arising from, available to, or to be made available in connection with, 
the functions and offices, or portions thereof, transferred by this 
subtitle, subject to section 1531 of title 31, United States Code, 
shall be transferred to the Administrator for appropriate allocation. 
Unexpended funds transferred pursuant to this subsection shall be used 
only for the purposes for which the funds were originally authorized 
and appropriated.

SEC. 17332. EFFECT ON PERSONNEL.

    (a) Preservation of Grade and Compensation for 1 Year.--Except as 
otherwise provided in this subtitle, the transfer pursuant to this Act 
of full-time personnel (except special Government employees) and part-
time personnel holding permanent positions shall not cause any such 
employee to be separated or reduced in grade or compensation for 1 year 
after the date of transfer to the Agency.
    (b) Preservation of Compensation for Executive Schedule 
Appointees.--Any person who, on the day preceding the date of the 
transfer of functions and offices under section 17313, held a position 
compensated in accordance with the Executive Schedule prescribed in 
chapter 53 of title 5, United States Code, and who, without a break in 
service, is appointed in the Agency to a position having duties 
comparable to the duties performed immediately preceding such 
appointment shall continue to be compensated in the new position at not 
less than the rate provided for the previous position, for the duration 
of the service of such person in the new position.

SEC. 17333. INCIDENTAL TRANSFERS.

    (a) In General.--The Director of the Office of Management and 
Budget, in conjunction with the Administrator, shall make such 
determinations as may be necessary with regard to the functions, 
offices, or portions thereof transferred by this subtitle, and make 
such additional incidental dispositions of personnel, assets, 
liabilities, grants, contracts, property, records, and unexpended 
balances of appropriations, authorizations, allocations, and other 
funds held, used, arising from, available to, or to be made available 
in connection with such functions, offices, or portions thereof, as may 
be necessary to carry out this subtitle. The Director of the Office of 
Management and Budget shall provide for the termination of the affairs 
of all entities terminated by this subtitle and, in conjunction with 
the Administrator, for such further measures and dispositions as may be 
necessary to effectuate the purposes of this subtitle.
    (b) Allocation of SES Positions.--After consultation with the 
Director of the Office of Personnel Management, the Director of the 
Office of Management and Budget may make such determinations as may be 
necessary with regard to the transfer of positions within the Senior 
Executive Service in connection with functions and offices transferred 
by this subtitle.

SEC. 17334. SAVINGS PROVISIONS.

    (a) Continuity of Legal Force and Effect.--All orders, 
determinations, rules, regulations, permits, grants, contracts, 
certificates, licenses, and privileges--
            (1) which have been issued, made, granted, or allowed to 
        become effective by the President, by any Federal department or 
        agency or official thereof, or by a court of competent 
        jurisdiction, in the performance of functions which are 
        transferred under this subtitle to the Administrator or the 
        Agency; and
            (2) which are in effect at the time of such transfer,
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked by the President, the 
Administrator, or the authorized official, a court of competent 
jurisdiction, or by operation of law.
    (b) Pending Proceedings.--(1) This subtitle shall not affect any 
proceedings, including notices of proposed rulemaking, pending on the 
date of the transfer of functions and offices under section 17313 
before any department, agency, commission, or component thereof, 
functions of which are transferred by this subtitle. Such proceedings, 
to the extent that they relate to functions so transferred, shall be 
continued, except as provided in paragraph (3).
    (2) Orders may be issued in such proceedings, appeals may be taken 
therefrom, and payments may be made pursuant to such orders, as if this 
subtitle had not been enacted. Orders issued in any such proceedings 
shall continue in effect until modified, terminated, superseded, or 
revoked by the Secretary, by a court of competent jurisdiction, or by 
operation of law.
    (3) Nothing in this subsection shall be considered to prohibit the 
discontinuance or modification of any such proceeding under the same 
terms and conditions and to the same extent that such proceeding could 
have been discontinued or modified if this subtitle had not been 
enacted.
    (4) The Administrator may prescribe regulations providing for the 
orderly transfer of proceedings continued under this subsection to the 
Agency.
    (c) No Effect on Judicial Proceedings.--Except as provided in 
subsection (e)--
            (1) the transfer of functions and offices under section 
        17313 shall not affect suits commenced prior to the date of 
        such transfer; and
            (2) in all such suits, proceedings shall be had, appeals 
        taken, and judgments rendered in the same manner and effect as 
        if this subtitle had not been enacted.
    (d) Nonabatement of Proceedings.--No suit, action, or other 
proceeding commenced by or against any officer in the official capacity 
of such individual as an officer of any department or agency, functions 
of which are transferred by this subtitle, shall abate by reason of the 
enactment of this subtitle. No cause of action by or against any 
department or agency, functions of which are transferred by this 
subtitle, or by or against any officer thereof in the official capacity 
of such officer shall abate by reason of the enactment of this 
subtitle.
    (e) Continuation of Proceeding With Substitution of Parties.--If, 
before the date of the transfer of functions and offices under section 
17313, any department or agency, or officer thereof in the official 
capacity of such officer, is a party to a suit, and under this subtitle 
any function of such department, agency, or officer is transferred to 
the Administrator or any other official of the Agency, then such suit 
shall be continued with the Administrator or other appropriate official 
of the Agency substituted or added as a party.
    (f) Reviewability of Orders and Actions Under Transferred 
Functions.--Orders and actions of the Administrator in the exercise of 
functions transferred under this subtitle shall be subject to judicial 
review to the same extent and in the same manner as if such orders and 
actions had been by the agency or office, or part thereof, exercising 
such functions immediately preceding their transfer. Any statutory 
requirements relating to notice, hearings, action upon the record, or 
administrative review that apply to any function transferred by this 
subtitle shall apply to the exercise of such function by the 
Administrator.

SEC. 17335. REFERENCES.

    With respect to any function transferred by this subtitle and 
exercised on or after the date of such transfer, any reference in any 
other Federal law to any department, commission, or agency or to any 
officer or office the functions of which are so transferred is deemed 
to refer to the Administrator, other official, or component of the 
Agency to which this subtitle transfers such functions.

SEC. 17336. CONFORMING AMENDMENTS.

    Chapter 35 of title 44, United States Code, is amended--
            (1) in section 3504--
                    (A) in subsection (a) by striking ``Federal 
                statistical activities,''; and
                    (B) by striking subsection (d); and
            (2) in section 3514(a)--
                    (A) by adding ``and'' after the semicolon at the 
                end of paragraph (8);
                    (B) by striking ``; and'' at the end of paragraph 
                (9)(C) and inserting a period; and
                    (C) by striking paragraph (10).

SEC. 17337. TRANSITION.

    (a) Use of Funds.--Funds available to any department or agency (or 
any official or component thereof), the functions or offices of which 
are transferred to the Administrator or the Agency by this subtitle, 
may, with the approval of the Director of the Office of Management and 
Budget, be used to pay the compensation and expenses of any officer 
appointed pursuant to this subtitle and other transitional and planning 
expenses associated with the establishment of the Agency or transfer of 
functions or offices thereto until such time as funds for such purposes 
are otherwise available.
    (b) Use of Personnel.--With the consent of the appropriate 
department or agency head concerned, the Administrator may utilize the 
services of such officers, employees, and other personnel of the 
departments and agencies from which functions or offices have been 
transferred to the Administrator or the Agency, for such period of time 
as may reasonably be needed to facilitate the orderly implementation of 
this subtitle.

SEC. 17338. INTERIM APPOINTMENTS.

    (a) Authority To Appoint.--Notwithstanding any other provision of 
law, in the event that one or more officers required by this subtitle 
to be appointed by and with the advice and consent of the Senate shall 
not have entered upon office on the date of the transfer of functions 
and offices under section 17313, the President may designate an officer 
in the executive branch to act in such office for 120 days or until the 
office is filled as provided in this subtitle, whichever occurs first.
    (b) Compensation.--Any officer acting in an office pursuant to 
subsection (a) shall receive compensation at the rate prescribed for 
such office under this subtitle.

             Subtitle D--United States Trade Administration

                     CHAPTER 1--GENERAL PROVISIONS

SEC. 17401. FINDINGS.

    The Congress finds that--
            (1) principal national goals of the United States are to--
                    (A) maintain United States leadership in 
                international trade liberalization and expansion 
                efforts;
                    (B) reinvigorate the ability of the United States 
                economy to compete in international markets and to 
                respond flexibly to changes in international 
                competition; and
                    (C) expand United States participation in 
                international trade through aggressive promotion and 
                marketing of American products and services;
            (2) the economy of the United States is so inextricably 
        linked with the international economic system that all domestic 
        economic sectors are influenced by the dynamics of global trade 
        and investment;
            (3) the expansion of United States participation in 
        international trade will improve the general welfare of the 
        people of the United States by increasing demand for American 
        products and services, creating jobs, and increasing the gross 
        national product;
            (4) business, labor, and all levels of government must 
        place the highest priority on developing methods and policies 
        to achieve the goals described in paragraph (1), and the 
        achievement of such goals is dependent on a marked improvement 
        in the capability of United States businesses to compete in 
        foreign markets;
            (5) the Federal Government can enhance the capability of 
        United States businesses to compete in foreign markets by 
        acting to--
                    (A) reduce trade barriers to sales and investments 
                by such businesses;
                    (B) promote American goods and services in foreign 
                countries and encourage aggressive participation by the 
                private sector in the international marketplace; and
                    (C) promote and maintain an international trade 
                system that establishes open, transparent, and fair 
trade rules and leads to the expansion of United States trade;
            (6) effective and efficient Government action to enhance 
        the capability of United States businesses to compete in 
        foreign markets requires coordination of the development and 
        implementation of Government policies relating to the 
        international trade interests of the United States;
            (7) effective and efficient Government action with respect 
        to international trade further requires the employment of 
        personnel consisting of individuals who, like the personnel of 
        the governments of United States trading partners, are highly 
        experienced and educated in international trade operations and 
        negotiations;
            (8) the present organizational structure of Government 
        administration of international trade activities is too diffuse 
        and leads to inconsistent and conflicting policies and actions;
            (9) such inconsistent and contradictory policies and 
        actions inhibit domestic trade interests, create trade 
        opportunities for our international competitors, and discourage 
        experienced Government personnel from career service in 
        international trade activities;
            (10) United States performance in international trade is 
        fundamentally linked to the competitiveness of American 
        industry in the world economy;
            (11) improvements in the competitiveness of United States 
        industry, products, and services can be aided by reducing 
        traditional antagonisms among government, industry, labor, and 
        the public;
            (12) a lack of analytical capability and knowledge 
        concerning the competitive position of American industries and 
        foreign industries greatly hampers or delays the ability of the 
        United States to formulate responsible trade policies and 
        policies that affect the international competitiveness of 
        domestic industries;
            (13) the consolidation of Government functions relating to 
        international trade, including functions relating to technical 
        analysis, policymaking, international negotiation, and 
        operational responsibilities, into the United States Trade 
        Administration shall provide the needed elevation and 
        coordination of Government activity in international trade;
            (14) the continued prosperity and overall competitive 
        posture of the United States calls for a decisive and unified 
        trade policy that vigorously promotes an equitable 
        international trade environment in which the United States is 
        able to compete fully and fairly;
            (15) continued United States leadership in the world 
        economy requires the formulation and implementation of a trade 
        policy that is delineated and understood by the rest of the 
        world; and
            (16) establishing a decisive and unified trade policy has 
        become a number one priority of the United States;
            (17) enhancing the process of consultation and advice 
        between the executive branch, the Congress, and the private 
        sector will assist in developing the consensus on and support 
        for the trade policy of the United States;
            (18) there is no one single agency or department within the 
        executive branch with overall responsibility for the 
        development, coordination, implementation, and administration 
        of the United States trade policy, and the proliferation and 
        division of agencies within the executive branch have weakened 
        the overall leadership of the United States in international 
        trade matters; and
            (19) the economic well-being of the American people will be 
        substantially enhanced through the establishment of the United 
        States Trade Administration.

SEC. 17402. DEFINITIONS.

    For purposes of this subtitle, unless otherwise provided or 
indicated by the context--
            (1) the term ``Administration'' means the United States 
        Trade Administration;
            (2) the term ``Federal agency'' has the meaning given to 
        the term ``agency'' by section 551(1) of title 5, United States 
        Code;
            (3) the term ``function'' means any duty, obligation, 
        power, authority, responsibility, right, privilege, activity, 
        or program;
            (4) the term ``office'' includes any office, 
        administration, agency, institute, unit, organizational entity, 
        or component thereof; and
            (5) the term ``USTR'' means the United States Trade 
        Representative as provided for under section 17411.

