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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1722 Introduced in Senate (IS)]

  2d Session
                                S. 1722

 To amend the Fair Labor Standards Act of 1938 and the National Labor 
 Relations Act to strengthen minimum wage and striker replacement, and 
  to ensure quality job training, education, health care, and pension 
             security for workers, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 2, 1996

 Mr. Wellstone introduced the following bill; which was read twice and 
         referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
 To amend the Fair Labor Standards Act of 1938 and the National Labor 
 Relations Act to strengthen minimum wage and striker replacement, and 
  to ensure quality job training, education, health care, and pension 
             security for workers, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Working Families Economic Security 
Act of 1996''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                    TITLE I--MINIMUM WAGE GUARANTEE

Sec. 101. Findings and policies.
Sec. 102. Minimum wage increase and indexation.
                        TITLE II--INCOME EQUITY

Sec. 201. Denial of deduction for payments of excessive compensation.
             TITLE III--WORKER PROTECTION IN LABOR DISPUTES

Sec. 301. Prevention of discrimination during and at the conclusion of 
                            labor disputes.
Sec. 302. Prevention of discrimination during and at the conclusion of 
                            railway labor disputes.
Sec. 303. Initial contract disputes.
                   TITLE IV--WORKFORCE OF THE FUTURE

                     Subtitle A--General Provisions

Sec. 401. Short title.
Sec. 402. Findings and purpose.
Sec. 403. Definitions.
Sec. 404. Authorization of appropriations.
               Subtitle B--Streamlining and Consolidation

Sec. 411. Purpose; findings; sense of the Congress.
Sec. 412. Elimination of certain programs.
Sec. 413. Streamlining and integration of adult training programs.
Sec. 414. Process for establishing 21st century workforce development 
                            system.
Sec. 415. Centralized waivers.
                 Subtitle C--Market Building Activities

                  Chapter 1--Federal Level Activities

Sec. 421. Purpose.
Sec. 422. National Workforce Development Board.
Sec. 423. Mechanisms for building high quality integrated workforce 
                            development systems.
Sec. 424. Quality assurance system.
                   Chapter 2--State Level Activities

Sec. 431. State Workforce Development Councils.
Sec. 432. Membership.
Sec. 433. Chairperson.
Sec. 434. Duties and responsibilities.
Sec. 435. Development of quality assurance systems and consumer 
                            reports.
Sec. 436. Administration.
Sec. 437. Establishment of unified service delivery areas.
Sec. 438. Financial and management information systems.
Sec. 439. Capacity building grants.
Sec. 440. Performance standards for unified service delivery areas.
                   Chapter 3--Local Level Activities

Sec. 441. Workforce development boards.
Sec. 442. Workforce development board policy blueprint.
Sec. 443. Report card.
Sec. 444. Capacity building.
                  Subtitle D--One-Stop Career Centers

Sec. 451. Career centers.
                   TITLE V--CORPORATE ACCOUNTABILITY

Sec. 501. Short title.
Sec. 502. Findings.
Sec. 503. Corporate code of conduct.
Sec. 504. Preference for entities adopting and enforcing corporate code 
                            of conduct.
Sec. 505. Certificate of compliance.
Sec. 506. Annual compliance review and petition process.
Sec. 507. Regulations.
Sec. 508. Definitions.
                   TITLE VI--HEALTH INSURANCE REFORM

Sec. 601. Short title.
Sec. 602. Definitions.
     Subtitle A--Health Care Access, Portability, and Renewability

                     Chapter 1--Group Market Rules

Sec. 611. Guaranteed availability of health coverage.
Sec. 612. Guaranteed renewability of health coverage.
Sec. 613. Portability of health coverage and limitation on preexisting 
                            condition exclusions.
Sec. 614. Special enrollment periods.
Sec. 615. Disclosure of information.
                   Chapter 2--Individual Market Rules

Sec. 620. Individual health plan portability.
Sec. 621. Guaranteed renewability of individual health coverage.
Sec. 622. State flexibility in individual market reforms.
Sec. 623. Definition.
                    Chapter 3--COBRA Clarifications

Sec. 631. COBRA clarifications.
         Chapter 4--Private Health Plan Purchasing Cooperatives

Sec. 641. Private health plan purchasing cooperatives.
          Subtitle B--Application and Enforcement of Standards

Sec. 651. Applicability.
Sec. 652. Enforcement of standards.
                  Subtitle C--Miscellaneous Provisions

Sec. 661. HMOs allowed to offer plans with deductibles to individuals 
                            with medical savings accounts.
Sec. 662. Rules governing litigation involving retiree health benefits.
Sec. 663. Health coverage availability study.
Sec. 664. Sense of the Committee concerning medicare.
Sec. 665. Parity for mental health services.
Sec. 666. Effective date.
Sec. 667. Severability.
                          TITLE VII--PENSIONS

Sec. 701. Sense of the Senate.
             TITLE VIII--NORTH AMERICAN TRADE FAIRNESS ACT

Sec. 801. Short title.
Sec. 802. Conditions for continued participation in the NAFTA.
Sec. 803. Consultation with Congress.
Sec. 804. No expansion of NAFTA.
Sec. 805. Definitions.
            TITLE IX--COMMISSION ON RETIREMENT INCOME POLICY

Sec. 901. Establishment.
Sec. 902. Duties.
Sec. 903. Membership.
Sec. 904. Staff and support services.
Sec. 905. Powers.
Sec. 906. Report.
Sec. 907. Termination.

                    TITLE I--MINIMUM WAGE GUARANTEE

SEC. 101. FINDINGS AND POLICIES.

    Congress finds that--
            (1) the real value and purchasing power of the minimum wage 
        are at their lowest point in 40 years;
            (2) it remains in the interest of the American people to 
        ensure that our lowest-paid workers are paid a living wage the 
        value of which does not continually erode;
            (3) a phased increase in the minimum wage will--
                    (A) help restore the value and purchasing power of 
                the minimum wage to prior levels;
                    (B) increase incentives for the poor to seek and 
                retain jobs; and
                    (C) help to mitigate poverty in inner city 
                communities that have a disproportionate share of low-
                wage and unskilled workers; and
            (4) indexing is needed to prevent continual erosion in the 
        value of the minimum wage and to substitute modest annual 
        increases in the minimum wage consistent with general wage 
        trends for large, belated, and sometimes inadequate adjustments 
        by Congress.

SEC. 102. MINIMUM WAGE INCREASE AND INDEXATION.

    Paragraph (1) of section 6(a) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
            ``(1) except as otherwise provided in this section--
                    ``(A) not less than--
                            ``(i) $4.70 an hour during the year 
                        beginning on September 1, 1996; and
                            ``(ii) $5.15 an hour during the year 
                        beginning September 1, 1997; and
                    ``(B) with respect to the year beginning on 
                September 1, 1999, and biennially thereafter, not less 
                than the amount applicable under this paragraph 
                adjusted on June 1 of such year to equal 45 percent of 
                the monthly average hourly earnings for nonfarm, 
                nonsupervisory private workers for the preceding 12 
                months, as determined by the Bureau of Labor 
                Statistics, rounded to the nearest multiple of $0.05, 
                except that any amount determined under this 
                subparagraph shall not be less than the amount 
                applicable under this paragraph for the preceding 
                year;''.

                        TITLE II--INCOME EQUITY

SEC. 201. DENIAL OF DEDUCTION FOR PAYMENTS OF EXCESSIVE COMPENSATION.

    (a) In General.--Section 162 of the Internal Revenue Code of 1986 
(relating to deduction for trade or business expenses) is amended by 
inserting after subsection (h) the following new subsection:
    ``(i) Excessive Compensation.--
            ``(1) In general.--No deduction shall be allowed under this 
        chapter for any excessive compensation with respect to any 
        full-time employee.
            ``(2) Excessive compensation.--For purposes of this 
        subsection, the term `excessive compensation' means, with 
        respect to any employee, the amount by which--
                    ``(A) the compensation for services performed by 
                such employee during the taxable year, exceeds
                    ``(B) an amount equal to 25 times the lowest 
                compensation for services performed by any other 
                employee during such taxable year.
            ``(3) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Compensation.--
                            ``(i) In general.--The term `compensation' 
                        means salary, wages, and bonuses.
                            ``(ii) Part-year employees.--In the case of 
                        any part-year employee, the compensation of the 
                        employee shall be computed on an annualized 
                        basis.
                    ``(B) Employer.--All persons treated as a single 
                employer under subsection (a) or (b) of section 52 or 
                subsection (m) or (o) of section 414 shall be treated 
                as 1 employer.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

             TITLE III--WORKER PROTECTION IN LABOR DISPUTES

SEC. 301. PREVENTION OF DISCRIMINATION DURING AND AT THE CONCLUSION OF 
              LABOR DISPUTES.

    Section 8(a) of the National Labor Relations Act (29 U.S.C. 158(a)) 
is amended--
            (1) by striking the period at the end of paragraph (5) and 
        inserting ``; or''; and
            (2) by adding at the end thereof the following new 
        paragraph:
            ``(6) to promise, to threaten, or take other action--
                    ``(A) to hire a permanent replacement for an 
                employee who--
                            ``(i) at the commencement of a labor 
                        dispute, was an employee of the employer in a 
                        bargaining unit in which a labor organization--
                                    ``(I) was the certified or 
                                recognized exclusive representative; or
                                    ``(II) on the basis of written 
                                authorizations by a majority of the 
                                unit employees, was seeking to be so 
                                certified or recognized; and
                            ``(ii) in connection with that dispute, has 
                        engaged in concerted activities for the purpose 
                        of collective bargaining or other mutual aid or 
                        protection through that labor organization; or
                    ``(B) to withhold or deny any other employment 
                right or privilege to an employee, who meets the 
                criteria described in clauses (i) and (ii) of paragraph 
                (A) and who is working for or has unconditionally 
                offered to return to work for the employer, out of a 
                preference for any other individual that is based on 
                the fact that the individual is performing, has 
                performed or has indicated a willingness to perform 
                bargaining unit work for the employer during the labor 
                dispute.''.

SEC. 302. PREVENTION OF DISCRIMINATION DURING AND AT THE CONCLUSION OF 
              RAILWAY LABOR DISPUTES.

    Paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C. 
152) is amended--
            (1) by inserting ``(a)'' after ``Fourth.''; and
            (2) by adding at the end thereof the following:
    ``(b) No carrier, or officer or agent of the carrier, shall 
promise, threaten or take other action--
            ``(1) to hire a permanent replacement for an employee who--
                    ``(A) at the commencement of a dispute, was an 
                employee of the carrier in a craft or class in which a 
                labor organization--
                            ``(i) was the designated or authorized 
                        representative; or
                            ``(ii) on the basis of written 
                        authorizations by a majority of the craft or 
                        class, was seeking to be so designated or 
                        authorized; and
                    ``(B) in connection with that dispute, has 
                exercised the right to join, to organize, to assist in 
                organizing, or to bargain collectively through that 
                labor organization; or
            ``(2) to withhold or deny any other employment right or 
        privilege to an employee, who meets the criteria described in 
        subparagraphs (A) and (B) of paragraph (1) and who is working 
        for or has unconditionally offered to return to work for the 
        carrier, out of a preference for any other individual that is 
        based on the fact that the individual is employed, was 
        employed, or indicated a willingness to be employed during the 
        dispute.''.

SEC. 303. INITIAL CONTRACT DISPUTES.

    Section 8 of the National Labor Relations Act (29 U.S.C. 158) is 
amended by adding at the end thereof the following new subsection:
    ``(h)(1) If, not later than 60 days after the certification of a 
new representative of employees for the purpose of collective 
bargaining, the employer of the employees and the representative have 
not reached a collective bargaining agreement with respect to the terms 
and conditions of employment, the employer and representative shall 
jointly select a mediator to mediate the issues on which the employer 
and representative cannot agree.
    ``(2) If the employer and representative are unable to agree upon a 
mediator, the employer or the representative may request the Federal 
Mediation and Conciliation Service to select a mediator and the Federal 
Mediation and Conciliation Service shall upon the request select a 
person to serve as mediator.
    ``(3) If, not later than 30 days after the date of the selection of 
a mediator under paragraph (1) or (2), the employer and the 
representative have not reached agreement on the issues described in 
paragraph 1, the employer or the representative may transfer the 
matters remaining in controversy to the Federal Mediation and 
Conciliation Service for binding arbitration.''.

                   TITLE IV--WORKFORCE OF THE FUTURE

                     Subtitle A--General Provisions

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Workforce of the Future 
Development Act''.

SEC. 402. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) increasing international competition, technological 
        advances, and structural changes in the United States economy 
        present new challenges to private firms and public policymakers 
        in creating a skilled workforce with the ability to adapt to 
        change and technological progress;
            (2) the Federal Government should work with the private 
        sector to create a streamlined, high-performance workforce 
        development system that is driven by the needs of its customers 
        rather than bureaucratic requirements;
            (3) such a system should actively encourage collaboration 
        among private sector firms and publicly funded education and 
        training efforts in order to assist jobseekers and workers to 
        adjust to structural economic changes;
            (4) although it is necessary for the Federal Government to 
        consolidate or eliminate unnecessary programs, the primary goal 
        of Federal workforce development policy should be to help 
        facilitate transactions taking place between jobseekers, 
        workers, and business in local labor markets;
            (5) while the Federal Government must maintain its 
        commitment to provide economically and educationally 
        disadvantaged individuals with skills and support services 
        necessary to succeed in the labor market, Federal workforce 
        development policy must also begin to provide incentives to 
        assist firms to help upgrade the skills of their frontline 
        workers;
            (6) in order for labor markets to function more 
        effectively, there must be--
                    (A) timely, accurate information about the supply, 
                demand, price, and quality of services available in the 
                job training marketplace; and
                    (B) trained brokers available to assist customers 
                to choose the most suitable service;
            (7) accordingly, the United States needs a comprehensive 
        integrated labor market information system to ensure that 
        workforce development programs are related to the demand for 
        particular skills in local labor markets, and a mechanism for 
        providing brokerage services to ensure that information about 
        the employment and earnings of the local workforce, and the 
        performance of education and training institutions, will be 
        available to jobseekers, workers, and firms;
            (8) in order to bring more coherence to Federal workforce 
        development policy, there should be a single entity at the 
        Federal, State, and local level vested with the necessary 
        authority to strategically plan ways to transform the separate 
        training and employment programs into an integrated and 
        accountable workforce development system;
            (9) these Federal, State, and local strategic planning 
        bodies should be structured in such a way to give businesses 
        and workers a meaningful role in shaping policy and overseeing 
        the quality of workforce development programs;
            (10) in recent years, many States and communities have made 
        progress in developing new approaches to better integrate 
        Federal employment and training programs;
            (11) the Federal Government should take more systematic 
        measures to encourage experimentation and flexibility, and to 
        disseminate best practices in the design and implementation of 
        a comprehensive workforce development system throughout the 
        country; and
            (12) the Federal Government should address the findings of 
        this subsection through the implementation of immediate and 
        long-term improvements that result in the establishment of a 
        high-quality workforce development system needed for the 
        economy of the 21st century.
    (b) Purpose.--It is the purpose of this title to take certain 
immediate actions, and to establish a process for bringing about longer 
term improvements, that are needed to begin the transformation of 
federally funded education and job training efforts from a collection 
of fragmented programs into a coherent, integrated, accountable 
workforce development system that--
            (1) is based on the needs of jobseekers, workers, and 
        employers, rather than bureaucratic requirements;
            (2) is accessible to any jobseeker, worker, or employer;
            (3) focuses on accountability, performance, and accurate 
        information;
            (4) provides flexibility and responsibility to the States, 
        and in turn to local communities, for design and implementation 
of workforce development systems;
            (5) requires the active involvement of firms and workers in 
        the governance, design, and implementation of such system;
            (6) is linked directly to employment and training 
        opportunities in the private sector; and
            (7) adopts best practices of quality administration and 
        management that have been successful in the private sector.

SEC. 403. DEFINITIONS.

    As used in this title:
            (1) Development grant.--The term ``development grant'' 
        means a grant provided to each State under section 423(a).
            (2) Hard-to-serve.--The term ``hard-to-serve'' means an 
        individual meeting the requirements of section 203(b) of the 
        Job Training Partnership Act (29 U.S.C. 1603(b)).
            (3) Implementation grant.--The term ``implementation 
        grant'' means a grant provided under section 423(b).
            (4) Integrated workforce development system; integrated 
        system.--The terms ``integrated workforce development system'' 
        and ``integrated system'' mean the system of employment, 
        training, and employment-related education programs, including 
        the programs described in section 413(a) and any additional 
        Federal or State programs designated by the Governor of a 
        State, comprising the system described in section 423(b).
            (5) Leading edge state.--The term ``leading edge State'' 
        means a State that has been awarded an implementation grant 
        under section 423(b).
            (6) National board.--The term ``National Board'' means the 
        National Workforce Development Board established under section 
        422(b).
            (7) National report card.--The term ``National Report 
        Card'' means the Nation's Workforce Development Report Card 
        prepared pursuant to section 422(c)(1).
            (8) One-stop career center.--The term ``one-stop career 
        center'' means an access point for intake, assessment, 
        referral, and placement services, including services provided 
        electronically, that is part of the network established 
        pursuant to section 451.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor, unless otherwise specified.
            (10) State blueprint.--The term ``State Blueprint'' means 
        the State Workforce Development Policy Blueprint prepared 
        pursuant to section 434(a);
            (11) State council.--The term ``State Council'' means a 
        State Workforce Development Council established pursuant to 
        section 431.
            (12) State report card.--The term ``State Report Card'' 
        means the State Workforce Development Report Card issued 
        pursuant to section 434(b).
            (13) Unified service delivery area.--The term ``unified 
        service delivery area'' means the common geographic service 
        area boundaries established pursuant to section 437 and 
        overseen by a workforce development board.
            (14) Workforce development board.--The term ``workforce 
        development board'' means a local board established pursuant to 
        section 441.
            (15) Workforce development program.--The term ``workforce 
        development program'' means any federally funded or State-
        funded program that provides job training assistance to 
        individuals or assists employers to identify or train workers.

SEC. 404. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Subject to subsection (b), there are authorized to 
be appropriated to carry out subtitles C and D such sums as may be 
necessary for each of fiscal years 1996 through 2000.
    (b) Limitations.--
            (1) Fiscal year 1996.--Of the funds made available pursuant 
        to subsection (a) for fiscal year 1996--
                    (A) not more than 5 percent shall be used for the 
                activities of the National Board;
                    (B) not more than 15 percent shall be used for 
                development grants pursuant to section 423(a); and
                    (C) not less than 70 percent shall be used for 
                implementation grants pursuant to section 423(b).
            (2) Fiscal years 1997 through 2000.--Of the funds made 
        available pursuant to subsection (a) for each of fiscal years 
        1997 through 2000--
                    (A) not more than 5 percent shall be used for the 
                activities of the National Board; and
                    (B) not less than 85 percent shall be used for 
                implementation grants pursuant to section 423(b).

               Subtitle B--Streamlining and Consolidation

SEC. 411. PURPOSE; FINDINGS; SENSE OF THE CONGRESS.

    (a) Purpose.--The purpose of this subtitle is to streamline the 
system of federally funded employment training services available to 
jobseekers, workers, and businesses.
    (b) Findings.--The Congress finds that--
            (1) the process of streamlining the current collection of 
        federally funded employment training programs begins with 
        eliminating and consolidating separate employment training 
        programs; and
            (2) as such programs are eliminated, the funding for such 
        programs should be utilized to support the creation of a 
        market-driven workforce development system, as described in 
        section 402(b).
    (c) Sense of the Congress.--It is the sense of the Congress that--
            (1) any budget savings realized as a result of the repeal 
        of programs pursuant to section 412 or through the 
        consolidation of programs pursuant to sections 413 and 414 
        should be reinvested in the Nation's job training system; and
            (2) as programs are eliminated and merged, it is imperative 
        that such elimination and merging be done without in any way 
        reducing the commitment or level of effort of the Federal 
        Government to improving the education, employment, and earnings 
        of all workers and jobseekers, particularly hard-to-serve 
        individuals.

SEC. 412. ELIMINATION OF CERTAIN PROGRAMS.