             CHAPTER 2--UNITED STATES TRADE ADMINISTRATION

SEC. 17411. ESTABLISHMENT OF THE ADMINISTRATION.

    (a) In General.--There is established the United States Trade 
Administration which shall be a free-standing establishment in the 
executive branch of Government as defined under section 104 of title 5, 
United States Code. The United States Trade Representative shall be the 
Administrator of the United States Trade Administration and shall be 
appointed by the President, by and with the advice and consent of the 
Senate.
    (b) Ambassador Status.--The USTR shall have the rank and status of 
Ambassador and shall represent the United States in all trade 
negotiations conducted by the Administration.
    (c) Successor to Department of Commerce.--The Administration shall 
be deemed to be the successor to the Department of Commerce for the 
purposes of protocol in any trade-related matter.

SEC. 17412. FUNCTIONS OF THE USTR.

    (a) In General.--In addition to the functions transferred to the 
USTR by this subtitle, such other functions as the President may assign 
or delegate to the USTR, and such other functions as the USTR may, 
after the effective date of this subtitle, be required to carry out by 
law, the USTR shall--
            (1) serve as the principal advisor to the President on 
        international trade policy and advise the President on the 
        impact of other policies of the United States Government on 
        international trade;
            (2) exercise primary responsibility, with the advice of the 
        interagency organization established under section 242 of the 
        Trade Expansion Act of 1962, for developing and implementing 
        international trade policy, including commodity matters and, to 
        the extent related to international trade policy, direct 
        investment matters and, in exercising such responsibility, 
        advance and implement the goals described in section 17401(1) 
        as the primary mandate of the Administration;
            (3) exercise lead responsibility for the conduct of 
        international trade negotiations, including international 
        negotiations relating to commodity matters, intellectual 
        property rights, services, and direct investment negotiations, 
        in which the United States participates;
            (4) exercise lead responsibility for the establishment of a 
        national export strategy, including policies designed to 
        implement such strategy;
            (5) with the advice of the interagency organization 
        established under section 242 of the Trade Expansion Act of 
        1962, issue policy guidance to other Federal agencies on 
        international trade, commodity, and direct investment functions 
        to the extent necessary to assure the coordination of 
        international trade policy;
            (6) have general operational responsibility for major 
        nonagricultural international trade functions under 
        Reorganization Plan No. 3 of 1979;
            (7) seek and promote new opportunities for United States 
        products and services to compete in the world marketplace;
            (8) assist small businesses in developing export markets;
            (9) enforce the laws of the United States relating to 
        trade;
            (10) analyze international economic trends and 
        developments;
            (11) report directly to the Congress on the administration 
        of, and matters pertaining to, the trade agreements program 
        under the Omnibus Trade and Competitiveness Act of 1988, the 
        Trade Act of 1974, the Trade Expansion Act of 1962, and section 
        350 of the Tariff Act of 1930;
            (12) report directly to the Congress, on an annual basis--
                    (A) the status of enforcement of international 
                agreements to which the United States is a party that 
                provide for the protection of intellectual property 
                rights;
                    (B) analyses of the impact on United States 
                citizens and businesses of piracy of intellectual 
                property by foreign entities; and
                    (C) any recommendations for new international 
                agreements to provide for the protection of 
                intellectual property rights;
            (13) keep each official adviser to the United States 
        delegations to international conferences, meetings, and 
        negotiation sessions relating to trade agreements who is 
        appointed by a committee of the Senate or the House of 
        Representatives under section 161 of the Trade Act of 1974 
        currently informed on United States negotiating objectives with 
        respect to trade agreements, the status of negotiations in 
        progress with respect to such agreements, and the nature of any 
        changes in domestic law or the administration thereof which the 
        USTR may recommend to the Congress to carry out any trade 
        agreement;
            (14) consult and cooperate with State and local governments 
        and other interested parties on international trade matters of 
        interest to such governments and parties, and to the extent 
        related to international trade matters, on investment matters, 
        and, when appropriate, hold informal public hearings;
            (15) serve as the principal advisor to the President in 
        identifying and assessing the consequences of any Government 
        policies that adversely affect, or have the potential to 
        adversely affect, the international competitiveness of United 
        States industries and services;
            (16) pursue the enforcement of international agreements to 
        which the United States is a party that provide for the 
        protection of intellectual property rights, seek new 
        international agreements to minimize theft of intellectual 
        property owned by United States citizens and businesses, and 
        otherwise promote protection of intellectual property rights.
    (b) Interagency Organization.--The USTR shall chair the interagency 
organization established under section 242 of the Trade Expansion Act 
of 1962.
    (c) National Security Council.--The USTR shall be a member of the 
National Security Council.
    (d) Advisory Council.--The USTR shall be Deputy Chairman of the 
National Advisory Council on International Monetary and Financial 
Policies established under Executive Order 11269, issued February 14, 
1966.
    (e) Agriculture.--(1) The USTR shall consult with the Secretary of 
Agriculture or the designee of the Secretary of Agriculture on all 
matters that potentially involve international trade in agricultural 
products.
    (2) If an international meeting for negotiation or consultation 
includes discussion of international trade in agricultural products, 
the USTR or the designee of the USTR shall be Chairman of the United 
States delegation to such meeting and the Secretary of Agriculture or 
the designee of such Secretary shall be Vice Chairman. The provisions 
of this paragraph shall not limit the authority of the USTR under 
subsection (h) to assign to the Secretary of Agriculture responsibility 
for the conduct of, or participation in, any trade negotiation or 
meeting.
    (f) Trade Promotion.--The USTR shall be the chairperson of the 
Trade Promotion Coordinating Committee established under section 2312 
of the Export Enhancement Act of 1988 (15 U.S.C. 4727).
    (g) National Economic Council.--The USTR shall be a member of the 
National Economic Council established under Executive Order No. 12835, 
issued January 25, 1993.
    (h) International Trade Negotiations.--Except where expressly 
prohibited by law, the USTR, at the request or with the concurrence of 
the head of any other Federal agency, may assign the responsibility for 
conducting or participating in any specific international trade 
negotiation or meeting to the head of such agency whenever the USTR 
determines that the subject matter of such international trade 
negotiation is related to the functions carried out by such agency.

SEC. 17413. DEPUTY ADMINISTRATOR OF THE UNITED STATES TRADE 
              ADMINISTRATION.

    (a) Establishment.--There shall be in the Administration the Deputy 
Administrator of the United States Trade Administration, who shall be 
appointed by the President, by and with the advice and consent of the 
Senate.
    (b) Absence, Disability, or Vacancy of USTR.--The Deputy 
Administrator of the United States Trade Administration shall act for 
and exercise the functions of the USTR during the absence or disability 
of the USTR or in the event the office of the USTR becomes vacant. The 
Deputy Administrator of the United States Trade Administration shall 
act for and exercise the functions of the USTR until the absence or 
disability of the USTR no longer exists or a successor to the USTR has 
been appointed by the President and confirmed by the Senate.
    (c) Functions of Deputy Administrator of the United States Trade 
Administration.--The Deputy Administrator of the United States Trade 
Administration shall exercise all functions, under the direction of the 
USTR, transferred to or established in the Administration, except those 
functions exercised by the Deputy United States Trade Representatives, 
the Inspector General, and the General Counsel of the Administration, 
as provided by this subtitle.

SEC. 17414. DEPUTY UNITED STATES TRADE REPRESENTATIVES.

    (a) Establishment.--There shall be in the Administration 2 Deputy 
United States Trade Representatives, who shall be appointed by the 
President, by and with the advice and consent of the Senate. The Deputy 
United States Trade Representatives shall exercise all functions under 
the direction of the USTR, and shall include--
            (1) the Deputy United States Trade Representative for 
        Negotiations; and
            (2) the Deputy United States Trade Representative to the 
        World Trade Organization.
    (b) Functions of Deputy United States Trade Representatives.--(1) 
The Deputy United States Trade Representative for Negotiations shall 
exercise all functions transferred under section 17431 and shall have 
the rank and status of Ambassador.
    (2) The Deputy United States Trade Representative to the World 
Trade Organization shall exercise all functions relating to 
representation to the World Trade Organization and shall have the rank 
and status of Ambassador.

SEC. 17415. ASSISTANT ADMINISTRATORS.

    (a) Establishment.--There shall be in the Administration 3 
Assistant Administrators, who shall be appointed by the President, by 
and with the advice and consent of the Senate. The Assistant 
Administrators shall exercise all functions under the direction of the 
Deputy Administrator of the United States Trade Administration and 
include--
            (1) the Assistant Administrator for Export Administration;
            (2) the Assistant Administrator for Import Administration; 
        and
            (3) the Assistant Administrator for Trade and Policy 
        Analysis.
    (b) Functions of Assistant Administrators.--(1) The Assistant 
Administrator for Export Administration shall exercise all functions 
transferred under section 17432(a)(1)(C).
    (2) The Assistant Administrator for Import Administration shall 
exercise all functions transferred under section 17432(a)(1)(D).
    (3) The Assistant Administrator for Trade and Policy Analysis shall 
exercise all functions transferred under section 17432(a)(1)(B) and all 
functions transferred under section 17432(a)(2).

SEC. 17416. GENERAL COUNSEL.

    There shall be in the Administration a General Counsel, who shall 
be appointed by the President, by and with the advice and consent of 
the Senate. The General Counsel shall provide legal assistance to the 
USTR concerning the activities, programs, and policies of the 
Administration.

SEC. 17417. INSPECTOR GENERAL.

    There shall be in the Administration an Inspector General who shall 
be appointed in accordance with the Inspector General Act of 1978, as 
amended by section 17471(b) of this Act.

SEC. 17418. CHIEF FINANCIAL OFFICER.

    There shall be in the Administration a Chief Financial Officer who 
shall be appointed in accordance with section 901 of title 31, United 
States Code, as amended by section 17471(e) of this Act. The Chief 
Financial Officer shall perform all functions prescribed by the Deputy 
Administrator of the United States Trade Administration, under the 
direction of the Deputy Administrator.

               CHAPTER 3--TRANSFERS TO THE ADMINISTRATION

SEC. 17431. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.

    There are transferred to the USTR of the United States Trade 
Administration all functions of the United States Trade Representative 
and the Office of the United States Trade Representative in the 
Executive Office of the President and all functions of any officer or 
employee of such Office.

SEC. 17432. TRANSFERS FROM THE DEPARTMENT OF COMMERCE.

    (a) In General.--There are transferred to the USTR the following 
functions:
            (1) All functions of, and all functions performed under the 
        direction of, the following officers and employees of the 
        Department of Commerce:
                    (A) The Under Secretary of Commerce for 
                International Trade.
                    (B) The Assistant Secretary of Commerce for 
                International Economic Policy and the Assistant 
                Secretary of Commerce for Trade Development.
                    (C) The Under Secretary of Commerce for Export 
                Administration.
                    (D) The Assistant Secretary of Commerce for Import 
                Administration.
            (2) All functions of the Secretary of Commerce relating to 
        the National Trade Data Bank.
            (3) All functions of the Secretary of Commerce under the 
        Tariff Act of 1930, the Uruguay Round Agreements Act, the Trade 
        Act of 1974, and other trade-related Acts for which 
        responsibility is not otherwise assigned under this title.
    (b) United States and Foreign Commercial Service.--
            (1) Renaming and abolition of certain functions.--The 
        United States and Foreign Commercial Service shall, upon the 
        effective date specified in section 17109(a), be known as the 
        ``United States Trade Service'' (hereafter in this subsection 
        referred to as the ``USTS''). All operations of the USTS in the 
        United States (other than those performed at the headquarters 
        office referred to in section 2301(c) of the Export Enhancement 
        Act of 1988 (15 U.S.C. 4721(c)) with respect to the foreign 
        operations of the USTS) are abolished.
            (2) Transfer to ustr.--The USTS and its functions are 
        transferred to the USTR. All functions performed immediately 
        before the effective date specified in section 17109(a) by the 
        Secretary of Commerce or the Department of Commerce with 
        respect to the USTS are transferred to the USTR.
            (3) Director general.--(A) There shall be a Director 
        General of Trade who shall be appointed by the President, by 
        and with the advice and consent of the Senate, who shall have 
        the rank and status of Ambassador, and who shall be the head of 
        the USTS and shall be responsible for other trade promotion 
        functions of the Administration. The Director General of Trade 
        shall report to the USTR.
            (B) The individual serving as Assistant Secretary of 
        Commerce and Director General of Trade immediately before the 
        effective date specified in section 17109(a) may serve as the 
        Director General of Trade on and after such effective date 
        until a successor has taken office. Compensation for any 
        service under this subparagraph shall be at the rate at which 
        the individual was compensated immediately before the effective 
        date specified in section 17109(a).
            (4) Transfer of usts officers.--The transfer to the USTR 
        pursuant to this section of any Commercial Service Officer 
        serving immediately before the effective date specified in 
        section 17109(a) shall not cause such officer to be reduced in 
        rank, grade, or compensation.

SEC. 17433. TRADE AND DEVELOPMENT AGENCY.

    (a) Abolition of Agency.--The Trade and Development Agency is 
abolished.
    (b) Conforming Amendment.--Section 661 of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2421) is repealed.

SEC. 17434. FUNCTIONS WITH RESPECT TO TEXTILE AGREEMENTS.

    (a) Transfer of Functions.--Notwithstanding the provisions of 
Executive Order 11651 and Executive Order 12475 (7 U.S.C. 1854 note), 
the functions of the Committee for the Implementation of Textile 
Agreements (hereafter in this section referred to as ``CITA'') are 
transferred to the USTR, except for all functions related to the 
determination of the existence of serious damage or actual threat 
thereof to the domestic United States textile industry which are 
transferred to the International Trade Commission.
    (b) Abolition of CITA.--CITA is abolished.

SEC. 17435. PLAN FOR CONSOLIDATION OF TRADE ACTIVITIES.

    Within 6 months after the date of the enactment of this Act, the 
USTR shall transmit to the Congress a comprehensive plan to consolidate 
Federal trade programs and activities. The plan shall provide for--
            (1) an itemized summary of all Federal trade programs and 
        activities identified by authorizing statute or executive 
        order, including staff allocation and resource expenditures;
            (2) a unified budget for reallocating Federal trade 
        priorities;
            (3) identification of and recommendations for the 
        elimination of overlapping and duplicative missions and 
        functions among Federal trade programs and activities; and
            (4) identification of present cooperative activities among 
        Federal, State, and private trade programs, and recommendations 
        for Federal priorities and long-term opportunities for 
        developing and increasing such cooperation.

                  CHAPTER 4--ADMINISTRATIVE PROVISIONS

SEC. 17441. PERSONNEL PROVISIONS.

    (a) Appointments.--The USTR may appoint and fix the compensation of 
such officers and employees, including investigators, attorneys, and 
administrative law judges, as may be necessary to carry out the 
functions of the USTR and the Administration. Except as otherwise 
provided by law, such officers and employees shall be appointed in 
accordance with the civil service laws and their compensation fixed in 
accordance with title 5, United States Code.
    (b) Positions Above GS-15.--(1) At the request of the USTR, the 
Director of the Office of Personnel Management shall, under section 
5108 of title 5, United States Code, provide for the establishment in a 
grade level above GS-15 of the General Service, and in the Senior 
Executive Service, of a number of positions in the Administration equal 
to the number of positions in that grade level which were used 
primarily for the performance of functions and offices transferred by 
this subtitle and which were assigned and filled on the day before the 
effective date of this subtitle.
    (2) Appointments to positions provided for under this subsection 
may be made without regard to the provisions of section 3324 of title 
5, United States Code, if the individual appointed in such position is 
an individual who is transferred in connection with the transfer of 
functions and offices under this subtitle and, on the day before the 
effective date of this subtitle, holds a position and has duties 
comparable to those of the position to which appointed under this 
subsection.
    (3) The authority under this subsection with respect to any 
position established at a grade level above GS-15 shall terminate when 
the person first appointed to fill such position ceases to hold such 
position.
    (4) For purposes of section 414(a)(3)(A) of the Civil Service 
Reform Act of 1978, an individual appointed under this subsection shall 
be deemed to occupy the same position as the individual occupied on the 
day before the effective date of this subtitle.
    (c) Experts and Consultants.--The USTR may obtain the services of 
experts and consultants in accordance with section 3109 of title 5, 
United States Code, and compensate such experts and consultants for 
each day (including traveltime) at rates not in excess of the maximum 
rate of pay for a position at a grade level above GS-15 of the General 
Schedule under section 5332 of such title. The USTR may pay experts and 
consultants who are serving away from their homes or regular place of 
business travel expenses and per diem in lieu of subsistence at rates 
authorized by sections 5702 and 5703 of such title for persons in 
Government service employed intermittently.
    (d) Voluntary Services.--(1)(A) The USTR is authorized to accept 
voluntary and uncompensated services without regard to the provisions 
of section 1342 of title 31, United States Code, if such services will 
not be used to displace Federal employees employed on a full-time, 
part-time, or seasonal basis.
    (B) The USTR is authorized to accept volunteer service in 
accordance with the provisions of section 3111 of title 5, United 
States Code.
    (2) The USTR is authorized to provide for incidental expenses, 
including but not limited to transportation, lodging, and subsistence 
for individuals who provide voluntary services under subparagraph (A) 
or (B) of paragraph (1).
    (3) An individual who provides voluntary services under paragraph 
(1)(A) shall not be considered a Federal employee for any purpose other 
than for purposes of chapter 81 of title 5, United States Code, 
relating to compensation for work injuries, and chapter 171 of title 
28, United States Code, relating to tort claims.
    (e) Foreign Service Positions.--In order to assure United States 
representation in trade matters at a level commensurate with the level 
of representation maintained by industrial nations which are major 
trade competitors of the United States, the Secretary of State shall 
classify certain positions at Foreign Service posts as commercial 
minister positions and shall assign members of the Foreign Service 
performing functions of the Administration, with the concurrence of the 
USTR, to such positions in nations which are major trade competitors of 
the United States. The Secretary of State shall obtain and use the 
recommendations of the USTR with respect to the number of positions to 
be so classified under this subsection.

SEC. 17442. DELEGATION AND ASSIGNMENT.

    Except where otherwise expressly prohibited by law or otherwise 
provided by this subtitle, the USTR may delegate any of the functions 
transferred to the USTR by this subtitle and any function transferred 
or granted to the USTR after the effective date of this subtitle to 
such officers and employees of the Administration as the USTR may 
designate, and may authorize successive redelegations of such functions 
as may be necessary or appropriate. No delegation of functions by the 
USTR under this section or under any other provision of this subtitle 
shall relieve the USTR of responsibility for the administration of such 
functions.

SEC. 17443. SUCCESSION.

    (a) Order of Succession.--Subject to the authority of the 
President, and except as provided in section 17413(b), the USTR shall 
prescribe the order by which officers of the Administration who are 
appointed by the President, by and with the advice and consent of the 
Senate, shall act for, and perform the functions of, the USTR or any 
other officer of the Administration appointed by the President, by and 
with the advice and consent of the Senate, during the absence or 
disability of the USTR or such other officer, or in the event of a 
vacancy in the office of the USTR or such other officer.
    (b) Continuation.--Notwithstanding any other provision of law, and 
unless the President directs otherwise, an individual acting for the 
USTR or another officer of the Administration pursuant to subsection 
(a) shall continue to serve in that capacity until the absence or 
disability of the USTR or such other officer no longer exists or a 
successor to the USTR or such other officer has been appointed by the 
President and confirmed by the Senate.

SEC. 17444. REORGANIZATION.

    (a) In General.--Subject to subsection (b), the USTR is authorized 
to allocate or reallocate functions among the officers of the 
Administration, and to establish, consolidate, alter, or discontinue 
such organizational entities in the Administration as may be necessary 
or appropriate.
    (b) Exception.--The USTR may not exercise the authority under 
subsection (a) to establish, consolidate, alter, or discontinue any 
organizational entity in the Administration or allocate or reallocate 
any function of an officer or employee of the Administration that is 
inconsistent with any specific provision of this subtitle.

SEC. 17445. RULES.

    The USTR is authorized to prescribe, in accordance with the 
provisions of chapters 5 and 6 of title 5, United States Code, such 
rules and regulations as the USTR determines necessary or appropriate 
to administer and manage the functions of the USTR or the 
Administration.

SEC. 17446. FUNDS TRANSFER.

    The USTR may, when authorized in an appropriation Act in any fiscal 
year, transfer funds from one appropriation to another within the 
Administration, except that no appropriation for any fiscal year shall 
be either increased or decreased by more than 10 percent and no such 
transfer shall result in increasing any such appropriation above the 
amount authorized to be appropriated therefor.

SEC. 17447. CONTRACTS, GRANTS, AND COOPERATIVE AGREEMENTS.

    (a) In General.--Subject to the provisions of the Federal Property 
and Administrative Services Act of 1949, the USTR may make, enter into, 
and perform such contracts, leases, cooperative agreements, grants, or 
other similar transactions with public agencies, private organizations, 
and persons, and make payments (in lump sum or installments, and by way 
of advance or reimbursement, and, in the case of any grant, with 
necessary adjustments on account of overpayments and underpayments) as 
the USTR considers necessary or appropriate to carry out the functions 
of the USTR or the Administration.
    (b) Exception.--Notwithstanding any other provision of this 
subtitle, the authority to enter into contracts or to make payments 
under this subtitle shall be effective only to such extent or in such 
amounts as are provided in advance in appropriation Acts. This 
subsection does not apply with respect to the authority granted under 
section 449.

SEC. 17448. USE OF FACILITIES.

    (a) Use by USTR.--With their consent, the USTR, with or without 
reimbursement, may use the research, services, equipment, and 
facilities of--
            (1) an individual,
            (2) any public or private nonprofit agency or organization, 
        including any agency or instrumentality of the United States or 
        of any State, the District of Columbia, the Commonwealth of 
        Puerto Rico, or any territory or possession of the United 
        States,
            (3) any political subdivision of any State, the District of 
        Columbia, the Commonwealth of Puerto Rico, or any territory or 
        possession of the United States, or
            (4) any foreign government,
in carrying out any function of the USTR or the Administration.
    (b) Use of USTR Facilities.--The USTR, under terms, at rates, and 
for periods that the USTR considers to be in the public interest, may 
permit the use by public and private agencies, corporations, 
associations or other organizations, or individuals, of any real 
property, or any facility, structure or other improvement thereon, 
under the custody of the USTR. The USTR may require permittees under 
this section to maintain or recondition, at their own expense, the real 
property, facilities, structures, and improvements used by such 
permittees.

SEC. 17449. GIFTS AND BEQUESTS.

    (a) In General.--The USTR is authorized to accept, hold, 
administer, and utilize gifts and bequests of property, both real and 
personal, for the purpose of aiding or facilitating the work of the 
Administration. Gifts and bequests of money and the proceeds from sales 
of other property received as gifts or bequests shall be deposited in 
the United States Treasury in a separate fund and shall be disbursed on 
order of the USTR. Property accepted pursuant to this subsection, and 
the proceeds thereof, shall be used as nearly as possible in accordance 
with the terms of the gift or bequest.
    (b) Tax Treatment.--For the purpose of Federal income, estate, and 
gift taxes, and State taxes, property accepted under subsection (a) 
shall be considered a gift or bequest to or for the use of the United 
States.
    (c) Investment.--Upon the request of the USTR, the Secretary of the 
Treasury may invest and reinvest in securities of the United States or 
in securities guaranteed as to principal and interest by the United 
States any moneys contained in the fund provided for in subsection (a). 
Income accruing from such securities, and from any other property held 
by the USTR pursuant to subsection (a), shall be deposited to the 
credit of the fund, and shall be disbursed upon order of the USTR.

SEC. 17450. WORKING CAPITAL FUND.

    (a) Establishment.--The USTR is authorized to establish for the 
Administration a working capital fund, to be available without fiscal 
year limitation, for expenses necessary for the maintenance and 
operation of such common administrative services as the USTR shall find 
to be desirable in the interest of economy and efficiency, including--
            (1) a central supply service for stationery and other 
        supplies and equipment for which adequate stocks may be 
        maintained to meet in whole or in part the requirements of the 
        Administration and its components;
            (2) central messenger, mail, and telephone service and 
        other communications services;
            (3) office space and central services for document 
        reproduction and for graphics and visual aids;
            (4) a central library service; and
            (5) such other services as may be approved by the Director 
        of the Office of Management and Budget.
    (b) Operation of Fund.--The capital of the fund shall consist of 
any appropriations made for the purpose of providing working capital 
and the fair and reasonable value of such stocks of supplies, 
equipment, and other assets and inventories on order as the USTR may 
transfer to the fund, less the related liabilities and unpaid 
obligations. The fund shall be reimbursed in advance from available 
funds of agencies and offices in the Administration, or from other 
sources, for supplies and services at rates which will approximate the 
expense of operation, including the accrual of annual leave and the 
depreciation of equipment. The fund shall also be credited with 
receipts from sale or exchange of property and receipts in payment for 
loss or damage to property owned by the fund. There shall be covered 
into the United States Treasury as miscellaneous receipts any surplus 
of the fund (all assets, liabilities, and prior losses considered) 
above the amounts transferred or appropriated to establish and maintain 
the fund. There shall be transferred to the fund the stocks of 
supplies, equipment, other assets, liabilities, and unpaid obligations 
relating to those services which the USTR determines will be performed.