    (a) In General.--The following provisions are repealed:
            (1) Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
        2015(d)(4)).
            (2) Section 211 of the Appalachian Regional Development Act 
        of 1965 (40 U.S.C. App. 211).
            (3) Section 204 of the Immigration Reform and Control Act 
        of 1986 (8 U.S.C. 1255a note).
            (4) Section 20 of the Federal Transit Act (49 U.S.C. App. 
        1616).
            (5) Section 43 of the Airline Deregulation Act of 1978 (49 
        U.S.C. App. 1552).
            (6) Title II of Public Law 95-250 (92 Stat. 172).
            (7) Section 413 of the Carl D. Perkins Vocational and 
        Applied Technology Education Act (21 U.S.C. 2413).
            (8) Title V of the Job Training Partnership Act (29 U.S.C. 
        1791 et seq.).
            (9) Part J of title IV such Act (29 U.S.C. 1784 et seq.).
            (10) Section 325 of such Act (29 U.S.C. 1662d).
            (11) Section 325A of such Act (29 U.S.C. 1662d-1).
            (12) Section 326 of such Act (29 U.S.C. 1662e).
            (13) Sections 1141 through 1144 of title 10, United States 
        Code.
    (b) Repeals of Employment Training Programs.--The repeals made by 
subsection (a) shall take effect on the date of enactment of this Act.
    (c) Technical and Conforming Amendments.--The National Board shall 
include in the draft joint resolution submitted under section 414(b), 
technical and conforming amendments regarding the provisions repealed 
under subsection (a). Such proposed amendments should be consistent 
with the purposes of this title.

SEC. 413. STREAMLINING AND INTEGRATION OF ADULT TRAINING PROGRAMS.

    (a) Requirements.--
            (1) In general.--A State that receives an implementation 
        grant to develop an integrated workforce development system--
                    (A) shall include in such system the components of 
                the program and activities carried out on the date of 
                enactment of this Act under the provisions described in 
                subsection (b)(1); and
                    (B) may include any other Federal or State 
                workforce development program identified by the 
                Governor under paragraph (2).
            (2) Additional programs.--Any other Federal or State 
        workforce development program identified by the Governor 
        pursuant to section 423(b), subject to a two-thirds vote of the 
        National Board, may be included in the integrated system of a 
        State described in paragraph (1).
    (b) Repeals of Job Training Programs.--
            (1) In general.--The following provisions are repealed:
                    (A) Part A of title II of the Job Training 
                Partnership Act (29 U.S.C. 1601 et seq.).
                    (B) Title III of such Act (29 U.S.C. 1651 et seq.).
                    (C) Part C of title IV of such Act (29 U.S.C. 
                1721).
                    (D) Sections 235 and 236 of the Trade Act of 1974 
                (19 U.S.C. 2295 and 2296), and paragraphs (1) and (2) 
                of section 250(d) of such Act (19 U.S.C. 2331(d) (1) 
                and (2)).
            (2) Effective date.--The repeals made by paragraph (1) 
        shall take effect on September 30, 1999.
            (3) Technical and conforming amendments.--The National 
        Board shall include in the draft joint resolution submitted 
        under section 414(b), technical and conforming amendments 
        regarding the provisions repealed under paragraph (1). Such 
        proposed amendments should be consistent with the purposes of 
        this title.

SEC. 414. PROCESS FOR ESTABLISHING 21ST CENTURY WORKFORCE DEVELOPMENT 
              SYSTEM.

    (a) Annual Recommendations.--Not later than 180 days after the date 
of enactment of this Act, and each June 1 thereafter, the National 
Board shall make recommendations to the President and Congress for the 
elimination of Federal workforce development programs, or programs 
whose functions should be subsumed under other Federal programs.
    (b) Report and Joint Resolution.--
            (1) Report.--Not later than June 1, 1999, the National 
        Board, based on such board's analysis of the experience of 
        leading edge States and the progress made toward establishing 
        an integrated, market-driven workforce development system, 
        shall prepare and submit to the Committee on Economic and 
        Educational Opportunities of the House of Representatives and 
        the Committee on Labor and Human Resources of the Senate a 
        report containing the findings of such board, and 
        recommendations for proposed reforms.
            (2) Joint resolution.--Not later than June 1, 1999, the 
        National Board shall submit to the Congress a draft of a joint 
        resolution containing provisions to develop a streamlined, 
        integrated, market-driven workforce development system, from 
        the programs described in section 413(b) and any other Federal 
        workforce development program determined by the National Board 
        as appropriate to be included that is consistent with this 
        title, pursuant to section 402(b). The joint resolution shall 
        include recommendations for standard outcome measures as 
        described in section 424(a)(2) and shall describe how the new 
        system will maintain services to hard-to-serve populations.

SEC. 415. CENTRALIZED WAIVERS.

    (a) Expedited Process.--Not later than 180 days after the date of 
enactment of this Act, the President shall establish an expedited 
process to consider and act on waiver requests submitted by the States 
under this section.
    (b) States Not Receiving Implementation Grants.--
            (1) In general.--Any State may apply, in accordance with 
        this section, for a waiver of statutory or regulatory 
        requirements under 1 or more of the programs described in 
        section 413(b)(1), for a period of 2 years to facilitate the 
        provision of assistance for workforce development.
            (2) Waiver authority.--A waiver may be granted under this 
        subsection only if--
                    (A) the requirement sought to be waived impedes the 
                ability of the State, or a local entity in the States, 
                to carry out the State or local workforce development 
                plan;
                    (B) the State has waived, or agrees to waive, 
                similar requirements of State law; and
                    (C) in the case of a statewide waiver, the State--
                            (i) provides all State and local agencies 
                        and appropriate organizations in the State, 
                        including labor organizations, with notice and 
                        an opportunity to comment on the State's 
                        proposal to seek a waiver; and
                            (ii) submits the affected agency's comments 
                        with the waiver application.
            (3) Application.--Each application submitted under this 
        subsection shall--
                    (A) identify the statutory or regulatory 
                requirements that are requested to be waived and the 
                goals that the State or local agency intends to 
                achieve;
                    (B) describe the action that the State has 
                undertaken to remove State statutory or regulatory 
                barriers identified in the application;
                    (C) describe the purpose of the waiver and the 
                expected programmatic outcomes if the request is 
                granted;
                    (D) describe the numbers and types of people to be 
                affected by such waiver;
                    (E) describe a timetable for implementing the 
                waiver;
                    (F) describe the process the State will use to 
                monitor, on a biannual basis, the progress in 
                implementing the waiver; and
                    (G) describe how the goals of the program or 
                programs for which a waiver is granted will continue to 
                be met.
    (c) States Receiving Implementation Grants.--Subject to subsection 
(d), each State receiving an implementation grant under section 423(b) 
shall have the statutory or regulatory requirement, described in its 
grant application or State Blueprint of such State waived for the 
duration of the implementation grant.
    (d) Limitations.--
            (1) In general.--A waiver shall not be granted under a 
        workforce development program if such waiver would alter--
                    (A) the purposes or goals of such program;
                    (B) the allocation of funds under such program;
                    (C) any statutory or regulatory requirement under 
                such program relating to public health or safety, civil 
                rights, protections granted under title I and sections 
                503 and 504 of the Rehabilitation Act of 1973 (29 
                U.S.C. 701 et seq.), occupational safety and health, 
                environmental protection, displacement of current 
                employees, or fraud and abuse; or
                    (D) eligibility requirements under such program, 
                except that a waiver may be granted with respect to an 
                eligibility requirement if such waiver would provide 
                for increased flexibility in developing common 
                definitions for individuals eligible for such program.
            (2) Circulars and related regulations.--The following 
        circulars promulgated by the Office of Management and Budget 
        shall be subject to the waiver authority of this subsection:
                    (A) A-87, relating to cost principles for State and 
                local governments.
                    (B) A-102, relating to grants and cooperative 
                agreements with State and local governments.
                    (C) A-122, relating to nonprofit organizations.
                    (D) A-110, relating to administrative requirements 
                for grants and cooperative agreements with nonprofit 
                organizations and institutions of higher education.
                    (E) A-21, relating to cost principles for 
                institutions of higher education.
            (3) Effective date.--A waiver granted under this section 
        shall take effect on the date such waiver is granted.
            (4) Review of application.--Each application submitted by a 
        State pursuant to subsection (b)(3) shall be reviewed by the 
        Secretary or agency head who has jurisdiction over the 
        workforce development program or programs to which such waiver 
        request relates.
            (5) Approval or disapproval of application.--
                    (A) Timing.--Each application submitted by a State 
                in accordance with subsection (b)(3) shall be reviewed 
                promptly upon receipt, and shall be approved or 
                disapproved not later than the end of the 60-day period 
                beginning on the date such application is received.
                    (B) Approval.--A waiver or waivers proposed in an 
                application may be approved for the 2-year period 
                beginning on the date such application is approved, if 
                the State demonstrates in the application that such 
                waiver or waivers will achieve coordination, expansion, 
                and improvement in the quality of services under its 
                workforce development system.
                    (C) Disapproval and resubmission.--If an 
                application is incomplete or unsatisfactory, the 
                appropriate Federal official shall, before the end of 
                the period referred to in subparagraph (A)--
                            (i) notify the State of the reasons for the 
                        failure to approve the application;
                            (ii) notify the State that the application 
                        may be resubmitted during the period referred 
                        to in clause (iii); and
                            (iii) permit the State to resubmit a 
                        corrected or amended application during the 60-
                        day period beginning on the date of 
                        notification under this subparagraph.
                    (D) Review of resubmitted application.--Any 
                application resubmitted under subparagraph (C) shall be 
                approved or disapproved before the expiration of the 
                60-day period beginning on the date of the 
                resubmission.
            (6) Revocation of waiver.--If, after the approval of an 
        application under this subsection, the Secretary determines 
        that the waiver or waivers do not achieve coordination, 
        expansion, and improvement in the quality of services under the 
        workforce development programs to which such waiver or waivers 
        relate, the waiver or waivers may be revoked in whole or in 
        part.

                 Subtitle C--Market Building Activities

                  CHAPTER 1--FEDERAL LEVEL ACTIVITIES

SEC. 421. PURPOSE.

    The purpose of this subtitle and subtitle D is to establish a 
framework at the Federal, State, and local levels for key stakeholders 
to work cooperatively to build the infrastructure, brokerage, and 
accountability systems needed to transform current Federally funded job 
training programs into a market-driven workforce development system.

SEC. 422. NATIONAL WORKFORCE DEVELOPMENT BOARD.

    (a) Findings.--The Congress finds that a national workforce 
development board is necessary to ensure--
            (1) the establishment and continuous improvement of the 
        national workforce development system;
            (2) that integrated strategic planning takes place among 
        the Federal agencies currently responsible for administering 
        job training programs;
            (3) incorporation of private sector expertise to the 
        governance of the national workforce development system; and
            (4) that unnecessary legislative and regulatory barriers to 
        service integration are removed as a market-driven workforce 
        development system is established.
    (b) Establishment.--
            (1) In general.--There is established the National 
        Workforce Development Board.
            (2) Composition.--The National Board shall be comprised of 
        16 members, of whom--
                    (A) 1 member shall be the Secretary of Labor;
                    (B) 1 member shall be the Secretary of Education;
                    (C) 1 member shall be the Secretary of Health and 
                Human Services;
                    (D) 1 member shall be the Secretary of Commerce;
                    (E) 3 members shall be representatives of business 
                (including representatives of small businesses and 
                large employers);
                    (F) 3 members shall be representatives of organized 
                labor;
                    (G) 3 members shall be State and local elected 
                officials of whom 2 shall be Governors of a State and 1 
                shall be a local elected official; and
                    (H)(i) 1 member shall be selected from 
                representatives of community-based organizations;
                    (ii) 1 member shall be selected from 
                representatives of secondary schools or postsecondary 
                educational institutions; and
                    (iii) 1 member shall be selected from 
                representatives of nongovernmental organizations that 
                have a history of successfully protecting the rights of 
                individuals with disabilities or older persons.
            (3) Additional requirements.--The members described in 
        subparagraphs (E) and (F) of paragraph (2) shall--
                    (A) in the aggregate, represent a broad cross 
                section of occupations and industries;
                    (B) to the extent feasible, be geographically 
                representative of the United States, and reflect the 
                racial, ethnic, and gender diversity of the United 
                States; and
                    (C) include at least 1 member of the National Skill 
                Standards Board established pursuant to section 503 of 
                the National Skill Standards Act of 1994 (20 U.S.C. 
                5933).
            (4) Expertise.--The National Board and the staff shall have 
        sufficient expertise to effectively carry out the duties and 
        functions of the National Board.
            (5) Appointment.--The members described in subparagraphs 
        (E), (F), (G), and (H) of paragraph (2) shall be appointed by 
        the President, by and with the advice and consent of the 
        Senate.
            (6) Ex officio nonvoting members.--The Director of the 
        Office of Management and Budget and the chairpersons and 
        ranking minority members of the Committee on Labor and Human 
        Resources of the Senate and the Committee on Economic and 
        Educational Opportunities of the House of Representatives shall 
        be ex officio, nonvoting members of the National Board.
            (7) Terms.--Each member of the National Board appointed 
        under subparagraph (E), (F), (G), and (H) of paragraph (2) 
        shall be appointed for a term of 4 years, except that of the 
        initial members of the National Board appointed under such 
        subparagraphs--
                    (A) 4 members shall be appointed for a term of 2 
                years;
                    (B) 4 members shall be appointed for a term of 3 
                years; and
                    (C) 4 members shall be appointed for a term of 4 
                years.
            (8) Vacancies.--Any vacancy on the National Board shall not 
        affect the powers of the National Board, but shall be filled in 
        the same manner as the original appointments.
            (9) Chairpersons.--The President, by and with the advice 
        and consent of the Senate, shall select 1 cochairperson of the 
        National Board from among the members of the National Board 
        appointed under paragraph (2)(E) and 1 cochairperson from among 
        the members appointed pursuant to paragraph (2)(F).
            (10) Compensation and expenses.--
                    (A) Compensation.--Each member of the National 
                Board who is not a full-time employee or officer of the 
                Federal Government shall serve without compensation. 
                Each member of the National Board who is an officer or 
                employee of the Federal Government shall serve without 
                compensation in addition to that received for the 
                services of such member as an officer or employee of 
                the Federal Government.
                    (B) Expenses.--The members of the National Board 
                shall be allowed travel expenses, including per diem in 
                lieu of subsistence, at rates authorized for employees 
                of agencies under subchapter I of chapter 57 of title 
                5, United States Code, while away from their homes or 
                regular places of business in the performance of 
                services for the National Board.
            (11) Executive director and staff.--
                    (A) Executive director.--The cochairpersons of the 
                National Board shall appoint an Executive Director who 
                shall be compensated at a rate determined by the 
                National Board, not to exceed the rate payable for 
                level V of the Executive Schedule under section 5316 of 
                title 5, United States Code.
                    (B) Staff.--The Executive Director may--
                            (i) appoint and compensate such additional 
                        staff as may be necessary to enable the 
                        National Board to perform its duties; and
                            (ii) fix the compensation of the staff 
                        without regard to the provisions of chapter 51 
                        and subchapter III of chapter 53 of title 5, 
                        United States Code, relating to classifications 
                        of positions and General Schedule pay rates, 
                        except that the rate of pay for the staff may 
                        not exceed the rate payable for level V of the 
                        Executive Schedule under section 5316 of such 
                        title.
            (12) Agency support.--
                    (A) Use of facilities.--The National Board may use 
                the research, equipment, services, and facilities of 
                any agency or instrumentality of the United States with 
                the consent of such agency or instrumentality.
                    (B) Staff of federal agencies.--Upon the request of 
                the National Board, the head of any Federal agency may 
                detail to the National Board, on a reimbursable basis, 
                any of the personnel of such Federal agency to assist 
                the National Board in carrying out this title. Such 
                detail shall be without interruption or loss of civil 
                service status or privilege.
            (13) Procurement of temporary and intermittent services.--
        The cochairpersons of the National Board may procure temporary 
        and intermittent services of experts and consultants under 
        section 3109(b) of title 5, United States Code.
    (c) Duties.--
            (1) National report card.--
                    (A) In general.--Not later than January 1, 1997, 
                and each January 1 thereafter, the National Board shall 
                prepare a report to be known as the Nation's Workforce 
                Development Report Card.
                    (B) Requirements.--The National Report Card shall 
                assess the performance of the workforce development 
                system of the United States, based on the earnings and 
                employment gains and other nonemployment-related 
                outcomes of individuals assisted by the programs 
                comprising such system. The National Report Card shall 
                evaluate all workforce development programs that 
                receive Federal funding, and shall--
                            (i) assess the performance of each program;
                            (ii) assess performance based on the type 
                        of assistance provided, including the 
                        categories of services identified in section 
                        424(b)(1)(C);
                            (iii) assess year-to-year changes in 
                        performance;
                            (iv) report on the extent to which hard-to-
                        serve populations are receiving services and 
                        the related outcomes in relation to services 
                        received in the preceding 3 years;
                            (v) determine the annual Federal investment 
                        in workforce development in each State;
                            (vi) assess the lessons learned from the 
                        experience of leading-edge States, and States 
                        that waive certain program requirements to 
                        experiment with alternative workforce 
                        development strategies; and
                            (vii) assess the performance of the 
                        workforce development system in each State.
            (2) Congressional testimony.--The cochairpersons of the 
        National Board shall, at least annually, provide testimony, 
        during a joint hearing before the Committee on Labor and Human 
        Resources of the Senate and the Committee on Economic and 
        Educational Opportunities of the House of Representatives on 
        the progress being made in--
                    (A) developing a more streamlined integrated and 
                accountable public and private workforce development 
                system in the United States; and
                    (B) carrying out the purposes described in section 
                402(b).
            (3) Review of grant proposals.--The National Board shall 
        review the development grant proposals pursuant section 423(a), 
        and the implementation grant proposals pursuant to section 
        423(b), and make recommendations to the Secretary regarding 
        such proposals.
            (4) Final recommendations.--Not later than January 1, 1999, 
        the National Board shall submit recommendations in the form of 
        a joint resolution to the President and Congress, pursuant to 
        section 414(b).
    (d) Termination.--The National Board shall terminate on the date on 
which the National Board submits the joint resolution to President and 
Congress under section 414(b).
    (e) National Commission for Employment Policy.--
            (1) In general.--Part F of title IV of the Job Training 
        Partnership Act (29 U.S.C. 1771 et seq.) is repealed.
            (2) Conforming amendment.--Subsection (i) of section 106 of 
        such Act (29 U.S.C. 1516(i)) is amended by striking ``(i) 
        Functions of NCEP.--The National Commission for Employment 
        Policy'' and inserting ``(i) Functions of National Workforce 
        Development Board.--The National Workforce Development Board 
        established under section 422 of the Workforce of the Future 
        Development Act''.

SEC. 423. MECHANISMS FOR BUILDING HIGH QUALITY INTEGRATED WORKFORCE 
              DEVELOPMENT SYSTEMS.

    (a) State Development Grants.--
            (1) Purpose.--The purpose of this subsection is to assist 
        States and communities in strategic planning for integrated 
        workforce development systems, including the development of a 
        financial and management information system, a quality 
        assurance system, and an integrated labor market information 
        system.
            (2) Grants to states.--The Secretary may provide a 
        development grant to a State in such amount as the Secretary, 
        in consultation with the National Board, determines to be 
        necessary to enable such State to develop a strategic plan, as 
        described in paragraph (1), for the development of a 
        comprehensive statewide integrated workforce development 
        system.
            (3) Application.--To be eligible to receive a development 
        grant under this subsection, the Governor of a State, on behalf 
        of the State, shall submit to the National Board and the 
        Secretary an application, at such time, in such form, and 
        containing such information as the Secretary may require.
    (b) Implementation Grants to Leading-Edge States.--
            (1) Purpose.--The purpose of this subsection is to assist 
        States in implementing statewide high-quality integrated 
        workforce development systems that are accountable for 
        achieving results.
            (2) Grants to states.--The Secretary, in consultation with 
        the National Board, may provide an implementation grant to the 
        State in such amount as the Secretary determines to be 
        necessary to enable such State to implement an integrated 
        workforce development system.
            (3) Period of grant.--The provision of payments under a 
        grant under this subsection shall not exceed 4 fiscal years, 
        and shall be subject to the annual approval of the Secretary, 
        in consultation with the National Board, and the availability 
        of appropriations for the fiscal year involved.
            (4) Allocation requirements.--
                    (A) First year.--For the first fiscal year for 
                which a State receives amounts from an implementation 
                grant under this subsection, the State shall use not 
                less than 75 percent of such amount to provide 
                subgrants to local workforce development boards.
                    (B) Second year.--For the second fiscal year for 
                which a State receives amounts from an implementation 
                grant under this subsection, the State shall use not 
                less than 80 percent of such amount to provide 
                subgrants to local workforce development boards.
                    (C) Third and succeeding years.--For the third, and 
                each succeeding, fiscal year for which a State receives 
                amounts from an implementation grant under this 
                subsection, the State shall use not less than 85 
                percent of such amount to provide subgrants to local 
                workforce development boards.
            (5) Limitation.--A State shall be eligible to receive not 
        more than 1 implementation grant under this subsection.
            (6) Application.--To be eligible to receive an 
        implementation grant under this subsection, the Governor of a 
        State, on behalf of the State, shall submit to the National 
        Board and the Secretary an application that shall include a 
        copy of the State Blueprint and such other information as the 
        Secretary, with the advice of the National Board, may require.
    (c) Dissemination of Information on Best Practices.--The Secretary, 
in consultation with the National Board, shall--
            (1) collect and disseminate information that will assist 
        State and local communities undertaking activities to 
        streamline and reform their job training systems, including 
        information on--
                    (A) the successful experiences of States and 
                localities that--
                            (i) have received development or 
                        implementation grants;
                            (ii) have been granted waivers; or
                            (iii) are experimenting with training 
                        account systems; and
                    (B) research concerning the restructuring of 
                workforce development systems; and
            (2) facilitate the exchange of information and ideas among 
        States and local entities that are building market-based 
        workforce development systems.
    (d) Workforce Development Impact Reports.--
            (1) Submission.--For each bill or resolution concerning 
        workforce development reported by any committee of the Senate 
        or the House of Representatives, the National Board shall 
        determine whether proposed Federal job training legislation 
        complies with the requirements relating to data reporting, 
        common definitions, and common funding cycles described in 
        subsections (b) and (e) of section 424. A determination of 
        compliance by the National Board under this subsection shall be 
        included in the committee report accompanying such legislation, 
        if timely submitted to such committee before such report is 
        filed.
            (2) Procedure.--It shall not be in order in the Senate or 
        the House of Representatives to consider any bill or resolution 
        concerning workforce development that would not comply with the 
        national workforce development system, as determined by the 
        National Board under paragraph (1).
            (3) Waiver.--Paragraph (2) may be waived or suspended in 
        the Senate or the House of Representatives only by the 
        affirmative vote of three-fifths of the members of such House.