SEC. 17451. SERVICE CHARGES.

    (a) Authority.--Notwithstanding any other provision of law, the 
USTR may establish reasonable fees and commissions with respect to 
applications, documents, awards, loans, grants, research data, 
services, and assistance administered by the Administration, and the 
USTR may change and abolish such fees and commissions. Before 
establishing, changing, or abolishing any schedule of fees or 
commissions under this section, the USTR may submit such schedule to 
the Congress.
    (b) Deposits.--The USTR is authorized to require a deposit before 
the USTR provides any item, information, service, or assistance for 
which a fee or commission is required under this section.
    (c) Deposit of Moneys.--Moneys received under this section shall be 
deposited in the Treasury in a special account for use by the USTR and 
are authorized to be appropriated and made available until expended.
    (d) Factors in Establishing Fees and Commissions.--In establishing 
reasonable fees or commissions under this section, the USTR may take 
into account--
            (1) the actual costs which will be incurred in providing 
        the items, information, services, or assistance concerned;
            (2) the efficiency of the Government in providing such 
        items, information, services, or assistance;
            (3) the portion of the cost that will be incurred in 
        providing such items, information, services, or assistance 
        which may be attributed to benefits for the general public 
        rather than exclusively for the person to whom the items, 
        information, services, or assistance is provided;
            (4) any public service which occurs through the provision 
        of such items, information, services, or assistance; and
            (5) such other factors as the USTR considers appropriate.
    (e) Refunds of Excess Payments.--In any case in which the USTR 
determines that any person has made a payment which is not required 
under this section or has made a payment which is in excess of the 
amount required under this section, the USTR, upon application or 
otherwise, may cause a refund to be made from applicable funds.

SEC. 17452. SEAL OF DEPARTMENT.

    The USTR shall cause a seal of office to be made for the 
Administration of such design as the USTR shall approve. Judicial 
notice shall be taken of such seal.

                      CHAPTER 5--RELATED AGENCIES

SEC. 17461. INTERAGENCY TRADE ORGANIZATION.

    Section 242(a)(3) of the Trade Expansion Act of 1962 (19 U.S.C. 
1872(a)(3)) is amended to read as follows:
            ``(3)(A) The interagency organization established under 
        subsection (a) shall be composed of--
                    ``(i) the United States Trade Representative, who 
                shall be the chairperson,
                    ``(ii) the Secretary of Agriculture,
                    ``(iii) the Secretary of the Treasury,
                    ``(iv) the Secretary of Labor,
                    ``(v) the Secretary of State, and
                    ``(vi) the representatives of such other 
                departments and agencies as the United States Trade 
                Representative shall designate.
            ``(B) The United States Trade Representative may invite 
        representatives from other agencies, as appropriate, to attend 
        particular meetings if subject matters of specific functional 
        interest to such agencies are under consideration. It shall 
        meet at such times and with respect to such matters as the 
        President or the chairperson shall direct.''.

SEC. 17462. NATIONAL SECURITY COUNCIL.

    The fourth paragraph of section 101(a) of the National Security Act 
of 1947 (50 U.S.C. 402(a)) is amended--
            (1) by redesignating clauses (5), (6), and (7) as clauses 
        (6), (7), and (8), respectively; and
            (2) by inserting after clause (4) the following new clause:
            ``(5) the United States Trade Representative;''.

SEC. 17463. INTERNATIONAL MONETARY FUND.

    Section 3 of the Bretton Woods Agreement Act is amended by adding 
at the end the following new subsection:
    ``(e) The United States executive director of the Fund shall 
consult with the United States Trade Representative with respect to 
matters under consideration by the Fund which relate to trade.''.

                    CHAPTER 6--CONFORMING AMENDMENTS

SEC. 17471. AMENDMENTS TO GENERAL PROVISIONS.

    (a) Presidential Succession.--Section 19(d)(1) of title 3, United 
States Code, is amended by inserting ``the United States Trade 
Representative,'' before ``Secretary of Labor,''.
    (b) Inspector General.--The Inspector General Act of 1978 is 
amended--
            (1) in subsection 9(a)(1) by inserting after subparagraph 
        (W) the following:
                    ``(X) of the United States Trade Representative, 
                all functions of the Inspector General of the 
                Department of Commerce and the Office of the Inspector 
                General of the Department of Commerce relating to the 
                functions transferred to the United States Trade 
                Representative by section 17432 of the Department of 
                Commerce Dismantling Act; and''; and
            (2) in section 11--
                    (A) in paragraph (1) by inserting ``the United 
                States Trade Representative;'' after ``the Attorney 
                General;''; and
                    (B) in paragraph (2) by inserting ``the United 
                States Trade Administration,'' after ``Treasury;''.
    (c) Amendment to the Trade Act of 1974.--(1) Chapter 4 of title I 
of the Trade Act of 1974 is amended to read as follows:

           ``CHAPTER 4--REPRESENTATION IN TRADE NEGOTIATIONS

``SEC. 141. FUNCTIONS OF THE UNITED STATES TRADE REPRESENTATIVE.

    ``The United States Trade Representative of the United States Trade 
Administration established under section 201 of the Trade 
Reorganization Act of 1995 shall--
            ``(1) be the chief representative of the United States for 
        each trade negotiation under this chapter or chapter 1 of title 
        III of this Act, or subtitle A of title I of the Omnibus Trade 
        and Competitiveness Act of 1988, or any other provision of law 
        enacted after the Department of Commerce Dismantling Act;
            ``(2) report directly to the President and the Congress, 
        and be responsible to the President and the Congress for the 
        administration of trade agreements programs under this Act, the 
        Omnibus Trade and Competitiveness Act of 1988, the Trade 
        Expansion Act of 1962, section 350 of the Tariff Act of 1930, 
        and any other provision of law enacted after the Department of 
        Commerce Dismantling Act;
            ``(3) advise the President and the Congress with respect to 
        nontariff barriers to international trade, international 
        commodity agreements, and other matters which are related to 
        the trade agreements programs; and
            ``(4) be responsible for making reports to Congress with 
        respect to the matters set forth in paragraphs (1) and (2).''.
    (2) The table of contents in the first section of the Trade Act of 
1974 is amended by striking the items relating to chapter 4 and section 
141 and inserting the following:

           ``Chapter 4--Representation in Trade Negotiations

``Sec. 141. Functions of the United States Trade Representative.''.
    (d) Foreign Service Personnel.--The Foreign Service Act of 1980 is 
amended by striking paragraph (3) of section 202(a) (22 U.S.C. 3922(a)) 
and inserting the following:
    ``(3) The United States Trade Representative of the United States 
Trade Administration may utilize the Foreign Service personnel system 
in accordance with this Act--
            ``(A) with respect to the personnel performing functions--
                    ``(i) which were transferred to the Department of 
                Commerce from the Department of State by Reorganization 
                Plan No. 3 of 1979; and
                    ``(ii) which were subsequently transferred to the 
                United States Trade Representative by section 17432 of 
                the Department of Commerce Dismantling Act; and
            ``(B) with respect to other personnel of the United States 
        Trade Administration to the extent the President determines to 
        be necessary in order to enable the United States Trade 
        Administration to carry out functions which require service 
        abroad.''.
    (e) Chief Financial Officers.--Section 901(b)(1) of title 31, 
United States Code, is amended by adding at the end the following:
            ``(Q) The United States Trade Administration.''.

SEC. 17472. REPEALS.

    Sections 1 and 2 of the Act of June 5, 1939 (15 U.S.C. 1502 and 
1503; 53 Stat. 808), relating to the Under Secretary of Commerce, are 
repealed.

SEC. 17473. CONFORMING AMENDMENTS RELATING TO EXECUTIVE SCHEDULE 
              POSITIONS.

    (a) Positions at Level I.--Section 5312 of title 5, United States 
Code, is amended by amending the item relating to the United States 
Trade Representative to read as follows:
            ``United States Trade Representative, United States Trade 
        Administration.''.
    (b) Positions at Level II.--Section 5313 of title 5, United States 
Code, is amended by adding at the end the following:
            ``Deputy Administrator of the United States Trade 
        Administration.
            ``Deputy United States Trade Representatives, United States 
        Trade Administration (2).
            ``Director General of Trade, United States Trade 
        Administration (2).''.
    (c) Positions at Level III.--Section 5314 of title 5, United States 
Code, is amended by adding at the end the following:
            ``Assistant Administrators, United States Trade 
        Administration (3).''.
    (d) Positions at Level IV.--Section 5315 of title 5, United States 
Code, is amended--
            (1) by striking the item relating to the Assistant 
        Secretary of Commerce and Director General of the United States 
        and Foreign Commercial Service; and
            (2) by adding at the end the following:
            ``General Counsel, United States Trade Administration.
            ``Inspector General, United States Trade Administration.
            ``Chief Financial Officer, United States Trade 
        Administration.''.

      CHAPTER 7--TRANSITIONAL, SAVINGS, AND CONFORMING PROVISIONS

SEC. 17481. ADDITIONAL TRANSFERS.

    Any function of the Secretary of Commerce or the Department of 
Commerce which--
            (1) is not transferred by this subtitle; and
            (2) is incidental to, necessary for, or primarily related 
        to, the performance of a function transferred by this subtitle,
is transferred to the head of the Federal agency to which the related 
function is transferred by this subtitle.

SEC. 17482. INCIDENTAL TRANSFERS.

    After consultation with the Director of the Office of Personnel 
Management, the Director of the Office of Management and Budget is 
authorized, at such times as the Director of the Office of Management 
and Budget may provide, to make such determinations as may be necessary 
with regard to the transfer of positions within the Senior Executive 
Service in connection with the functions and offices transferred by 
this subtitle.

SEC. 17483. EFFECT ON PERSONNEL.

    (a) In General.--Except as otherwise provided by this subtitle, the 
transfer pursuant to this subtitle of full-time personnel (except 
special Government employees) and part-time personnel holding permanent 
positions shall not cause any such employee to be separated or reduced 
in grade or compensation for one year after the date of transfer of 
such employee under this subtitle.
    (b) Executive Schedule Positions.--Except as otherwise provided by 
this subtitle, any person who, on the day preceding the effective date 
of this subtitle, held a position compensated in accordance with the 
Executive Schedule prescribed in chapter 53 of title 5, United States 
Code, and who, without a break in service, is appointed in a Federal 
agency to which functions are transferred by this subtitle to a 
position having duties comparable to the duties performed immediately 
preceding such appointment shall continue to be compensated in such new 
position at not less than the rate provided for such previous position, 
for the duration of the service of such person in such new position.
    (c) Termination of Certain Positions.--Except for members of the 
Foreign Service, positions whose incumbents are appointed by the 
President, by and with the advice and consent of the Senate, the 
functions of which are transferred by this subtitle, shall terminate on 
the effective date of this subtitle.

SEC. 17484. SAVINGS PROVISIONS.

    (a) Administrative Actions Relating to Promulgation of Rules.--Any 
administrative action relating to the preparation or promulgation of a 
regulation by a Federal agency relating to a function transferred under 
this subtitle may be continued by the Federal agency to which such 
function is transferred with the same effect as if this subtitle had 
not been enacted.
    (b) Federal Official as Party in Action.--If, before the date on 
which this subtitle takes effect, the Office of the United States Trade 
Representative, or any officer thereof in his or her official capacity, 
is a party to an action with respect to a function transferred by this 
subtitle to a Federal agency, then such action shall be continued with 
the head of the agency substituted or added as a party.
    (c) Judicial Review.--Orders and actions of the head of a Federal 
agency in the exercise of functions transferred to the head of such 
agency by this subtitle shall be subject to judicial review to the same 
extent and in the same manner as if such orders and actions had been by 
the Department of Commerce or the Office of the United States Trade 
Representative, or any office or officer thereof, in the exercise of 
such functions immediately preceding their transfer. Any statutory 
requirements relating to notice, hearings, action upon the record, or 
administrative review that apply to any function transferred by this 
subtitle shall apply to the exercise of such function by the head of 
the Federal agency to which such function is transferred by this 
subtitle.

SEC. 17485. REFERENCE.

    With respect to any functions transferred by this subtitle and 
exercised after the effective date of this subtitle, reference in any 
other Federal law to--
            (1) the Secretary of Commerce or the United States Trade 
        Representative; or
            (2) the Department of Commerce or the Office of the United 
        States Trade Representative or any officer or office thereof,
shall be considered to refer to the head of the Federal agency to whom 
such functions were transferred by this subtitle.

SEC. 17486. TRANSITION.

    With the consent of the Secretary of Commerce or the United States 
Trade Representative, as the case may be, the head of each Federal 
agency to which functions or offices are transferred by this subtitle 
is authorized to utilize--
            (1) the services of such officers, employees, and other 
        personnel of the Department of Commerce or the Office of the 
        United States Trade Representative, as the case may be, with 
        respect to functions or offices transferred to that agency by 
        this subtitle; and
            (2) funds appropriated to such functions or offices for 
        such period of time as may reasonably be needed to facilitate 
        the orderly implementation of this subtitle.

                        CHAPTER 8--MISCELLANEOUS

SEC. 17491. EFFECTIVE DATE.

    (a) In General.--This subtitle shall take effect on the effective 
date specified in section 17109(a), except that at any time after the 
date of the enactment of this Act the officers provided for in chapter 
2 may be nominated and appointed, as provided in such chapter.
    (b) Interim Compensation and Expenses.--Funds available to the 
Department of Commerce or the Office of the United States Trade 
Representative (or any official or component thereof), with respect to 
the functions transferred by this subtitle, may be used, with approval 
of the Director of the Office of Management and Budget, to pay the 
compensation and expenses of an officer appointed under subsection (a) 
who will carry out such functions until funds for that purpose are 
otherwise available.

SEC. 17492. INTERIM APPOINTMENTS.

    (a) In General.--If one or more officers required by this subtitle 
to be appointed by and with the advice and consent of the Senate have 
not entered upon office on the effective date of this subtitle and 
notwithstanding any other provision of law, the President may designate 
any officer who was appointed by and with the advice and consent of the 
Senate, and who was such an officer on the day before the effective 
date of this subtitle, to act in the office until it is filled as 
provided by this subtitle.
    (b) Compensation.--Any officer acting in an office pursuant to 
subsection (a) shall receive compensation at the rate prescribed by 
this subtitle for such office.

SEC. 17493. FUNDING REDUCTIONS RESULTING FROM REORGANIZATION.

    (a) Funding Reductions.--Notwithstanding section 17610, beginning 
in the first fiscal year that begins on or after the effective date of 
this subtitle, the amount expended by the United States in performing 
all functions which, immediately before the effective date of this 
subtitle, were performed by the Department of Commerce or any agency, 
officer, or employee thereof and are transferred by this subtitle may 
not exceed 75 percent of the total amount expended by the United States 
in performing all such functions during fiscal year 1994.
    (b) Implementation Plan.--(1) Not later than 90 days after the date 
of the enactment of this Act, the Director of the Office of Management 
and Budget shall submit a report to the Congress on a plan that--
            (A) provides for the implementation of the funding 
        reductions required under subsection (a); and
            (B) makes legislative recommendations for additional 
        authority necessary or useful in implementing such funding 
        reductions.
    (2) In preparing the report, the Office of Management and Budget 
shall consult with the USTR.

SEC. 17494. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions of this subtitle. Amounts 
appropriated under this section shall be available until expended.

          Subtitle E--Patent and Trademark Office Corporation

SEC. 17501. SHORT TITLE.

    This subtitle may be cited as the ``Patent and Trademark Office 
Corporation Act of 1995''.

                 CHAPTER 1--PATENT AND TRADEMARK OFFICE

SEC. 17511. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A 
              CORPORATION.

    Section 1 of title 35, United States Code, is amended to read as 
follows:
``Sec. 1. Establishment
    ``(a) Establishment.--The Patent and Trademark Office is 
established as a wholly owned Government corporation subject to chapter 
91 of title 31, except as otherwise provided in this title.
    ``(b) Offices.--The Patent and Trademark Office shall maintain an 
office in the District of Columbia, or the metropolitan area thereof, 
for the service of process and papers and shall be deemed, for purposes 
of venue in civil actions, to be a resident of the District of 
Columbia. The Patent and Trademark Office may establish offices in such 
other places as it considers necessary or appropriate in the conduct of 
its business.
    ``(c) Reference.--For purposes of this title, the Patent and 
Trademark Office shall also be referred to as the `Office'.''.

SEC. 17512. POWERS AND DUTIES.

    Section 2 of title 35, United States Code, is amended to read as 
follows:
``Sec. 2. Powers and Duties
    ``(a) In General.--The Patent and Trademark Office shall be 
responsible for--
            ``(1) the granting and issuing of patents and the 
        registration of trademarks;
            ``(2) conducting studies, programs, or exchanges of items 
        or services regarding domestic and international patent and 
        trademark law or the administration of the Office, including 
        programs to recognize, identify, assess, and forecast the 
        technology of patented inventions and their utility to 
        industry;
            ``(3) authorizing or conducting studies and programs 
        cooperatively with foreign patent and trademark offices and 
        international organizations, in connection with the granting 
        and issuing of patents and the registration of trademarks; and
            ``(4) disseminating to the public information with respect 
        to patents and trademarks.
    ``(b) Specific Powers.--The Office--
            ``(1) shall have perpetual succession;
            ``(2) shall adopt and use a corporate seal, which shall be 
        judicially noticed and with which letters patent, certificates 
        of trademark registrations, and papers issued by the Office 
        shall be authenticated;
            ``(3) may sue and be sued in its corporate name and be 
        represented by its own attorneys in all judicial and 
        administrative proceedings;
            ``(4) may indemnify the Commissioner of Patents and 
        Trademarks, and other officers, attorneys, agents, and 
        employees (including members of the Management Advisory Board 
        established in section 5), of the Office for liabilities and 
        expenses incurred within the scope of their employment;
            ``(5) may adopt, amend, and repeal bylaws, rules, and 
        regulations, governing the manner in which its business will be 
        conducted and the powers granted to it by law will be 
        exercised, without regard to chapter 35 of title 44;
            ``(6) may acquire, construct, purchase, lease, hold, 
        manage, operate, improve, alter, and renovate any real, 
        personal, or mixed property, or any interest therein, as it 
        considers necessary to carry out its functions, without regard 
        to the provisions of the Federal Property and Administrative 
        Services Act of 1949;
            ``(7)(A) may make such purchases, contracts for the 
        construction, maintenance, or management and operation of 
        facilities, and contracts for supplies or services, after 
        advertising, in such manner and at such times sufficiently in 
        advance of opening bids, as the Office determines is adequate 
        to ensure notice and an opportunity for competition, except 
        that advertising shall not be required when the Office 
        determines that the making of any such purchase or contract 
        without advertising is necessary, or that advertising is not 
        reasonably practicable;
            ``(B) may enter into and perform such purchases and 
        contracts for printing services, including the process of 
        composition, platemaking, presswork, silk screen processes, 
        binding, microform, and the products of such processes, as it 
        considers necessary to carry out the functions of the Office, 
        without regard to sections 501 through 517 and 1101 through 
        1123 of title 44; and
            ``(C) may enter into and perform such other contracts, 
        leases, cooperative agreements, or other transactions with 
        international, foreign, and domestic public agencies and 
        private organizations, and persons as is necessary in the 
        conduct of its business and on such terms as it considers 
        appropriate;
            ``(8) may use, with their consent, services, equipment, 
        personnel, and facilities of other departments, agencies, and 
        instrumentalities of the Federal Government, on a reimbursable 
        basis, and to cooperate with such other departments, agencies, 
        and instrumentalities in the establishment and use of services, 
        equipment, and facilities of the Office;
            ``(9) may obtain from the Administrator of General Services 
        such services as the Administrator is authorized to provide to 
        other agencies of the United States, on the same basis as those 
        services are provided to other agencies of the United States;
            ``(10) may use, with the consent of the agency, government, 
        or international organization concerned, the services, records, 
        facilities, or personnel of any State or local government 
        agency or instrumentality or foreign government or 
        international organization to perform functions on its behalf;
            ``(11) may determine the character of and the necessity for 
        its obligations and expenditures and the manner in which they 
        shall be incurred, allowed, and paid, subject to the provisions 
        of this title and the Act of July 5, 1946 (commonly referred to 
        as the `Trademark Act of 1946');
            ``(12) may retain and use all of its revenues and receipts, 
        including revenues from the sale, lease, or disposal of any 
        real, personal, or mixed property, or any interest therein, of 
        the Office, in carrying out the functions of the Office, 
        including for research and development and capital investment, 
without apportionment under the provisions of subchapter II of chapter 
15 of title 31;
            ``(13) shall have the priority of the United States with 
        respect to the payment of debts from bankrupt, insolvent, and 
        decedents' estates;
            ``(14) may accept monetary gifts or donations of services, 
        or of real, personal, or mixed property, in order to carry out 
        the functions of the Office;
            ``(15) may execute, in accordance with its bylaws, rules, 
        and regulations, all instruments necessary and appropriate in 
        the exercise of any of its powers;
            ``(16) may provide for liability insurance and insurance 
        against any loss in connection with its property, other assets, 
        or operations either by contract or by self-insurance; and
            ``(17) shall pay any settlement or judgment entered against 
        it from the funds of the Office and not from amounts available 
        under section 1304 of title 31.''.

SEC. 17513. ORGANIZATION AND MANAGEMENT.