SEC. 424. QUALITY ASSURANCE SYSTEM.

    (a) Purpose.--The purpose of this section is to improve the quality 
of all Federal programs directed at improving the knowledge, skills, 
and abilities of members of the workforce by strengthening 
accountability and encouraging the adoption of quality improvement 
processes at all levels of the workforce development system. In order 
to accomplish this purpose, this title--
            (1) directs the Secretaries of Labor, Education, and Health 
        and Human Services to jointly, in consultation with the 
        National Board--
                    (A) develop common terms and definitions as 
                described in subsection (b);
                    (B) develop a placement accountability system as 
                described in subsection (c); and
                    (C) adjust existing program performance standards 
                as described in section 440(c); and
            (2) directs the National Board to recommend a system of 
        performance standards in its joint resolution submitted to 
        Congress pursuant to section 414(b) that includes standard 
        outcome measures relating to--
                    (A) employment;
                    (B) job retention;
                    (C) earnings; and
                    (D) nonemployment outcome measures, such as 
                learning and competency gains.
    (b) Common Terms and Definitions.--
            (1) In general.--Each workforce development program that 
        receives Federal funds shall collect and report to the Governor 
        and the State Council, if applicable, for each participant to 
        whom assistance is provided, the following information:
                    (A) The quarterly employment status and earnings 
                for 1 year after the participant no longer receives 
                assistance under such program.
                    (B) Economic and demographic characteristics, 
                including the participant's--
                            (i) social security number;
                            (ii) date of birth;
                            (iii) gender;
                            (iv) race or ethnicity;
                            (v) disability status;
                            (vi) education (highest formal grade level 
                        achieved at commencement of participation in 
                        program);
                            (vii) academic degrees and credentials at 
                        time of entry into the program; and
                            (viii) employment status at the time of 
                        entry into the program.
                    (C) Services received, the extent, when 
                appropriate, and spending for such services, 
                including--
                            (i) assessments;
                            (ii) testing;
                            (iii) counseling;
                            (iv) job development or job search 
                        assistance;
                            (v) occupational skills training;
                            (vi) work experience;
                            (vii) job readiness training;
                            (viii) basic skills education;
                            (ix) postsecondary academic education 
                        (nonoccupational);
                            (x) supportive and supplementary services; 
                        and
                            (xi) on-the-job training.
                    (D) Program outcomes, as specified by the State, 
                such as--
                            (i) advancement to higher level education 
                        or training;
                            (ii) attainment of additional degrees or 
                        credentials (including skill standards as such 
                        standards become available);
                            (iii) assessment of learning gain in basic 
                        skills programs;
                            (iv) attainment and retention of subsidized 
                        or unsubsidized employment;
                            (v) quarterly earnings; and
                            (vi) reduction in welfare dependency.
            (2) Replacement of existing requirements.--Program 
        monitoring under this section shall supplant existing 
        monitoring and reporting requirements for program participants.
            (3) Adoption of common terms and definitions.--
                    (A) Report.--Not later than 180 days after the date 
                of enactment of this Act, each Federal department and 
                agency with responsibility for a workforce development 
                program shall report to the National Board on its 
                progress in adopting the common terms and definitions 
                for program participants, service activities, and 
                outcomes by program operators and grant recipients.
                    (B) Implementation.--Not later than 1 year after 
                the date of enactment of this Act, each workforce 
                development program receiving Federal funds shall use 
                the common terms and definitions.
                    (C) Use.--Upon adoption by the appropriate Federal 
                agencies, the common definitions for terminology 
                developed and reported pursuant to section 455 of the 
                Job Training Partnership Act (29 U.S.C. 1735(b)) shall 
                be utilized in interpreting and compiling the core data 
                elements. Notwithstanding any other provision of 
                Federal law, such common definitions shall be utilized 
                in lieu of existing program definitions for similar 
                data elements.
            (4) Recommendations.--Not later than 180 days after the 
        date all of the Members of the National Board are appointed, 
        the National Board shall make recommendations to the 
        Secretaries of Labor, Education, and Health and Human Services, 
        and the heads of other agencies operating workforce development 
        programs, on common definitions for other terms, including 
        terms relating to--
                    (A) program status, including--
                            (i) applicant;
                            (ii) participant;
                            (iii) terminee; and
                            (iv) training-related placement;
                    (B) program eligibility, including--
                            (i) family income; and
                            (ii) economically disadvantaged 
                        individuals; and
                    (C) other terms considered appropriate by the 
                National Board, such as common cost categories.
            (5) Amendments.--If any of the proposed common definitions 
        require amendment to existing laws, the National Board shall 
        submit to Congress recommendations for legislative action not 
        later than 9 months after the date all of the members of the 
        National Board are appointed.
    (c) Placement Accountability.--
            (1) In general.--The purpose of this subsection is to 
        establish a placement accountability system using a cost-
        effective data source with information on job placement, 
        earnings, and job retention, to foster accountability by all 
        federally funded workforce development programs.
            (2) Performance monitoring.--Each workforce development 
        program that receives Federal funds shall--
                    (A) engage in continuous performance self-
                monitoring by measuring, at a minimum, the quarterly 
                employment status and earnings of each recipient of 
                assistance under such program; and
                    (B) monitor each recipient of assistance for a 
                period of not less than 1 year, beginning on the date 
                on which the recipient no longer receives assistance 
                under such program.
            (3) Reimbursement.--Requesting programs shall reimburse the 
        State agency responsible for wage record data for the cost of 
        matching such information. Notwithstanding any other provision 
        of Federal law, requesting programs may use Federal funds for 
        such reimbursement.
            (4) Confidentiality.--Requesting pro- grams--
                    (A) shall protect the confidentiality of wage 
                record data through the use of recognized security 
                procedures; and
                    (B) may not retain such data for more than 10 
                years.
            (5) Submission to state council.--The State agency 
        responsible for labor market information shall submit the 
        results of the matching to the State Council, in accordance 
        with procedures and schedules specified by the National Board 
        and the Secretary.
            (6) Responsibility of governors.--The Governor of each 
        State shall ensure the submission of the matched data to the 
        State Council, the National Board, the Secretary, and other 
        Federal entities, as required by the National Board.
    (d) Dissemination of Quality Assurance.--The information obtained 
under subsection (c) shall be made available to--
            (1) the State Council of the State in which the program is 
        located;
            (2) the local workforce development boards in the State in 
        which the program is located; and
            (3) consumers of labor market information to judge 
        individual program performance in an easily accessible format.
    (e) Consistent Funding Cycles.--
            (1) In general.--All federally funded workforce development 
        training activities shall, to the extent practicable, be funded 
        on a consistent funding cycle basis.
            (2) Recommendations for funding cycle.--Not later than 180 
        days after the date on which all of the members of the National 
        Board are appointed, the National Board shall make 
        recommendations to Congress on the appropriate funding cycle to 
        be used for all workforce development programs and activities.

                   CHAPTER 2--STATE LEVEL ACTIVITIES

SEC. 431. STATE WORKFORCE DEVELOPMENT COUNCILS.

    (a) Establishment.--Each State desiring to participate in the 
development or implementation of an integrated and accountable 
workforce development system under section 423 shall establish a State 
Workforce Development Council or have located within such State an 
existing entity that is similar to a State Council and that includes 
members who are representatives of employers and workers.
    (b) Purpose.--Each State Council shall serve as the principal 
advisory board for the Governor of such State for all programs included 
in the integrated workforce development system of such State.
    (c) Functions.--Each State Council shall assume the functions and 
responsibilities of councils and commissions required under Federal law 
that are part of the integrated workforce development system of such 
State.

SEC. 432. MEMBERSHIP.

    (a) In General.--
            (1) Representatives of business and industry and organized 
        labor.--Each State Council shall be comprised of individuals 
        who are appointed by the Governor for a term of not less than 2 
        years from among--
                    (A) representatives of business and industry, who 
                shall constitute not less than 33 percent of the 
                membership of the State Council, including individuals 
                who are members of local workforce development boards;
                    (B) representatives of organized labor who shall 
                constitute not less than 25 percent of the membership 
                of the State Council and shall be selected from among 
                individuals nominated by recognized State labor 
                federations;
                    (C) representatives of secondary and postsecondary 
                academic or vocational education institutions;
                    (D) representatives of community-based 
                organizations; and
                    (E) representatives of community colleges.
            (2) Additional members.--Each State Council may include 1 
        or more qualified members who are appointed by the Governor 
        from among representatives of the following:
                    (A) Nongovernmental organizations that have a 
                history of successfully protecting the rights of 
                individuals with disabilities or older persons.
                    (B) Units of general local government or consortia 
                of such units.
                    (C) State officials responsible for administering 
                programs described in sections 413 and 414 and included 
                in the integrated system.
                    (D) The State legislature.
                    (E) Any local program that receives Federal funding 
                from any program included in the integrated workforce 
                development system of the State.
    (b) Ex Officio.--
            (1) Nonvoting members.--The Governor may appoint ex officio 
        additional nonvoting members to the State Council.
            (2) Expertise.--The Governor of the State shall ensure that 
        the State Council and the staff of the State Council have 
        sufficient expertise to effectively carry out the duties and 
        functions of the State Council described under the laws 
        relating to the applicable program.

SEC. 433. CHAIRPERSON.

    The Governor of the State shall appoint a chairperson of the State 
Council who shall be a representative of the business community.

SEC. 434. DUTIES AND RESPONSIBILITIES.

    (a) State Workforce Development Policy Blueprint.--The State 
Council shall assist the Governor to prepare and submit to the National 
Board a biennial report to be known as the State Workforce Development 
Policy Blueprint. The State Blueprint shall--
            (1) serve as a strategic plan for integrating federally 
        funded workforce development programs included in an integrated 
        system of the State, established pursuant to section 423(b), 
        with State-funded job training, employment, employment-related 
        education, and economic development activities;
            (2) summarize and analyze information about training needs 
        of critical industries in the State contained in the local 
        workforce development policy blueprints developed by the 
        workforce development boards;
            (3) establish State goals for the integrated workforce 
        development system and a common core set of performance 
        measures and standards for programs included in the system, to 
        be used in lieu of existing performance measures and standards 
        for each of the included programs;
            (4) analyze how the businesses and labor organizations of 
        the State are--
                    (A) progressing in the restructuring of the work 
                place to provide continuous learning;
                    (B) improving the skills and abilities of frontline 
                workers of such businesses; and
                    (C) participating in State and local efforts to 
                transform federally funded education and job training 
                programs into a coherent and accountable workforce 
                development system;
            (5) utilize information available from the State Report 
        Card and other sources to analyze the relative effectiveness of 
        individual workforce development programs within the State and 
        of the State's workforce development system as a whole;
            (6) evaluate the progress being made within the State in 
        streamlining, consolidating, and reforming the workforce 
        development system of the State in accordance with the purposes 
        contained in section 402(b) and the framework for State 
        implementation contained in the implementation grant proposal 
        of the State;
            (7) describe how service to special hard-to-serve 
        populations is to be maintained;
            (8) identify how any funds that a State may be receiving 
        under section 423(b) are to be utilized in conjunction with 
        existing resources to continuously improve the effectiveness of 
        the workforce development system of the State;
            (9) describe the method to be used to allocate funds 
        received under section 423(b) in a fair and equitable manner 
        among unified service delivery areas;
            (10) specify the additional elements, if any, to be 
        included in operating agreements between local workforce 
        development boards and one-stop career centers;
            (11) specify additional criteria, if any, for selection of 
        one-stop career centers;
            (12) specify the nonemployment-related outcome measures 
        that will be used for the workforce development system;
            (13) specify the nature and scope of the budget authority 
        for local workforce development boards in the State; and
            (14) supplant federally required planning reports for 
        programs under the integrated workforce development system of 
        the State.
    (b) State Workforce Development Report Card.--The State Council 
shall assist the Governor of the State to issue an annual report to be 
known as the State Workforce Development Report Card. The State Report 
Card shall describe the performance of all workforce development 
programs operating in the State that receive Federal funding and any 
additional State-funded programs that the Governor may choose to 
include. The State Report Card shall--
            (1) include an integrated budget that documents the annual 
        spending, number of clients served, and types of services 
        provided for workforce development programs for the State as a 
        whole and for each unified service delivery area within the 
        State;
            (2) assess the level of services to hard-to-serve 
        populations in relation to the number served and outcomes for 
        those populations during the preceding 3 years;
            (3) utilize information available from the quality 
        assurance system established under section 424 to assess--
                    (A) employment and earnings experiences of 
                individuals who have received assistance from each 
                workforce development program operated in the State; 
                and
                    (B) relative employment and earnings experiences of 
                participants receiving services from each one-stop 
                career center in the State;
            (4) include an analysis of other nonemployment-related 
        results for each workforce development program operating within 
        the State; and
            (5) include a report of annual employment trends and 
        earnings (by industry and occupation) in the State and each 
        unified service delivery area, to assist State and local 
        policymakers, training providers, and users of the system to 
        link the training provided to the skill and labor force needs 
        of local employers.
    (c) Workforce Development Board Certification and Effectiveness 
Criteria.--Each State Council shall--
            (1) assist the Governor to certify each local workforce 
        development board; and
            (2) make recommendations to the Governor for criteria that 
        will be used to judge the effectiveness of each of the 
        workforce development boards of the State.

SEC. 435. DEVELOPMENT OF QUALITY ASSURANCE SYSTEMS AND CONSUMER 
              REPORTS.

    (a) In General.--The State Council shall develop a quality 
assurance system to complement and expand upon the quality assurance 
system established in section 424 in order to provide customers of job 
training services with consumer reports on the supply, demand, price, 
and quality of job training services in each unified service delivery 
area in the State.
    (b) Selection of Tools and Measures.--Each State shall select the 
tools and measures that are appropriate to the needs of such State, 
including--
            (1) collecting and organizing service provider performance 
        data in accordance with information generated from the State 
        Report Card under section 434(b), the financial and management 
        information system designed pursuant to section 438; and
            (2) conducting surveys as appropriate to ascertain customer 
        satisfaction.
    (c) Collection and Dissemination.--The State Council shall, in 
conjunction with the local workforce development boards, establish 
mechanisms for collecting and disseminating the quality assurance 
information on a regular basis to--
            (1) individuals seeking employment;
            (2) employers;
            (3) policymakers at the Federal, State, and local levels; 
        and
            (4) training and education providers.
    (d) Assurances.--Each public and private education, training, and 
career development service provider receiving Federal funds under a 
program in an integrated system of the State pursuant to section 423(b) 
shall collect and provide the quality assurance information required 
under this section.

SEC. 436. ADMINISTRATION.

    (a) Authorities.--Each State Council shall be independent of other 
State workforce development agencies and have the authority to--
            (1) employ staff; and
            (2) receive and disburse funds.
    (b) Special Projects.--Each State Council may fund and operate 
special pilot or demonstration projects for purposes of research or 
continuous improvement of system performance.
    (c) Limitation on Use of Funds.--Not more than 5 percent of the 
funds received by the State from an implementation grant under section 
423(b) shall be used for the administration of the State Council.

SEC. 437. ESTABLISHMENT OF UNIFIED SERVICE DELIVERY AREAS.

    (a) Recommendations.--Each State Council shall make recommendations 
to the Governor of such State for the establishment of unified service 
delivery areas that may be used as intrastate geographic boundaries, to 
the extent practicable, for all workforce development programs in an 
integrated system of the State implemented pursuant to section 423(b).
    (b) Establishment.--Each State receiving an implementation grant 
under section 423(b) shall, based upon the recommendations of the State 
Council, and in consultation and cooperation with local communities, 
establish unified service delivery areas throughout the State for the 
purpose of providing community-wide workforce development assistance in 
one-stop career centers under section 451.
    (c) Responsibilities.--In establishing unified service delivery 
areas, the Governor, in consultation with the State Council and local 
communities--
            (1) shall take into consideration--
                    (A) existing labor market areas;
                    (B) existing units of general local government;
                    (C) existing service delivery areas established 
                under section 101 of the Job Training Partnership Act 
                (29 U.S.C. 1511); and
                    (D) the distance traveled by individuals to receive 
                services;
            (2) may merge existing service delivery areas; and
            (3) may not approve a total number of unified service 
        delivery areas that is greater than the total number of service 
        delivery areas in existence in the State on the date of 
        enactment of this Act.

SEC. 438. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS.

    (a) In General.--Each State shall use a portion of the funds the 
State receives under section 423(a) to design a unified financial and 
management information system. Each State that receives an 
implementation grant under section 423(b) shall require that all 
programs designated in the integrated system use the unified financial 
and management information system.
    (b) Requirements.--Each unified financial and management 
information system shall--
            (1) notwithstanding any other provision of Federal law, 
        supplant federally required fiscal reporting and monitoring for 
        each individual program included in the integrated system;
            (2) be used by all agencies involved in workforce 
        development activities, including one-stop career centers which 
        shall have the capability to track the overall public 
        investments within the State and unified service delivery 
        areas, and to inform policymakers as to the results being 
        achieved through that investment;
            (3) contain a common structure of financial reporting 
        requirements, fiscal systems, and monitoring for all workforce 
        development expenditures included in the integrated system that 
        shall utilize the common data elements and definitions included 
        in section 424(b); and
            (4) support local efforts to establish unified service 
        systems, including intake and eligibility determination for all 
        financial aid sources.

SEC. 439. CAPACITY BUILDING GRANTS.

    From funds made available to a State for implementation pursuant to 
section 423(b) or development pursuant to section 423(a), the State 
shall develop a strategy to enhance the capacity of the institutions, 
organizations, and staff involved in State and local workforce 
development activities by providing services such as--
            (1) training for members of the local workforce development 
        boards;
            (2) training for frontline staff of any local education or 
        training service provider or one-stop career center;
            (3) technical assistance regarding managing systemic 
        change;
            (4) customer service training;
            (5) organization of peer-to-peer network for training, 
        technical assistance, and information sharing;
            (6) organizing a best practices database covering the 
        various workforce development system components; and
            (7) training for State and local staff on the principles of 
        quality management and decentralizing decisionmaking.

SEC. 440. PERFORMANCE STANDARDS FOR UNIFIED SERVICE DELIVERY AREAS.

    (a) In General.--The Governor of each State that implements an 
integrated workforce development system under section 423(b) may, in 
consultation with the State Council, the local workforce development 
boards in the State, and employees of any of the job training programs 
included in the integrated system or the employee organizations of such 
employees, make adjustments to existing performance standards for 
programs in such system in the unified service delivery areas of the 
State by prescribing performance criteria.
    (b) Criteria.--Criteria prescribed under subsection (a) may include 
such factors as--
            (1) placement, retention, and earnings of participants in 
        unsubsidized employment, including--
                    (A) earnings at 1, 2, and 4 quarters after 
                termination from the program; and
                    (B) comparability of wages 1 year after termination 
                from the program with wages prior to participation in 
                the program;
            (2) acquisition of skills pursuant to a skill standards and 
        skill certification system endorsed by the National Skill 
        Standards Board established pursuant to section 503 of the 
        National Skill Standards Act of 1994 (20 U.S.C. 5933);
            (3) the satisfaction of participants and employers with 
        services provided and employment outcomes; and
            (4) the quality of services provided and the level of 
        services provided to hard-to-serve populations, such as low-
        income individuals and older workers.
    (c) Adjustments.--Each Governor of a State that implements an 
integrated workforce development system under section 423(b) shall, 
within parameters established by the National Board, and after 
consultation with the workforce development boards in the State, 
prescribe adjustments to the performance criteria prescribed under 
subsection (a) for the unified service delivery areas based on--
            (1) specific economic, geographic, and demographic factors 
        in the State and in regions within the State; and
            (2) the characteristics of the population to be served, 
        including the demonstrated difficulties in serving special 
        populations.
    (d) Use of Criteria.--The performance criteria prescribed under 
this section shall be utilized in lieu of similar criteria for programs 
receiving Federal funding included in the integrated system of the 
State, to the extent determined by the State Council subject to the 
approval of the National Board.

                   CHAPTER 3--LOCAL LEVEL ACTIVITIES

SEC. 441. WORKFORCE DEVELOPMENT BOARDS.

    (a) Establishment.--In each State receiving an implementation grant 
under section 423(b), and subject to subsection (b), the local elected 
officials of each unified service delivery area shall establish a 
workforce development board to administer the workforce development 
assistance provided by all the programs in the integrated workforce 
development system in such area.
    (b) Exception.--States with a single unified delivery area with 
contiguous borders shall not be subject to the requirement of 
subsection (a).
    (c) Membership.--
            (1) In general.--Each workforce development board shall be 
        comprised of--
                    (A) representatives of business and industry, who 
                shall constitute a majority of the board and who shall 
                be business leaders in the unified service delivery 
                area;
                    (B)(i) representatives of State and local organized 
                labor organizations, who shall be selected from among 
                individuals nominated by recognized State labor 
                federations; and
                    (ii) representatives of community-based 
                organizations, who shall be selected from among those 
                individuals nominated by officers of such 
                organizations;
                    (C) representatives of educational institutions;
                    (D) community leaders, such as leaders of--
                            (i) economic development agencies;
                            (ii) human service agencies and 
                        institutions;
                            (iii) veterans' organizations; and
                            (iv) entities providing job training;
                    (E) representatives of nongovernmental 
                organizations that have a history of successfully 
                protecting the rights of individuals with disabilities 
                or older persons; and
                    (F) a local elected official, who shall be a 
                nonvoting member.
            (2) Special rule.--The representatives described in 
        paragraph (1)(B) shall comprise not less than 33 percent of the 
        membership of the Board.
    (d) Nominations.--
            (1) Business and industry representatives.--
                    (A) In general.--The representatives of business 
                and industry described in subsection (c)(1) shall be 
                selected by local elected officials from among 
                individuals nominated by general purpose business 
                organizations after consultation with, and receiving 
                recommendations from, other business organizations in 
                the unified service delivery area.
                    (B) Definition.--For purposes of this paragraph, 
                the term ``general purpose business organization'' 
                means an organization that admits to membership any 
                for-profit business operating within the unified 
                service delivery area.
            (2) Labor representatives.--The representatives of 
        organized labor described in subsection (c)(1)(B)(i) shall be 
        selected from among individuals recommended by recognized State 
        and local labor federations.
            (3) Other members.--The members of the workforce 
        development board described in subparagraphs (C), (D), and (E) 
        of subsection (c)(1) shall be selected by chief local elected 
        officials in accordance with subsection (e) from individuals 
        recommended by interested organizations.
            (4) Expertise.--The State Council and Governor of each 
        State shall ensure that the workforce development board and the 
        staff of the State Council have sufficient expertise to 
        effectively carry out the duties and functions of existing 
        local boards described under the laws relating to the 
        applicable program.
    (e) Appointment Process.--In the case of a unified service delivery 
area--
            (1) in which there is 1 unit of general local government, 
        the chief elected official of such unit shall determine the 
        number of members to serve on the workforce development board 
        and appoint the members to such board from the individuals 
        nominated or recommended under subsection (d); and
            (2) in which there are 2 or more units of general local 
        government, the chief elected officials of such units shall 
        determine the number of members to serve on the workforce 
        development board and appoint the members to such board from 
        the individuals nominated or recommended under subsection (d), 
        in accordance with an agreement entered into by such units of 
        general local government or, in the absence of such an 
        agreement, by the Governor of the State in which the unified 
        service delivery area is located.
    (f) Terms.--Each workforce development board shall establish, in 
its bylaws, terms to be served by its members, who may serve until the 
successors of such members are appointed.
    (g) Vacancies.--Any vacancy on a workforce development board shall 
be filled in the same manner as the original appointment was made.
    (h) Removal for Cause.--Any member of a workforce development board 
may be removed for cause in accordance with procedures established by 
the workforce development board.
    (i) Chairperson.--Each workforce development board shall select a 
chairperson, by a majority vote of the members of the board, from among 
the members of the workforce development board who are from business or 
industry. The term of the chairperson shall be determined by the board.
    (j) Duties.--Each workforce development board shall--
            (1) prepare a workforce development board policy blueprint 
        in accordance with section 442;
            (2) issue an annual unified service delivery area report 
        card in accordance with section 443;
            (3) review and comment on the local plans for all programs 
        included in the integrated workforce development system of the 
        State and operating within the unified service delivery area, 
        prior to the submission of such plans to the appropriate State 
        Council, or the relevant Federal agency, if no State approval 
        is required;
            (4) oversee the operations of the one-stop career center 
        established in the unified service delivery area under section 
        451, including the responsibility to--
                    (A) designate one-stop career center operators 
                within the unified service delivery area consistent 
                with selection criteria specified in section 
                434(a)(11);
                    (B) develop and approve the budgets and annual 
                operating plans of the one-stop career centers;
                    (C) establish annual performance standards, 
                customer service quality criteria, and outcome measures 
                for the one-stop career centers, consistent with 
                measures developed pursuant to section 440;
                    (D) assess the results of programs and services;
                    (E) ensure that services and skills provided 
                through the centers are of high quality and are 
                relevant to labor market demands; and
                    (F) determine priorities for client services from 
                Federal funding sources in the system; and
            (5) develop a strategy to disseminate consumer reports 
        produced under section 435 to workers, jobseekers, and 
        employers, and other individuals in the unified service 
        delivery area.
    (k) Administration.--
            (1) In general.--Each local workforce development board 
        shall have the authority to receive and disburse funds made 
        available for carrying out the provisions of this title and 
        shall employ its own staff, independent of local programs and 
        service providers.
            (2) Funding.--Each workforce development board shall 
        receive a portion of its funding from the implementation grant 
        of the State, with additional funds made available from 
        participating programs.
    (l) Conflict of Interest.--No member of a workforce development 
board shall cast a vote on the provision of services by that member (or 
any organization which that member directly represents) or vote on any 
matter that would provide direct financial benefit to such member.

SEC. 442. WORKFORCE DEVELOPMENT BOARD POLICY BLUEPRINT.

    (a) In General.--Each workforce development board shall prepare and 
submit to the State Council a biennial report, to be known as the 
workforce development board policy blueprint, except that in States 
with a single unified service delivery area, the additional elements 
required in the regional blueprint shall be incorporated into the State 
Blueprint.
    (b) Requirements.--The workforce development board policy blueprint 
shall--
            (1) include a list of the key industries and industry 
        clusters of small to mid-size firms that are most critical to 
        the current and future economic competitiveness of unified 
        service delivery areas;
            (2) identify the workforce development needs of the 
        critical industries and industry clusters;
            (3) summarize the capacity of local education and training 
        providers to respond to the workforce development needs;
            (4) indicate how the local workforce development programs 
        intend to strategically deploy resources available from 
        implementation grants and existing programs operating in the 
        unified service delivery area to better meet the workforce 
        development needs of critical industries and industry clusters 
        in the unified service delivery area and enhance program 
        performance;
            (5) include a plan to develop one-stop career centers, as 
        described in section 451, including an estimate of the costs in 
        personnel and other resources to develop a network adequate to 
        provide universal access to such centers in the local labor 
        market;
            (6) describe how services will be maintained to all groups 
        served by the participating programs in accordance with their 
        legislative intent, including hard-to-serve populations;
            (7) identify actions for building the capacity of the 
        workforce development system in the unified service delivery 
        area; and
            (8) report on the level and recent changes in earned income 
        of workers in the local labor market, in relation to State and 
        national levels, by occupation and industry.
    (c) Use in Other Reports.--The workforce development board policy 
blueprint may be utilized in lieu of local planning reports required by 
any other Federal law for any program included in the integrated 
workforce development system, subject to the approval of the State 
Council.

SEC. 443. REPORT CARD.

    (a) In General.--Each workforce development board shall annually 
prepare and submit to the State Council a unified service delivery area 
report card in accordance with this section. The report card shall 
describe the performance of all workforce development programs and 
service providers, including the one-stop career centers, operating in 
the area that is included in the integrated workforce development 
system. In States with a single unified service delivery area, the 
State Council shall prepare the report card.
    (b) Requirements.--The report card shall--
            (1) report on the relationship between services provided 
        and the local labor market needs as described in the workforce 
        development board policy blueprint;
            (2) using the quality assurance system information 
        established pursuant to section 435, include an analysis of 
        employment-related, and other outcomes achieved by the programs 
        and service providers operating in the area;
            (3) identify the performance of the one-stop career 
        centers;
            (4) detail the economic and demographic characteristics of 
        individuals served compared to the characteristics of the 
        general population of the unified service delivery area, and 
        the jobseekers, workers, and businesses of such area; and
            (5) assess the level of services to hard-to-serve 
        populations in relation to the number served and the outcomes 
        for those during the preceding 3 years.

SEC. 444. CAPACITY BUILDING.

    (a) In General.--Each workforce development board shall identify 
actions to be taken for building the capacity of the workforce 
development system in such unified service delivery, except that in 
States with a single unified delivery area, the State Council shall be 
responsible for carrying out the actions under this section.
    (b) Funding.--The State Council shall make funds available to each 
workforce development board for capacity building activities from funds 
made available under section 423(b) and any other funds within the 
integrated workforce development budget of the State. For the 
activities described in subsection (c), the workforce development board 
may also submit requests to the State Council to redirect a portion of 
training and technical assistance resources available from any of the 
workforce development programs included in the integrated system within 
the unified service development area of the workforce development 
board.
    (c) Types of Activities.--Capacity building activities may 
include--
            (1) training of workforce development board members;
            (2) staff training;
            (3) technical assistance regarding managing systemic 
        change;
            (4) customer service training;
            (5) organization of a peer-to-peer network for training, 
        technical assistance, and information sharing;
            (6) organizing a best practices database covering the 
        various system activities; and
            (7) training for local staff on the principles of quality 
        management and decentralized decisionmaking.

                  Subtitle D--One-Stop Career Centers

SEC. 451. CAREER CENTERS.

    (a) Establishment.--Each workforce development board receiving 
funds under an implementation grant awarded under section 423(b) shall 
develop and implement a network of one-stop career centers in the 
unified service delivery area of the workforce development board. The 
one-stop career centers shall provide jobseekers, workers, and 
businesses universal access to a comprehensive array of quality 
employment, education, and training services.
    (b) Procedures.--Each workforce development board shall, in 
conjunction with a local elected official or officials in the unified 
service delivery area, and consistent with criteria specified in 
section 434(a)(11), select a method for establishing one-stop career 
centers.
    (c) Eligible Entities.--Each entity within the unified service 
delivery area that performs the functions specified in subsections (e) 
and (f) for any of the programs in the integrated workforce development 
system shall be eligible to be selected as a one-stop career center.
    (d) Period of Selection.--Each one-stop career center operator 
shall be designated for 2-year periods. Every 2 years, one-stop career 
center designations shall be reevaluated by the workforce development 
board based on performance indicated in the unified service delivery 
area report card and other criteria established by the workforce 
development board and the State Council.
    (e) Brokerage Services to Individuals.--Each one-stop career center 
shall make available to the public, at no cost--
            (1) outreach to make individuals aware of, and encourage 
        the use of, services available from workforce development 
        programs operating in the unified service delivery area;
            (2) intake and orientation to the information and services 
        available through the one-stop career center;
            (3) preliminary assessments of the skill levels (including 
        appropriate testing) and service needs of individuals, 
        including--
                    (A) basic skills;
                    (B) occupational skills;
                    (C) prior work experience;
                    (D) employability;
                    (E) interests;
                    (F) aptitude; and
                    (G) supportive service needs;
            (4) job search assistance, including resume and interview 
        preparation and workshops;
            (5) information relating to the supply, demand, price, and 
        quality of job training services available in each unified 
        service delivery area in the State; and
            (6) referral to appropriate job training, employment, and 
        employment-related education or support services in the unified 
        service delivery area.
    (f) Brokerage Services to Employers.--Each one-stop career center 
shall provide to each requesting employer--
            (1) information relating to supply, demand, price, and 
        quality of job training services available in each unified 
        service delivery area in the State, consistent with the 
        consumer reports described in section 435;
            (2) customized screening and referral of individuals for 
        employment;
            (3) customized assessment of skills of the current workers 
        of the employer;
            (4) an analysis of the skill needs of the employer; and
            (5) other specialized employment and training services.
    (g) Conflicts.--Any entity that performs one-stop career center 
functions shall be prohibited from making an education and training 
referral to itself.
    (h) Fees.--
            (1) In general.--Except as provided in paragraph (2), each 
        one-stop career center may charge fees for the services 
        described in subsection (f), subject to approval by the 
        workforce development board.
            (2) Limitation.--No fee may be charged for any service that 
        an individual would be eligible to receive at no cost under a 
        participating program.
            (3) Income.--Income received by a one-stop career center 
        from the fees collected shall be used by the workforce 
        development board to expand or enhance one-stop career centers 
        available within the unified service delivery area.
    (i) Core Data Elements and Common Definitions.--Each one-stop 
career center shall adopt the core data elements and common definitions 
as specified in section 424(b), and updated by the National Board.
    (j) Operating Agreements.--
            (1) In general.--Each one-stop career center operator shall 
        enter into a written agreement with the workforce development 
        board concerning the operation of the center.
            (2) Approval.--The agreement shall--
                    (A) be subject to the approval of--
                            (i) the local chief elected official or 
                        officials;
                            (ii) the State Council; and
                            (iii) the Governor of the State in which 
                        the center is located; and
                    (B) address--
                            (i) the services to be provided;
                            (ii) the role that local officials of the 
                        United States Employment Service will play in 
                        the operation of one-stop career centers in the 
                        unified service delivery area;
                            (iii) the financial and nonfinancial 
                        contributions to be made to the centers from 
                        funds made available pursuant to section 423(b) 
                        and all participating workforce development 
                        programs;
                            (iv) methods of administration;
                            (v) procedures to be used to ensure 
                        compliance with statutory requirements of the 
                        programs in the integrated workforce 
                        development system; and
                            (vi) other elements, as required by the 
                        workforce development board or the State 
                        Council under section 434(a).

                   TITLE V--CORPORATE ACCOUNTABILITY

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Corporate Accountability Act of 
1996''.

SEC. 502. FINDINGS.

    The Congress makes the following findings:
            (1) Every year the United States Government buys more than 
        $200,000,000,000 in goods and services, ranging from weapons 
        systems to cleaning supplies, making it the largest customer in 
        the American marketplace.
            (2) Harnessing the immense purchasing power that the United 
        States Government wields through its procurement practices to 
        reward good corporate citizenship and to discourage corporate 
        irresponsibility would serve as a powerful inducement for 
        greater corporate accountability at home and abroad.

SEC. 503. CORPORATE CODE OF CONDUCT.

    It is the sense of Congress that any entity entering into a 
contract with the Federal Government for goods or services should do 
the following:
            (1) Provide a safe and healthy workplace.
            (2) Ensure that the entity applies fair employment 
        practices, including (A) avoidance of use of child and forced 
        labor, (B) avoidance of discrimination based upon race, gender, 
        national origin, or religious beliefs, (C) respect for freedom 
        of association and the right to organize and bargain 
        collectively, and (D) payment of a living wage to all workers.
            (3) Uphold responsible environmental protection and 
        environmental practices.
            (4) Comply with United States and local laws (whichever are 
        more stringent) promoting good business practices, including 
        laws prohibiting illicit payments and ensuring fair 
        competition.
            (5) Maintain, through leadership at all levels, a corporate 
        culture that (A) respects free expression consistent with 
        legitimate business concerns, and does not condone political 
        coercion in the workplace, (B) encourages good corporate 
        citizenship and makes a positive contribution to the 
        communities in which the contractor operates, and (C) 
        recognizes, values, and exemplifies ethical conduct by all 
        employees.
            (6) Require similar behavior by partners, suppliers, and 
        subcontractors under terms of contracts.

SEC. 504. PREFERENCE FOR ENTITIES ADOPTING AND ENFORCING CORPORATE CODE 
              OF CONDUCT.

    For each fiscal year it shall be a goal of the head of each 
executive agency to award at least 15 percent (in terms of contract 
price) of the contracts entered into by the head of the executive 
agency in that fiscal year to entities that have been certified by the 
head of that executive agency or the head of any other executive agency 
under section 505 as entities that have adopted and are enforcing the 
corporate code of conduct.

SEC. 505. CERTIFICATION OF COMPLIANCE.

    (a) Determination.--Upon the request of an offeror for a contract 
to be entered into by the head of an executive agency, the head of the 
executive agency shall determine whether the offeror is complying with, 
and agrees to continue to comply with, the corporate code of conduct.
    (b) Certification.--Upon determining that an offeror is complying 
with, and agrees to continue to comply with, the corporate code of 
conduct, the head of an executive agency shall transmit to the 
Administrator of General Services a written certification that the head 
of the executive agency has determined that the offeror has adopted, 
and is enforcing, the corporate code of conduct.
    (c) Decertification.--The head of any executive agency may revoke a 
certification of an entity by the head of any executive agency under 
subsection (b) upon a determination made under section 506 or otherwise 
that, after the certification, the entity ceased to comply with the 
corporate code of conduct. The head of an agency revoking a 
certification shall notify the Administrator of General Services of the 
revocation.
    (d) Directory of Certified and Decertified Entities.--The 
Administrator of General Services shall maintain a directory of 
entities that have been certified or decertified under this section. 
The directory shall indicate, for each such entity, whether the entity 
has a certified status or a decertified status. The Administrator shall 
make the information in the directory available to the head of an 
executive agency as necessary for the head of the executive agency to 
carry out responsibilities under this title.

SEC. 506. ANNUAL COMPLIANCE REVIEW AND PETITION PROCESS.

    (a) Annual Compliance Review.--For each entity that receives a 
preference under section 504 in the award of a contract to the entity 
by an executive agency, the head of the executive agency shall conduct 
periodic reviews of the entity, as appropriate, to determine whether 
the entity is in compliance with the corporate code of conduct.
    (b) Petition.--
            (1) In general.--In the case of an entity that is treated 
        as being eligible for a preference under section 504 in the 
        award of a contract by an executive agency, an interested party 
        may petition the head of the executive agency to carry out a 
        review of the compliance of that entity with the corporate code 
        of conduct. The petition shall specify the alleged violations 
        of the corporate code of conduct to be reviewed and be 
        accompanied by detailed documentation supporting the 
        allegations.
            (2) Response by executive agency.--(A) Upon receipt of a 
        petition, the head of the executive agency shall determine 
        whether to dismiss the petition or to accept the petition for 
        investigation and public hearing.
            (B) The head of the executive agency may dismiss a petition 
        if the head of the executive agency determines that the 
        petition is frivolous or reasonably believes, on the basis of 
        the evidence presented, that the violations alleged in the 
        petition did not occur.
            (C) Within 180 days after the head of the executive agency 
        determines to accept a petition, the head of the executive 
        agency shall investigate the allegations set forth in the 
        petition, hold a public hearing, and make a final decision on 
        the petition.
            (D) If in the final decision on a petition, the head of the 
        executive agency finds that a contractor has violated the 
        corporate code of conduct, the head of the executive agency, 
        shall recommend remedies to the contractor to be implemented 
        within 180 days. If such remedies or appropriate alternatives 
        approved by the head of the executive agency are not 
        implemented within that 180-day period, the head of the 
        executive agency may suspend or terminate the contract as the 
        head of the executive agency considers appropriate.
            (3) Interested party.--For purposes of this subsection, an 
        interested party is any person interested in the implementation 
        of the corporate code of conduct whose direct economic interest 
        may be affected by the award of the contract to the contractor.
    (c) Enforcement.--The head of an executive agency that awarded a 
contract to an entity on a preferential basis afforded under section 
504 may suspend or terminate the contract at any time that the head of 
executive agency determines, on the basis of information available to 
that official under subsection (a) or (b), that the contractor is not 
in compliance with the corporate code of conduct.