    Section 3 of title 35, United States Code, is amended to read as 
follows:
``Sec. 3. Officers and employees
    ``(a) Commissioner.--
            ``(1) In general.--The management of the Patent and 
        Trademark Office shall be vested in the Commissioner of Patents 
        and Trademarks (hereafter in this title referred to as the 
        `Commissioner'), who shall be a citizen of the United States 
        and who shall be appointed by the President, by and with the 
        advice and consent of the Senate. The Commissioner shall be a 
        person who, by reason of professional background and experience 
        in patent and trademark law, is especially qualified to manage 
        the Office.
            ``(2) Duties.--
                    ``(A) In general.--The Commissioner shall be 
                responsible for the management and direction of the 
                Office, including the issuance of patents and the 
                registration of trademarks.
                    ``(B) Advising the president.--The Commissioner 
                shall advise the President of all activities of the 
                Patent and Trademark Office undertaken in response to 
                obligations of the United States under treaties and 
                executive agreements, or which relate to cooperative 
                programs with those authorities of foreign governments 
                that are responsible for granting patents or 
                registering trademarks. The Commissioner shall also 
                recommend to the President changes in law or policy 
                which may improve the ability of U.S. citizens to 
                secure and enforce patent rights or trademark rights in 
                the United States or in foreign countries.
                    ``(C) Consulting with the management advisory 
                board.--The Commissioner shall consult with the 
                Management Advisory Board established in section 5 on a 
                regular basis on matters relating to the operation of 
                the Patent and Trademark Office, and shall consult with 
                the Board before submitting budgetary proposals to the 
                Office of Management and Budget or changing or 
                proposing to change patent or trademark user fees or 
                patent or trademark regulations.
            ``(3) Term.--The Commissioner shall serve a term of six 
        years, and may continue to serve until a successor is appointed 
        and assumes office. The Commissioner may be reappointed to 
        subsequent terms.
            ``(4) Oath.--The Commissioner shall, before taking office, 
        take an oath to discharge faithfully the duties of the Office.
            ``(5) Compensation.--The Commissioner shall receive 
        compensation at the rate of pay in effect for level II of the 
        Executive Schedule under section 5313 of title 5.
            ``(6) Removal.--The Commissioner may be removed from office 
        by the President only for cause.
            ``(7) Designee of commissioner.--The Commissioner shall 
        designate an officer of the Office who shall be vested with the 
        authority to act in the capacity of the Commissioner in the 
        event of the absence or incapacity of the Commissioner.
    ``(b) Officers and Employees of the Office.--
            ``(1) Deputy commissioners.--The Commissioner shall appoint 
        a Deputy Commissioner for Patents and a Deputy Commissioner for 
        Trademarks for terms that shall expire on the date on which the 
        Commissioner's term expires. The Deputy Commissioner for 
        Patents shall be a person with demonstrated experience in 
        patent law and the Deputy Commissioner for Trademarks shall be 
        a person with demonstrated experience in trademark law. The 
        Deputy Commissioner for Patents and the Deputy Commissioner for 
        Trademarks shall be the principal policy advisors to the 
        Commissioner on all aspects of the activities of the Office 
        that affect the administration of patent and trademark 
        operations, respectively.
            ``(2) Other officers and employees.--The Commissioner 
        shall--
                    ``(A) appoint an Inspector General and such other 
                officers, employees (including attorneys), and agents 
                of the Office as the Commissioner considers necessary 
                to carry out its functions;
                    ``(B) fix the compensation of such officers and 
                employees, subject to the limits set forth in 
                subsection (c); and
                    ``(C) define the authority and duties of such 
                officers and employees and delegate to them such of the 
                powers vested in the Office as the Commissioner may 
                determine.
The Office shall not be subject to any administratively or statutorily 
imposed limitation on positions or personnel, and no positions or 
personnel of the Office shall be taken into account for purposes of 
applying any such limitation, except to the extent otherwise 
specifically provided by statute with respect to the Office.
    ``(c) Limits on Compensation.--Except as otherwise provided in this 
title or any other provision of law, the basic pay of an officer or 
employee of the Office for any calendar year may not exceed the annual 
rate of basic pay in effect for level III of the Executive Schedule 
under section 5314 of title 5. The Commissioner shall by regulation 
establish a limitation on the total compensation payable to officers or 
employees of the Office, consistent with the limitation under section 
5307 of title 5.
    ``(d) Inapplicability of Title 5 Generally.--Except as otherwise 
provided in this section, officers and employees of the Office shall 
not be subject to the provisions of title 5 relating to Federal 
employees.
    ``(e) Carryover of Personnel.--
            ``(1) To the office.--Effective as of the effective date of 
        the Patent and Trademark Office Corporation Act of 1995, all 
        officers and employees of the Patent and Trademark Office on 
        the day before such effective date shall become officers and 
        employees of the Office, without a break in service.
            ``(2) Continuation in office of certain officers.--
                    ``(A) Commissioner of patents and trademarks.--The 
                individual serving as the Commissioner of Patents and 
                Trademarks on the day before the effective date of the 
                Patent and Trademark Office Corporation Act of 1995 may 
                serve as the Commissioner for a period of 1 year 
                beginning on such effective date or, if earlier, until 
                a Commissioner has been appointed under subsection (a).
                    ``(B) Assistant commissioner for patents.--The 
                individual serving as the Assistant Commissioner for 
                Patents on the day before the effective date of the 
                Patent and Trademark Office Corporation Act of 1995 may 
                serve as the Deputy Commissioner for Patents for a 
                period of 1 year beginning on such effective date or, 
                if earlier, until a Deputy Commissioner for Patents has 
                been appointed under subsection (b).
                    ``(C) Assistant commissioner for trademarks.--The 
                individual serving as the Assistant Commissioner for 
                Trademarks on the day before the effective date of the 
                Patent and Trademark Office Corporation Act of 1995 may 
                serve as the Deputy Commissioner for Trademarks for a 
                period of 1 year beginning on such effective date or, 
                if earlier, until a Deputy Commissioner for Trademarks 
                has been appointed under subsection (b).
    ``(f) Employee Protection.--Not later than the effective date of 
the Patent and Trademark Office Corporation Act of 1995, the 
Commissioner shall, notwithstanding section 3531 of such Act, take 
appropriate measures to protect the employment interests of individuals 
who become employees of the Office pursuant to subsection (e)(1). Such 
measures shall include provisions to ensure that--
            ``(1) the Office will adopt labor agreements in accordance 
        with subsection (g);
            ``(2) no such individual shall, during the 2-year period 
        commencing on the effective date of the Patent and Trademark 
        Office Corporation Act of 1995, be subject to separation or any 
        reduction in compensation by reason of the establishment of the 
        Office as a Government corporation pursuant to such Act;
            ``(3) all sick leave, annual leave, and compensatory time 
        accrued or accumulated under title 5 before the start of such 
        2-year period shall be obligations of the Office during such 
        period; and
            ``(4) there shall be made available to such employees not 
        less than 1 life insurance program and not less than 3 health 
        insurance programs, during such 2-year period, which shall be 
        reasonably comparable, in terms of employee premium cost and 
        coverage, to the Federal health and life insurance programs 
        available to such employees on the day before the start of such 
        period.
    ``(g) Labor Agreements.--
            ``(1) Adoption of existing agreements.--The Office shall 
        adopt all labor agreements which are in effect, as of the day 
        before the effective date of the Patent and Trademark Office 
        Corporation Act of 1995, with respect to such Office (as then 
        in effect). Each such agreement shall remain in effect for the 
        2-year period commencing on such date, unless the agreement 
        provides for a shorter duration or the parties agree otherwise 
        before such period ends.
    ``(2) Continued applicability of chapter 71.--Chapter 71 of title 5 
shall continue to apply with respect to the Office after the Patent and 
Trademark Office Corporation Act of 1995 takes effect.
    ``(h) Termination Rights.--Any employee referred to in the first 
sentence of subsection (f) whose employment with the Office is 
terminated during the 2-year period commencing on the effective date of 
the Patent and Trademark Office Corporation Act of 1995 shall be 
entitled to rights and benefits, to be afforded by the Office, similar 
to those such employee would have had under Federal law if termination 
had occurred immediately before such date.
    ``(i) Retirement.--
            ``(1) Continued coverage.--Any employee referred to in the 
        first sentence of subsection (f) who, on the day before the 
        effective date of the Patent and Trademark Office Corporation 
        Act of 1995, is subject to subchapter III of chapter 83 of 
        title 5 or chapter 84 of such title shall, so long as such 
        employee remains employed by the Office without a break in 
        service, remain subject to such subchapter or chapter, as the 
        case may be. Any employment that satisfies the preceding 
        sentence shall be considered employment by the Government of 
        the United States for purposes of such subchapter or chapter. 
        During any such employment, the Office shall be considered to 
        be the employing agency of the employee and shall make all 
        agency contributions required under such subchapter or chapter 
        with respect to such employee.
            ``(2) Deposit requirement.--Not later than 1 year after the 
        effective date of the Patent and Trademark Office Corporation 
        Act of 1995, the Office shall pay into the Treasury of the 
        United States, to the credit of the Civil Service Retirement 
        and Disability Fund, an amount determined by the Office of 
        Personnel Management to represent the present value of the 
        difference between (A) the future cost of benefits payable from 
        the Fund and due the employees referred to in the first 
        sentence of subsection (f) that are attributable to employment 
        on or after the effective date of the Patent and Trademark 
        Office Corporation Act of 1995, and (B) the contributions made 
        by such employees and the Office under paragraph (1). In 
        determining the amount due, the Office of Personnel Management 
        shall take into consideration the actual interest such amount 
        can be expected to earn when invested in the Treasury.
    ``(j) Competitive Status.--For purposes of appointment to a 
position in the competitive service for which an officer or employee of 
the Office is qualified, such officer or employee--
            ``(1) shall not forfeit any competitive status, acquired by 
        such officer or employee before the effective date of the 
        Patent and Trademark Office Corporation Act of 1995, by reason 
        of becoming an officer or employee of the Office pursuant to 
        subsection (e)(1); or
            ``(2) if not covered by paragraph (1), shall acquire 
        competitive status after completing at least 1 year of 
        continuous service under a nontemporary appointment to a 
        position within the Office (taking into account any such 
service performed with the former Patent and Trademark Office 
immediately before such effective date).
    ``(k) Savings Provisions.--All orders, determinations, rules, and 
regulations regarding compensation and benefits and other terms and 
conditions of employment, in effect for the Office and its officers and 
employees immediately before the effective date of the Patent and 
Trademark Office Corporation Act of 1995, shall continue in effect with 
respect to the Office and its officers and employees until modified, 
superseded, or set aside by the Office or a court of appropriate 
jurisdiction or by operation of law.''.

 SEC. 17514. MANAGEMENT ADVISORY BOARD.

    Chapter 1 of part I of title 35, United States Code, is amended by 
inserting after section 4 the following:
``Sec. 5. Patent and Trademark Office Management Advisory Board
    ``(a) Compensation.--
            ``(1) Appointment.--The Patent and Trademark Office shall 
        have a Management Advisory Board (hereafter in this title 
        referred to as the `Board') of 18 members, 6 of whom shall be 
        appointed by the President, 6 of whom shall be appointed by the 
        Speaker of the House of Representatives, and 6 of whom shall be 
        appointed by the President pro tempore of the Senate. Not more 
        than 4 of the 6 members appointed by each appointing authority 
        shall be members of the same political party.
            ``(2) Terms.--Members of the Board shall be appointed for a 
        term of 6 years each, except that of the members first 
        appointed by each appointing authority, 1 shall be for a term 
        of 1 year, 1 shall be for a term of 2 years, 1 shall be for a 
        term of 3 years, 1 shall be for a term of 4 years, and 1 shall 
        be for a term of 5 years. No member may serve more than 1 term.
            ``(3) Chair.--The President shall designate the chair of 
        the Board, whose term as chair shall be for 3 years.
            ``(4) Timing of appointments.--Initial appointments to the 
        Board shall be made within 3 months after the effective date of 
        the Patent and Trademark Office Corporation Act of 1995, and 
        vacancies shall be filled within 3 months after they occur.
            ``(5) Vacancies.--Vacancies shall be filled in the manner 
        in which the original appointment was made under this 
        subsection. Members appointed to fill a vacancy occurring 
        before the expiration of the term for which the member's 
        predecessor was appointed shall be appointed only for the 
        remainder of that term. A member may serve after the expiration 
        of that member's term until a successor is appointed.
    ``(b) Basis for Appointments.--Members of the Board shall be 
citizens of the United States who shall be chosen so as to represent 
the interests of diverse users of the Patent and Trademark Office, and 
shall include individuals with substantial background and achievement 
in corporate finance and management.
    ``(c) Applicability of Certain Ethics Laws.--Members of the Board 
shall be special Government employees within the meaning of section 202 
of title 18.
    ``(d) Meetings.--The Board shall meet at the call of the chair to 
consider an agenda set by the chair.
    ``(e) Duties.--The Board shall--
            ``(1) review the policies, goals, performance, budget, and 
        user fees of the Patent and Trademark Office, and advise the 
        Commissioner on these matters; and
            ``(2) within 60 days after the end of each fiscal year, 
        prepare an annual report on the matters referred to in 
        paragraph (1), transmit the report to the President and the 
        Committees on the Judiciary of the Senate and the House of 
        Representatives, and publish the report in the Patent and 
        Trademark Office Official Gazette.
    ``(f) Staff.--The Board shall employ a staff and procure support 
services for the staff adequate to enable the Board to carry out its 
functions, using funds available to the Commissioner under section 42 
of this title. Persons employed by the Board shall receive compensation 
as determined by the Board, serve in accordance with terms and 
conditions of employment established by the Board, and be subject 
solely to the direction of the Board, notwithstanding any other 
provision of law.
    ``(g) Compensation.--Members of the Board may accept reimbursement 
for expenses incurred in attending meetings of the Board and 
compensation not to exceed $1000 per day for each day in attendance at 
meetings of the Board.
    ``(h) Access to Information.--Members of the Board shall be 
provided access to records and information in the Patent and Trademark 
Office, except for personnel or other privileged information and 
information concerning patent applications required to be kept in 
confidence by section 122 of this title.
    ``(i) Applicability of Federal Advisory Committee Act.--The 
provisions of the Federal Advisory Committee Act (5 U.S.C. App.) shall 
not apply to meetings of the Board, but all meetings of the Board shall 
be announced in the Federal Register at least 30 days in advance and 
all meetings shall be open to the public unless closed by the Board for 
good cause.''.

 SEC. 17515. INDEPENDENCE FROM DEPARTMENT OF COMMERCE.

    Section 6 of title 35, United States Code, is amended--
            (1) by striking ``, under the direction of the Secretary of 
        Commerce,'' each place it appears; and
            (2) by striking ``, subject to the approval of the 
        Secretary of Commerce,''.

SEC. 17516. TRADEMARK TRIAL AND APPEAL BOARD.

    Section 17 of the Act of July 5, 1946 (commonly referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1067) is amended to read as 
follows:
    ``Sec. 17. (a) In every case of interference, opposition to 
registration, application to register as a lawful concurrent user, or 
application to cancel the registration of a mark, the Commissioner 
shall give notice to all parties and shall direct a Trademark Trial and 
Appeal Board to determine and decide the respective rights of 
registration.
    ``(b) The Trademark Trial and Appeal Board shall include the 
Commissioner, the Deputy Commissioner for Patents, the Deputy 
Commissioner for Trademarks, and members competent in trademark law who 
are appointed by the Commissioner.''.

SEC. 17517. BOARD OF PATENT APPEALS AND INTERFERENCES.