SEC. 507. REGULATIONS.

    The Federal Acquisition Regulatory Council shall amend the Federal 
Acquisition Regulation to provide for the implementation of the 
provisions of this title.

SEC. 508. DEFINITIONS.

    In this title:
            (1) The term ``executive agency'' has the meaning given 
        such term in section 4 of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403).
            (2) The term ``corporate code of conduct'' means the 
        corporate code of conduct set forth in section 503.

                   TITLE VI--HEALTH INSURANCE REFORM

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Health Insurance Reform Act of 
1996''.

SEC. 602. DEFINITIONS.

    As used in this title:
            (1) Beneficiary.--The term ``beneficiary'' has the meaning 
        given such term under section 3(8) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1002(8)).
            (2) Employee.--The term ``employee'' has the meaning given 
        such term under section 3(6) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(6)).
            (3) Employer.--The term ``employer'' has the meaning given 
        such term under section 3(5) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(5)), except that such term 
        shall include only employers of two or more employees.
            (4) Employee health benefit plan.--
                    (A) In general.--The term ``employee health benefit 
                plan'' means any employee welfare benefit plan, 
                governmental plan, or church plan (as defined under 
                paragraphs (1), (32), and (33) of section 3 of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1002 (1), (32), and (33))) that provides or pays 
                for health benefits (such as provider and hospital 
                benefits) for participants and beneficiaries whether--
                            (i) directly;
                            (ii) through a group health plan offered by 
                        a health plan issuer as defined in paragraph 
                        (8); or
                            (iii) otherwise.
                    (B) Rule of construction.--An employee health 
                benefit plan shall not be construed to be a group 
                health plan, an individual health plan, or a health 
                plan issuer.
                    (C) Arrangements not included.--Such term does not 
                include the following, or any combination thereof:
                            (i) Coverage only for accident, or 
                        disability income insurance, or any combination 
                        thereof.
                            (ii) Medicare supplemental health insurance 
                        (as defined under section 1882(g)(1) of the 
                        Social Security Act).
                            (iii) Coverage issued as a supplement to 
                        liability insurance.
                            (iv) Liability insurance, including general 
                        liability insurance and automobile liability 
                        insurance.
                            (v) Workers compensation or similar 
                        insurance.
                            (vi) Automobile medical payment insurance.
                            (vii) Coverage for a specified disease or 
                        illness.
                            (viii) Hospital or fixed indemnity 
                        insurance.
                            (ix) Short-term limited duration insurance.
                            (x) Credit-only, dental-only, or vision-
                        only insurance.
                            (xi) A health insurance policy providing 
                        benefits only for long-term care, nursing home 
                        care, home health care, community-based care, 
                        or any combination thereof.
            (5) Family.--
                    (A) In general.--The term ``family'' means an 
                individual, the individual's spouse, and the child of 
                the individual (if any).
                    (B) Child.--For purposes of subparagraph (A), the 
                term ``child'' means any individual who is a child 
                within the meaning of section 151(c)(3) of the Internal 
                Revenue Code of 1986.
            (6) Group health plan.--
                    (A) In general.--The term ``group health plan'' 
                means any contract, policy, certificate or other 
                arrangement offered by a health plan issuer to a group 
                purchaser that provides or pays for health benefits 
                (such as provider and hospital benefits) in connection 
                with an employee health benefit plan.
                    (B) Arrangements not included.--Such term does not 
                include the following, or any combination thereof:
                            (i) Coverage only for accident, or 
                        disability income insurance, or any combination 
                        thereof.
                            (ii) Medicare supplemental health insurance 
                        (as defined under section 1882(g)(1) of the 
                        Social Security Act).
                            (iii) Coverage issued as a supplement to 
                        liability insurance.
                            (iv) Liability insurance, including general 
                        liability insurance and automobile liability 
                        insurance.
                            (v) Workers compensation or similar 
                        insurance.
                            (vi) Automobile medical payment insurance.
                            (vii) Coverage for a specified disease or 
                        illness.
                            (viii) Hospital or fixed indemnity 
                        insurance.
                            (ix) Short-term limited duration insurance.
                            (x) Credit-only, dental-only, or vision-
                        only insurance.
                            (xi) A health insurance policy providing 
                        benefits only for long-term care, nursing home 
                        care, home health care, community-based care, 
                        or any combination thereof.
            (7) Group purchaser.--The term ``group purchaser'' means 
        any person (as defined under paragraph (9) of section 3 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002(9)) or entity that purchases or pays for health benefits 
        (such as provider or hospital benefits) on behalf of two or 
        more participants or beneficiaries in connection with an 
        employee health benefit plan. A health plan purchasing 
        cooperative established under section 641 shall not be 
        considered to be a group purchaser.
            (8) Health plan issuer.--The term ``health plan issuer'' 
        means any entity that is licensed (prior to or after the date 
        of enactment of this Act) by a State to offer a group health 
        plan or an individual health plan.
            (9) Participant.--The term ``participant'' has the meaning 
        given such term under section 3(7) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1002(7)).
            (10) Plan sponsor.--The term ``plan sponsor'' has the 
        meaning given such term under section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1002(16)(B)).
            (11) Secretary.--The term ``Secretary'', unless 
        specifically provided otherwise, means the Secretary of Labor.
            (12) State.--The term ``State'' means each of the several 
        States, the District of Columbia, Puerto Rico, the United 
        States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.

     Subtitle A--Health Care Access, Portability, and Renewability

                     CHAPTER 1--GROUP MARKET RULES

SEC. 611. GUARANTEED AVAILABILITY OF HEALTH COVERAGE.

    (a) In General.--
            (1) Nondiscrimination.--Except as provided in subsection 
        (b), section 612 and section 613--
                    (A) a health plan issuer offering a group health 
                plan may not decline to offer whole group coverage to a 
                group purchaser desiring to purchase such coverage; and
                    (B) an employee health benefit plan or a health 
                plan issuer offering a group health plan may establish 
                eligibility, continuation of eligibility, enrollment, 
                or premium contribution requirements under the terms of 
                such plan, except that such requirements shall not be 
                based on health status, medical condition, claims 
                experience, receipt of health care, medical history, 
                evidence of insurability (including conditions arising 
                out of acts of domestic violence), genetic information, 
                or disability.
            (2) Health promotion and disease prevention.--Nothing in 
        this subsection shall prevent an employee health benefit plan 
        or a health plan issuer from establishing premium discounts or 
        modifying otherwise applicable copayments or deductibles in 
        return for adherence to programs of health promotion and 
        disease prevention.
    (b) Application of Capacity Limits.--
            (1) In general.--Subject to paragraph (2), a health plan 
        issuer offering a group health plan may cease offering coverage 
        to group purchasers under the plan if--
                    (A) the health plan issuer ceases to offer coverage 
                to any additional group purchasers; and
                    (B) the health plan issuer can demonstrate to the 
                applicable certifying authority (as defined in section 
                652(d)), if required, that its financial or provider 
                capacity to serve previously covered participants and 
                beneficiaries (and additional participants and 
                beneficiaries who will be expected to enroll because of 
                their affiliation with a group purchaser or such 
                previously covered participants or beneficiaries) will 
                be impaired if the health plan issuer is required to 
                offer coverage to additional group purchasers.
        Such health plan issuer shall be prohibited from offering 
        coverage after a cessation in offering coverage under this 
        paragraph for a 6-month period or until the health plan issuer 
        can demonstrate to the applicable certifying authority (as 
        defined in section 652(d)) that the health plan issuer has 
        adequate capacity, whichever is later.
            (2) First-come-first-served.--A health plan issuer offering 
        a group health plan is only eligible to exercise the 
        limitations provided for in paragraph (1) if the health plan 
        issuer offers coverage to group purchasers under such plan on a 
        first-come-first-served basis or other basis established by a 
        State to ensure a fair opportunity to enroll in the plan and 
        avoid risk selection.
    (c) Construction.--
            (1) Marketing of group health plans.--Nothing in this 
        section shall be construed to prevent a State from requiring 
        health plan issuers offering group health plans to actively 
        market such plans.
            (2) Involuntary offering of group health plans.--Nothing in 
        this section shall be construed to require a health plan issuer 
        to involuntarily offer group health plans in a particular 
        market. For the purposes of this paragraph, the term ``market'' 
        means either the large employer market or the small employer 
        market (as defined under applicable State law, or if not so 
        defined, an employer with not more than 50 employees).

SEC. 612. GUARANTEED RENEWABILITY OF HEALTH COVERAGE.

    (a) In General.--
            (1) Group purchaser.--Subject to subsections (b) and (c), a 
        group health plan shall be renewed or continued in force by a 
        health plan issuer at the option of the group purchaser, except 
        that the requirement of this subparagraph shall not apply in 
        the case of--
                    (A) the nonpayment of premiums or contributions by 
                the group purchaser in accordance with the terms of the 
                group health plan or where the health plan issuer has 
                not received timely premium payments;
                    (B) fraud or misrepresentation of material fact on 
                the part of the group purchaser;
                    (C) the termination of the group health plan in 
                accordance with subsection (b); or
                    (D) the failure of the group purchaser to meet 
                contribution or participation requirements in 
                accordance with paragraph (3).
            (2) Participant.--Subject to subsections (b) and (c), 
        coverage under an employee health benefit plan or group health 
        plan shall be renewed or continued in force, if the group 
        purchaser elects to continue to provide coverage under such 
        plan, at the option of the participant (or beneficiary where 
        such right exists under the terms of the plan or under 
        applicable law), except that the requirement of this paragraph 
        shall not apply in the case of--
                    (A) the nonpayment of premiums or contributions by 
                the participant or beneficiary in accordance with the 
                terms of the employee health benefit plan or group 
                health plan or where such plan has not received timely 
                premium payments;
                    (B) fraud or misrepresentation of material fact on 
                the part of the participant or beneficiary relating to 
                an application for coverage or claim for benefits;
                    (C) the termination of the employee health benefit 
                plan or group health plan;
                    (D) loss of eligibility for continuation coverage 
                as described in part 6 of subtitle B of title I of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1161 et seq.); or
                    (E) failure of a participant or beneficiary to meet 
                requirements for eligibility for coverage under an 
                employee health benefit plan or group health plan that 
                are not prohibited by this title.
            (3) Rules of Construction.--Nothing in this subsection, nor 
        in section 611(a), shall be construed to--
                    (A) preclude a health plan issuer from establishing 
                employer contribution rules or group participation 
                rules for group health plans as allowed under 
                applicable State law;
                    (B) preclude a plan defined in section 3(37) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1102(37)) from establishing employer 
                contribution rules or group participation rules; or
                    (C) permit individuals to decline coverage under an 
                employee health benefit plan if such right is not 
                otherwise available under such plan.
    (b) Termination of Group Health Plans.--
            (1) Particular type of group health plan not offered.--In 
        any case in which a health plan issuer decides to discontinue 
        offering a particular type of group health plan, a group health 
        plan of such type may be discontinued by the health plan issuer 
        only if--
                    (A) the health plan issuer provides notice to each 
                group purchaser covered under a group health plan of 
                this type (and participants and beneficiaries covered 
                under such group health plan) of such discontinuation 
                at least 90 days prior to the date of the 
                discontinuation of such plan;
                    (B) the health plan issuer offers to each group 
                purchaser covered under a group health plan of this 
                type, the option to purchase any other group health 
                plan currently being offered by the health plan issuer; 
                and
                    (C) in exercising the option to discontinue a group 
                health plan of this type and in offering one or more 
                replacement plans, the health plan issuer acts 
                uniformly without regard to the health status or 
                insurability of participants or beneficiaries covered 
                under the group health plan, or new participants or 
                beneficiaries who may become eligible for coverage 
                under the group health plan.
            (2) Discontinuance of all group health plans.--
                    (A) In general.--In any case in which a health plan 
                issuer elects to discontinue offering all group health 
                plans in a State, a group health plan may be 
                discontinued by the health plan issuer only if--
                            (i) the health plan issuer provides notice 
                        to the applicable certifying authority (as 
                        defined in section 652(d)) and to each group 
                        purchaser (and participants and beneficiaries 
                        covered under such group health plan) of such 
                        discontinuation at least 180 days prior to the 
                        date of the expiration of such plan; and
                            (ii) all group health plans issued or 
                        delivered for issuance in the State are 
                        discontinued and coverage under such plans is 
                        not renewed.
                    (B) Application of provisions.--The provisions of 
                this paragraph and paragraph (3) may be applied 
                separately by a health plan issuer--
                            (i) to all group health plans offered to 
                        small employers (as defined under applicable 
                        State law, or if not so defined, an employer 
                        with not more than 50 employees); or
                            (ii) to all other group health plans 
                        offered by the health plan issuer in the State.
            (3) Prohibition on market reentry.--In the case of a 
        discontinuation under paragraph (2), the health plan issuer may 
        not provide for the issuance of any group health plan in the 
        market sector (as described in paragraph (2)(B)) in which 
        issuance of such group health plan was discontinued in the 
        State involved during the 5-year period beginning on the date 
        of the discontinuation of the last group health plan not so 
        renewed.
    (c) Treatment of Network Plans.--
            (1) Geographic limitations.--A network plan (as defined in 
        paragraph (2)) may deny continued participation under such plan 
        to participants or beneficiaries who neither live, reside, nor 
        work in an area in which such network plan is offered, but only 
        if such denial is applied uniformly, without regard to health 
        status or the insurability of particular participants or 
        beneficiaries.
            (2) Network plan.--As used in paragraph (1), the term 
        ``network plan'' means an employee health benefit plan or a 
        group health plan that arranges for the financing and delivery 
        of health care services to participants or beneficiaries 
        covered under such plan, in whole or in part, through 
        arrangements with providers.
    (d) COBRA Coverage.--Nothing in subsection (a)(2)(E) or subsection 
(c) shall be construed to affect any right to COBRA continuation 
coverage as described in part 6 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1161 et 
seq.).

SEC. 613. PORTABILITY OF HEALTH COVERAGE AND LIMITATION ON PREEXISTING 
              CONDITION EXCLUSIONS.

    (a) In General.--An employee health benefit plan or a health plan 
issuer offering a group health plan may impose a limitation or 
exclusion of benefits relating to treatment of a preexisting condition 
based on the fact that the condition existed prior to the coverage of 
the participant or beneficiary under the plan only if--
            (1) the limitation or exclusion extends for a period of not 
        more than 12 months after the date of enrollment in the plan;
            (2) the limitation or exclusion does not apply to an 
        individual who, within 30 days of the date of birth or 
        placement for adoption (as determined under section 
        609(c)(3)(B) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1169(c)(3)(B)), was covered under the plan; and
            (3) the limitation or exclusion does not apply to a 
        pregnancy.
    (b) Crediting of Previous Qualifying Coverage.--
            (1) In general.--Subject to paragraph (4), an employee 
        health benefit plan or a health plan issuer offering a group 
        health plan shall provide that if a participant or beneficiary 
        is in a period of previous qualifying coverage as of the date 
        of enrollment under such plan, any period of exclusion or 
        limitation of coverage with respect to a preexisting condition 
        shall be reduced by 1 month for each month in which the 
        participant or beneficiary was in the period of previous 
        qualifying coverage. With respect to an individual described in 
        subsection (a)(2) who maintains continuous coverage, no 
        limitation or exclusion of benefits relating to treatment of a 
        preexisting condition may be applied to a child within the 
        child's first 12 months of life or within 12 months after the 
        placement of a child for adoption.
            (2) Discharge of duty.--An employee health benefit plan 
        shall provide documentation of coverage to participants and 
        beneficiaries whose coverage is terminated under the plan. 
        Pursuant to regulations promulgated by the Secretary, the duty 
        of an employee health benefit plan to verify previous 
        qualifying coverage with respect to a participant or 
        beneficiary is effectively discharged when such employee health 
        benefit plan provides documentation to a participant or 
        beneficiary that includes the following information:
                    (A) the dates that the participant or beneficiary 
                was covered under the plan; and
                    (B) the benefits and cost-sharing arrangement 
                available to the participant or beneficiary under such 
                plan.
        An employee health benefit plan shall retain the documentation 
        provided to a participant or beneficiary under subparagraphs 
        (A) and (B) for at least the 12-month period following the date 
        on which the participant or beneficiary ceases to be covered 
        under the plan. Upon request, an employee health benefit plan 
        shall provide a second copy of such documentation to such 
        participant or beneficiary within the 12-month period following 
        the date of such ineligibility.
            (3) Definitions.--As used in this section:
                    (A) Previous qualifying coverage.--The term 
                ``previous qualifying coverage'' means the period 
                beginning on the date--
                            (i) a participant or beneficiary is 
                        enrolled under an employee health benefit plan 
                        or a group health plan, and ending on the date 
                        the participant or beneficiary is not so 
                        enrolled; or
                            (ii) an individual is enrolled under an 
                        individual health plan (as defined in section 
                        623) or under a public or private health plan 
                        established under Federal or State law, and 
                        ending on the date the individual is not so 
                        enrolled;
                for a continuous period of more than 30 days (without 
                regard to any waiting period).
                    (B) Limitation or exclusion of benefits relating to 
                treatment of a preexisting condition.--The term 
                ``limitation or exclusion of benefits relating to 
                treatment of a preexisting condition'' means a 
                limitation or exclusion of benefits imposed on an 
                individual based on a preexisting condition of such 
                individual.
            (4) Effect of previous coverage.--An employee health 
        benefit plan or a health plan issuer offering a group health 
        plan may impose a limitation or exclusion of benefits relating 
        to the treatment of a preexisting condition, subject to the 
        limits in subsection (a)(1), only to the extent that such 
        service or benefit was not previously covered under the group 
        health plan, employee health benefit plan, or individual health 
        plan in which the participant or beneficiary was enrolled 
        immediately prior to enrollment in the plan involved.
    (c) Late Enrollees.--Except as provided in section 614, with 
respect to a participant or beneficiary enrolling in an employee health 
benefit plan or a group health plan during a time that is other than 
the first opportunity to enroll during an enrollment period of at least 
30 days, coverage with respect to benefits or services relating to the 
treatment of a preexisting condition in accordance with subsections (a) 
and (b) may be excluded, except the period of such exclusion may not 
exceed 18 months beginning on the date of coverage under the plan.
    (d) Affiliation Periods.--With respect to a participant or 
beneficiary who would otherwise be eligible to receive benefits under 
an employee health benefit plan or a group health plan but for the 
operation of a preexisting condition limitation or exclusion, if such 
plan does not utilize a limitation or exclusion of benefits relating to 
the treatment of a preexisting condition, such plan may impose an 
affiliation period on such participant or beneficiary not to exceed 60 
days (or in the case of a late participant or beneficiary described in 
subsection (c), 90 days) from the date on which the participant or 
beneficiary would otherwise be eligible to receive benefits under the 
plan. An employee health benefit plan or a health plan issuer offering 
a group health plan may also use alternative methods to address adverse 
selection as approved by the applicable certifying authority (as 
defined in section 652(d)). During such an affiliation period, the plan 
may not be required to provide health care services or benefits and no 
premium shall be charged to the participant or beneficiary.
    (e)  Preexisting Condition.--For purposes of this section, the term 
``preexisting condition'' means a condition, regardless of the cause of 
the condition, for which medical advice, diagnosis, care, or treatment 
was recommended or received within the 6-month period ending on the day 
before the effective date of the coverage (without regard to any 
waiting period).
    (f) State Flexibility.--Nothing in this section shall be construed 
to preempt State laws that --
            (1) require health plan issuers to impose a limitation or 
        exclusion of benefits relating to the treatment of a 
        preexisting condition for periods that are shorter than those 
        provided for under this section; or
            (2) allow individuals, participants, and beneficiaries to 
        be considered to be in a period of previous qualifying coverage 
        if such individual, participant, or beneficiary experiences a 
        lapse in coverage that is greater than the 30-day period 
        provided for under subsection (b)(3);
unless such laws are preempted by section 514 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1144).

SEC. 614. SPECIAL ENROLLMENT PERIODS.