    Section 7 of title 35, United States Code, is amended to read as 
follows:
``Sec. 7. Board of Patent Appeals and Interferences
    ``(a) Establishment and Composition.--There shall be in the Patent 
and Trademark Corporation a Board of Patent Appeals and Interferences. 
The Commissioner, the Deputy Commissioner for Patents, the Deputy 
Commissioner for Trademarks, the officer principally responsible for 
the examination of patents, the officer principally responsible for the 
examination of trademarks, and the examiners-in-chief shall constitute 
the Board. The examiners-in-chief shall be persons of competent legal 
knowledge and scientific ability.
    ``(b) Duties.--The Board of Patent Appeals and Interferences shall, 
on written appeal of an applicant, review adverse decisions of 
examiners upon applications for patents and shall determine priority 
and patentability of invention in interferences declared under section 
135(a) of this title. Each appeal and interference shall be heard by at 
least 3 members of the Board, who shall be designated by the 
Commissioner. Only the Board of Patent Appeals and Interferences may 
grant rehearings.''.

SEC. 17518. SUITS BY AND AGAINST THE CORPORATION.

    Chapter 1 of part I of title 35, United States Code, is amended--
            (1) by redesignating sections 8 through 14 as sections 9 
        through 15; and
            (2) by inserting after section 7 the following new section:
``Sec. 8. Suits by and against the Corporation
    ``(a) In General.--
            ``(1) Actions under united states law.--Any civil action, 
        suit, or proceeding to which the Patent and Trademark Office is 
        a party is deemed to arise under the laws of the United States. 
        Exclusive jurisdiction over all civil actions by or against the 
        Office is in the Federal courts as provided by law.
            ``(2) Contract claims.--Any action, suit, or proceeding 
        against the Office founded upon contract shall be subject to 
        the limitations and exclusive remedy provided in section 
        1346(a)(2) and sections 1491 through 1509 of title 28, whether 
        or not such contract claims are cognizable under the sections 
        507, 1346, 1402, 1491, 1496, 1497, 1501, 1503, 2071, 2072, 
        2411, 2501, 2512 of title 28). For purposes of the Contract 
        Disputes Act of 1978 (41 U.S.C. 601 and following), the 
        Commissioner shall be deemed to be the agency head with respect 
        to contract claims arising with respect to the Office.
            ``(3) Tort claims.--Any action, suit, or proceeding against 
        the Office founded upon tort shall be subject to the 
        limitations and exclusive remedies provided in section 1346(b) 
        and sections 2671 through 2680 of title 28, whether or not such 
        tort claims are cognizable under section 1346(b) of title 28.
            ``(4) Prohibition on attachment, liens, etc.--No 
        attachment, garnishment, lien, or similar process, intermediate 
        or final, in law or equity, may be issued against property of 
        the Office.
            ``(5) Substitution of office as party.--The Office shall be 
        substituted as defendant in any civil action, suit, or 
        proceeding against an officer or employee of the Office, if the 
        Office determines that the employee was acting within the scope 
        of the officer or employee's employment with the Office. If the 
        Office refuses to certify scope of employment, the officer or 
        employee may at any time before trial petition the court to 
        find and certify that the officer or employee was acting within 
        the scope of the officer or employee's employment. Upon 
        certification by the court, the Office shall be substituted as 
        the party defendant. A copy of the petition shall be served 
        upon the Office.
    ``(b) Relationship With Justice Department.--
            ``(1) Exercise by office of attorney general's 
        authorities.--Except as provided in this section, in relation 
        to all judicial proceedings in which the Office or an officer 
        or employee thereof is a party or in which the officer or 
        employee thereof is interested and which arise from or relate 
        to officers or employees thereof acting within the scope of 
        their employment, torts, contracts, property, registration of 
        patent and trademark practitioners, patents or trademarks, or 
        fees, the officer or employee thereof may exercise, without 
        prior authorization from the Attorney General, the authorities 
        and duties that otherwise would be exercised by the Attorney 
        General on behalf of the officer or employee thereof under 
        title 28, and other laws. In all other judicial or 
        administrative proceedings in which the Office or an officer or 
        employee of the Office is a party or is interested, the Office 
        may exercise these authorities and duties only after obtaining 
        authorization from the Attorney General.
            ``(2) Appearances by attorney general.--The Attorney 
        General may file an appearance on behalf of the Office or an 
        employee of the Office, without the consent of the Office, in 
        any suit in which the Office is a party and represent the 
        Office with exclusive authority in the conduct, settlement, or 
        compromise of that suit.
            ``(3) Consultations with and assistance by attorney 
        general.--The Office may consult with the Attorney General 
        concerning any legal matter, and the Attorney General shall 
        provide advice and assistance to the Office, including 
        representing the Office in litigation, if requested by the 
        Office.
            ``(4) Representation before supreme court.--The Attorney 
        General shall represent the Office in all cases before the 
        United States Supreme Court.
            ``(5) Qualifications of attorneys.--An attorney admitted to 
        practice to the bar of the highest court of at least one State 
        in the United States or the District of Columbia and appointed 
        by the Office may represent the Office in any legal proceeding 
        in which the Office or an officer or employee of the Office is 
        a party or interested, regardless of whether the attorney is a 
        resident of the jurisdiction in which the proceeding is held 
        and notwithstanding any other prerequisites of qualification or 
        appearance required by the court or administrative body.''.

 SEC. 17519. ANNUAL REPORT OF COMMISSIONER.

    Section 15 of title 35, United States Code, as redesignated by 
section 17518 of this Act, is amended to read as follows:
``Sec. 15. Annual report to Congress
    ``The Commissioner shall report to the Congress, not later than 90 
days after the end of each fiscal year, the moneys received and 
expended by the Office, the purposes for which the moneys were spent, 
the quality and quantity of the work of the Office, and other 
information relating to the Office.''.

SEC. 17520. SUSPENSION OR EXCLUSION FROM PRACTICE.

    Section 32 of title 35, United States Code, is amended by inserting 
before the last sentence the following: ``The Commissioner shall have 
the discretion to designate any officer or employee of the Patent and 
Trademark Office to conduct the hearing required by this section.''.

SEC. 17521. FUNDING.

    Section 42 of title 35, United States Code, is amended to read as 
follows:
``Sec. 42. Patent and Trademark Office funding
    ``(a) Fees Payable to the Office.--All fees for services performed 
by or materials furnished by the Patent and Trademark Office shall be 
payable to the Office.
    ``(b) Use of Moneys.--Moneys of the Patent and Trademark Office not 
otherwise used to carry out the functions of the Office shall be kept 
in cash on hand or on deposit, or invested in obligations of the United 
States or guaranteed by the United States, or in obligations or other 
instruments which are lawful investments for fiduciary, trust, or 
public funds. Fees available to the Commissioner under this title shall 
be used exclusively for the processing of patent applications and for 
other services and materials relating to patents. Fees available to the 
Commissioner under section 31 of the Act of July 5, 1946 (commonly 
referred to as the `Trademark Act of 1946') (15 U.S.C. 1113) shall be 
used exclusively for the processing of trademark registrations and for 
other services and materials relating to trademarks.
    ``(c) Borrowing Authority.--The Patent and Trademark Office is 
authorized to issue from time to time for purchase by the Secretary of 
the Treasury its debentures, bonds, notes, and other evidences of 
indebtedness (hereafter in this subsection referred to as 
`obligations') in an amount not exceeding $2,000,000 outstanding at any 
one time, to assist in financing its activities. Such obligations shall 
be redeemable at the option of the Office before maturity in the manner 
stipulated in such obligations and shall have such maturity as is 
determined by the Office with the approval of the Secretary of the 
Treasury. Each such obligation issued to the Treasury shall bear 
interest at a rate not less than the current yield on outstanding 
marketable obligations of the United States of comparable maturity 
during the month preceding the issuance of the obligation as determined 
by the Secretary of the Treasury. The Secretary of the Treasury shall 
purchase any obligations of the Office issued under this subsection and 
for such purpose the Secretary of the Treasury is authorized to use as 
a public-debt transaction the proceeds of any securities issued under 
chapter 31 of title 31, and the purposes for which securities may be 
issued under that chapter are extended to include such purpose. Payment 
under this subsection of the purchase price of such obligations of the 
Patent and Trademark Office shall be treated as public debt 
transactions of the United States.''.

SEC. 17522. AUDITS.

    Chapter 4 of part I title 35, United States Code, is amended by 
adding at the end the following new section:
``Sec. 43. Audits
    ``(a) In General.--Financial statements of the Patent and Trademark 
Office shall be prepared on an annual basis in accordance with 
generally accepted accounting principles. Such statements shall be 
audited by an independent certified public accountant chosen by the 
Secretary. The audit shall be conducted in accordance with standards 
that are consistent with generally accepted Government auditing 
standards and other standards established by the Comptroller General, 
and with the generally accepted auditing standards of the private 
sector, to the extent feasible.
    ``(b) Review by Comptroller General.--The Comptroller General may 
review any audit of the financial statement of the Patent and Trademark 
Office that is conducted under subsection (a). The Comptroller General 
shall report to the Congress and the Office the results of any such 
review and shall include in such report appropriate recommendations.
    ``(c) Audit by Comptroller General.--The Comptroller General may 
audit the financial statements of the Office and such audit shall be in 
lieu of the audit required by subsection (a). The Office shall 
reimburse the Comptroller General for the cost of any audit conducted 
under this subsection.
    ``(d) Access to Office Records.--All books, financial records, 
report files, memoranda, and other property that the Comptroller 
General deems necessary for the performance of any audit shall be made 
available to the Comptroller General.
    ``(e) Applicability in Lieu of Title 31 Provisions.--This section 
applies to the Office in lieu of the provisions of section 9105 of 
title 31.''.

SEC. 17523. TRANSFER.

    (a) Transfer of Functions.--Except as otherwise provided in this 
subtitle, there are transferred to, and vested in, the Patent and 
Trademark Office all functions, powers, and duties vested by law in the 
Secretary of Commerce or the Department of Commerce or in the officers 
or components in the Department of Commerce with respect to the 
authority to grant patents and register trademarks, and in the Patent 
and Trademark Office, as in effect on the day before the effective date 
of this subtitle, and in the officers and components of such Office.
    (b) Transfer of Funds and Property.--The Secretary of Commerce 
shall transfer to the Patent and Trademark Office, on the effective 
date of this subtitle, so much of the assets, liabilities, contracts, 
property, records, and unexpended and unobligated balances of 
appropriations, authorizations, allocations, and other funds employed, 
held, used, arising from, available to, or to be made available to the 
Department of Commerce, including funds set aside for accounts 
receivable which are related to functions, powers, and duties which are 
vested in the Patent and Trademark Office by this subtitle.
    (c) Transfer of Surcharge Fund.--On the effective date of this 
subtitle, there are transferred to the Patent and Trademark Office 
those residual and unappropriated balances remaining as of the 
effective date within the Patent and Trademark Office Surcharge Fund 
established by section 10101(b) of the Omnibus Budget Reconciliation 
Act of 1990 (35 U.S.C. 41 note).

            CHAPTER 2--EFFECTIVE DATE; TECHNICAL AMENDMENTS

 SEC. 17531. EFFECTIVE DATE.

    This subtitle shall take effect on the date that is 6 months after 
the date of the enactment of this Act.

SEC. 17532. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to Title 35.--
            (1) The table of contents for part I of title 35, United 
        States Code, is amended by amending the item relating to 
        chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions.......       1''.

            (2) The table of sections for chapter 1 of title 35, United 
        States Code, is amended to read as follows:

     ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec.
 ``1. Establishment.
 ``2. Powers and duties.
 ``3. Officers and employees.
 ``4. Restrictions on officers and employees as to interest in patents.
 ``5. Patent and Trademark Office Management Advisory Board.
 ``6. Duties of Commissioner.
 ``7. Board of Patent Appeals and Interferences.
 ``8. Suits by and against the Corporation.
 ``9. Library.
``10. Classification of patents.
``11. Certified copies of records.
``12. Publications.
``13. Exchange of copies of patents with foreign countries.
``14. Copies of patents for public libraries.
``15. Annual report to Congress.''.
    (3) The table of contents for chapter 4 of part I of title 35, 
United States Code, is amended by adding at the end the following new 
item:

``43. Audits.''.
    (b) Other Provisions of Law.--
            (1) Section 9101(3) of title 31, United States Code, is 
        amended by adding at the end the following:
                    ``(O) the Patent and Trademark Office.''.
            (2) Section 602(d) of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 474) is 
        amended--
                    (A) in paragraph (20) by striking ``or'' after the 
                semicolon;
                    (B) in paragraph (21) by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(22) the Patent and Trademark Office.''.
            (3) Section 500(e) of title 5, United States Code (5 U.S.C. 
        500(e)) is amended by striking ``Patent Office'' and inserting 
        ``Patent and Trademark Office''.
            (4) Section 5102(c)(23) of title 5, United States Code, is 
        amended by striking ``, Department of Commerce''.
            (5) Section 5316 of title 5, United States Code (5 U.S.C. 
        5316) is amended by striking ``Commissioner of Patents, 
        Department of Commerce.'', ``Deputy Commissioner of Patents and 
        Trademarks.'', ``Assistant Commissioner for Patents.'', and 
        ``Assistant Commissioner for Trademarks.''.
            (6) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
        1511) is amended by striking ``(d) Patent and Trademark 
        Office;'' and redesignating subsections (a) through (g) as 
        paragraphs (1) through (6), respectively.
            (7) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
        is amended by striking ``Patent Office'' and inserting ``Patent 
        and Trademark Office''.
            (8) Sections 505(m) and 512(o) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
        amended by striking ``of the Department of Commerce''.
            (9) Section 105(e) of the Federal Alcohol Administration 
        Act (27 U.S.C. 205(e)) is amended by striking ``Patent Office'' 
        and inserting ``Patent and Trademark Office''.
            (10) Section 1744 of title 28, United States Code is 
        amended--
                    (A) by striking ``Patent Office'' each place it 
                appears and inserting ``Patent and Trademark Office''; 
                and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (11) Section 1745 of title 28, United States Code, is 
        amended by striking ``United States Patent Office'' and 
        inserting ``Patent and Trademark Office''.
            (12) Section 1928 of title 28, United States Code, is 
        amended by striking ``Patent Office'' and inserting ``Patent 
        and Trademark Office''.
            (13) Section 160 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2190) is amended--
                    (A) by striking ``Patent Office'' and inserting 
                ``Patent and Trademark Office''; and
                    (B) by striking ``Commissioner of Patents'' and 
                inserting ``Commissioner of Patents and Trademarks''.
            (14) Section 305(c) of the National Aeronautics and Space 
        Act of 1958 (42 U.S.C. 2457(c)) is amended by striking 
        ``Commissioner of Patents'' and inserting ``Commissioner of 
        Patents and Trademarks''.
            (15) Section 12(a) of the Solar Heating and Cooling 
        Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
        striking ``Commissioner of the Patent Office'' and inserting 
        ``Commissioner of Patents and Trademarks''.
            (16) Section 1111 of title 44, United States Code, is 
        amended by striking ``Commissioner of Patents'' and inserting 
        ``Commissioner of Patents and Trademarks''.
            (17) Sections 1114 and 1123 of title 44, United States 
        Code, are each amended by striking ``Commissioner of Patents''.
            (18) Section 1123 of title 44, United States Code, is 
        amended by striking ``the Patent Office,''.
            (19) Sections 1337 and 1338 of title 44, United States 
        Code, and the items relating to those sections in the table of 
        contents for chapter 13 of such title, are repealed.
            (20) Section 10(i) of the Trading With the Enemy Act (50 
        U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
        Patents'' and inserting ``Commissioner of Patents and 
        Trademarks''.
            (21) Section 8G(a)(2) of the Inspector General Act of 1978 
        (5 U.S.C. App.) is amended by inserting ``the Patent and 
        Trademark Office,'', after ``the Panama Canal Commission,''.
            (22) Section 255(g)(1)(A) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) 
        is amended by inserting after the item relating to the United 
        States Enrichment Corporation the following new item:
                    ``Patent and Trademark Office;''.
            (23) Section 10101(b)(2)(B) of the Omnibus Budget 
        Reconciliation Act of 1990 (35 U.S.C. 41 note) is amended by 
striking ``, to the extent provided in appropriation Acts,'' and 
inserting ``without appropriation''.

                  Subtitle E--Miscellaneous Provisions

SEC. 17601. REFERENCES.

    Any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to an office from which a function is transferred by this 
title--
            (1) to the Secretary of Commerce or an officer of the 
        Department of Commerce, is deemed to refer to the head of the 
        department or office to which such function is transferred; or
            (2) to the Department of Commerce or an agency in the 
        Department of Commerce is deemed to refer to the department or 
        office to which such function is transferred.

SEC. 17602. EXERCISE OF AUTHORITIES.

    Except as otherwise provided by law, a Federal official to whom a 
function is transferred by this title may, for purposes of performing 
the function, exercise all authorities under any other provision of law 
that were available with respect to the performance of that function to 
the official responsible for the performance of the function 
immediately before the effective date of the transfer of the function 
under this title.

SEC. 17603. SAVINGS PROVISIONS.

    (a) Legal Documents.--All orders, determinations, rules, 
regulations, permits, grants, loans, contracts, agreements, 
certificates, licenses, and privileges--
            (1) that have been issued, made, granted, or allowed to 
        become effective by the President, the Secretary of Commerce, 
        any officer or employee of any office transferred by this 
        title, or any other Government official, or by a court of 
        competent jurisdiction, in the performance of any function that 
        is transferred by this title, and
            (2) that are in effect on the effective date of such 
        transfer (or become effective after such date pursuant to their 
        terms as in effect on such effective date),
shall continue in effect according to their terms until modified, 
terminated, superseded, set aside, or revoked in accordance with law by 
the President, any other authorized official, a court of competent 
jurisdiction, or operation of law.
    (b) Proceedings.--This title shall not affect any proceedings or 
any application for any benefits, service, license, permit, 
certificate, or financial assistance pending on the date of the 
enactment of this title before an office transferred by this title, but 
such proceedings and applications shall be continued. Orders shall be 
issued in such proceedings, appeals shall be taken therefrom, and 
payments shall be made pursuant to such orders, as if this title had 
not been enacted, and orders issued in any such proceeding shall 
continue in effect until modified, terminated, superseded, or revoked 
by a duly authorized official, by a court of competent jurisdiction, or 
by operation of law. Nothing in this subsection shall be considered to 
prohibit the discontinuance or modification of any such proceeding 
under the same terms and conditions and to the same extent that such 
proceeding could have been discontinued or modified if this title had 
not been enacted.
    (c) Suits.--This title shall not affect suits commenced before the 
date of the enactment of this title, and in all such suits, proceeding 
shall be had, appeals taken, and judgments rendered in the same manner 
and with the same effect as if this title had not been enacted.
    (d) Nonabatement of Actions.--No suit, action, or other proceeding 
commenced by or against the Department of Commerce or the Secretary of 
Commerce, or by or against any individual in the official capacity of 
such individual as an officer or employee of an office transferred by 
this title, shall abate by reason of the enactment of this title.
    (e) Continuance of Suits.--If any officer of the Department of 
Commerce or the Commerce Programs Resolution Agency in the official 
capacity of such officer is party to a suit with respect to a function 
of the officer, and under this title such function is transferred to 
any other officer or office, then such suit shall be continued with the 
other officer or the head of such other office, as applicable, 
substituted or added as a party.

SEC. 17604. TRANSFER OF ASSETS.

    Except as otherwise provided in this title, so much of the 
personnel, property, records, and unexpended balances of 
appropriations, allocations, and other funds employed, used, held, 
available, or to be made available in connection with a function 
transferred to an official or agency by this title shall be available 
to the official or the head of that agency, respectively, at such time 
or times as the Director of the Office of Management and Budget directs 
for use in connection with the functions transferred.

SEC. 17605. DELEGATION AND ASSIGNMENT.

    Except as otherwise expressly prohibited by law or otherwise 
provided in this title, an official to whom functions are transferred 
under this title (including the head of any office to which functions 
are transferred under this title) may delegate any of the functions so 
transferred to such officers and employees of the office of the 
official as the official may designate, and may authorize successive 
redelegations of such functions as may be necessary or appropriate. No 
delegation of functions under this section or under any other provision 
of this title shall relieve the official to whom a function is 
transferred under this title of responsibility for the administration 
of the function.

SEC. 17606. AUTHORITY OF ADMINISTRATOR WITH RESPECT TO FUNCTIONS 
              TRANSFERRED.

    (a) Determinations.--If necessary, the Administrator shall make any 
determination of the functions that are transferred under this title.
    (b) Incidental Transfers.--The Administrator, at such time or times 
as the Administrator shall provide, may make such determinations as may 
be necessary with regard to the functions transferred by this title, 
and to make such additional incidental dispositions of personnel, 
assets, liabilities, grants, contracts, property, records, and 
unexpended balances of appropriations, authorizations, allocations, and 
other funds held, used, arising from, available to, or to be made 
available in connection with such functions, as may be necessary to 
carry out the provisions of this title. The Administrator shall provide 
for the termination of the affairs of all entities terminated by this 
title and for such further measures and dispositions as may be 
necessary to effectuate the purposes of this title.

SEC. 17607. PROPOSED CHANGES IN LAW.

    Not later than one year after the date of the enactment of this 
title, the Director of the Office of Management and Budget shall submit 
to the Congress a description of any changes in Federal law necessary 
to reflect abolishments, transfers, terminations, and disposals under 
this title.

SEC. 17608. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

    For purposes of this title, the vesting of a function in a 
department or office pursuant to reestablishment of an office shall be 
considered to be the transfer of the function.

SEC. 17609. DEFINITIONS.

    For purposes of this title, the following definitions apply:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Commerce Programs Resolution Agency.
            (2) Agency.--The term ``Agency'' means the Commerce 
        Programs Resolution Agency.
            (3) Function.--The term ``function'' includes any duty, 
        obligation, power, authority, responsibility, right, privilege, 
        activity, or program.
            (4) Office.--The term ``office'' includes any office, 
        administration, agency, bureau, institute, council, unit, 
        organizational entity, or component thereof.
            (5) Wind-up period.--The term ``wind-up period'' means the 
        period beginning on the effective date specified in section 
        17109(a) and ending on the termination date specified in 
        section 17106(d).

SEC. 17610. LIMITATION ON ANNUAL EXPENDITURES FOR CONTINUED FUNCTIONS.

    (a) In General.--The amount expended by the United States each 
fiscal year for an agency, or for performance of a transferred function 
which immediately before the effective date specified in section 
17109(a) was performed by an agency, officer, or employee of the 
Department of Commerce, may not exceed 75 percent of the total amount 
expended by the United States for that agency or for performance of 
that function during fiscal year 1994.
    (b) Exemptions.--Subsection (a) shall not apply to the performance 
of a function which immediately before the effective date specified in 
section 17109(a) was performed by the Bureau of the Census or the 
Patent and Trademark Office.

SEC. 17611. USER FEES.

    Within 6 months after the date of the enactment of this Act, the 
head of each agency that performs a function vested in the agency by 
this title shall report to Congress its recommendations for 
implementing user fees to offset operating costs for the provision of 
services in the performance of that function.

SEC. 17612. UNOBLIGATED BALANCES RETURNED TO TREASURY.

    Any unobligated balances appropriated to carry out any program 
referred to in this Act shall be transferred to the general fund of the 
Treasury.

SEC. 17613. ANNUAL GAO REPORT.

    (a) Report.--Not later than 1 year after the effective date 
specified in section 17109(a), and not later than the end of each 1-
year period thereafter, the Comptroller General of the United States 
shall submit to the Congress a report describing the costs, if any, 
during the 1-year period preceding the submission of the report, that 
were incurred by United States exporters as a result of the transfer of 
the functions of the Bureau of Export Administration of the Department 
of Commerce under this title, or as a result of the limitation on 
expenditures required by section 17493. Each such report shall cover, 
but not be limited to, costs incurred by exporters as a result of--
            (1) delays in the processing of export license 
        applications;
            (2) a reduction in outreach activities of the Government 
        that educate exporters on complying with exporting requirements 
        under United States law;
            (3) delays in the processing of commodity classification 
        requests by exporters regarding the applicability of export 
        controls to specific products and technical data; and
            (4) delays in the processing of requests by exporters for 
        advisory opinions by the Government regarding whether specific 
        transactions are likely to be approved or denied by the 
        Government.
    (b) Termination of Provisions.--If, in any report submitted under 
subsection (a), the Comptroller General determines that costs described 
in such subsection were incurred by United States exporters, then 
sections 17610(a) and 17493(a) shall cease to apply to the functions of 
the Bureau of Export Administration of the Department of Commerce 
transferred under this title.

                      TITLE XVIII--WELFARE REFORM

    [Text to be supplied.]

                   TITLE XIX--CONTRACT TAX PROVISIONS

    [Text to be supplied.]

                        TITLE XX--BUDGET PROCESS

    [Text to be supplied.]
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