    In the case of a participant, beneficiary or family member who--
            (1) through marriage, separation, divorce, death, birth or 
        placement of a child for adoption, experiences a change in 
        family composition affecting eligibility under a group health 
        plan, individual health plan, or employee health benefit plan;
            (2) experiences a change in employment status, as described 
        in section 603(2) of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1163(2)), that causes the loss of 
        eligibility for coverage, other than COBRA continuation 
        coverage under a group health plan, individual health plan, or 
        employee health benefit plan; or
            (3) experiences a loss of eligibility under a group health 
        plan, individual health plan, or employee health benefit plan 
        because of a change in the employment status of a family 
        member;
each employee health benefit plan and each group health plan shall 
provide for a special enrollment period extending for a reasonable time 
after such event that would permit the participant to change the 
individual or family basis of coverage or to enroll in the plan if 
coverage would have been available to such individual, participant, or 
beneficiary but for failure to enroll during a previous enrollment 
period. Such a special enrollment period shall ensure that a child born 
or placed for adoption shall be deemed to be covered under the plan as 
of the date of such birth or placement for adoption if such child is 
enrolled within 30 days of the date of such birth or placement for 
adoption.

SEC. 615. DISCLOSURE OF INFORMATION.

    (a) Disclosure of Information by Health Plan Issuers.--
            (1) In general.--In connection with the offering of any 
        group health plan to a small employer (as defined under 
        applicable State law, or if not so defined, an employer with 
        not more than 50 employees), a health plan issuer shall make a 
        reasonable disclosure to such employer, as part of its 
        solicitation and sales materials, of--
                    (A) the provisions of such group health plan 
                concerning the health plan issuer's right to change 
                premium rates and the factors that may affect changes 
                in premium rates;
                    (B) the provisions of such group health plan 
                relating to renewability of coverage;
                    (C) the provisions of such group health plan 
                relating to any preexisting condition provision; and
                    (D) descriptive information about the benefits and 
                premiums available under all group health plans for 
                which the employer is qualified.
        Information shall be provided to small employers under this 
        paragraph in a manner determined to be understandable by the 
        average small employer, and shall be sufficiently accurate and 
        comprehensive to reasonably inform small employers, 
        participants and beneficiaries of their rights and obligations 
        under the group health plan.
            (2) Exception.--With respect to the requirement of 
        paragraph (1), any information that is proprietary and trade 
        secret information under applicable law shall not be subject to 
        the disclosure requirements of such paragraph.
            (3) Construction.--Nothing in this subsection shall be 
        construed to preempt State reporting and disclosure 
        requirements to the extent that such requirements are not 
        preempted under section 514 of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1144).
    (b) Disclosure of Information to Participants and Beneficiaries.--
            (1) In general.--Section 104(b)(1) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1024(b)(1)) 
        is amended in the matter following subparagraph (B)--
                    (A) by striking ``102(a)(1),'' and inserting 
                ``102(a)(1) that is not a material reduction in covered 
                services or benefits provided,''; and
                    (B) by adding at the end thereof the following new 
                sentences: ``If there is a modification or change 
                described in section 102(a)(1) that is a material 
                reduction in covered services or benefits provided, a 
                summary description of such modification or change 
                shall be furnished to participants not later than 60 
                days after the date of the adoption of the modification 
                or change. In the alternative, the plan sponsors may 
                provide such description at regular intervals of not 
                more than 90 days. The Secretary shall issue 
                regulations within 180 days after the date of enactment 
                of the Health Insurance Reform Act of 1996, providing 
                alternative mechanisms to delivery by mail through 
                which employee health benefit plans may notify 
                participants of material reductions in covered services 
                or benefits.''.
            (2) Plan description and summary.--Section 102(b) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1022(b)) is amended--
                    (A) by inserting ``including the office or title of 
                the individual who is responsible for approving or 
                denying claims for coverage of benefits'' after ``type 
                of administration of the plan'';
                    (B) by inserting ``including the name of the 
                organization responsible for financing claims'' after 
                ``source of financing of the plan''; and
                    (C) by inserting ``including the office, contact, 
                or title of the individual at the Department of Labor 
                through which participants may seek assistance or 
                information regarding their rights under this Act and 
                the Health Insurance Reform Act of 1996 with respect to 
                health benefits that are not offered through a group 
                health plan.'' after ``benefits under the plan''.

                   CHAPTER 2--INDIVIDUAL MARKET RULES

SEC. 620. INDIVIDUAL HEALTH PLAN PORTABILITY.

    (a) Limitation on Requirements.--
            (1) In general.--With respect to an individual desiring to 
        enroll in an individual health plan, if such individual is in a 
        period of previous qualifying coverage (as defined in section 
        613(b)(3)(A)(i)) under one or more group health plans or 
        employee health benefit plans that commenced 18 or more months 
prior to the date on which such individual desires to enroll in the 
individual plan, a health plan issuer described in paragraph (3) may 
not decline to offer coverage to such individual, impose a new period 
of exclusion or limitation of coverage with respect to a preexisting 
condition (as defined in section 613(e)), or deny enrollment to such 
individual based on the health status, medical condition, claims 
experience, receipt of health care, medical history, evidence of 
insurability, or disability of the individual, except as described in 
subsections (b) and (c).
            (2) Health promotion and disease prevention.--Nothing in 
        this subsection shall be construed to prevent a health plan 
        issuer offering an individual health plan from establishing 
        premium discounts or modifying otherwise applicable copayments 
        or deductibles in return for adherence to programs of health 
        promotion or disease prevention.
            (3) Health plan issuer.--A health plan issuer described in 
        this paragraph is a health plan issuer that issues or renews 
        individual health plans.
            (4) Premiums.--Nothing in this subsection shall be 
        construed to affect the determination of a health plan issuer 
        as to the amount of the premium payable under an individual 
        health plan under applicable State law.
    (b) Eligibility for Other Group Coverage.--The provisions of 
subsection (a) shall not apply to an individual who is eligible for 
coverage under a group health plan or an employee health benefit plan, 
or who has had coverage terminated under a group health plan or 
employee health benefit plan for failure to make required premium 
payments or contributions, or for fraud or misrepresentation of 
material fact, or who is otherwise eligible for continuation coverage 
as described in part 6 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1161 et seq.) or 
under an equivalent State program.
    (c) Application of Capacity Limits.--
            (1) In general.--Subject to paragraph (2), a health plan 
        issuer offering coverage to individuals under an individual 
        health plan may cease enrolling individuals under the plan if--
                    (A) the health plan issuer ceases to enroll any new 
                individuals; and
                    (B) the health plan issuer can demonstrate to the 
                applicable certifying authority (as defined in section 
                652(d)), if required, that its financial or provider 
                capacity to serve previously covered individuals will 
                be impaired if the health plan issuer is required to 
                enroll additional individuals.
        Such a health plan issuer shall be prohibited from offering 
        coverage after a cessation in offering coverage under this 
        paragraph for a 6-month period or until the health plan issuer 
        can demonstrate to the applicable certifying authority (as 
        defined in section 652(d)) that the health plan issuer has 
        adequate capacity, whichever is later.
            (2) First-come-first-served.--A health plan issuer offering 
        coverage to individuals under an individual health plan is only 
        eligible to exercise the limitations provided for in paragraph 
        (1) if the health plan issuer provides for enrollment of 
        individuals under such plan on a first-come-first-served basis 
        or other basis established by a State to ensure a fair 
        opportunity to enroll in the plan and avoid risk selection.
    (d) Market Requirements.--
            (1) In general.--The provisions of subsection (a) shall not 
        be construed to require that a health plan issuer offering 
        group health plans to group purchasers offer individual health 
        plans to individuals.
            (2) Conversion policies.--A health plan issuer offering 
        group health plans to group purchasers under this title shall 
        not be deemed to be a health plan issuer offering an individual 
        health plan solely because such health plan issuer offers a 
        conversion policy.
            (3) Marketing of plans.--Nothing in this section shall be 
        construed to prevent a State from requiring health plan issuers 
        offering coverage to individuals under an individual health 
        plan to actively market such plan.

SEC. 621. GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH COVERAGE.

    (a) In General.--Subject to subsections (b) and (c), coverage for 
individuals under an individual health plan shall be renewed or 
continued in force by a health plan issuer at the option of the 
individual, except that the requirement of this subsection shall not 
apply in the case of--
            (1) the nonpayment of premiums or contributions by the 
        individual in accordance with the terms of the individual 
        health plan or where the health plan issuer has not received 
        timely premium payments;
            (2) fraud or misrepresentation of material fact on the part 
        of the individual; or
            (3) the termination of the individual health plan in 
        accordance with subsection (b).
    (b) Termination of Individual Health Plans.--
            (1) Particular type of individual health plan not 
        offered.--In any case in which a health plan issuer decides to 
        discontinue offering a particular type of individual health 
        plan to individuals, an individual health plan may be 
        discontinued by the health plan issuer only if--
                    (A) the health plan issuer provides notice to each 
                individual covered under the plan of such 
                discontinuation at least 90 days prior to the date of 
                the expiration of the plan;
                    (B) the health plan issuer offers to each 
                individual covered under the plan the option to 
                purchase any other individual health plan currently 
                being offered by the health plan issuer to individuals; 
                and
                    (C) in exercising the option to discontinue the 
                individual health plan and in offering one or more 
                replacement plans, the health plan issuer acts 
                uniformly without regard to the health status or 
                insurability of particular individuals.
            (2) Discontinuance of all individual health plans.--In any 
        case in which a health plan issuer elects to discontinue all 
        individual health plans in a State, an individual health plan 
        may be discontinued by the health plan issuer only if--
                    (A) the health plan issuer provides notice to the 
                applicable certifying authority (as defined in section 
                652(d)) and to each individual covered under the plan 
                of such discontinuation at least 180 days prior to the 
                date of the discontinuation of the plan; and
                    (B) all individual health plans issued or delivered 
                for issuance in the State are discontinued and coverage 
                under such plans is not renewed.
            (3) Prohibition on market reentry.--In the case of a 
        discontinuation under paragraph (2), the health plan issuer may 
        not provide for the issuance of any individual health plan in 
        the State involved during the 5-year period beginning on the 
        date of the discontinuation of the last plan not so renewed.
    (c) Treatment of Network Plans.--
            (1) Geographic limitations.--A health plan issuer which 
        offers a network plan (as defined in paragraph (2)) may deny 
        continued participation under the plan to individuals who 
        neither live, reside, nor work in an area in which the 
        individual health plan is offered, but only if such denial is 
        applied uniformly, without regard to health status or the 
        insurability of particular individuals.
            (2) Network plan.--As used in paragraph (1), the term 
        ``network plan'' means an individual health plan that arranges 
        for the financing and delivery of health care services to 
        individuals covered under such health plan, in whole or in 
        part, through arrangements with providers.

SEC. 622. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS.

    (a) In General.--With respect to any State law with respect to 
which the Governor of the State notifies the Secretary of Health and 
Human Services that such State law will achieve the goals of sections 
620 and 621, and that is in effect on, or enacted after, the date of 
enactment of this Act (such as laws providing for guaranteed issue, 
open enrollment by one or more health plan issuers, high-risk pools, or 
mandatory conversion policies), such State law shall apply in lieu of 
the standards described in sections 620 and 621 unless the Secretary of 
Health and Human Services determines, after considering the criteria 
described in subsection (b)(1), in consultation with the Governor and 
Insurance Commissioner or chief insurance regulatory official of the 
State, that such State law does not achieve the goals of providing 
access to affordable health care coverage for those individuals 
described in sections 620 and 621.
    (b) Determination.--
            (1) In general.--In making a determination under subsection 
        (a), the Secretary of Health and Human Services shall only--
                    (A) evaluate whether the State law or program 
                provides guaranteed access to affordable coverage to 
                individuals described in sections 620 and 621;
                    (B) evaluate whether the State law or program 
                provides coverage for preexisting conditions (as 
                defined in section 613(e)) that were covered under the 
                individuals' previous group health plan or employee 
                health benefit plan for individuals described in 
                sections 620 and 621;
                    (C) evaluate whether the State law or program 
                provides individuals described in sections 620 and 621 
                with a choice of health plans or a health plan 
                providing comprehensive coverage; and
                    (D) evaluate whether the application of the 
                standards described in sections 620 and 621 will have 
                an adverse impact on the number of individuals in such 
                State having access to affordable coverage.
            (2) Notice of intent.--If, within 6 months after the date 
        of enactment of this Act, the Governor of a State notifies the 
        Secretary of Health and Human Services that the State intends 
        to enact a law, or modify an existing law, described in 
        subsection (a), the Secretary of Health and Human Services may 
        not make a determination under such subsection until the 
        expiration of the 12-month period beginning on the date on 
        which such notification is made, or until January 1, 1997, 
        whichever is later. With respect to a State that provides 
        notice under this paragraph and that has a legislature that 
        does not meet within the 12-month period beginning on the date 
        of enactment of this Act, the Secretary shall not make a 
        determination under subsection (a) prior to January 1, 1998.
            (3) Notice to state.--If the Secretary of Health and Human 
        Services determines that a State law or program does not 
        achieve the goals described in subsection (a), the Secretary of 
        Health and Human Services shall provide the State with adequate 
        notice and reasonable opportunity to modify such law or program 
        to achieve such goals prior to making a final determination 
        under subsection (a).
    (c) Adoption of NAIC Model.--If, not later than 9 months after the 
date of enactment of this Act--
            (1) the National Association of Insurance Commissioners 
        (hereafter referred to as the ``NAIC''), through a process 
        which the Secretary of Health and Human Services determines has 
        included consultation with representatives of the insurance 
        industry and consumer groups, adopts a model standard or 
        standards for reform of the individual health insurance market; 
        and
            (2) the Secretary of Health and Human Services determines, 
        within 30 days of the adoption of such NAIC standard or 
        standards, that such standards comply with the goals of 
        sections 620 and 621;
a State that elects to adopt such model standards or substantially 
adopt such model standards shall be deemed to have met the requirements 
of sections 620 and 621 and shall not be subject to a determination 
under subsection (a).

SEC. 623. DEFINITION.

    (a) In General.--As used in this subtitle, the term ``individual 
health plan'' means any contract, policy, certificate or other 
arrangement offered to individuals by a health plan issuer that 
provides or pays for health benefits (such as provider and hospital 
benefits) and that is not a group health plan under section 602(6).
    (b) Arrangements Not Included.--Such term does not include the 
following, or any combination thereof:
            (1) Coverage only for accident, or disability income 
        insurance, or any combination thereof.
            (2) Medicare supplemental health insurance (as defined 
        under section 1882(g)(1) of the Social Security Act).
            (3) Coverage issued as a supplement to liability insurance.
            (4) Liability insurance, including general liability 
        insurance and automobile liability insurance.
            (5) Workers' compensation or similar insurance.
            (6) Automobile medical payment insurance.
            (7) Coverage for a specified disease or illness.
            (8) Hospital or fixed indemnity insurance.
            (9) Short-term limited duration insurance.
            (10) Credit-only, dental-only, or vision-only insurance.
            (11) A health insurance policy providing benefits only for 
        long-term care, nursing home care, home health care, community-
        based care, or any combination thereof.

                    CHAPTER 3--COBRA CLARIFICATIONS

SEC. 631. COBRA CLARIFICATIONS.

    (a) Public Health Service Act.--
            (1) Period of coverage.--Section 2202(2) of the Public 
        Health Service Act (42 U.S.C. 300bb-2(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) by transferring the sentence 
                        immediately preceding clause (iv) so as to 
                        appear immediately following such clause (iv); 
                        and
                            (ii) in the last sentence (as so 
                        transferred)--
                                    (I) by inserting ``, or a 
                                beneficiary-family member of the 
                                individual,'' after ``an individual''; 
                                and
                                    (II) by striking ``at the time of a 
                                qualifying event described in section 
                                2203(2)'' and inserting ``at any time 
                                during the initial 18-month period of 
                                continuing coverage under this title'';
                    (B) in subparagraph (D)(i), by inserting before ``, 
                or'' the following: ``, except that the exclusion or 
                limitation contained in this clause shall not be 
                considered to apply to a plan under which a preexisting 
                condition or exclusion does not apply to an individual 
                otherwise eligible for continuation coverage under this 
                section because of the provision of the Health 
                Insurance Reform Act of 1996''; and
                    (C) in subparagraph (E), by striking ``at the time 
                of a qualifying event described in section 2203(2)'' 
                and inserting ``at any time during the initial 18-month 
                period of continuing coverage under this title''.
            (2) Election.--Section 2205(1)(C) of the Public Health 
        Service Act (42 U.S.C. 300bb-5(1)(C)) is amended--
                    (A) in clause (i), by striking ``or'' at the end 
                thereof;
                    (B) in clause (ii), by striking the period and 
                inserting ``, or''; and
                    (C) by adding at the end thereof the following new 
                clause:
                            ``(iii) in the case of an individual 
                        described in the last sentence of section 
                        2202(2)(A), or a beneficiary-family member of 
                        the individual, the date such individual is 
                        determined to have been disabled.''.
            (3) Notices.--Section 2206(3) of the Public Health Service 
        Act (42 U.S.C. 300bb-6(3)) is amended by striking ``at the time 
        of a qualifying event described in section 2203(2)'' and 
        inserting ``at any time during the initial 18-month period of 
        continuing coverage under this title''.
            (4) Birth or adoption of a child.--Section 2208(3)(A) of 
        the Public Health Service Act (42 U.S.C. 300bb-8(3)(A)) is 
        amended by adding at the end thereof the following new flush 
        sentence:
        ``Such term shall also include a child who is born to or placed 
        for adoption with the covered employee during the period of 
        continued coverage under this title.''.
    (b) Employee Retirement Income Security Act of 1974.--
            (1) Period of coverage.--Section 602(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)) is 
        amended--
                    (A) in the last sentence of subparagraph (A)--
                            (i) by inserting ``, or a beneficiary-
                        family member of the individual,'' after ``an 
                        individual''; and
                            (ii) by striking ``at the time of a 
                        qualifying event described in section 603(2)'' 
                        and inserting ``at any time during the initial 
                        18-month period of continuing coverage under 
                        this part'';
                    (B) in subparagraph (D)(i), by inserting before ``, 
                or'' the following: ``, except that the exclusion or 
                limitation contained in this clause shall not be 
                considered to apply to a plan under which a preexisting 
                condition or exclusion does not apply to an individual 
                otherwise eligible for continuation coverage under this 
                section because of the provision of the Health 
                Insurance Reform Act of 1996''; and
                    (C) in subparagraph (E), by striking ``at the time 
                of a qualifying event described in section 603(2)'' and 
                inserting ``at any time during the initial 18-month 
                period of continuing coverage under this part''.
            (2) Election.--Section 605(1)(C) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1165(1)(C)) is amended--
                    (A) in clause (i), by striking ``or'' at the end 
                thereof;
                    (B) in clause (ii), by striking the period and 
                inserting ``, or''; and
                    (C) by adding at the end thereof the following new 
                clause:
                            ``(iii) in the case of an individual 
                        described in the last sentence of section 
                        602(2)(A), or a beneficiary-family member of 
                        the individual, the date such individual is 
                        determined to have been disabled.''.
            (3) Notices.--Section 606(3) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1166(3)) is amended by 
        striking ``at the time of a qualifying event described in 
        section 603(2)'' and inserting ``at any time during the initial 
        18-month period of continuing coverage under this part''.
            (4) Birth or adoption of a child.--Section 607(3)(A) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1167(3)) is amended by adding at the end thereof the following 
        new flush sentence:
        ``Such term shall also include a child who is born to or placed 
        for adoption with the covered employee during the period of 
        continued coverage under this part.''.
    (c) Internal Revenue Code of 1986.--
            (1) Period of coverage.--Section 4980B(f)(2)(B) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) in the last sentence of clause (i) by striking 
                ``at the time of a qualifying event described in 
                paragraph (3)(B)'' and inserting ``at any time during 
                the initial 18-month period of continuing coverage 
                under this section'';
                    (B) in clause (iv)(I), by inserting before ``, or'' 
                the following: ``, except that the exclusion or 
                limitation contained in this subclause shall not be 
                considered to apply to a plan under which a preexisting 
                condition or exclusion does not apply to an individual 
                otherwise eligible for continuation coverage under this 
                subsection because of the provision of the Health 
                Insurance Reform Act of 1996''; and
                    (C) in clause (v), by striking ``at the time of a 
                qualifying event described in paragraph (3)(B)'' and 
                inserting ``at any time during the initial 18-month 
                period of continuing coverage under this section''.
            (2) Election.--Section 4980B(f)(5)(A)(iii) of the Internal 
        Revenue Code of 1986 is amended--
                    (A) in subclause (I), by striking ``or'' at the end 
                thereof;
                    (B) in subclause (II), by striking the period and 
                inserting ``, or''; and
                    (C) by adding at the end thereof the following new 
                subclause:
                                    ``(III) in the case of an qualified 
                                beneficiary described in the last 
                                sentence of paragraph (2)(B)(i), the 
                                date such individual is determined to 
                                have been disabled.''.
            (3) Notices.--Section 4980B(f)(6)(C) of the Internal 
        Revenue Code of 1986 is amended by striking ``at the time of a 
        qualifying event described in paragraph (3)(B)'' and inserting 
        ``at any time during the initial 18-month period of continuing 
        coverage under this section''.
            (4) Birth or adoption of a child.--Section 4980B(g)(1)(A) 
        of the Internal Revenue Code of 1986 is amended by adding at 
        the end thereof the following new flush sentence:
                ``Such term shall also include a child who is born to 
                or placed for adoption with the covered employee during 
                the period of continued coverage under this section.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to qualifying events occurring on or after the date of the 
enactment of this Act for plan years beginning after December 31, 1996.
    (e) Notification of Changes.--Not later than 60 days prior to the 
date on which this section becomes effective, each group health plan 
(covered under title XXII of the Public Health Service Act, part 6 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, and section 4980B(f) of the Internal Revenue Code of 1986) shall 
notify each qualified beneficiary who has elected continuation coverage 
under such title, part or section of the amendments made by this 
section.

         CHAPTER 4--PRIVATE HEALTH PLAN PURCHASING COOPERATIVES

SEC. 641. PRIVATE HEALTH PLAN PURCHASING COOPERATIVES.

    (a) Definition.--As used in this title, the term ``health plan 
purchasing cooperative'' means a group of individuals or employers 
that, on a voluntary basis and in accordance with this section, form a 
cooperative for the purpose of purchasing individual health plans or 
group health plans offered by health plan issuers. A health plan 
issuer, agent, broker or any other individual or entity engaged in the 
sale of insurance may not underwrite a cooperative.
    (b) Certification.--
            (1) In general.--If a group described in subsection (a), 
        desires to form a health plan purchasing cooperative in 
        accordance with this section and such group appropriately 
        notifies the State and the Secretary of such desire, the State, 
        upon a determination that such group meets the requirements of 
        this section, shall certify the group as a health plan 
        purchasing cooperative. The State shall make a determination of 
        whether such group meets the requirements of this section in a 
        timely fashion. Each such cooperative shall also be registered 
        with the Secretary.
            (2) State refusal to certify.--If a State fails to 
        implement a program for certifying health plan purchasing 
        cooperatives in accordance with the standards under this title, 
        the Secretary shall certify and oversee the operations of such 
        cooperatives in such State.
            (3) Interstate cooperatives.--For purposes of this section, 
        a health plan purchasing cooperative operating in more than one 
        State shall be certified by the State in which the cooperative 
is domiciled. States may enter into cooperative agreements for the 
purpose of certifying and overseeing the operation of such 
cooperatives. For purposes of this subsection, a cooperative shall be 
considered to be domiciled in the State in which most of the members of 
the cooperative reside.
    (c) Board of Directors.--
            (1) In general.--Each health plan purchasing cooperative 
        shall be governed by a Board of Directors that shall be 
        responsible for ensuring the performance of the duties of the 
        cooperative under this section. The Board shall be composed of 
        a broad cross-section of representatives of employers, 
        employees, and individuals participating in the cooperative. A 
        health plan issuer, agent, broker or any other individual or 
        entity engaged in the sale of individual health plans or group 
        health plans may not hold or control any right to vote with 
        respect to a cooperative.
            (2) Limitation on compensation.--A health plan purchasing 
        cooperative may not provide compensation to members of the 
        Board of Directors. The cooperative may provide reimbursements 
        to such members for the reasonable and necessary expenses 
        incurred by the members in the performance of their duties as 
        members of the Board.
            (3) Conflict of interest.--No member of the Board of 
        Directors (or family members of such members) nor any 
        management personnel of the cooperative may be employed by, be 
        a consultant for, be a member of the board of directors of, be 
        affiliated with an agent of, or otherwise be a representative 
        of any health plan issuer, health care provider, or agent or 
        broker. Nothing in the preceding sentence shall limit a member 
        of the Board from purchasing coverage offered through the 
        cooperative. This paragraph shall not apply to any management 
        personnel who is not employed by, or getting any remuneration 
        from, a health plan issuer offering a group health or 
        individual health plan, but who, as a result of performing 
        marketing functions as required under subsection (e)(1)(E), is 
        mandated by State law to be licensed as an agent or broker.
    (d) Membership and Marketing Area.--
            (1) Membership.--A health plan purchasing cooperative may 
        establish limits on the maximum size of employers who may 
        become members of the cooperative, and may determine whether to 
        permit individuals to become members. Upon the establishment of 
        such membership requirements, the cooperative shall, except as 
        provided in subparagraph (B), accept all employers (or 
        individuals) residing within the area served by the cooperative 
        who meet such requirements as members on a first come, first-
        served basis, or on another basis established by the State to 
        ensure equitable access to the cooperative.
            (2) Marketing area.--A State may establish rules regarding 
        the geographic area that must be served by a health plan 
        purchasing cooperative. With respect to a State that has not 
        established such rules, a health plan purchasing cooperative 
        operating in the State shall define the boundaries of the area 
        to be served by the cooperative, except that such boundaries 
        may not be established on the basis of health status or 
        insurability of the populations that reside in the area.
    (e) Duties and Responsibilities.--
            (1) In general.--A health plan purchasing cooperative 
        shall--
                    (A) enter into agreements with multiple, 
                unaffiliated health plan issuers, except that the 
                requirement of this subparagraph shall not apply in 
                regions (such as remote or frontier areas) in which 
                compliance with such requirement is not possible;
                    (B) enter into agreements with employers and 
                individuals who become members of the cooperative;
                    (C) participate in any program of risk-adjustment 
                or reinsurance, or any similar program, that is 
                established by the State;
                    (D) prepare and disseminate comparative health plan 
                materials (including information about cost, quality, 
                benefits, and other information concerning group health 
                plans and individual health plans offered through the 
                cooperative);
                    (E) actively market to all eligible employers and 
                individuals residing within the service area; and
                    (F) act as an ombudsman for group health plan or 
                individual health plan enrollees.
            (2) Permissible activities.--A health plan purchasing 
        cooperative may perform such other functions as necessary to 
        further the purposes of this title, including--
                    (A) collecting and distributing premiums and 
                performing other administrative functions;
                    (B) collecting and analyzing surveys of enrollee 
                satisfaction;
                    (C) charging membership fee to enrollees (such fees 
                may not be based on health status) and charging 
                participation fees to health plan issuers;
                    (D) cooperating with (or accepting as members) 
                employers who provide health benefits directly to 
                participants and beneficiaries only for the purpose of 
                negotiating with providers; and
                    (E) negotiating with health care providers and 
                health plan issuers.
    (f) Limitations on Cooperative Activities.--A health plan 
purchasing cooperative shall not--
            (1) perform any activity relating to the licensing of 
        health plan issuers;
            (2) assume financial risk directly or indirectly on behalf 
        of members of a health plan purchasing cooperative relating to 
        any group health plan or individual health plan;
            (3) establish eligibility, continuation of eligibility, 
        enrollment, or premium contribution requirements for 
        participants, beneficiaries, or individuals based on health 
        status, medical condition, claims experience, receipt of health 
        care, medical history, evidence of insurability, genetic 
        information, or disability;
            (4) operate on a for-profit or other basis where the legal 
        structure of the cooperative permits profits to be made and not 
        returned to the members of the cooperative, except that a for-
        profit health plan purchasing cooperative may be formed by a 
        nonprofit organization or organizations--
                    (A) in which membership in such organization is not 
                based on health status, medical condition, claims 
                experience, receipt of health care, medical history, 
                evidence of insurability, genetic information, or 
                disability; and
                    (B) that accepts as members all employers or 
                individuals on a first-come, first-served basis, 
                subject to any established limit on the maximum size of 
                and employer that may become a member; or
            (5) perform any other activities that conflict or are 
        inconsistent with the performance of its duties under this 
        title.
    (g) Limited Preemption of Certain State Laws.--
            (1) In general.--With respect to a health plan purchasing 
        cooperative that meets the requirements of this section, State 
        fictitious group laws shall be preempted.
            (2) Health plan issuers.--
                    (A) Rating.--With respect to a health plan issuer 
                offering a group health plan or individual health plan 
                through a health plan purchasing cooperative that meets 
                the requirements of this section, State premium rating 
                requirement laws, except to the extent provided under 
                subparagraph (B), shall be preempted unless such laws 
                permit premium rates negotiated by the cooperative to 
                be less than rates that would otherwise be permitted 
                under State law, if such rating differential is not 
                based on differences in health status or demographic 
                factors.
                    (B) Exception.--State laws referred to in 
                subparagraph (A) shall not be preempted if such laws--
                            (i) prohibit the variance of premium rates 
                        among employers, plan sponsors, or individuals 
                        that are members of a health plan purchasing 
                        cooperative in excess of the amount of such 
                        variations that would be permitted under such 
                        State rating laws among employers, plan 
                        sponsors, and individuals that are not members 
                        of the cooperative; and
                            (ii) prohibit a percentage increase in 
                        premium rates for a new rating period that is 
                        in excess of that which would be permitted 
                        under State rating laws.
                    (C) Benefits.--Except as provided in subparagraph 
                (D), a health plan issuer offering a group health plan 
                or individual health plan through a health plan 
                purchasing cooperative shall comply with all State 
                mandated benefit laws that require the offering of any 
                services, category or care, or services of any class or 
                type of provider.
                    (D) Exception.--In those States that have enacted 
                laws authorizing the issuance of alternative benefit 
                plans to small employers, health plan issuers may offer 
                such alternative benefit plans through a health plan 
                purchasing cooperative that meets the requirements of 
                this section.
    (h) Rules of Construction.--Nothing in this section shall be 
construed to--
            (1) require that a State organize, operate, or otherwise 
        create health plan purchasing cooperatives;
            (2) otherwise require the establishment of health plan 
        purchasing cooperatives;
            (3) require individuals, plan sponsors, or employers to 
        purchase group health plans or individual health plans through 
        a health plan purchasing cooperative;
            (4) require that a health plan purchasing cooperative be 
        the only type of purchasing arrangement permitted to operate in 
        a State;
            (5) confer authority upon a State that the State would not 
        otherwise have to regulate health plan issuers or employee 
        health benefits plans; or
            (6) confer authority upon a State (or the Federal 
        Government) that the State (or Federal Government) would not 
        otherwise have to regulate group purchasing arrangements, 
        coalitions, association plans, or other similar entities that 
        do not desire to become a health plan purchasing cooperative in 
        accordance with this section.
    (i) Application of ERISA.--For purposes of enforcement only, the 
requirements of parts 4 and 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1101) shall apply to 
a health plan purchasing cooperative as if such plan were an employee 
welfare benefit plan.

          Subtitle B--Application and Enforcement of Standards

SEC. 651. APPLICABILITY.

    (a) Construction.--
            (1) Enforcement.--
                    (A) In general.--A requirement or standard imposed 
                under this title on a group health plan or individual 
                health plan offered by a health plan issuer shall be 
                deemed to be a requirement or standard imposed on the 
                health plan issuer. Such requirements or standards 
                shall be enforced by the State insurance commissioner 
                for the State involved or the official or officials 
                designated by the State to enforce the requirements of 
                this title. In the case of a group health plan offered 
                by a health plan issuer in connection with an employee 
                health benefit plan, the requirements or standards 
                imposed under this title shall be enforced with respect 
                to the health plan issuer by the State insurance 
                commissioner for the State involved or the official or 
                officials designated by the State to enforce the 
                requirements of this title.
                    (B) Limitation.--Except as provided in subsection 
                (c), the Secretary shall not enforce the requirements 
                or standards of this title as they relate to health 
                plan issuers, group health plans, or individual health 
                plans. In no case shall a State enforce the 
                requirements or standards of this title as they relate 
                to employee health benefit plans.
            (2) Preemption of state law.--Nothing in this title shall 
        be construed to prevent a State from establishing, 
        implementing, or continuing in effect standards and 
        requirements--
                    (A) not prescribed in this title; or
                    (B) related to the issuance, renewal, or 
                portability of health insurance or the establishment or 
                operation of group purchasing arrangements, that are 
                consistent with, and are not in direct conflict with, 
                this title and provide greater protection or benefit to 
                participants, beneficiaries or individuals.
    (b) Rule of Construction.--Nothing in this title shall be construed 
to affect or modify the provisions of section 514 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1144).
    (c) Continuation.--Nothing in this title shall be construed as 
requiring a group health plan or an employee health benefit plan to 
provide benefits to a particular participant or beneficiary in excess 
of those provided under the terms of such plan.

SEC. 652. ENFORCEMENT OF STANDARDS.

    (a) Health Plan Issuers.--Each State shall require that each group 
health plan and individual health plan issued, sold, renewed, offered 
for sale or operated in such State by a health plan issuer meet the 
standards established under this title pursuant to an enforcement plan 
filed by the State with the Secretary. A State shall submit such 
information as required by the Secretary demonstrating effective 
implementation of the State enforcement plan.
    (b) Employee Health Benefit Plans.--With respect to employee health 
benefit plans, the Secretary shall enforce the reform standards 
established under this title in the same manner as provided for under 
sections 502, 504, 506, and 510 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132, 1134, 1136, and 1140). The civil 
penalties contained in paragraphs (1) and (2) of section 502(c) of such 
Act (29 U.S.C. 1132(c)(1) and (2)) shall apply to any information 
required by the Secretary to be disclosed and reported under this 
section.
    (c) Failure to Implement Plan.--In the case of the failure of a 
State to substantially enforce the standards and requirements set forth 
in this title with respect to group health plans and individual health 
plans as provided for under the State enforcement plan filed under 
subsection (a), the Secretary, in consultation with the Secretary of 
Health and Human Services, shall implement an enforcement plan meeting 
the standards of this title in such State. In the case of a State that 
fails to substantially enforce the standards and requirements set forth 
in this title, each health plan issuer operating in such State shall be 
subject to civil enforcement as provided for under sections 502, 504, 
506, and 510 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1132, 1134, 1136, and 1140). The civil penalties contained in 
paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C. 
1132(c)(1) and (2)) shall apply to any information required by the 
Secretary to be disclosed and reported under this section.
    (d) Applicable Certifying Authority.--As used in this subtitle, the 
term ``applicable certifying authority'' means, with respect to--
            (1) health plan issuers, the State insurance commissioner 
        or official or officials designated by the State to enforce the 
        requirements of this title for the State involved; and
            (2) an employee health benefit plan, the Secretary.
    (e) Regulations.--The Secretary may promulgate such regulations as 
may be necessary or appropriate to carry out this title.
    (f) Technical Amendment.--Section 508 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1138) is amended by inserting 
``and under the Health Insurance Reform Act of 1996'' before the 
period.

                  Subtitle C--Miscellaneous Provisions

SEC. 661. HMOS ALLOWED TO OFFER PLANS WITH DEDUCTIBLES TO INDIVIDUALS 
              WITH MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Section 1301(b) of the Public Health Service Act 
(42 U.S.C. 300e(b)) is amended by adding at the end the following new 
paragraph:
            ``(6)(A) If a member certifies that a medical savings 
        account has been established for the benefit of such member, a 
        health maintenance organization may, at the request of such 
        member reduce the basic health services payment otherwise 
        determined under paragraph (1) by requiring the payment of a 
        deductible by the member for basic health services.
            ``(B) For purposes of this paragraph, the term `medical 
        savings account' means an account which, by its terms, allows 
        the deposit of funds and the use of such funds and income 
        derived from the investment of such funds for the payment of 
        the deductible described in subparagraph (A).''.
    (b) Medical Savings Accounts.--It is the sense of the Committee on 
Labor and Human Resources of the Senate that the establishment of 
medical savings accounts, including those defined in section 
1301(b)(6)(B) of the Public Health Service Act (42 U.S.C. 
300e(b)(6)(B)), should be encouraged as part of any health insurance 
reform legislation passed by the Senate through the use of tax 
incentives relating to contributions to, the income growth of, and the 
qualified use of, such accounts.
    (c) Sense of the Senate.--It is the sense of the Senate that the 
Congress should take measures to further the purposes of this title, 
including any necessary changes to the Internal Revenue Code of 1986 to 
encourage groups and individuals to obtain health coverage, and to 
promote access, equity, portability, affordability, and security of 
health benefits.

SEC. 662. RULES GOVERNING LITIGATION INVOLVING RETIREE HEALTH BENEFITS.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is 
amended by adding at the end the following new section:

``SEC. 516. RULES GOVERNING LITIGATION INVOLVING RETIREE HEALTH 
              BENEFITS.

    ``(a) Maintenance of Benefits.--
            ``(1) In general.--If--
                    ``(A) retiree health benefits or plan or plan 
                sponsor payments in connection with such benefits are 
                to be or have been terminated or reduced under an 
                employee welfare benefit plan; and
                    ``(B) an action is brought by any participant or 
                beneficiary to enjoin or otherwise modify such 
                termination or reduction,
        the court without requirement of any additional showing shall 
        promptly order the plan and plan sponsor to maintain the 
        retiree health benefits and payments at the level in effect 
        immediately before the termination or reduction while the 
        action is pending in any court. No security or other 
        undertaking shall be required of any participant or beneficiary 
        as a condition for issuance of such relief. An order requiring 
        such maintenance of benefits may be refused or dissolved only 
        upon determination by the court, on the basis of clear and 
        convincing evidence, that the action is clearly without merit.
            ``(2) Exceptions.--Paragraph (1) shall not apply to any 
        action if--
                    ``(A) the termination or reduction of retiree 
                health benefits is substantially similar to a 
                termination or reduction in health benefits (if any) 
                provided to current employees which occurs either 
                before, or at or about the same time as, the 
                termination or reduction of retiree health benefits, or
                    ``(B) the changes in benefits are in connection 
                with the addition, expansion, or clarification of the 
                delivery system, including utilization review 
                requirements and restrictions, requirements that goods 
                or services be obtained through managed care entities 
                or specified providers or categories of providers, or 
                other special major case management restrictions.
            ``(3) Modifications.--Nothing in this section shall 
        preclude a court from modifying the obligation of a plan or 
        plan sponsor to the extent retiree benefits are otherwise being 
        paid by the plan sponsor.
    ``(b) Burden of Proof.--In addition to the relief authorized in 
subsection (a) or otherwise available, if, in any action to which 
subsection (a)(1) applies, the terms of the employee welfare benefit 
plan summary plan description or, in the absence of such description, 
other materials distributed to employees at the time of a participant's 
retirement or disability, are silent or are ambiguous, either on their 
face or after consideration of extrinsic evidence, as to whether 
retiree health benefits and payments may be terminated or reduced for a 
participant and his or her beneficiaries after the participant's 
retirement or disability, then the benefits and payments shall not be 
terminated or reduced for the participant and his or her beneficiaries 
unless the plan or plan sponsor establishes by a preponderance of the 
evidence that the summary plan description or other materials about 
retiree benefits--
            ``(1) were distributed to the participant at least 90 days 
        in advance of retirement or disability;
            ``(2) did not promise retiree health benefits for the 
        lifetime of the participant and his or her spouse; and
            ``(3) clearly and specifically disclosed that the plan 
        allowed such termination or reduction as to the participant 
        after the time of his or her retirement or disability.
The disclosure described in paragraph (3) must have been made 
prominently and in language which can be understood by the average plan 
participant.
    ``(c) Representation.--Notwithstanding any other provision of law, 
an employee representative of any retired employee or the employee's 
spouse or dependents may--
            ``(1) bring an action described in this section on behalf 
        of such employee, spouse, or dependents; or
            ``(2) appear in such an action on behalf of such employee, 
        spouse or dependents.
    ``(d) Retiree Health Benefits.--For the purposes of this section, 
the term `retiree health benefits' means health benefits (including 
coverage) which are provided to--
            ``(1) retired or disabled employees who, immediately before 
        the termination or reduction, have a reasonable expectation to 
        receive such benefits upon retirement or becoming disabled; and
            ``(2) their spouses or dependents.''
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act is amended by inserting after the item relating to section 515 
the following new item:

``Sec. 516. Rules governing litigation involving retiree health 
                            benefits.''
    (c) Effective Date.--The amendments made by this section shall 
apply to actions relating to terminations or reductions of retiree 
health benefits which are pending or brought, on or after March 23, 
1995.

SEC. 663. HEALTH COVERAGE AVAILABILITY STUDY.

    (a) In General.--The Secretary of Health and Human Services, in 
consultation with the Secretary, representatives of State officials, 
consumers, and other representatives of individuals and entities that 
have expertise in health insurance and employee benefits, shall conduct 
a two-part study, and prepare and submit reports, in accordance with 
this section.
    (b) Evaluation of Availability.--Not later than January 1, 1997, 
the Secretary of Health and Human Services shall prepare and submit to 
the appropriate committees of Congress a report, concerning--
            (1) an evaluation, based on the experience of States, 
        expert opinions, and such additional data as may be available, 
        of the various mechanisms used to ensure the availability of 
        reasonably priced health coverage to employers purchasing group 
        coverage and to individuals purchasing coverage on a non-group 
        basis; and
            (2) whether standards that limit the variation in premiums 
        will further the purposes of this title.
    (c) Evaluation of Effectiveness.--Not later than January 1, 1998, 
the Secretary of Health and Human Services shall prepare and submit to 
the appropriate committees of Congress a report, concerning the 
effectiveness of the provisions of this title and the various State 
laws, in ensuring the availability of reasonably priced health coverage 
to employers purchasing group coverage and individuals purchasing 
coverage on a non-group basis.

SEC. 664. SENSE OF THE COMMITTEE CONCERNING MEDICARE.

    (a) Findings.--The Committee on Labor and Human Resources of the 
Senate finds that the Public Trustees of Medicare concluded in their 
1995 Annual Report that--
            (1) the Medicare program is clearly unsustainable in its 
        present form;
            (2) ``the Hospital Insurance Trust Fund, which pays 
        inpatient hospital expenses, will be able to pay benefits for 
        only about 7 years and is severely out of financial balance in 
        the long range''; and
            (3) the Public Trustees ``strongly recommend that the 
        crisis presented by the financial condition of the Medicare 
        trust fund be urgently addressed on a comprehensive basis, 
        including a review of the programs's financing methods, benefit 
        provisions, and delivery mechanisms''.
    (b) Sense of the Committee.--It is the Sense of the Committee on 
Labor and Human Resources of the Senate that the Senate should take 
measures necessary to reform the Medicare program, to provide increased 
choice for seniors, and to respond to the findings of the Public 
Trustees by protecting the short-term solvency and long-term 
sustainability of the Medicare program.

SEC. 665. PARITY FOR MENTAL HEALTH SERVICES.

    (a) Prohibition.--An employee health benefit plan, or a health plan 
issuer offering a group health plan or an individual health plan, shall 
not impose treatment limitations or financial requirements on the 
coverage of mental health services if similar limitations or 
requirements are not imposed on coverage for services for other 
conditions.
    (b) Rule of Construction.--Nothing in subsection (a) shall be 
construed as prohibiting an employee health benefit plan, or a health 
plan issuer offering a group health plan or an individual health plan, 
from requiring preadmission screening prior to the authorization of 
services covered under the plan or from applying other limitations that 
restrict coverage for mental health services to those services that are 
medically necessary.

SEC. 666. EFFECTIVE DATE.

    Except as otherwise provided for in this title, the provisions of 
this title shall apply as follows:
            (1) With respect to group health plans and individual 
        health plans, such provisions shall apply to plans offered, 
        sold, issued, renewed, in effect, or operated on or after 
        January 1, 1997.
            (2) With respect to employee health benefit plans, on the 
        first day of the first plan year beginning on or after January 
        1, 1997.

SEC. 667. SEVERABILITY.

    If any provision of this title or the application of such provision 
to any person or circumstance is held to be unconstitutional, the 
remainder of this title and the application of the provisions of such 
to any person or circumstance shall not be affected thereby.

                          TITLE VII--PENSIONS

SEC. 701. SENSE OF THE SENATE.

    It is the sense of the Senate that--
            (1) the tax on reversion of qualified pension plan assets 
        to employers should not be repealed or modified; and
            (2) the provisions allowing transfer of excess pension 
        assets to retiree health accounts should not be expanded.

             TITLE VIII--NORTH AMERICAN TRADE FAIRNESS ACT

SEC. 801. SHORT TITLE.

    This title may be cited as the ``North American Trade Fairness 
Act''.

SEC. 802. CONDITIONS FOR CONTINUED PARTICIPATION IN THE NAFTA.

    (a) In General.--
            (1) Withdrawal of approval.--Notwithstanding any other 
        provision of law, unless each of the conditions described in 
        paragraph (2) is met--
                    (A) the approval of the NAFTA by the Congress 
                provided for in section 101(a) of the North American 
                Free Trade Agreement Implementation Act shall cease to 
                be effective on October 1, 1998, and
                    (B) not later than March 31, 1998, the President 
                shall provide written notice of withdrawal to the 
                Governments of Canada and Mexico in accordance with 
                Article 2205 of the NAFTA.
            (2) Conditions for continuing participation in nafta.--The 
        conditions described in this paragraph are that before December 
        31, 1997--
                    (A) the President--
                            (i) renegotiate the terms of the NAFTA in 
                        accordance with paragraphs (1), (2), (3), and 
                        (4) of subsection (b), and
                            (ii) provide the certification to the 
                        Congress described in subsection (b)(9),
                    (B) the Secretary of Labor provide the 
                certification described in subsection (b)(5),
                    (C) the Secretary of Commerce provide the 
                certification described in subsection (b)(6),
                    (D) the Secretary of Agriculture and the 
                Administrator of the Food and Drug Administration 
                provide the certification described in paragraphs 
                (7)(A) and (8) of subsection (b), and
                    (E) the Administrator of the Environmental 
                Protection Agency submit the certification and report 
                described in subsection (b)(7)(B).
    (b) Areas of Renegotiation and Certification.--The areas of 
renegotiation and certification described in this subsection are as 
follows:
            (1) Renegotiate the nafta to correct trade deficits.--The 
        President is authorized and directed to confer with the 
        Governments of Canada and Mexico and to renegotiate the terms 
        of the NAFTA to achieve a trade balance among the NAFTA Parties 
        when the United States experiences a significant trade deficit 
        with another Party.
            (2) Renegotiate the nafta to correct currency 
        distortions.--The President is authorized and directed to 
        confer with the Governments of Canada and Mexico and to 
        renegotiate the terms of the NAFTA to mitigate the adverse 
        effects of rapid or substantial changes in exchange rates 
        between the United States dollar and the currency of another 
        NAFTA Party.
            (3) Renegotiate the nafta to correct agricultural 
        distortions.--The President is authorized and directed to 
        confer with the Governments of Canada and Mexico and to 
        renegotiate the terms of the NAFTA to prevent imports of 
        agricultural commodities from any NAFTA Party from unfairly 
        displacing production from small- and moderate-sized farm 
        operations in the United States or from significantly and 
        negatively affecting the security of the food supply in the 
        United States.
            (4) Renegotiate the nafta to raise labor, health, and 
        environmental standards.--The President is authorized and 
        directed to renegotiate the NAFTA to ensure that improvements 
        are made in labor, health, and environmental standards in all 
        the NAFTA Parties and to require, as a condition for continuing 
        the trade privileges of the NAFTA, that each NAFTA Party 
        effectively enforce its domestic labor, health, and 
        environmental laws and regulations.
            (5) Certification of gains in jobs and living standards.--
        If the Secretary of Labor, after consultation with appropriate 
        government agencies and citizen organizations, determines 
        that--
                    (A) the number of jobs lost because of imports of 
                manufactured goods from other NAFTA Parties does not 
                significantly exceed the number of jobs resulting from 
                increased exports of United States manufactured goods 
                to other NAFTA Parties since January 1, 1994,
                    (B) the purchasing power of wage-earners in the 
                United States, measured by real hourly wage levels, has 
                not been significantly and negatively affected by the 
                NAFTA since January 1, 1994, and
                    (C) enforcement of the labor standards described in 
                paragraph (4) has led to new employment opportunities, 
                improved working conditions and living standards, and 
                enhanced and protected workers' rights in the 
territories of the NAFTA Parties,
        the Secretary shall so certify to the Congress.
            (6) Certification of increased domestic manufacturing.--If 
        the Secretary of Commerce, after consultation with the 
        appropriate government agencies and citizen organizations, 
        determines that the balance between the export of United States 
        manufactured goods to NAFTA Parties and the imports of 
        manufactured goods from NAFTA Parties is not significantly 
        affected in a negative manner, the Secretary shall so certify 
        to the Congress. In making the determination, the Secretary 
        shall not include any goods originating outside the United 
        States that are exported to another NAFTA Party, nor imports 
        from another NAFTA Party that are destined for other countries.
            (7) Certification relating to health and environmental 
        standards.--
                    (A) In general.--If the Secretary of Agriculture 
                and the Administrator of the Food and Drug 
                Administration, after consultation with appropriate 
                government agencies and citizen organizations, 
                determine, with respect to imports from NAFTA Parties, 
                that since January 1, 1994, there has not been an 
                increased amount of contaminated and adulterated food, 
                food containing additives or pesticide residues 
                exceeding United States standards, or food containing 
                additives or pesticide residues which cannot be legally 
                used in the United States, the Secretary and 
                Administrator shall so certify to the Congress. In 
                making this determination, all foods and food products, 
                including fruits, vegetables, grains, oilseeds, and 
                meats, both fresh and processed, shall be reviewed. 
                Special attention shall be given to foods which have 
                had a history of violations.
                    (B) Border area pollution.--If the Administrator of 
                the Environmental Protection Agency determines that 
                conditions affecting public health in the United 
                States-Mexico border zone have not worsened since 
                January 1, 1994, the Administrator shall so certify to 
                the Congress. In addition, the Administrator, in 
                consultation with the Secretariat for the NAFTA 
                Commission on Environmental Cooperation, shall report 
                to the Congress on the outcomes of the Administration's 
                investigations on pollution and health hazards in and 
                around the United States-Mexico border zone since the 
                implementation of the NAFTA. The report shall include, 
                but not be limited to--
                            (i) a description and status report of all 
                        industrial site cleanup and environmental 
                        improvement projects begun in the border zone 
                        since January 1, 1994;
                            (ii) information available from local, 
                        State, and Federal health agencies reflecting 
                        the incidence since January 1, 1990, in and 
                        around the border zone of hepatitis, neural 
                        stem birth defects, lupus, chronic adolescent 
                        diarrhea, tuberculosis, nonneural birth 
                        defects, cholera, botulism, and other disorders 
                        commonly related to industrial pollution, 
                        inadequate infrastructures, and hazardous 
                        waste; and
                            (iii) information on the incidence of air 
                        and water pollution, including data reported 
                        under the Clean Air Act, the Clean Water Act, 
                        and related legislation since January 1, 1990, 
                        and the causes, levels, and types of pollution 
                        which have occurred.
                    (C) Environmental standards.--If the Administrator 
                of the Environmental Protection Agency determines that 
                enforcement of the health and environmental standards 
                described in paragraph (4) has enhanced the protection 
                of health and the environment in the countries of the 
                NAFTA Parties, the Administrator shall so certify to 
                the Congress.
            (8) Certification relating to family farms and food 
        security.--If the Secretary of Agriculture determines that 
        production from small- and moderate-sized farm operations in 
        the United States has not been unfairly displaced by imports 
        from NAFTA partners and that the security of the food supply of 
        the United States has not been significantly and negatively 
        affected by those imports, the Secretary shall so certify to 
        the Congress.
            (9) Certification relating to democracy and human 
        freedoms.--If the President, after consultation with 
        appropriate government agencies, international organizations, 
        and citizen organizations, determines that the Governments of 
        the NAFTA Parties protect the basic, internationally recognized 
        human, democratic, and labor rights of their countries' 
        inhabitants, the President shall so certify to the Congress.

SEC. 803. CONSULTATION WITH CONGRESS.

    The President shall consult regularly with the Congress regarding 
the negotiations described in section 802(b) (1), (2), (3), and (4). 
The United States Trade Representative shall consult with the 
appropriate committees of Congress in the development of any technical 
and conforming amendments that may be required to carry out the 
provisions of this title.

SEC. 804. NO EXPANSION OF NAFTA.

    Until such time as the conditions described in section 802(b) are 
met, it is the sense of the Congress that the President should not 
engage in negotiations to expand the NAFTA to include other countries 
and that fast-track authority should not be renewed with respect to the 
approval of any such expansion of the NAFTA.

SEC. 805. DEFINITIONS.

    As used in this title:
            (1) NAFTA.--The term ``NAFTA'' means the North American 
        Free Trade Agreement entered into between the United States, 
        Canada, and Mexico on December 17, 1992.
            (2) NAFTA party.--The term ``NAFTA Party'' means the United 
        States, Canada, or Mexico.
            (3) United states-mexico border zone.--The term ``United 
        States-Mexico border zone'' means the area that comprises the 
        12-mile zone on the Mexican side of the United States-Mexico 
        border and the counties within any State of the United States 
        that are contiguous with Mexico.

            TITLE IX--COMMISSION ON RETIREMENT INCOME POLICY

SEC. 901. ESTABLISHMENT.

    There is established a commission to be known as the Commission on 
Retirement Income Policy (in this title referred to as the 
``Commission'').

SEC. 902. DUTIES.

    (a) In General.--The Commission shall conduct a full and complete 
review and study of--
            (1) trends in retirement savings in the United States;
            (2) existing Federal incentives and programs that are 
        established to encourage and protect such savings; and
            (3) new Federal incentives and programs that are needed to 
        encourage and protect such savings.
    (b) Specific Issues.--In fulfilling the duty described in 
subsection (a), the Commission shall address--
            (1) the amount and sources of Federal and private funds, 
        including tax expenditures (as defined in section 3 of the 
        Congressional Budget Act of 1974 (2 U.S.C. 622)), needed to 
        finance the incentives and programs referred to in subsection 
        (a)(2) and any new Federal incentive or program that the 
        Commission recommends be established;
            (2) the most efficient and effective manner, considering 
        the needs of retirement plan sponsors for simplicity, 
        reasonable cost, and appropriate incentives, of ensuring that 
        individuals in the United States will have adequate retirement 
        savings;
            (3) the amounts of retirement income that future retirees 
        will need to replace various levels of preretirement income, 
        including amounts necessary to pay for medical and long-term 
        care;
            (4) the workforce and demographic trends that affect the 
        pensions of future retirees;
            (5) the role of retirement savings in the economy of the 
        United States;
            (6) sources of retirement income other than private 
        pensions that are available to individuals in the United 
        States; and
            (7) the shift away from insured and qualified pension 
        benefits in the United States.
    (c) Recommendations.--
            (1) In general.--The Commission shall formulate 
        recommendations based on the review and study conducted under 
        subsection (a). The recommendations shall include measures that 
        address the needs of future retirees for--
                    (A) appropriate pension plan coverage and other 
                mechanisms for saving for retirement;
                    (B) an adequate retirement income;
                    (C) preservation of benefits they accumulate by 
                participating in pension plans;
                    (D) information concerning pension plan benefits; 
                and
                    (E) procedures to resolve disputes involving such 
                benefits.
            (2) Effect on federal budget deficit.--A recommendation of 
        the Commission for a new Federal incentive or program that 
        would result in an increase in the Federal budget deficit shall 
        not appear in the report required under section 906 unless it 
        is accompanied by a recommendation for offsetting the increase.

SEC. 903. MEMBERSHIP.

    (a) Number and Appointment.--
            (1) In general.--The Commission shall be composed of 16 
        members appointed not later than 90 days after the date of the 
        enactment of this Act. The Commission shall consist of the 
        following members:
                    (A) 4 individuals appointed by the President.
                    (B) 3 individuals appointed by the Speaker of the 
                House of Representatives.
                    (C) 3 individuals appointed by the minority leader 
                of the House of Representatives.
                    (D) 3 individuals appointed by the majority leader 
                of the Senate.
                    (E) 3 individuals appointed by the minority leader 
                of the Senate.
            (2) Qualifications.--The individuals referred to in 
        paragraph (1) shall be Members of the Congress, leaders of 
        business or labor, distinguished academics, or other 
        individuals with distinctive qualifications or experience.
    (b) Terms.--Each member shall be appointed for the life of the 
Commission.
    (c) Vacancies.--A vacancy in the Commission shall be filled not 
later than 90 days after the date of the creation of the vacancy in the 
manner in which the original appointment was made.
    (d) Compensation.--
            (1) Rates of pay.--Except as provided in paragraph (2), 
        members of the Commission shall serve without pay.
            (2) Travel expenses.--Each member of the Commission shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 of title 
        5, United States Code.
    (e) Quorum.--10 members of the Commission shall constitute a 
quorum, but 6 members may hold hearings, take testimony, or receive 
evidence.
    (f) Chairperson.--The chairperson of the Commission shall be 
elected by a majority vote of the members of the Commission.
    (g) Meetings.--The Commission shall meet at the call of the 
chairperson of the Commission.
    (h) Decisions.--Decisions of the Commission shall be made according 
to the vote of not less than a majority of the members who are present 
and voting at a meeting called pursuant to subsection (g).

SEC. 904. STAFF AND SUPPORT SERVICES.

    (a) Executive Director.--The Commission shall have an executive 
director appointed by the Commission. The Commission shall fix the pay 
of the executive director.
    (b) Staff.--The Commission may appoint and fix the pay of 
additional personnel as it considers appropriate.
    (c) Applicability of Certain Civil Service Laws.--The executive 
director and staff of the Commission may be appointed without regard to 
the provisions of title 5, United States Code, governing appointments 
in the competitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of that title 
relating to classification and General Schedule pay rates.
    (d) Experts and Consultants.--The Commission may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code, at rates the Commission determines to be appropriate.
    (e) Staff of Federal Agencies.--Upon request of the Commission, the 
head of any Federal agency may detail, on a reimbursable basis, any of 
the personnel of the agency to the Commission to assist it in carrying 
out its duties under this title.
    (f) Administrative Support Services.--Upon the request of the 
Commission, the Administrator of General Services shall provide to the 
Commission, on a reimbursable basis, the administrative support 
services necessary for the Commission to carry out its responsibilities 
under this title.

SEC. 905. POWERS.

    (a) Hearings and Sessions.--
            (1) In general.--The Commission may, for the purpose of 
        carrying out this title, hold hearings, sit and act at times 
        and places, take testimony, and receive evidence as the 
        Commission considers appropriate. The Commission may administer 
        oaths or affirmations to witnesses appearing before it.
            (2) Public hearings.--The Commission shall, to the extent 
        practicable, hold public hearings to receive the views of a 
        broad spectrum of the public on the status of the private 
        retirement system of the United States.
    (b) Delegation of Authority.--Any member, committee, or agent of 
the Commission may, if authorized by the Commission, take any action 
which the Commission is authorized to take by this section.
    (c) Information.--
            (1) Information from federal agencies.--
                    (A) In general.--The Commission may secure directly 
                from any Federal agency information necessary to enable 
                it to carry out this title. Upon request of the 
                Commission, the head of the Federal agency shall 
                furnish the information to the Commission.
                    (B) Exception.--Subparagraph (A) shall not apply to 
                any information that the Commission is prohibited to 
                secure or request by another law.
            (2) Public surveys.--The Commission may conduct the public 
        surveys necessary to enable it to carry out this title. In 
        conducting such surveys, the Commission shall not be considered 
        an agency for purposes of chapter 35 of title 44, United States 
        Code.
    (d) Mails.--The Commission may use the United States mails in the 
same manner and under the same conditions as other Federal agencies.
    (e) Contract and Procurement Authority.--The Commission may make 
purchases, and may contract with and compensate government and private 
agencies or persons for property or services, without regard to--
            (1) section 3709 of the Revised Statutes (41 U.S.C. 5); and
            (2) title III of the Federal Property and Administrative 
        Services Act of 1949 (41 U.S.C. 251 et seq.).
    (f) Gifts.--The Commission may accept, use, and dispose of gifts of 
services or property, both real and personal, for the purpose of 
assisting the work of the Commission. Gifts of money and proceeds from 
sales of property received as gifts shall be deposited in the Treasury 
and shall be available for disbursement upon order of the Commission. 
For purposes of Federal income, estate, and gift taxes, property 
accepted under this subsection shall be considered as a gift to the 
United States.
    (g) Volunteer Services.--Notwithstanding section 1342 of title 31, 
United States Code, the Commission may accept and use voluntary and 
uncompensated services as the Commission determines necessary.

SEC. 906. REPORT.

    Not later than December 31, 1997, the Commission shall submit a 
report to the President, the majority and minority leaders of the 
Senate, and the majority and minority leaders of the House of 
Representatives. The report shall review the matters that the 
Commission is required to study under section 902 and shall set forth 
the recommendations of the Commission.

SEC. 907. TERMINATION.

    The Commission shall terminate not later than the expiration of the 
90-day period beginning on the date on which the Commission submits its 
report under section 906.
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